Earlier this year, the U.S. House of Representatives passed a new retirement bill called Secure 2.0, designed to build off Secure Act 2019. The new bill aims to make it easier for workers to prepare for retirement. This version of Secure Act 2.0 passed by the House requires most employer-sponsored retirement plans to enroll new employees automatically. This makes it easier for student loan borrowers to save and lower retirement plan administration costs for small businesses.
Currently, the Senate is working on two separate pieces of legislation that should be combined into one package. The Senate’s effort would ultimately reconcile with the House bill. Multiple provisions in the Senate bills overlap with the House’s. However, a handful of additional provisions include access to an emergency fund in your 401(k).
Secure Act 2.0
The following explains how Secure Act 2.0 would allow individuals to save more:
- It expands automatic enrollment in retirement plans
- It promotes the Saver's Credit
- It raises catch-up contribution limits
- It offers extra assistance to student loan borrowers
In addition, this act would improve current retirement plans by:
- Delaying required minimum distributions
- Making it easier to buy annuities
Finally, Secure Act 2.0 would lower costs for employers by:
- Granting tax credits for small businesses
- Supporting small 403(b) plans
- Easing up on plan paperwork
Diving Deeper Into The New Law
When looking at the provisions both the House and Senate have made, it would certainly help retirees. However, it ultimately avoids the heart of the retirement crises – half of Americans don’t save for retirement. Secure Act 2.0 doesn’t support workers who slip through the cracks or move from job to job where they go months or even years without saving for retirement. Retirement savings plans aren’t universally covered, which accounts for a large part of the ongoing American retirement crisis.
What You Can Do As A Business Owner
It is more common for individuals to contemplate getting a procedure that will benefit them now rather than saving that money for retirement. While others think they can’t afford to save for retirement. GMS is here to provide guidance on the best plan for your employees. Offering retirement plans is essential for recruiting and retaining quality employees. However, it’s a benefit that comes along with a lot of complexity and risk. GMS helps cut costs, reduce stress, save time, and offer the benefits your employees need. Contact us today to learn more.