7 Big Changes Coming to Your 401k

💡Starting in 2025, most employers will automatically enroll all eligible employees into their 401k plan with a minimum contribution rate of 3%.

📚Starting in 2024, employers can match employee student loan payments with retirement contributions.

⏳The required minimum distribution age will increase from 72 to 73 in 2022, and to 75 in 2033.

💸Starting in 2024, employees can make penalty-free withdrawals of up to $1,000 per year for emergency expenses, with a requirement to replace the funds within 3 years.

🔝Starting in 2025, catch-up contribution limits will be raised for workers age 60 to 63, allowing them to save up to $10,000 annually on top of the standard limit.

When will automatic enrollment into 401k plans begin?

—Most employers will implement automatic enrollment in 2025, with a minimum contribution rate of 3%.

How will the new rules impact student loan payments?

—Starting in 2024, employers can match employee student loan payments with retirement contributions, helping employees save for both their student loans and retirement.

What is the required minimum distribution age?

—The required minimum distribution age is 72 currently, but it will increase to 73 in 2022 and 75 in 2033.

What are penalty-free withdrawals for emergency expenses?

—Starting in 2024, employees can make penalty-free withdrawals of up to $1,000 per year for emergency expenses, with a requirement to replace the funds within 3 years.

What are catch-up contributions?

—Catch-up contributions allow individuals age 50 and older to save additional money in their retirement accounts. Starting in 2025, workers age 60 to 63 can make catch-up contributions of up to $10,000 annually.

00:00Introduction to 7 big changes coming to your 401k.

02:03Starting in 2025, most employers will automatically enroll employees into 401k plans with a minimum contribution rate of 3%.

03:40Starting in 2024, employers can match employee student loan payments with retirement contributions.

06:51The required minimum distribution age will increase from 72 to 73 in 2022, and to 75 in 2033.

09:29Starting in 2024, employees can make penalty-free withdrawals of up to $1,000 per year for emergency expenses.

09:53Starting in 2025, workers age 60 to 63 can make catch-up contributions of up to $10,000 annually.