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Understanding 401(k) contribution limits can be confusing even sometimes overwhelming. They are, however, essential to know. Below is a break down of important contribution limits that help employees determine whether their savings are on track or if there is an opportunity to catch up. The annual contribution limit is a great goal to keep in mind. It also encourages individuals who are able to defer additional funds into retirement savings to take advantage of doing so. 2024 2023 2022 Employee Contribution Limit $23,000 $22,500 $20,500 Employee Catch-Up Contribution (For employees aged 50 and...

Summary of Key retirement and Tax Provisions On December 29, 2022, the Consolidated Appropriations Act of 2023 was signed into law. The Act, referred to as SECURE 2.0, includes important provisions affecting retirement savings plans. These provisions offer many new benefits to employers and employees which are designed to make it more attractive for employers to offer retirement plans and to improve retirement outcomes for employees. Below is a summary of selected provisions with potentially broad effects. Employers may need to consult with appropriate legal counsel and other professionals to...

Study reveals plan participants are on a positive trajectory, aided by auto features Being able to replace working income with income generated from retirement savings is the essential definition of retirement readiness. The percentage of working income that an individual may need in retirement will vary, depending on a number of factors, such as whether or not they will still have a mortgage, the amount of their Social Security benefit, their tax bracket, variable healthcare costs, lifestyle choices and having income from part-time work, among others. When projecting retirement income needs...

The Department of Labor (DOL) released guidance in January 2021 that will help plan sponsors keep track of participants. Finding former employees who still have plan balances but no longer work for the company can be challenging. And losing track of them may be a fiduciary issue because of the “exclusive benefit” rule set down in ERISA. It requires that plans diligently seek to distribute assets, even to missing or unresponsive participants. Best Practices for Pension Plans is one of a set of three related publications released by the DOL on January 12, 2021. It provides information to help...

Want to Improve Retirement Outcomes? Make Sure Employees Understand Social Security Basics New research reveals Americans have a significant knowledge gap regarding Social Security benefits. According to a recent survey 1, more than half of Americans express confidence that they know exactly how to optimize their Social Security benefits. However, only 6% actually understand all the factors that determine the maximum benefit someone can receive. In addition, the report highlighted additional knowledge gaps: A full 39% don’t know at what age they are eligible to receive their full benefits...