Other Retirement Facts:
The SECURE Act was passed in 2019, but is now facing possible amendments being added for the SECURE Act 2.0. On today’s episode of the podcast, we talk through these proposed changes and what that means for you.
To start, the required minimum distribution (RMD) age may change from 72 years old to 75 years old. The good news is, this allows more time for you to go without RMDs if you want or have more time to do a Roth conversion. This will be phased in over time. The tax dollars will still be paid though through either your RMDs or when your heirs take it out after you pass.
Right now, you have to opt-in to a 401(k), but in the future, it might be a decision to opt-out as employers could auto-enroll you into a 401(k) program. This could help younger workers save from an earlier age in order to be better set up for retirement. For people closer to retirement age, the catch-up contributions could change to allow you to save more.
If you have big student loans and can’t afford to save for retirement while paying loans, this next amendment may help. Matching funds on student loan payoffs are being proposed. The question is, will companies do it?
Finally, a database may be created in order for people to find their lost 401(k) accounts. After leaving a job, unfortunately, a lot of people leave their 401(k) behind. A lost and found database of these accounts will help people better track down their accounts. Since younger generations are more likely to switch jobs frequently, this could be really beneficial.
Listen to the entire episode or skip ahead to hear more about a possible change using the timestamps below.
[1:35] – The SECURE Act is facing possible new amendments.
[1:59] – The RMD age could change again.
[6:11] – Employers could auto-enroll you into a 401(k).
[8:08] – Catch-up contributions could increase.
[11:19] – Matching funds on student loan payoffs are being proposed.
[13:58] – A database will be created to find older 401(k)s.
A Quotable Moment:
“I always joke with clients and say, the IRS has been a very patient creditor. They understand the game—they made all the rules, right? They know at some point they will be getting their tax dollars on this money.”