SECURE 2.0 Act Helps Small Businesses Encourage Employees to Save
Enhanced credits for small-business retirement plans, expanded 401(k) options and other provisions support businesses that give their employees a leg up on saving.


The SECURE 2.0 Act includes several provisions to help small-business owners increase opportunities for their employees to save more.
About 36% of Americans can’t cover a $400 emergency expense, according to the Federal Reserve. And a study by the Ascent found that the savings balance for the average American is only $4,500.
If you’re reading this article, that’s likely not you. But if you own a small business, you might have stakeholders who fit that description.

Sign up for Kiplinger’s Free E-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.
Expanding the ways people can save is a good thing that we want to happen — especially if you are a small-business owner. The 2022 PwC Employee Financial Wellness Survey notes that financial stress and money worries impact several areas of employees’ lives, including both their productivity and attendance at work.
The human resources software services company ADP reports that in addition to lower productivity, financial strain also leads to higher health care costs.
While it’s not guaranteed that saving more will lessen your employees’ financial worries, it doesn’t hurt to try. There are a lot of provisions in the SECURE 2.0 Act that can help, and while people like to say the devil is in the details, I like to say the planning opportunities are in the details. This is especially true if you are a small-business owner looking to help your employees save more.
While planning always comes down to who you are, your unique situation and what goals you want to achieve, it’s helpful to be familiar with the provisions in the SECURE 2.0 Act and what they might mean for you as a small-business owner. As I always recommend, get in touch with your financial professional to discuss what these provisions mean for your specific situation.
Expanded Savings Opportunities
To address lower rates of saving among the average American, the SECURE 2.0 Act includes a variety of expanded savings opportunities, including:
Starter 401(k). This is a simpler version of the 401(k) that companies can set up without having to put in their own money. People can defer salary into this starter 401(k) up to the IRA limits and start saving for retirement in a more cost-effective, tax-advantaged way.
Whether this takes off is another question. Most of the people who aren’t saving enough either don’t make enough or don’t have enough access to retirement-savings vehicles. This attempts to make it easier for small businesses to set up plans with fewer limitations, less liability and less cost.
Saver’s Match. This is a match of savings of up to $1,000 from the government that will go into an individual’s retirement account, versus the credit we now get at tax time. This is designed to move the current tax credit to a retirement account to encourage more people to save for retirement. But you must be saving in a retirement account to receive the match.
Expanded mandatory automatic enrollment for new retirement accounts. If you were to establish a new 401(k) for your employees, there would be a requirement to set up automatic enrollment for them and a requirement that their salary deferral be automatically increased over several years. Research has shown that these types of provisions increase savings, which could mean your employees will be better prepared for retirement.
Enhanced credits for small-business retirement plan setup. This increases the credit for the administrative costs of setting up a new retirement plan from 50% to 100% in some cases, which is a nice additional benefit if you are a small-business owner.
Enhanced Retirement Contribution Changes
Some other provisions to be aware of have to do with IRA and other retirement plan contributions. Here are a few:
IRA catch-up limit indexed for inflation. For IRAs, we are allowed after age 50 to put an additional $1,000 in these accounts so long as we are still working, or our spouse has income. That amount hasn’t historically been indexed for inflation, but that $1,000 catch-up provision will now be indexed for inflation.
Retirement plan sign-up incentives. This makes it so you can give a small incentive — like a gift card — to your employees to encourage them to sign up for a retirement plan.
Consult a Professional
There are more than 100 retirement provisions in this bill that are changing retirement savings rules. It could take years of study to understand the rules, so it makes sense to leverage your resources in this area.
These are some things to talk over with your trusted financial professional, who is likely well-versed in the rules, so you can make the optimal decisions for your small business.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Jamie Hopkins is a well-recognized writer, speaker and thought leader in the area of retirement income planning. He serves as Director of Retirement Research at Carson Group and is a finance professor of practice at Creighton University's Heider College of Business. His most recent book, "Rewirement: Rewiring The Way You Think About Retirement," details the behavioral finance issues that hold people back from a more financially secure retirement.
-
Social Security Under Trump: Live Updates to Keep You Up to Date
Social Security Blog Social Security is undergoing big changes in 2025 under President Trump. Get live daily news, updates, tips and analysis to help you navigate the developments.
By Donna LeValley Published
-
Stock Market Today: Auto Tariffs Send Stocks Lower
The main indexes snapped their win streaks after the White House confirmed President Trump will talk about auto tariffs after the close.
By Karee Venema Published
-
Tax Advantages of Oil and Gas Investments: What You Need to Know
Tax incentives allow for deductions and potential tax-free earnings — benefits accessible only to accredited investors in small producer projects.
By Daniel Goodwin Published
-
Charitable Contributions: Five Frequently Asked Questions
Make the most of your good intentions by understanding the ins and outs of charitable giving. A good starting point is knowing what's deductible and what isn't.
By Stephen B. Dunbar III, JD, CLU Published
-
Financial Leverage, Part Two: Don't Say We Didn't Warn You
A lesson in how highly leveraged investments can benefit the first movers and crush the next round of buyers.
By Stephen P. Harbeck Published
-
Taxes in Retirement: What ESOP Participants Need to Know
Most Employee Stock Ownership Plans (ESOP) participants transfer company stock to an IRA starting around age 55, so taxes on that money have been deferred.
By Peter Newman, CFA Published
-
Would You Benefit From Investing in Cryptocurrency?
Understanding the complexity of adding digital currency to your investments is critical, especially since drastic price changes can happen very quickly.
By Robert Cannon, MBA, CFF®, AIFA® Published
-
Why Company Stock May Be Riskier Than Employees Realize
Stock compensation has its perks, but employees must be realistic (and unemotional) about their investments' prospects. Sometimes strategic sales are smart.
By Michael Aloi, CFP® Published
-
Can You Be Fired for Going to Work When You're Contagious?
What's an employer to do when an employee shows up at the office with a cold or the flu and spreads germs to co-workers?
By H. Dennis Beaver, Esq. Published
-
Social Security Fairness Act: Five Financial Planning Issues to Revisit
More money as a public-sector retiree is great, but there could be unintended consequences with taxes, Medicare and more if you're not careful.
By Daniel Goodman, CFP®, CLU® Published