Big changes are coming to your 401(k). Here’s what you need to know
Employee benefits attorney Lake Moore was interviewed for an article by CNN Business writer Nicole Goodkind about proposed efforts by Congress to enhance 401(k) plans as a way to help Americans save more for retirement. The proposed changes include implementing an automatic enrollment feature, increasing catch-up contribution limits for workers between the ages of 62 and 64, delaying mandatory withdrawals until age 75 (up from age 72) and limiting tax penalties on those who fail to withdraw the required minimum from their accounts after age 75, and allowing certain part-time employees to contribute to a retirement account.
Another proposed change to 401(k) plans in the SECURE 2.0 Act targets workers who delay contributing into a retirement fund until they have paid off their student loans in full and, therefore, lose out on years of potential savings. The proposed solution would allow employers to treat student loan repayments as elective retirement account deferrals and provide a matching contribution to their 401(k) accounts.
“The earlier you do [invest], the more those investment gains can multiply,” said Moore.