SECURE 2.0 Act’s Automatic Enrollment Provision: Pros and Cons

The new legislation requires employers to automatically enroll employees in retirement plans like 401(k)s. What are the benefits and drawbacks?

401k is spelled out on top of four stacks of coins that get progressively higher.
(Image credit: Getty Images)

While the SECURE 2.0 Act is making some key changes to the rules for retirement savings, one of its biggest is to employer-sponsored retirement plans. A new provision will require employers to automatically enroll eligible employees in new plans with a participation amount of at least 3%. Why was the change made? And is it a good money move? Let's break it down.

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Tony Drake, CFP®, Investment Advisor Representative
Founder & CEO, Drake and Associates

Tony Drake is a CERTIFIED FINANCIAL PLANNER™ and the founder and CEO of Drake & Associates in Waukesha, Wis. Tony is an Investment Adviser Representative and has helped clients prepare for retirement for more than a decade. He hosts The Retirement Ready Radio Show on WTMJ Radio each week and is featured regularly on TV stations in Milwaukee. Tony is passionate about building strong relationships with his clients so he can help them build a strong plan for their retirement.