More SECURE 2.0 Retirement Enhancements Kick in This Year
Saving for retirement gets a boost with these SECURE 2.0 Act provisions that are starting in 2025.
Starting this year, the SECURE 2.0 Act introduces several important changes that can significantly impact your retirement savings. Here’s what you need to know to make the most of these new provisions:
Automatic enrollment in retirement plans. Beginning this year, new 401(k) and 403(b) plans will automatically enroll eligible employees. This means that if you start a new job or your company starts a new workplace retirement plan, you’ll be automatically enrolled in the plan with a contribution rate of at least 3%, which can increase annually up to 15%. This feature helps ensure that you start saving for retirement right away, even if you don’t take any action.
Higher catch-up contributions. If you’re age 60 to 63, you’ll be able to make higher catch-up contributions to your retirement plan starting this year. The new limit will be the greater of $10,000 or 50% more than the regular catch-up amount. This change is designed to help those nearing retirement age boost their savings.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Improved access for part-time workers. SECURE 2.0 reduces the participation requirement for long-term, part-time workers from three years to two years. This means that if you work part-time for a long period, you’ll be able to participate in your employer’s 401(k) plan sooner, giving you more time to save for retirement.
Retirement savings lost and found. The Department of Labor will create a national online searchable database to help you find lost retirement accounts. This can be particularly useful if you’ve changed jobs multiple times and lost track of your retirement savings.
Automatic portability. This provision makes it easier to transfer your retirement savings from one employer’s plan to another when you change jobs. It helps ensure that your retirement savings stay with you, no matter where you work.
The bottom line
The provisions in SECURE 2.0 create several opportunities to enhance your retirement readiness. Here’s what you can do:
- Take advantage of automatic enrollment and auto-escalation. If your new employer offers these features, they can help you save more effortlessly.
- Maximize catch-up contributions. If you’re eligible, make sure to take full advantage of the higher limits to boost your retirement savings.
- Participate in your employer’s plan. Whether you’re a full-time or part-time worker, contributing to your employer’s retirement plan can significantly impact your future financial security.
- Keep track of your retirement accounts. Use the new lost-and-found database to ensure you don’t lose track of your savings.
- Transfer your savings when you change jobs. Make use of automatic portability to keep your retirement savings intact.
Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies should consult their financial professional.
Franklin Templeton, its affiliated companies, and its employees are not in the business of providing tax or legal advice to taxpayers. Taxpayers should seek advice based on the taxpayer’s particular circumstances from an independent tax adviser.
Related Content
- New SECURE 2.0 Super 401(k) Catch-Up Contribution for Ages 60-63
- SECURE 2.0 Retirement Savings Changes to Know
- New Rules for Retirement Savings Taking Effect in 2025
- Three Changes Coming for Social Security in 2025
- Three Medicare Changes on the Horizon for 2025
-
Is Home Insurance Tax Deductible?With home insurance rates on the rise, you might be hoping to at least claim the cost as a tax deduction. Here's what you need to know ahead of tax season.
-
The December Jobs Report Is Out. Here's What It Means for the Next Fed MeetingThe December jobs report signaled a sluggish labor market, but it's not weak enough for the Fed to cut rates later this month.
-
Trump Signals Plan to Ban Institutional Investors From Buying Single-Family HomesThe president says the move could improve housing affordability. Here’s what the data shows about investor ownership, recent buying trends and what it could mean for homebuyers.
-
Is Home Insurance Tax Deductible?
With home insurance rates on the rise, you might be hoping to at least claim the cost as a tax deduction. Here's what you need to know ahead of tax season.
-
The December Jobs Report Is Out. Here's What It Means for the Next Fed Meeting
The December jobs report signaled a sluggish labor market, but it's not weak enough for the Fed to cut rates later this month.
-
4 Simple Money Targets to Aim for in 2026 (And How to Hit Them), From a Financial PlannerWhile January is the perfect time to strengthen your financial well-being, you're more likely to succeed if you set realistic goals and work with a partner.
-
I'm a Wealth Adviser: Everyone Needs an Estate Plan (Seriously, Even You)If you've acquired assets over time, even just a home and some savings, you have an estate. That means you need a plan for that estate for your beneficiaries.
-
How to Be a Smart Insurance Shopper: The Price Might Be Right, But the Coverage Might Not BeChoosing the cheapest policy could cost you when you have a loss. You'll get the best results if you focus on the right coverage with the help of a good agent.
-
7 Reasons Why Your Portfolio Needs Short-Term Bond ETFsMoney market funds are a safe option for your cash, but ultra-short and short-term bond ETFs also deserve consideration. Here are seven reasons why.
-
Nasdaq Takes a Hit as the Tech Trade Falters: Stock Market TodayThe Dow Jones Industrial Average outperformed on strength in cyclical stocks.
-
I'm a Wealth Planner: Forget 2026 Market Forecasts and Focus on These 3 Goals for Financial SuccessWe know the economy is unpredictable and markets will do what they do, no matter who predicts what. Here's how to focus on what you can control.
