“The increase in catch-up contributions ... will impact quite a few folks and give them a greater ability to pour more pre-tax dollars into retirement accounts,” Primeau said. “The act also discusses indexing the IRA catch-up limit for those age 50-plus [currently $1,000], which means folks could contribute more to IRA accounts as well.”
SECURE 2.0 would also allow employees to provide matching contributions based on employees' student loan payments.
“The idea of allowing a student loan repayment to qualify for a matching employer contribution has some merit,” Armstrong added.
Expansion of Roth post-tax contributions to cover SEP (simplified employee pension) and SIMPLE (Savings Incentive Match Plan for Employees) IRAs will allow many clients to take advantage of tax-deferred growth that a Roth IRA offers, Zvoma said. Current law doesn’t permit a Roth option for SEP and SIMPLE contributions. “Employer matching contributions would now also be allowed on a Roth post-tax basis,” she added.
“I really like the idea of having catch-up contributions to employer plans go to the Roth portion of the employer plan,” added Mary Kay Foss, a CPA in Walnut Creek, Calif.
EARN may let advisors help clients in other ways.
The legislation, for example, requires the Treasury to create a "lost and found" database that would help account holders and their beneficiaries to recover assets from employer retirement plans.
“Many people change jobs these days and their former employers may not know where they are,” Foss said. “This will allow advisors to help their clients find lost benefits.”