Saving for Retirement Just Got More Complicated
The recent passage of the Secure Act 2.0 introduced fresh opportunities for retirement savings, but it also brought along some potential challenges that could catch savers off guard. Being aware of these possible drawbacks can enable you to make more informed decisions or, at least, be ready for future implications.
Our CEO Marianela Collado, CPA/PFS, CFP®, CDS® was recently quoted in NerdWallet, discussing the changes introduced by Secure Act 2.0 to catch-up contributions and company matches for workplace plans. One potentially problematic issue arises with the provision for last-minute catch-up contributions, where workers aged 60 to 63 can make larger contributions to their retirement plans. While this option may be helpful to some, it may not be feasible for those whose income are declining as they approach retirement. Marianela emphasized that it’s essential for individuals to start saving for retirement early, as no amount of catch-up contributions can replace the power of starting to save early in one’s career.
The changes brought about by the Secure Act 2.0 add complexity to retirement planning, making it crucial for individuals to consult with financial advisors to ensure they are saving enough in the right ways to secure a comfortable retirement.
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