Retirement Retirement Planning

7 Ways SECURE 2.0 Could Benefit You in 2024

SECURE 2.0 could give you the boost you’ve been waiting for to move your savings journey forward.

couple discussing home economics
Updated Sept. 24, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

The SECURE 2.0 Act was signed into law by President Biden in late 2022. It includes some changes to the retirement saving laws that could help you get ahead financially.

As you save for the future, take a look at some of the ways the SECURE 2.0 Act could help you in 2024.

Earn cash back on everyday purchases with this rare account

Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!1

With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!

This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.

Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.

Apply for a Discover Cashback Checking account today

How SECURE 2.0 helps

Kirsten Davis/peopleimages.com/Adobe senior couple reviewing bills at home

Many of us know we should tuck away funds now when it comes to saving for the future. But the reality of most budgets makes saving easier said than done. That’s especially true when it comes to saving for long-term goals like retirement.

The SECURE 2.0 Act has made some helpful changes to retirement savings laws. These tweaks aim to make saving for your third act easier.

Self-funded emergency accounts instead of tapping 401(k)

K Seisa/peopleimages.com/Adobe A senior couple diligently conducts a budget review while working together on a laptop and examining various documents.

Life has a habit of throwing unexpected expenses your way. If you don’t have an emergency fund on hand, you might be left scrambling to cover the expense.

Some workers with savings invested in a 401(k) might withdraw funds from the account early to cover the immediate cost. The downside is that this action comes with penalties, and you’ll be taking a step back from your retirement savings goals.

To help solve this problem, the SECURE 2.0 Act allows employers to offer self-funded emergency savings accounts. Employees can have a portion of their salary directed to this account. Once they hit an emergency savings goal, the funds will be sent to the worker’s retirement account.

Employers can automatically enroll employees in emergency accounts

wutzkoh/Adobe business partnership coworkers using a tablet to analyze graph

In 2024, employers can automatically enroll qualifying employees and funnel 3% of the worker’s salary to the emergency fund. Although employees can opt out, this offers an automated way to save for unexpected expenses.

Earn $200 cash rewards bonus with this incredible card

There's a credit card that's making waves with its amazing bonus and benefits. The Wells Fargo Active Cash® Card(Rates and fees) has no annual fee and you can earn $200 after spending $500 in purchases in the first 3 months.

The Active Cash Card puts cash back into your wallet. Cardholders can earn unlimited 2% cash rewards on purchases — easy! That's one of the best cash rewards options available.

This card also offers an intro APR of 0% for 12 months from account opening on purchases and qualifying balance transfers (then 19.49%, 24.49%, or 29.49% Variable). Which is great for someone who wants a break from high interest rates, while still earning rewards.

The best part? There's no annual fee.

Click here to apply now.

Additional penalty-free withdrawal situations

motortion/Adobe  terminally ill mother

In the past, making an early withdrawal from your 401(k) usually resulted in a 10% penalty tax. If you make a withdrawal before age 59 1/2, the new rules expand the circumstances for when the withdrawal can be made penalty-free.

Some of the new penalty-free withdrawal situations include:

  • You have a terminal illness.
  • You can take out up to $22,000 to pay for expenses after a federally declared natural disaster.
  • You can take out up to $1,000 for unforeseeable or immediate financial needs due to a personal emergency.

You may only take a penalty-free withdrawal for one of the reasons listed above each year. If you make a withdrawal due to a particular reason, you can’t make a withdrawal for the same issue for at least three years.

Student debt help

JD8/Adobe graduation hat on dollar banknotes

Building a retirement nest egg can be difficult due to your student loan payments. The SECURE 2.0 Act offers a unique solution.

If you're making payments on your student loans, your employer can match that amount and contribute the funds to your retirement account. 

So, employees with a 401(k), 403(b), or SIMPLE IRA can take advantage of the benefits of matching funds even if their student loan payments prevent them from making a contribution to their retirement account.

Catch-up contributions

Nina Lawrenson/peopleimages.com/Adobe retirement couple budget

Savers age 50 and older can make catch-up contributions. In 2024, the catch-up contribution allows savers to contribute an additional $1,000 to their IRA. That’s on top of the regular limit of $7,000.

In 2025 and 2026, the catch-up contributions limits will grow. For savers starting late, the increased catch-up contributions could help pave the way for a more comfortable retirement.

Required minimum distributions don’t start until later

InsideCreativeHouse/Adobe elderly couple saving money

Required minimum distributions (RMDs) force you to start making annual withdrawals from your pre-tax retirement accounts. In the past, RMDs started when you reached age 70 1/2. Being required to take these funds each year could put pressure on your finances later on.

The SECURE 2.0 Act pushed back the RMD age. Now, you won’t have to take the RMD from accounts like your 401(k) or IRA until age 73. With this age increase, you can give your funds a bit more time to grow before pulling them out.

Find lost savings

fizkes/Adobe woman sit at desk manage budget

When you move from job to job, it’s not uncommon to lose track of a 401(k) or other workplace retirement account you started along the way. The SECURE 2.0 Act tasked the Department of Labor with creating a searchable database for retirement plans by the end of 2024.

If you’ve lost track of some funds, this forthcoming tool could help you recover them.

Bottom line

insta_photos/Adobe senior lady holding paper bill and calculating the monthly expenses on the calculater while sitting at the table at home.

Saving for retirement is a major financial task. It’s important to start early if you want to build wealth to carry you through your retirement. Even if you can’t save too much, investing any amount is worthwhile.

For savers with a lot of assets, it’s worth asking if you can retire early. A lifetime of saving could help you reach retirement earlier than you think.

Lucrative, Flat-Rate Cash Rewards

5.0
info

Wells Fargo Active Cash® Card

Current Offer

$200 cash rewards bonus after spending $500 in purchases in the first 3 months

Annual Fee

$0

Rewards Rate

Earn unlimited 2% cash rewards on purchases

Benefits and Drawbacks
Card Details