SECURE 2.0 Act Brings Major 401(k) Changes

The SECURE 2.0 Act, effective from 2025, introduces significant changes to 401(k) plans, including increased contribution limits and a 'super catch-up' provision for individuals aged 60 to 63, allowing them to contribute an additional $11,250 for a total of $34,750. This aims to help those nearing retirement enhance their savings capacity. Despite these opportunities, a significant portion of the American workforce still lacks substantial retirement savings, with many over 65 having less than $100,000 in their 401(k) accounts, as reported by GOBankingRates. Additionally, FIRE (Financial Independence, Retire Early) strategies emphasize calculating a retirement fund based on projected expenses and years in retirement, with a study suggesting that the required savings may be slightly lower than traditionally estimated. With inflation and market performance impacting retirement planning, individuals are encouraged to seek financial advice to optimize their savings and withdrawal strategies.