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SECURE Act 2.0 could completely change the way you save for retirement

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The House of Representatives passed HR 2954, the Securing a Strong Retirement Act, bringing it one step closer to becoming law, according to CNBC. The bill, commonly known as SECURE Act 2.0, passed with a total vote of 414 to 5 and is designed to help Americans save more for retirement.

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Plan provisions include mandates for employers to help employees take advantage of 401(k) retirement programs with pre-tax dollars, help for student borrowers to save for retirement, changes to 401(k) contribution limits (k) and changes to the departure date. age for required minimum distributions (RMDs).

How can these changes help you plan for your retirement?

401(k) Requirements

The SECURE Act 2.0 states that employers who have been in business for more than three years (and have more than 11 employees on payroll) automatically enroll eligible employees in a 401(k) plan. Minimum contributions would start at 3% of the worker’s salary and increase until the employee contributes 10% of their gross salary. Employees can opt out or change the amount of their contributions at any time, and exceptions exist for religious and government plans.

Considering that only 41% of U.S. employees contribute to a 401(k) today — while 68% of workers have access to it, according to a U.S. Census Bureau report — this provision could help make 401(k)s more common. in the workforce. . The mandate could also educate people on the value of a pension plan, and workers wouldn’t have to think about “joining.”

Catch-up contributions

For many Americans, it may seem too late to start saving for retirement. The new law would give older Americans the chance to “catch up” on their savings. People aged 62 to 64 could contribute $10,000 a year to their retirement account, up from $6,500 now.

Minimum required distributions

If you choose to delay retirement, have other investments such as stocks and dividends to leverage, or prefer to live off your Social Security benefits instead of your 401(k) initially, you’ll have more time to keep certain investment funds in your accounts due to the provisions of the SECURE Act 2.0.

Starting in 2022, you could wait up to age 73 to receive the required minimum distribution. This age increases to 74 in 2029 and to 75 in 2032 in accordance with the new legislation. The current age for taking required minimum distributions for many retirement accounts, including IRAs and 401(k)s, is 72, according to

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Help for employees with student loan debt

Under the legislation, employers could match student loan payments as retirement contributions to a 401(k). This could help graduates if heavy student debt prevents them from saving for retirement when they get a job after graduation.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketer with interests in finance, e-commerce, technology, and real estate. His long list of publishing credits includes Bankrate, Lending Tree and Chase Bank. She is the founder and owner of, a travel, technology and entertainment website. She lives in Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten and three lizards of different sizes and personalities – plus her two children and her husband. Find her on Twitter, @DawnAllcot.