CWG Insight Series: SECURE Act 2.0 - A Big Boost for Retirement Savings
In April of 2020, I wrote an article on the passing of the SECURE Act and how it would greatly effect IRA inheritance planning. In December 2022, SECURE Act 2.0 was passed with the aim of helping boost retirement savings. Here’s a breakdown of the key provisions:
An additional provision in the Act focuses on encouraging small businesses to set up 401k plans for their employees. For businesses with less than 50 employees, there is a startup credit of 100% of administrative costs up to $5,000 (up from the current 50% credit) and additional credits for employer contributions on behalf of employees up to $1,000. The Act also allows small businesses who currently offer a Simple IRA plan to exchange it for a 401(k) plan without having to close down the plan and wait for a certain period of time.
While we felt the SECURE Act 1.0 provisions hurt generational wealth transfer, the 2.0 provisions provide many positive changes that we’ll look to implement into our client and business plans immediately.