Email Adam Email
Financial
Jan 6, 2023

Secure Act 2.0 - What You Need to Know

Sponsored Content provided by Adam Shay - Director of VCFO Services, Red Bike Advisors

The Secure Act 2.0 was recently signed into law, and it has numerous changes for retirement rules and regulations. It is a sweeping set of legislation passed by Congress to address the needs of American workers and retirement. It expands access to employer-sponsored retirement plans, making it easier for business owners to offer 401(k)s and other plans without complex regulations or high costs. Here's what you need to know about the new law and how it could affect your retirement planning.

Employer Plan Impacts
Few benefits can have such a positive long-term impact on employee financial stability like the company retirement plans, especially 401(k)s. Some of the changes for employer sponsored plans, including 401(k)s, include:

  • Incentivizing employers to automatically enroll their employees in a workplace retirement plan.  Beginning in 2025 employers must automatically enroll eligible employees if they have a company retirement plan. With auto enrollment, employers can ensure their workforce is taking advantage of the power of compounding interest to achieve their retirement goals.
  • Allows part-time employees (who meet minimum annual hour requirements) the chance to qualify for employer sponsored plans - a major benefit considering nearly 17 million Americans work part-time jobs.
  • Roth elections can be made for employer matching contributions.  This will give employees greater flexibility with pre and post-tax dollar availability upon retirement.
  • Employers can treat employees’ student loan payments as if they were employer matches of 401(k) contributions.  This should encourage retirement savings by employees burdened by student debt.
  • Beginning in 2025 increases catchup contribution limits for individuals 60-63.  This will result in two different thresholds and amounts for catchup limits.
  • If you are starting a new retirement plan for your company, be sure to investigate the potential tax credits associated with it.

Required Minimum Distributions (RMDs)
RMDs were implemented in order to ensure that individuals eventually pay tax on pre-tax retirement contributions.  Starting in 2023, the RMD age is increased to 73 for certain individuals.  In 2032 the RMD age increases even more to age 75 for certain individuals.

Calls to Action
The Secure Act is a comprehensive and broad piece of legislation that impacts many aspects of retirement plans.  Implementation dates on the various pieces vary and all details / specifics could not be covered in this article.  Be sure to have a conversation with your tax and/or financial advisors before acting upon any mentioned Secure Act 2.0 changes.  If you have an existing 401(k) plan it may make sense to connect with your plan administrator to determine if there are any changes you should make.  If you need help from us, feel free to reach out.
 

Other Posts from Adam Shay

Redbikeadvisors block[55]
Ico insights

INSIGHTS

SPONSORS' CONTENT
Jasonpathfinder3

What You Need to Know About SECURE 2.0 and Its Effect on Retirement Plans

Jason Wheeler - Pathfinder Wealth Consulting
Headshots march websized 2

Is Your Commercial Roof Ready for April Showers?

David Grandey - Highland Roofing Company
Dave sweyer 300 x 300

Insights into the 2023 Leasing Market in Wilmington, NC: What You Need to Know

Dave Sweyer - Sweyer Property Management

Trending News

Conservation Group Signs $8M Deal To Buy The Point On Topsail Island

Audrey Elsberry - Mar 26, 2024

Rezoning Could Bring 123 Townhomes To Growing Leland Corridor

Emma Dill - Mar 25, 2024

N.C. Ports Officials React To Baltimore Bridge Collapse

Audrey Elsberry - Mar 26, 2024

Engineering Firm Hires Four Employees

Staff Reports - Mar 26, 2024

National Organization Bestows Top Award On Cape Fear Professional Women In Building

Staff Reports - Mar 26, 2024

In The Current Issue

Berries, A Battlefield And More In Pender

The N.C. Blueberry Festival, founded in 2003, is one of several events in Pender County that have drawn more attention over the years....


Hacking Cyberdefense Shortage

A shortage of cybersecurity professionals influenced professor Ulku Clark and her team to slowly evolve UNCW’s offerings to now include eigh...


INFO JUNKIE: Jack Fleming

Jack Fleming, owner of Socialry Marketing & Scourz and emcee for 1 Million Cups Wilmington, shares his media and tech picks....

Book On Business

The 2024 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2023 Power Breakfast: Major Developments