What Is a Starter 401(k)?

Starter 401(k) plans make it easier for employers to offer a retirement plan to employees and for employees to save for their future.

A couple who embraced early retirement sit on the beach together.
(Image credit: Getty Images)

The fear of not having enough money to last throughout retirement is real. The SECURE Act, which was officially enacted on Jan. 1, 2020, was drafted to address this problem, by changing a variety of retirement account rules. Fast forward to 2022, when Congress went one step further with the SECURE 2.0 Act of 2022 and the creation of Starter 401(k)s.

In 2020, about 75% of non-retired adults had at least some savings set aside for retirement. About 25% did not have any, according to the Federal Reserve. Today, of the non-retirees who have some type of retirement account, only 40% believe their retirement savings are on track.

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Kathryn Pomroy

For the past 18+ years, Kathryn has highlighted the humanity in personal finance by shaping stories that identify the opportunities and obstacles in managing a person's finances. All the same, she’ll jump on other equally important topics if needed. Kathryn graduated with a degree in Journalism and lives in Duluth, Minnesota. She joined Kiplinger in 2023 as a contributor.