Today’s Prep:
Do you know about the changes proposed in the SECURE Act 2.0? Eric shares a few of the highlights as well as his thoughts on the changes.
(Click the featured times below to jump forward in the episode)
Equipping Points:
Today on the podcast, we discuss the SECURE Act 2.0. While we have talked through the SECURE Act in the past, this is a whole new set of changes should it get passed. Which of these will play the biggest role in impacting your financial future?
When it comes to required minimum distributions (RMDs), the age only just recently changed to 72. With the SECURE Act 2.0, it could be pushed back even further to age 75. If that happens, who does this help? Remember, you can take the money out sooner than 75. This would just change when you are required to take it out. But what will this mean for your heirs?
Another element of the proposed SECURE Act 2.0 is allowing employers to auto-enroll their employees in a 401(k) program. This could have a big impact in helping people prepare for retirement, especially at a young age. This would change from an opt-in system for a 401(k) to more of an opt-out system if you didn’t want to participate.
There are a number of other possible changes. Catch-up contributions may be expanded. Matching contributions could be an option for people paying of school loans. In both cases, your future self benefits. A national database is also being proposed to track down lost accounts like 401(k)s and pensions.
Remember, all of these have yet to be passed. Have a conversation with your financial advisor to see how these could impact your financial plan.
Use the timestamps below to skip ahead or listen to the entire episode to hear more about the SECURE Act 2.0.
0:46 – What is the SECURE Act 2.0?
1:06 – What could be the new RMD age?
4:03 – Employers could auto-enroll employees in 401(k) program.
5:56 – Catch-up contributions would be extended.
7:38 – Matching funds on student loan payoffs.
9:32 – A national database could be started for lost accounts.
11:31 – What does Eric think about these possible changes?
Today’s Takeaway:
“The more you can save for retirement, the better your retirement is.“
-Eric Peterson
Related Resources:
Understanding The SECURE Act, Part 1
Understanding The SECURE Act, Part 2: Stretch IRAs
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