- ORIGINAL NEWS
Paying down student debt could soon boost your 401(k) balance. Here’s how
- SUMMARY
A new provision in the Secure 2.0 Act allows employers to match their employees’ student loan payments with contributions to their retirement plans.
This helps ease the burden of student loan debt, which affects many individuals’ ability to save for retirement.
Companies can set their own matching rules, and eligible employees who meet certain criteria can benefit from this opportunity.
Keep in mind that contributions to your 401(k) are pretax and reduce your taxable income, so pausing these payments to focus on your student loan debt may result in a slightly larger tax obligation.
If you’re interested in this benefit, check with your company’s HR department and consider sharing Abbott’s “Freedom 2 Save” blueprint as a reference for implementing a similar program.
This new provision aims to address the challenge of student loan debt and encourage more employees to save for retirement.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“A provision in the Secure 2.0 Act of 2022, which had a delayed effective date of Jan. 1, 2024, allows employers to match workers’ student loan payments with contributions to their retirement plans.”
“Nearly half of student loan borrowers said their debt affected how much they were able to salt away in their retirement plans, according to a recent Morning Consult survey of about 500 borrowers between the ages of 18 and 39.”
Negative
“Outstanding student loan debt in the U.S. exceeds $1.6 trillion, and burdens Americans more than credit card or auto loan debt.”
“Moreland recommends employees who hope to see the benefit adopted at their company also share Abbott’s “Freedom 2 Save” blueprint, available on its website, when they make the case.”