The Treasury Department and the Internal Revenue Service (IRS) have proposed a new rule affecting retirement plans for people aged 50 and over who want to make additional contributions, known as "catch-up contributions." The changes come from the SECURE 2.0 Act of 2022, and these new rules require some of those contributions to be made as "Roth" contributions if the participant earns a certain amount. The proposal includes details on what plans must follow, deadlines, and information about a public hearing where people can discuss these changes. Comments from the public are encouraged and can be submitted until March 14, 2025.
Simple Explanation
The IRS wants to change how older people save extra money for retirement. They are suggesting that some of this extra money needs to be saved in a special way called "Roth", if they earn a lot.