Changes in Roth 401(k)s You Should Know About

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The end of 2022 saw the passing of Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0, which brought about many changes, including some that drastically affect some 401(k) benefits. Many of these improvements are very welcome for people with these common retirement plans.

The changes should encourage more employees to invest more in their 401(k) and be better prepared for retirement. It is a good time to start preparing, too, because it is uncertain what will happen to Social Security payments in the not-too-distant future.

Higher Catch-Up Contribution Limits

Secure Act 2.0 made two changes that affect the 401(k) contribution limits. Fidelity says the standard limit for 2023 is $22,500, but if you are 50 or older, you can add another $7,500. When employers and employees contribute to the plan, up to $66,000 can be put into the account.