Retirement rundown: How SECURE 2.0 changes 401(k) plans this year

Confused about the impact SECURE 2.0 will have on your 401(k) and retirement savings this year? Here's what to expect:

WHAT'S NEW: SECURE 2.0 includes 90 provisions that make 401(k) plans available to more employees, help to ease administrative burdens for plan sponsors, and address other financial challenges, like student loans and unexpected emergency expenses, that impact an individual's ability to save for retirement. But keeping track of what provisions will be implemented and when can be a headache for HR leaders and plan sponsors. Staying on top of the calendar can give employees a head start on their retirement savings this year.?

"I'd encourage employers to lean on their partners for best practices around implementing the new provisions," says Michael Conrath , chief retirement strategist at J.P. 摩根 . "For employers who might have been reticent in the past about offering a workplace retirement plan due to costs, SECURE 2.0 helps to remedy that issue."??

Here are four provisions that will take effect in 2024, and what employers need to do to prepare for these changes: 4 ways SECURE 2.0 will impact retirement in 2024

STUDENT LOANS: Starting this year, retirement provisions within SECURE 2.0 will allow employers to match a percentage of an employee's student loan payment and direct it into a retirement plan. However, employers may be dragging their feet when it comes to implementing this feature into their 401(k) plan, and may not even understand the basics of it to begin with, says Will Sealy , co-founder and CEO of Summer , a student loan navigation tool for employers.?

"A lot of employers have said, 'We're paying the debt for the employee so they can save for retirement.' And you can do that, but this provision is the opposite," Sealy says. "It's the employees paying off their student loans, and with that proof of payment, employers are able to use that as a contributing match to the retirement account."??

Get a full understanding of what this feature means for savers with loans: Understand SECURE 2.0's student loan provision to help employees with debt

EMERGENCY SAVINGS: For workers faced with unexpected expenses from medical care, auto repair, home maintenance, job losses or other surprises, SECURE 2.0's new emergency savings account feature could give some employees "a sidecar" cache to take money out of with no tax penalties and lock in more potential matching contributions, says Joe Buhrmann , a senior financial planning practice management consultant with eMoney Advisor.

"It's an opportunity that maybe could help attract new savers to retirement plans and maybe help them build better savings habits," Buhrmann said. "Typically there are some birthing pains with much of this new legislation and getting them into practice."

Here's what to know about these offerings: SECURE 2.0 created emergency accounts. Will 401(k) plans use them?