For 2024, the before-tax and Roth elective deferral contribution limit will be $23,000, up from $22,500 in 2023. For those turning age 50 or older during the year, the catch-up contribution limit will remain at $7,500, resulting in a maximum contribution limit of $30,500.
If you want to take advantage of the new annual limits, you may want to consider boosting your contributions. Consult your specific plan rules for any plan limits that may apply.
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Action Is Required: Plan Eligibility for Long-Term, Part-Time Employees
What you need to know:
• Under the SECURE Act (“SECURE 1.0”), 401(k) plans are required to allow part-time employees to participate in the plan beginning in 2024 if they have three consecutive years of at least 500 hours of work.
• Please contact your third-party administrator (TPA) to determine your next steps.
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SECURE 2.0 further enhances this provision by reducing the long-term requirement to two years and expanding it to ERISA-governed 403(b) plans. This provision will be effective in 2025.
An Update on Required Minimum Distributions
In accordance with provisions outlined by the SECURE 2.0 Act of 2022, any Roth balances in your plan account will be removed from the calculation of your required minimum distributions (RMDs). Additionally, Roth balances will be excluded from any redemptions for purposes of completing RMDs. This change is effective January 1, 2024, and no action is required.
If you request a partial withdrawal or take installments, any Roth amount distributed will not be counted toward your RMD.
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