Retirement Savings Changes

The 2023 Omnibus Appropriations Act (December 2022) included several retirement savings law changes. Among the key changes:

• Automatic 401(k) enrollment. The law requires employers with 401(k) plans to automatically enroll employees at a contribution rate of at least 3%, but not more than 10%. Businesses with 10 or fewer workers and new companies in business for less than three years are among those that would be excluded from the mandate.

• Age increases for required minimum distributions (RMDs) from plans. RMDs will now not start until age 73 (up from 72) this year, and will rise to age 75 in 2033. RMD tax penalties are also reduced.

• “Catch Up” Allowances Increased. Older persons can now put an extra $10K annually in a 401(k) starting in 2025, up from the current $6.5K limit, for persons aged 60-63. Catch-up amounts will be indexed for inflation after 2025.

A good summary of all the provisions can be found here.

(posted: 2-16-23)

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Social Security COLA Increase

The Social Security Administration announced (October 13) that Social Security recipients will receive a cost-of-living allowance (COLA) increase of 8.7% for 2023. On average, Social Security benefits will increase by more than $140 per month.

The first benefit payments with the applied COLA adjustment will begin at the end of December/January timeframe.

(updated: 10-13-22)

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Benefits for Same-Sex Partners

The Biden Administration dropped court appeals (November 2021) that the Trump Administration had made on two class action lawsuits against the Social Security Administration (SSA). Under the lawsuits, SSA benefits were denied on the basis that the marriages did not meet the nine month minimum required length, which were caused by State marriage laws. Two court decisions deemed the SSA position as unconstitutional. The Trump Administration had appealed the decisions, and as of November 1, 2021, the Biden Administration Justice Department had dropped both appeals. 

(updated: 2-2-22)

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