SECURE Act 2.0 is here, and this law adds over 90 new provisions to help Americans save through employer-sponsored plans. ADP is here to help you learn about the ins and outs of SECURE 2.0 and how businesses can take advantage of increased tax incentives.
In 2019, Congress passed the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) to help individuals better prepare for retirement. On December 29, 2022, the SECURE 2.0 Act was signed into law to address additional issues related to retirement and savings, creating new flexibility and accessibility to help individuals plan for a more secure future.
Learn about the key provisions that are part of the SECURE 2.0 Act, how they impact employers and employees, and which provisions are mandatory and which are optional.
Stay informed about today’s major issues, ensuring you’re ready for tomorrow’s challenges, including updates on spending bills and retirement plans.
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The SECURE 2.0 Act is designed to encourage more employers to offer retirement plan benefits and more employees to participate in saving for their future. The law does so by updating and adding new retirement account provisions, including:
If your small business doesn't currently offer retirement benefits, you could be missing out on major incentives. Many provisions include tax credits to offset the administrative costs of setting up and maintaining retirement plans. For example, small businesses with up to 50 employees can receive tax credits for up to 100% of plan start up and administrative costs for the first three years,* as well as up to $1,000 per employee earning $100,000 or less in additional annual tax credit for employer contributions to defined contribution plans.
* Up to the greater of $500 or $250 times the number of eligible non-highly compensated employees up to $5,000 (minimum $500).
The SECURE 2.0 Act impacts Roth contributions in several ways. Two important changes you need to be aware of are:
SECURE 2.0 helps employees save in a number of ways:
SECURE Act has over 90 provisions with various effective dates ranging from 2023 through 2027. Many provisions will become effective in 2024.
SECURE 2.0 Act increases the age requirement for participants to begin taking a Required Minimum Distribution (RMD) from 72 to age 73 in 2023, increasing to age 75 in 2033.
SECURE 2.0 Act does not address social security reform within any of its provisions. It is designed to make retirement plans more accessible to Americans and includes provisions to encourage them to save more.
SECURE 2.0 Act is broad legislation designed to help Americans save for their future through provisions that aim to expand access to retirement plans, increase savings opportunities for employees and streamline administration of employer-sponsored retirement plans, including 401k plans.