Weekend Reading: Could SECURE Act 2.0 Fix the Retirement Crisis?

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Weekend Reading

What could SECURE Act 2.0 mean for your retirement strategy? While this 146-page legislation proposal contains an overwhelming amount of information, you can get educated on the high-point provisions in the article from Forbes below.


You’re more than likely well-versed on retirement strategy impacts brought by the passing of the 2019 SECURE Act, but here’s a new bill sweeping its way through Congress: SECURE Act 2.0. It's officially named the Securing a Strong Retirement Act, and it’s attempting to help alleviate the retirement insecurity issues we see today.

In short: Among other changes, this bill would require most employer-sponsored retirement plans to automatically enroll workers, help student-loan borrowers accumulate savings, and lower retirement plan administration costs for small businesses. It aims to help individuals save more and retire confidently, but with nearly half of Americans not saving for retirement in the first place, it has its work cut out.

Here are a few ways SECURE Act 2.0 is taking on the national retirement crisis:

  • Expanding automatic enrollment – It would require employers that offer 401(k), 403(b), and SIMPLE IRA plans to automatically enroll all new, eligible employees at a three percent deduction level that ticks up by 1 percent annually until reaching 10 percent
  • Raising catch-up contribution limits – It would allow annual adjustments as inflation rates change, and permit those over age 60 to deposit an additional $10,000 (indexed to inflation) into their 401(k)s and 403(b)s, and $5,000 into SIMPLE IRAs
  • Delaying required minimum distributions (RMDs) – It would increase the age at which you have to begin taking withdrawals from your retirement accounts to 75, instead of age 72
  • Nixing RMDs for those with less in savings – The bill states that those with less than $100,000 in retirement savings (indexed for inflation) are exempt from RMD rules

Keep in mind: The internet is abundant with opinion-based articles regarding new legislation, and this one is no different. In my opinion, while this legislation is appearing as though it will be highly beneficial to the average retiree, it seems the end goal is more tax revenue today, much like with SECURE Act 1.0. Keep an eye on this, as it may impact your planning near the end of the year.