What should you know about the proposed changes in the SECURE Act 2.0? We discuss a few of the possible impacts to you and your retirement plan.
Click on the timestamps below to jump to specific topics.
On today’s episode of the podcast we talk about the changes being proposed for the SECURE Act 2.0. What could change and how will that impact your plan?
The SECURE Act may raise the age limit for required minimum distributions (RMDs) from 72 to 75. What could this change mean? As people are living longer, this means potentially less distributions that have to happen over time. How could it impact future generations?
Another change is allowing employers to auto-enroll us into a 401(k). You’d still be able to opt out, but this will encourage people to invest into their retirement savings. As Social Security goes down, having a 401(k) is crucial. This may not affect retirees now but it will impact the younger generation, hopefully for the better.
Feeling behind on retirement savings? Catch-up contributions limits could increase and give you the power of compounding interest as you near retirement. Currently, the max contribution rate over the age of 50 is $26,000. The catch-up would go up to even more.
As college students graduate, many of them are drowning in student loan debt. A matching fund is being proposed, which Nathan thinks would be a really beneficial thing for young adults to be able to have the money to save toward retirement. This allows them to take advantage of compound interest from a young age as well.
Finally, have you ever lost a 401(k) from an old job? These orphaned accounts get lost and left behind all the time. A database is being proposed to find it and retrieve it more easily. Having these changes on your radar may help you stay in the know when it comes to your financial plan.
Listen to the entire episode or click on the timestamps below to skip ahead.
0:44 – Nathan shares about his recent vacation.
2:06 – What RMD changes could happen?
5:53 – Employers could start to auto-enroll us in a 401(k).
8:28 – Catch-up contributions would be added.
11:20 – Matching funds for student loan payoffs are being proposed.
13:44 – A database for orphaned retirement accounts.
A Point Of Wisdom:
The power of compounding interest is so good when you’re investing for 30+ years. It’s really powerful at that point.
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