New legislation could bring changes to 401(k) programs

CNN– Congress is taking action to help avoid a potential retirement crisis. A bill expected to reach President Joe Biden’s desk later this year could bring about new rules involving 401(k) programs.

If passed and signed, the legislation “Secure Act 2.0” could require most employer-sponsored retirement plans to enroll eligible workers automatically at a 3% level. That would increase by 1% until you’re contributing 10% of your paycheck annually, but workers would have the option to opt out or change their contribution level.

The plan would also delay mandatory withdrawals and limit penalties for those who fail to withdraw on time. It’s also a major change for part-time workers, who would be able to contribute to 401(k) plans for the first time.