Overview of the SECURE 2.0 Act and Its 2025 Impact

  • Brief background on the SECURE 2.0 Act
  • Why 2025 provisions matter for both employers and employees

Mandatory Automatic Enrollment for New Plans

How the New Rule Works

  • Automatic enrollment rate between 3% and 10% of pay
  • Annual automatic escalation requirements

Impact on Employees

  • Benefits of starting retirement savings early
  • Opt-out flexibility

Increased Catch-Up Contributions for Ages 60–63

New Catch-Up Limits in 2025

  • Greater of $10,000 or 150% of regular catch-up limit
  • 2025 limit = $11,250

Why This Matters

  • Helps those nearing retirement boost savings in peak earning years

Student Loan Payment Matching

How It Works

  • Employers match based on qualifying student loan payments

Benefits for Employees with Debt

  • Builds retirement savings without reducing loan repayment

Expanded Access for Long-Term, Part-Time Employees

Updated Eligibility Requirements

  • Reduction from 3 years to 2 years with 500 hours annually

Broader Participation Benefits

  • Expands access to retirement savings for more workers

Higher Contribution Limits

2025 Employee Contribution Cap

  • Limit increases to $23,500 for under age 50

Implications for Savers

  • More tax-advantaged space for retirement savings

Automatic Portability of Small Balances

New Balance Threshold

  • Balances up to $7,000 automatically rolled into new employer’s plan

Why This Helps

  • Reduces lost accounts and consolidates retirement savings

Emergency Savings Accounts (ESAs)

ESA Limits and Rules

  • Up to $2,500 post-tax, penalty-free withdrawals for emergencies

Benefits for Financial Security

  • Encourages short-term savings to avoid retirement withdrawals

New Roth 401(k) Options

Employer Match into Roth

  • Employees can choose Roth for employer contributions

RMD Changes for Roth 401(k)

  • No Required Minimum Distributions during account owner’s lifetime

Reduced Penalties for Missed RMDs

 New Penalty Rates

  • Reduced from 50% to 25%, or 10% if corrected quickly

Benefit to Retirees

  • Less severe consequences for honest mistakes

Delay of Roth Catch-Up Requirement for High Earners

New Effective Date

  • Roth catch-up requirement delayed until 2026

Impact on Employers and Employees

  • Provides more time for payroll and plan adjustments

Deadlines for Employer Compliance

Implementation Timeline

  • Must follow rules in 2025
  • Plan amendments due by December 31, 2026

How Cornerstone Portfolios Can Help You Navigate These Changes

 Services for Employers

  • Compliance reviews and plan design adjustments

Services for Employees

  • Contribution strategy planning and education sessions

Final Thoughts

  • The SECURE 2.0 Act brings big changes to 401(k) plans in 2025 — from higher contribution limits to new savings options and expanded access for more workers. Knowing these updates can help you save more, avoid mistakes, and make the most of your retirement plan.

Optimize Your 401(k) Plan for 2025

  • The SECURE 2.0 Act brings important updates to 401(k) plans in 2025 — and knowing how they affect you can make a big difference. At Cornerstone Portfolios, we help you understand these changes and create a plan that fits your goals, so you can feel confident about your financial future.

Schedule a review with Cornerstone Portfolios