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Saving for retirement may get easier—SECURE Act 2.0?

Updated: Apr 24, 2022

RL112 - Saving for retirement may get easier—SECURE Act 2.0?

Today on the Retirement Lifestyle Show, Erik Olson and Adrian Nicholson break down the new features of the proposed SECURE Act 2.0. They discuss how the act will improve retirement planning, the potential tax consequences to expect from the plan, and the best times to increase your catch-up contributions.

[02:52] The SECURE Act 2.0

[06:05] Required Minimum Distributions in The SECURE ACT 2.0

[07:24] What is a Required Minimum Distribution (RMD)?

[09:15] Potential Tax Consequences From the New RMD Rules

[11:20] Taxes, Life Expectancy, and Retirement Planning

[13:12] How to Plan For Qualified Charitable Distributions

[18:50] How the Auto-Enrollment Feature Will Improve Retirement Saving

[23:00] Lucrative Retirement Saving Incentives

[24:10] How and When To Increase Your Catch-Up Contributions

[26:20] Roth Conversions and Catch-up Contributions

[32:05] The Expected Boost in Saver's Credit

[35:57] Matching Contributions For Student Loan Payments

[42:10] Changes to Expect From Your 403B Plan

[45:18] Parting Thoughts

For more links and the full show notes keep scrolling down!

Roshan Loungani can be reached at or at 202-536-4468.

Erik Olson can be reached at or 815-940-4652.

Adrian Nicholson can be reached at or at 703-915-8905.

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Full Show Notes:

What to Expect From the New SECURE Act 2.0

Planning for retirement is undoubtedly one of the most important things you'll ever do for your future self. Even with that in mind, unfortunately, most Americans don't save for retirement. The interesting thing is that it's not like they don't want to; they just can't. The good news is that the way you plan and save for retirement may soon change. The newly proposed SECURE Act 2.0 is making its way through congress, with most people predicting it being passed into law after the House passed it by an overwhelming vote of 414 to 5. The Senate is working on its own version of the bill, but we don't see anything preventing the bill from being signed into law.

If passed into law, the bill would require most employer-sponsored retirement plans to enact measures such as automatically enrolling workers and lower retirement plan administration costs for small businesses. This will not only encourage people to save more, but also try to help the people who are still paying student loans or have the tendency of jumping from job to job.

Here are some of the main talking points from the bill.

  • Boost in the Saver's Credit. SECURE Act 2.0 would increase the tax credit to 50% of your retirement contribution, although at a $1,500 cap. It also removes income limits and increases the number of taxpayers who qualify for this benefit.

  • Mandatory auto-enrollment for new retirement plans. New 401(k), 403(b), and Simple IRA plans must use automatic enrollment. People with these plans would be automatically enrolled with a pre-tax contribution of 3% of pay, increasing 1% annually up to 10%. However, the rule will only apply to new plans, not existing ones.

  • Increase catch-up contributions. People of age 50 and older already can contribute an extra $6,500 to a 401(k) or $3,000 to a Simple IRA. If the SECURE Act 2.0 goes through, the bill will raise this limit to $10,000 for those who are 62, 63, and 64.

  • Matching contributions for student loan payments. Younger savers with outstanding student loans often miss out on retirement savings and the matching contributions they could have received. SECURE 2.0 would allow employers to make matching contributions tied to student loan payments, giving them a jump start on their future.

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All opinions expressed by podcast hosts and guests are solely their own. While based on information that they believe is reliable, neither Arete Wealth nor its affiliates warrant its completeness or accuracy, nor do their opinions reflect the opinion of Arete Wealth. This podcast is for general informational purposes only, and should not be regarded as specific advice or recommendations for any individual. Before making any decisions, consult a professional.

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