This all got passed by Senate and expected to clear House tonight.

https://www.wsj.com/articles/401k-changes-retirement-plans-congress-11671482120

RMDs have been postponed.

Quote:

---

The new legislation raises that age again, from 72 today to 73 starting on Jan. 1, 2023 and to 75 starting on Jan. 1, 2033.

---

Automatic enrollment in 401ks and 403bs is now required from 3 to 10% contribution rates.

Catch up contributions are increased:

Quote:

---

Another provision in the bill will allow older workers to make extra catch-up contributions to 401(k)-style retirement accounts. In 2023, people 50 and older will be able to contribute an extra $7,500 a year to these accounts. The bill would raise the catch-up amount to at least $11,250 a year for people 60 to 63 starting in 2025.

---

Roth 401k change:

Quote:

---

The legislation allows people with these Roth 401(k)s to skip required distributions, starting in 2024.

---

This is interesting. It allows set up of emergency accounts so I guess this is a separate Roth account than your first one?

Quote:

---

It allows employees to save up to $2,500 in a rainy-day Roth account, although employers can set lower limits. Additional contributions and any employer match would be invested in retirement savings. When an employee taps the emergency fund, the money would come out free of taxes and the 10% penalty that people under age 59 typically owe.

---

Looks like you can ultimately switch purpose of your 529 if you don't need it for school.

Quote:

---

The bill would also allow people to roll up to $35,000 from 529 plan accounts into Roth IRAs

---

New handout for the low income:

Quote:

---

To encourage people with low and moderate incomes to save in retirement accounts, the measure restructures a tax credit available to certain workers. The government would put up to $1,000 annually into the retirement accounts of eligible workers starting in 2027, regardless of whether they have an income tax liability. Currently, the credit is only available to people with an income tax liability.

---

YouBet said:

---

Looks like you can ultimately switch purpose of your 529 if you don't need it for school.

Quote:

---

The bill would also allow people to roll up to $35,000 from 529 plan accounts into Roth IRAs

---

---

This is a very interesting one. I wonder if you're limited based on your Roth IRA contributions and how the contributions are available pre-retirement.

Rainy-day Roth sounds kind of interesting but couldn't find more info on it.

This is very interesting.

Would it roll into the custodian's 529 account (the one presumably funding the 529), or the beneficiary's?

Either way would be great.

The 529 to Roth thing says accounts have to be opened for 15 years or something right?

Going to be interesting to see more details come out.

Curious if it's at the participant or beneficiary level. Can I open one for everyone in my household, my wife open another for everyone in our household etc...

Fund with $12k or so each (TVM 15 years to 35k) and then roll all of them into Roths? So I'm rolling the one where I'm both participant and beneficiary, and the one where my wife is participant but I'm beneficiary for $70k into my Roth, and same for her?

The no RMD on Roth 401k is long overdue. Roth IRAs don't have RMDs, so why did the Roth 401k.

Quote:

---

In the proposed legislation, Congress is also amending the IRS laws for retirement account rollovers from 529 plans, which are tax-advantaged savings accounts for higher education. Currently, any money withdrawn from a 529 plan that's not used for education is subject to a 10% federal penalty.

In the bill, beneficiaries of 529 college savings accounts would be allowed to roll over up to $35,000 total in their lifetime from a 529 plan into a Roth IRA. The Roth IRA would still be subject to annual contribution limits, and the 529 account must have been open for at least 15 years.

---

https://www.cnet.com/personal-finance/investing/rules-for-401k-and-ira-accounts-could-change-soon-what-you-need-to-know/