The Secure Act 2.0 will have a widespread impact on how Americans plan for retirement. One of the most exciting provisions may mean that Americans no longer have to choose between paying off student loans and receiving an employer’s contribution towards retirement.
This is especially timely since the pause on student loan payments has officially ended, and many people are scrambling to make room in their budgets for loan repayment. (For tips on doing this well, check out this article).
Beginning in 2024, qualifying student loan payments can be treated as elective deferrals by employers and awarded a match. This means employees can pay down their student loans without foregoing their employer's retirement match, a welcome change for the estimated 43.5 million Americans who have student debt. This is a great opportunity for employees to start saving for retirement early in their careers, while also managing their debt responsibly.
Of course, this is an optional provision, so many employers will overlook its importance. However, in an increasingly competitive job market, benefits are a key deciding factor when choosing where to work, sometimes weighing more heavily even than salary. Employers who choose to offer this benefit may edge out their competition by supporting the real needs of a dynamic workforce.