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Increased ages for RMDs
Required minimum distributions (RMDs) for people who reach age 72 after 2022 and age 73 before 2033 can start at age 73. Individuals who reach age 74 after 2032 can start RMDs at age 75.
In addition, the excise tax for delayed or insufficient RMDs is reduced from 50% to 25%.
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Expanding automatic features
Starting in 2025, employers offering new 401(k) and 403(b) plans will be required to automatically enroll workers at 3% to 10% of the employee's pay. Automatic escalation will also be required for these plans, increasing contributions by 1% a year, up to 10% to 15% of compensation.
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Emergencies become exempt from 10% penalty
Starting in 2024, Americans under age 59½ can withdraw up to $1,000 for an unforeseeable personal or family expense (subject to certain conditions) without paying the 10% early withdrawal penalty.
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Saver's Credit to be payable as a match
Starting in 2027, the existing retirement savings contributions credit (Saver's Credit) will become a matching contribution from the federal government, available for lower- and middle-income workers.
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Increased catch-up contributions
Beginning in 2025, people ages 60 to 63 will have increased catch-up contribution limits, capped at the greater of:
- $10,000, or
- 50% more than the regular catch-up amount for the year.
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Roth enhancements
For 401(k), 403(b), and governmental 457(b) plans:
- Roth distributions are no longer subject to RMD rules, aligning with Roth IRAs.
- Employers may now make Roth matching or nonelective contributions, if they choose to.
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Important disclosures
John Hancock Retirement Plan Services LLC offers administrative and/or recordkeeping services to sponsors and administrators of retirement plans. John Hancock Trust Company LLC provides trust and custodial services to such plans. Group annuity contracts and recordkeeping agreements are issued by John Hancock Life Insurance Company (U.S.A.), Boston, MA (not licensed in NY), and John Hancock Life Insurance Company of New York, Valhalla, NY. Product features and availability may differ by state. Securities are offered through John Hancock Distributors LLC, member FINRA, SIPC.
John Hancock Investment Management Distributors LLC is the principal underwriter and wholesale distribution broker-dealer for the John Hancock mutual funds, member FINRA, SIPC.
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