What are the other changes that will be implemented when the new legislation is enacted?
A significant percentage of younger employees cannot participate in the 401(k) plans that are offered by their employers because of the financial impact of student loan payments.
When and if these changes are implemented, employers will be able to provide 401(k) matches for employees that make these payments. Another change would automatically enroll all eligible employees into their employers’ retirement savings plans.
The 401(k) catch-up contribution for older employees would go up to $10,000 for people that are 60 years of age and older. In the Senate bill, the increase would be in place without an age limit, and there is a three-year window (62-64) in the House bill.
There is a savers credit for low and moderate income people that contribute into retirement savings plans. The Securing a Strong Retirement Act or SECURE Act 2.0 would expand the credit so more people can qualify, and the amount of the credit would be increased.