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
Chris 16239425

‘Creative,’ An Adjective To Describe Your Accountant?!

Chris Capone - Capone & Associates
Jimheadshot

The Wilmington Construction Market: Trends, Recognition, and Challenges

Jim Hundley - Thomas Construction Group
Unknown 7112393341

Why Feasibility is Paramount to Success

Holly Segur - Lead Intuitively – Corporate Coaching

Trending News

City Of Wilmington Hires Carson As DEI Director

Staff Reports - May 21, 2024

A Topsail Island Estate Fetches Record-setting $4.5M

Cece Nunn - May 21, 2024

Noodles & Company Opens First Wilmington Location This Week

Emma Dill - May 21, 2024

Martin Named Executive Director Of Battleship North Carolina

Staff Reports - May 21, 2024

Wilmington, Myrtle Beach Top PODS List Of Most Moved-to Cities For Second Year

Emma Dill - May 20, 2024

In The Current Issue

Area YMCA Continues To Expand

The YMCA of Southeastern North Carolina has about 13,000 members; approximately 11,000 live in the greater New Hanover County area....


Submarine Museum Could Surface Here

​A museum would continue to support those military families and honor submarine veterans but also serve as a way to provide science and math...


Half Marathon Takes Whole Race State Title

The top half marathon in each state was crowned based on nearly 20,000 votes from runners across the country....

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

2024 Power Breakfast: The Next Season