Three New Retirement Rules That Congress May Pass 

If Congress agrees on a colossal spending bill this week, new retirement rules that might make it simpler for Americans to accrue retirement savings and make it less costly to withdraw those assets could be implemented soon.

The Secure 2.0 retirement savings measures were compiled from a House-approved law and two proposals that passed Senate committees.

As TIAA President and CEO Thasunda Brown Duckett put it, Safe 2.0 will assist in raising savings, enable broader access to employer retirement plans, and offer more people an opportunity to receive a secure income stream in retirement.

Mandatory 401(k) enrollment plans will be required.

Automatic enrollment in a workplace retirement savings plan may become the norm for most new programs offered by employers. (At the moment, it’s up to the discretion of individual businesses.) The responsibility for not taking part would therefore fall on the employee.

To comply with Secure 2.0, businesses would have to establish an initial employee contribution rate of at least 3% and no more than 10%, with annual increases of 1% after that taking the cap on employee contributions to at least 10% and no more than 15%. 

The clause would take effect on or after December 31, 2024.

Employers Facilitate the payment of student loans

Paying down college loans might put a damper on retirement planning. With Secure 2.0, companies could contribute to an employee’s retirement plan in proportion to the number of their qualifying payments against student loans. In that manner, the worker would always be able to count on contributing to their retirement fund.

The clause would become active on January 1, 2024.

Employers would assist staff in establishing and gaining access to savings accounts.

If you take money from your 401(k) before you turn 59 and 1/2, you’ll have to fork up an additional 10% as an early withdrawal penalty.

Secure 2.0 may alleviate workers’ concerns about contributing to a tax-deferred retirement plan due to the possibility of needing to withdraw funds for unexpected expenses. Workers could access up to $1,000 per year without incurring fees if implemented. Employees would still be responsible for paying income tax in the year the withdrawal is taken, but they would be eligible for a refund if they paid it back within three years.

They will not be able to make another emergency withdrawal until the three-year repayment period has ended if they do not refund the exit.

The clause would become effective after December 31, 2024.