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You might have heard a buzz about the SECURE 2.0 Act lately, but what does it really mean for you as an employee? Let’s break down the essentials and how this new legislation could impact your retirement planning and financial future.
What is the SECURE 2.0 Act?
The SECURE 2.0 Act is a major update to retirement savings laws, building on the original SECURE Act. These updates are important because they might impact how you plan and save for your future. These changes are designed to make saving for retirement easier and more efficient for everyone. Here's a list of the provisions and you can download the full report here.
Effective Now
- Roth Employer Contributions
- Hardship Distributions Can Be Self-Certified
- Required Minimum Distribution (RMD) Age Increase
- No Penalties for Early Withdrawals for Terminal Illnesses
- Employer Matching of Student Loan Payments
- Emergency Withdrawals
- “Side-car” Emergency Savings Account
- Penalty-free Distributions for Victims of Domestic Abuse
Effective 2025
- Higher Age 50+ Catch-up Limits for those Age 60-63
Effective 2026
- Catch-up Contributions Must Be Made as Roth for High-income Earners
How Does This Affect You?
These updates can significantly impact your retirement planning strategy. If you haven’t already, now is a great time to review your current retirement plan and see how these new provisions might benefit you. Consider talking to a financial advisor or your HR department to get tailored advice based on the latest changes.
Download the full report here.
