Lawmakers are considering a massive $1.7 trillion spending bill. Folded inside are big changes to Americans’ retirement plans. Intended to boost retirement savings and access to 401(k) and individual retirement accounts, the Secure Act 2.0 is aimed at low- and middle-income workers, those strapped with student debt and people who may not yet have a long-term retirement account.
Will Hansen, the chief government affairs officer with the American Retirement Association, which advocated for Secure 2.0, told The Washington Post it’s the largest bill covering retirement in more than 15 years. “These provisions will increase the number of small businesses that are offering a plan, as well as increase the savings Americans are putting aside for retirement,” he said.
One of the key proposals for retirement savings includes automatic enrollment. Starting in 2025, most businesses would be required to automatically enroll employees in 401(k) plans. Employers would contribute 3 to 10 percent of their wages. Each year, the contribution would increase by 1 percent until it reaches at least 10 percent, though not more than 15 percent.
Businesses with 10 or fewer employees and businesses that have been open for less than three years would be exempt, along with church and government plans.
