Do you think about saving for your retirement and put away for your golden years?

In 2022, the Secure Act 2.0 was passed in an attempt to modernize and expand Americans’ defined contribution plans, like 401(k)s or 403(b)s. About 130 million Americans use these for retirement, according to BPAS Retirement Administrators CEO Paul Neveu.

There have been cumbersome administrative and tax-filing issues with the plans, but the goal of the Secure Act 2.0 is to urge workers to participate almost passively and make it easier for employers to offer to the employees.

Now, if not already enrolled, you will be automatically enrolled into a plan, so moving forward, you’d need to opt out instead of having your company ask you about opting in.

There are 750,000 different kinds of defined employer-based retirement plans, but still, 69 million do not participate in a workplace retirement fund, according to Neveu.

The Secure Act 2.0 also creates a $5,000 tax credit for employers to provide a plan; additional tax breaks; financial matches for employees; options for part-time workers; and more.

"There’s also an option to do student loan repayments to cover those in a match if a company would like to do that, and finally some enhancements to the self-correction program under the DOL and IRS to make it a more attractive program for employers to use,” Neveu said.

New plans that are started as of January and future months will be required to use automatic enrollment and automatic escalation. However this does not apply retroactively to existing plans as of now, he said. Right now for existing plans, that is an optional provision that an employer can elect or not elect.

Some states are even mandating a deduction into a state IRA for companies not providing a retirement plan.

In New York, the new law is called the Secure Choice Retirement Savings Program, a payroll-deducted IRA program. The state deadline is expected by 2024.