The new SECURE 2.0 law encourages employees to save for retirement, but its many provisions take effect over time
Employers and employees alike are generally familiar with 401(k) plans — retirement contribution plans that allow people to save money for retirement while deferring taxation on those funds. In the past 10 - 15 years, 401(k)s have evolved to address the needs of an ever-changing workforce — one that has not consistently planned well for financial security in retirement. In its Report on the Economic Well-Being of U.S. Households in 2022, the Federal Reserve found that while about 75% of non-retirees had some kind of retirement savings, only 31% of them reported thinking their retirement savings was on-track.
The latest iteration of the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 — commonly called SECURE 2.0 — is part of the retirement-planning evolution. Signed into law in December 2022, its intent is to encourage non-retirees to make better use of their 401(k) plans to save for retirement.
David B. Wentz, CEO of Tax Favored Benefits, a wealth management and retirement planning consulting firm based in Overland Park, Kan., gave a webinar in May to help equipment dealers offering 401(k) plans understand how SECURE 2.0’s more than 90 provisions could affect those plans. He and colleague Brandon Baedke, vice president of retirement plans for Tax Favored Benefits, discussed the important aspects of the act that are currently in effect as well as those taking effect in the near future.
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