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The big changes that could be coming to your retirement accounts | Money Smart

Lawmakers in Washington are working on a bill that could transform your 401k.

LANCASTER, Pa. — Retirement accounts and savings could be in for a massive overhaul thanks to a new piece of legislation called the "SECURE Act" 2.0.

Tracy Burke, partner and investment consultant with Conrad Siegel, said the legislation is expected to reach President Biden's desk by the end of the year.

“It’s designed to help retirees and boost retirement savings," Burke said. "Hopefully, this will help some folks tackle what might be called a "retirement crisis" coming up.”

The bill would require most employer-sponsored retirement plans, like your 401K, to enroll eligible workers automatically at a 3% contribution, and that contribution would increase by 1% until you're contributing 10% of your paycheck each year.

Burke noted that this a key step for many who are starting to think about retirement in the near future.

"As you come close to that finish line you always want to make sure that you’re planning ahead...making sure you are comfortable with that pending retirement," he said.

However, within the legislation, workers would have the option to opt out or change their contribution level.

Another major provision: changes for those who are dealing with student loans.

The proposed act would allow the employers, Burke said, "if they wanted to, to match, up to a certain point, what the employee is putting in for student loans."

This would be a major change that would take the burden off "the young person...so they don't have to choose between paying off student loans...or really saving for retirement."

While the bill isn't finalized yet, support for reform of the retirement system is strong within the House and the Senate 

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