July 26, 2023
New Penalty Free Plan Distributions
The SECURE Act 2.0, which was enacted in late 2022, builds upon updates made in the 2019 legislation of the same name. Many of the changes are designed to ensure broader access to plans, facilitate automatic enrollment and escalation, increase catch up contribution limits, and modify required minimum distribution (RMD) timing. There were also several employer targeted provisions designed to make it easier and less costly to offer and maintain an employer sponsored retirement plan. Beyond these changes, there were also updates to the rules governing plan distributions. While the focus is on finding ways to expand retirement savings, there were also updates made that allow for penalty free distributions to be taken under certain circumstances. This includes distributions for terminal illnesses, domestic abuse, and for birth/adoption
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