SECURE 2.0 Act: Required Minimum Distributions (RMD) and Age Limits Explained

Navigating the intricacies of retirement savings is vital for small business owners. The SECURE 2.0 Act has brought about pivotal changes in the realm of Required Minimum Distributions (RMDs) and Age Limits for retirement contributions. Understanding these modifications is crucial for optimizing retirement strategies in line with the latest legislation, offering greater flexibility and opportunities for both businesses and their employees.

Required Minimum Distributions & Age Limits Explained

The SECURE 2.0 Act has made noteworthy adjustments in the age criteria related to 401(k) plans. Specifically, the age at which individuals need to start taking Required Minimum Distributions (RMDs) from their accounts has shifted. Previously pegged at 70½, it’s now set at 72. Additionally, the act has eliminated the age limits for contributions, meaning individuals can now continue to contribute to their retirement savings without any age restrictions, provided they have an income.

Benefits for Small Businesses:

The alterations introduced by the SECURE 2.0 Act provide several advantages:

  1. Extended Savings Window: The opportunity to contribute for longer and the delayed start for RMDs grant employees more time for their investments to potentially grow. This change can boost participation rates substantially in company-offered 401(k) plans.
  1. Tailored Retirement Strategies: Without stringent age limits and with a revised RMD age, businesses and their workforce can customize retirement paths, accounting for personal life circumstances, health factors, and financial goals.
  1. Enhanced Employee Morale and Retention: By aligning retirement offerings with the SECURE 2.0 Act’s age-related modifications, businesses can appeal to and retain a seasoned, competent workforce.

In conclusion, the SECURE 2.0 Act’s updates surrounding Required Minimum Distributions and age limits offer a revamped retirement planning framework for small business owners. Embracing these changes can foster a flexible financial landscape, ensuring businesses and their employees have retirement plans that align with evolving individual needs.

For further insights on tailoring retirement plans in accordance with the latest legislative nuances, read more with the saveday blog.

From Novice to Chef: How My Air Fryer Taught Me Consistency in Cooking and Investing

Hey there savvy savers!

It’s Emma, your go-to girl for all things finance and… cooking? That’s right! Today, we’re dishing out lessons from my kitchen that surprisingly reminded me of the principles of smart investing. My trusty air fryer, beyond serving up the absolute crispiest potatoes, turned out to be an unexpected teacher in the importance of consistency, both in the kitchen and in my investing journey with saveday. 

Cooking Up Savings with the Air Fryer

My mom is an air-fryer-evangelist. She taught me all about how it could whip up healthier meals without excess oil. But when I started, much like diving into a new investment, I was both excited and skeptical. Yet as I experimented, a pattern emerged. The consistent heat circulation ensured that my dishes were cooked perfectly every time. No more soggy centers or burnt edges; just golden-brown perfection, bite after bite. 

Moreover, consistently using the air fryer made me realize the savings I was racking up. Fewer dining-out expenses and reduced grocery bills (since I wasn’t wasting ingredients on my botched cooking experiments) were clear indicators of how consistency pays off. 

The Parallel World of Investing

This got me thinking about my finance journey. Just as the steady circulation of the air fryer leads to optimal cooking, consistent investing with saveday helps optimize my financial growth. For me, it’s not about throwing all your money in at once or investing sporadically. It’s about the commitment to a regular, disciplined approach that yields results over time. Just take a look at how much a consistent $5 a week can grow over time.

Graph Generated by Nerdwallet

When you partner with saveday for your 401(k) plans, think of it as setting the temperature on your air fryer. You’re laying down the groundwork for a recipe that, with time and consistency, will provide delectable returns. 

Small Inputs, Compounding Outcomes

With my air fryer, small, consistent actions— like preheating, using minimal oil, or setting the timer— translated to mouth-watering meals every time. Similarly, in the realm of finance, regular contributions to your savings or 401(k) can lead to substantial growth over time, thanks to the magic of compound interest. 

Consistency Over Time is Key

Just as you wouldn’t crank up the heat on your air fryer hoping to get quicker results (spoiler: like me, you’ll probably just burn your food), it’s essential not to seek shortcuts in investing. Instead, setting a consistent contribution rate and sticking to it, irrespective of market highs or lows, is a strategy that often proves successful in the long run. 

Concluding Bites

In the end, my air fryer taught me that whether you’re cooking up crispy fries or a secure financial future, consistency is your best ally. By maintaining a disciplined approach, being patient, and understanding the process, you can ensure that your investments, much like your meals, turn out just right. 

For more tips on mastering the art of saving, read on here!

Yours in flavor and finance,

-Emma

How Small Businesses Can Claim More Tax Incentives

The SECURE 2.0 Act is legislation geared to help relieve the cost of 401(k) plans for small businesses. One of the clearest ways it does this is through tax incentives. When partnering with a saveday 401(k), which is $0 cost-to-employer, these savings can only compound. But what exactly are these tax incentives, and how can they benefit small businesses?

1. Startup Credits Enhanced:

Small businesses currently have the option to claim a tax credit for 50% of the startup costs involved in creating and administering a plan, with an annual maximum credit of $500. However, with the implementation of the SECURE 2.0 Act, this credit is increased. Now, businesses can claim a credit equal to either (a) $500 or (b) the lesser of $250 multiplied by the number of non-highly compensated employees eligible to participate in the plan, or $5,000. This change means that businesses can potentially access a maximum credit of $5,000 for a period of three years, which significantly offsets their initial costs.

2. Credit for Automatic Enrollment:

In addition to the startup credits, the SECURE 2.0 Act introduces a new credit for small businesses that add automatic enrollment to their new or existing retirement plans. This credit is worth $500 and can be claimed for three years.

3. Extended Period for Plan Adoption:

Businesses now have an extended period to adopt new retirement plans. So that means, rather than having to establish a plan by the end of the business year, businesses can set up a plan as late as their tax filing deadline, including extensions. This flexibility can assist in better financial planning for the tax credits.

Overall, the introduction of enhanced tax incentives for small businesses in SECURE 2.0 is a clear nod towards promoting retirement savings and making it more affordable for businesses to provide such plans. By partnering with a platform like saveday, which already minimizes costs, small businesses can leverage these incentives to the fullest, offering robust retirement benefits without a heavy financial burden.

Ready to learn more about how a 401(k) can transform your small business? Read more here. 

Viral Tik Tok Challenge vs. 401(k): Which Saves You More?

Welcome back, savvy savers!

It’s Emma here, serving up fresh insights straight to your screen. I (like many of us) occasionally pull myself into the digital whirlwind of Tik Tok- the platform where dancing and financial advice can coexist peacefully! That’s how I stumbled upon the viral 100 Envelopes Challenge. As an ardent believer in the power of my saveday 401(k), I had to put the numbers to the test. Which is better at saving me money: the 100 Envelopes Challenge or my trusty 401(k)?

The 100 envelopes challenge, explained

Here’s the brief rundown: whoever wants to participate will number envelopes from 1 to 100. Every payday, an envelope is picked at random, and the participant must stash the amount of cash corresponding to its number inside. Sounds straightforward, right? Now, let’s break down its savings potential. 


If you follow this challenge faithfully after each payday on a bimonthly basis, you’d amass $5,050 over 50 months. Not bad for a social media challenge!

Now, let’s see if it holds up to the mighty saveday 401(k)…

Behold: the power of the 401(k)

Investing in a 401(k) does more than just save. It helps your money grow. That growth is powered by compounding. Let’s see what a 10% return on your account that’s compounded monthly can look like with $5,050.

After 50 months more that cash will be worth $7,642.04 without you having to lift another finger. That’s $2,592.04 more than if you had just let it sit for all that time.

But what if you decided to do the 100 Envelope Challenge and 401(k) investing all at once? Let’s see what you can do when you add $5,050 for another 50 months.

After waiting, $19,206.55 would all be yours. 

If you decide to wait and let it grow for an even longer time, let’s say 30 years, you will have earned $251,777.07 by the end of it.

That’s $239,085.03 in pure profit. 

To sum it all up, I think the 100 Envelope Challenge can be an amazing introduction to your savings potential. But to really unlock your supercharged financial future, a 401(k) is the way to go. Coupling your saveday superpower with this viral challenge can lead to big savings later on. Overall, I’m calling it a win for 401(k)s and a win for people like us trying to save. 

Hungry for more saving insight? Saveday has a buffet of tips and tricks ready for your tastebuds over at their blog. Read on to discover how delicious your future can be!

Happy Saving,

-Emma

Understanding 401(k) Vesting: Securing Your Retirement Funds

Hey savvy savers!

Emma here, back with another dose of financial wisdom. Today, I’m diving deep into a term that floats around a lot with 401(k)s: vesting. Unfortunately, it’s not about thrifting a quirky vest with your friends (but I’m free Saturday if that sounds fun to anyone else). Vesting, in the 401(k) world, plays the role of determining when you officially “own” your retirement fund. 

What Is Vesting?

Vesting refers to the amount of time you need to be with your employer before you “own” or have the full right to the employer contributions made to your 401(k) account. Now, you always have 100% ownership of the funds you contribute from your paycheck. The schedule comes into play with the additional funds your employer might toss into the mix. 

Types of Vesting Schedules

  1. Immediate: You own 100% of your employer’s contributions as soon as they hit your account. So, if you decide to leave the company, you can take all of those contributions with you. Cha-ching!
  2. Graded: Here’s where patience pays off. With graded vesting, a specific percentage of your employer’s contributions becomes vested with each year of service. For example, after year one, you might be 20% vested, meaning you own 20% of your employer’s contributions. This percentage typically increases each year until you reach 100% vesting.
  3. Cliff: With cliff vesting, you’ll have to work for the company for a specific period (often around 3 years)  before you’re 100% vested. If you leave before this period, you might forfeit all employer contributions. But once you’ve reached the “cliff”, you’re fully vested. 

Why It Matters

Vesting is an incentive. Companies want talented employees (like us) to stick around. Offering a 401(k) match is attractive, but they might not want to hand over all those funds immediately if there’s a change you might leave early. The vesting schedule ensures that you’re rewarded the longer you stay. 

Navigating Your Vesting Schedule

First things first: check your 401(k) plan details or chat with HR. Know where you stand. If you’re considering a job change and you’re close to being fully vested, it might be worth waiting a bit, so you don’t leave money behind.

Saveday has been a lifesaver for working through nitty gritty details like these. Find out more tips and tricks with their blog here.

Until next time!

-Emma

New Job? Here’s What You Can Do With Your Old 401(k)

Welcome back, savvy savers!

It’s Emma, again (who’s still trying this whole saving thing)! Today we’re navigating a topic many of us will face at some point in our careers: when switching jobs, what do I do about my 401(k)? It’s an exciting (but definitely nerve-wracking) phase. Between the inevitable LinkedIn update and making the oh-so important decision that is your first-day outfit, it’s nice to know at least one major decision is in good hands. Saveday helped guide me through my options, so I’m here to pay it forward! 

A Glimpse at Your 401(k) Choices

1. Let It Be:

What it entails: Letting your cash stay put in your prior employer’s 401(k) setup. It’s the path of least resistance for many.

Upsides: The comfort of known investment avenues.

Downsides: Risk of a fragmented retirement plan over time, the potential lure of better options elsewhere, and the need to juggle plan particulars. The provider may have time limits on holding accounts for inactive employees, meaning the money could be returned to you in the form of a check if you don’t take action on it before the deadline. Then you’ll need to move the money into a new retirement account or face the possibility of penalty taxes.

2. Roll It Over:

What it entails: Funneling your former 401(k) assets into your new employer’s plan.

Upsides: Streamlined retirement funds, possibly superior investments or fewer fees.

Downsides: Potential rollover restrictions or hoops and the hustle of paperwork.

3. Cash Out:

What it entails: Withdrawing your 401(k) dollars, right here, right now.

Upsides: Immediate funds for emergencies or pivotal expenditures.

Downsides: Penalties for those below 59 ½, taxable withdrawals, and truncating your retirement growth.

4. Shift to an IRA:

What it entails: Redirecting your old 401(k) into an Individual Retirement Account.

Upsides: Augmented investment horizons, coalesced accounts, and tax-free direct rollovers.

Downsides: Greater autonomy may need more of your time, and watch out for provider fees.

Your Savvy Saver Checklist

Fees: Every 401(k) comes with a price tag. Always evaluate your option’s economic viability. Here’s where saveday’s candidness on pricing stands out.

Investment avenues: Ensure your pick resonates with your investment philosophy and risk appetite. Dive into saveday’s swift quiz to decode yours.

Taxes: Everyone’s (least) favorite subject! The timing of your 401(k) moves can influence your tax savings. Saveday has great guides for optimizing this.

In essence, those are your moves. Remember, every twist and turn on the savings route is a learning curve. With the right insights and tools, you’re not just saving; you’re building the future you deserve. 

The Saveday Edge

Job transitions are a whirlwind, even without the added 401(k) puzzle. That’s where saveday came in handy for me. Their user-centric dashboard coupled with a goldmine of informative assets demystifies the decision labyrinth. Rolling over? Consolidating? Or keen to up your knowledge quotient? Saveday’s got your six. Check out their blog to learn more.

Best of luck,

-Emma

Boosting 401(k) Participation: The Power of Automatic Enrollment for Small Businesses

Small business leaders know ensuring financial wellness is paramount. Optimal participation in 401(k) plans can be your big solution to give your employees and business the future they deserve. The answer is simpler than you think: Automatic Enrollment. 

Understanding Automatic Enrollment

Automatic Enrollment is straightforward. When new employees come on board, they are automatically integrated into the 401(k) plan. They, however, maintain the choice to opt-out if it doesn’t align with their financial plans. What seems like a small adjustment can significantly elevate participation rates.

Data Speaks Louder than Words 

  1. Increased Participation: Vanguard’s recent findings emphasize the efficacy of automatic enrollment. An impressive 90% of newly hired individuals stay committed to their employer’s plan for at least three years after their auto-enrollment.
  2. Reaching the Underrepresented: The study also underscores automatic enrollment’s role in democratizing savings. It remarkably boosts 401(k) participation rates among historically underrepresented groups, such as the young, those earning lower wages, and minority employees.
  3. Simplifying the Process: The true genius of automatic enrollment resides in its streamlined approach. It transitions those who might never contribute into proactive savers. Over time, this not only bolsters their financial standing but also fosters a sense of security and well-being. Even just $1 a day can mean thousands in the future.

Why Saveday Champions Automatic Enrollment

At the heart of saveday lies a commitment to amplifying employee savings without any added burden on employers. We’ve meticulously crafted our platform to be in perfect sync with businesses keen on embracing the future. When savings become an effortless endeavor for your employees, it directly correlates with heightened job satisfaction and unwavering loyalty.

Incorporating automatic enrollment isn’t merely a tactical move—it’s a visionary step. It empowers you to proactively confer a straightforward yet potent benefit, shaping a financially robust future for your workforce.

A strategic investment today paves the way for an enriching and secure tomorrow. Take a bet on your bright future and start your saving journey today.

Behind in Your Retirement Savings? Seize the Power of Catch-Up Contributions

Hello again, savvy savers!

Emma here, and as previously teased, we’re answering the tough questions today. We’ll do it by diving into an often-overlooked strategy to supercharge your retirement savings: Catch-Up Contributions. Time to address the all too common concern, “Is it too late for me to save for retirement?” Spoiler alert: with saveday, you’re just in time!

Understanding Catch-Up Contributions:

Believe me, I get it. Life happens, and saving for retirement might have taken a backseat. Whether it was unexpected expenses, prioritizing other life goals, or simply not having enough financial education early on (there’s no judgment here!) I’ve got good news. If you’re 50 or older, you have access to the lifeline of “Catch-Up Contributions”. 

Unpacking the Benefits:

As of 2023, younger folks (like me) can contribute up to $22,500 in a given year. But…

Those aged 50 and up get to push their savings even further. They can contribute a whopping $7,500 more. If you were to start at 50 and retire at 65, it would only take investing that amount once to reach $125,317 by the time you decide to claim your nest egg at a 10% rate of return with compounding. 

Saveday – Making Your Money Work for You:

When it comes to saving, I’ve learned that your biggest asset is time. Want to see how these catch-up contributions can give you the future you deserve? Plug in your savings to saveday today. Anyone else up for celebratory beachside mimosas? 

The journey to retirement is a marathon, not a sprint. Whether you started your savings journey early or are lacing up your shoes a bit later, tools and strategies are available to ensure you finish strong. With catch-up contributions, you’re given a powerful boost to sprint toward a comfortable retirement. And that’s just the tip of the iceberg. Read on more to see how your dollar can work harder.

Saveday is here to unravel all your tough money questions, and to make it work for you.

Hungry for more saving insight? Check out the saveday blog for some more inspiration!

Until next time,

-Emma

Tackling High Turnover Rates with Saveday’s Streamlined 401(k) Solution

High turnover rates can be a relentless cycle for small businesses. With employees coming and going, it becomes a steep climb to invest in long-term benefits like 401(k) plans. But here’s an industry secret: offering 401(k) benefits can be the key to reducing high turnover rates, fostering loyalty, and boosting overall employee morale. The best part? We’ve made it hassle free.

Let’s journey into the world of high turnover jobs and discover how saveday’s straightforward and cost-effective 401(k) solution can become the game-changer small businesses have been waiting for.

The High Turnover Puzzle

Industries plagued with high turnover rates, such as retail, hospitality, and fast food, often face the challenge of an ever-changing workforce. This flux can amplify training costs, decrease productivity, and lead to uneven customer experiences.

 A question often arises – if employees are constantly transitioning, is there value in offering long-term benefits?

The missed mark here is that a primary reason for these high turnover rates might be the absence of such benefits. In today’s world, where everyone’s seeking financial security, a 401(k) plan can be the difference between an employee choosing to stay or seeking greener pastures.

Why Saveday is the Solution to High Turnover Rates

Enter saveday. Our streamlined, fully-automated 401(k) solution has been crafted with the challenges of high turnover rates in mind. How does saveday tackle the high turnover rate dilemma?

  1. Zero Cost to Employers: With saveday, offering a 401(k) won’t drain your budget. It’s completely free for employers. So, high turnover rates or not, there’s no financial barrier to offering this impactful benefit.
  2. Attract and Retain Quality Talent: In a world of high turnover rates, stand out by offering a 401(k). It’s an unmistakable message to potential hires that you prioritize their future. This invaluable perk not only attracts the best but makes them want to stick around, effectively reducing those pesky high turnover rates.
  3. Simple and Hassle-Free: We know small businesses already have a full plate. That’s why saveday ensures the setup is as easy as 1-2-3. And once you’re onboard, our automated payroll integration and auto-enrollment ensure your plan runs smoothly with minimal oversight. You get to concentrate on what you love – growing your business.
  4. Increase Employee Satisfaction: Employees value employers who value them. Offering a future-focused benefit like a 401(k) boosts morale, leading to more dedication, better performance, and, you guessed it, lower turnover rates.
  5. Tax Incentives: If you decide to contribute to your employees’ 401(k) plans, there are tax deductions waiting for you. With saveday, you get a double win: free setup and potential tax benefits.

Elevate Your Business with the Right Move


It’s time to challenge the status quo. Let’s visualize this: your business thriving, with dedicated employees, customers receiving consistent top-notch service, and the shadow of high turnover rates becoming a distant memory. With saveday, this can be your reality.

By offering a 401(k) through saveday, you’re not only investing in your employees’ futures but also cementing the foundations of your business. And remember, while the costs to you are negligible, the potential benefits in terms of employee retention and satisfaction are monumental.

So, if you’re tired of battling high turnover rates, maybe it’s time for a new approach. One that focuses on long-term employee benefits. Let saveday guide you towards a stable, prosperous future for both your business and your indispensable team.

Dreaming of a business where employees stay, thrive, and drive success? Discover how saveday can integrate into your operations, offering a simple solution to tackle high turnover rates.

The Secret To Saving More On Taxes

Welcome back, savvy savers!

It’s Emma, back at it again, and as promised, we’re about to embark on an enlightening journey into the world of tax savings associated with retirement contributions. After conquering the labyrinth of 401(k) fees last time, let’s unveil another vital topic that will help you keep even more of your hard-earned money. 

Taxes & Retirement:

Picture this: you’ve been claiming the future you deserve – contributing diligently to your 401(k). Your dream retirement is in the bag. But did you know that you can strategize your savings even further? It can be your shield against the monster under all of our beds: taxes. 

The Power of Pre-Tax Contributions:

When you funnel your hard-earned cash into a traditional 401(k), that money is plucked straight from your paycheck before taxes are taken out. The magic? This reduces your total taxable income for the year. A lower taxable income means less money going to the government now and more staying snug in your account. 

Roth 401(k): A Different Approach

Opting for a Roth 401(k) takes a different path. You’ll pay taxes upfront on your contributions. But here’s the good part: when retirement arrives and you start withdrawing, those funds are tax-free. Imagine sipping a cocktail at your beachside retirement spot, knowing the funds you’re enjoying aren’t being nibbled at by taxes.

Strategize with Saveday:

Our heroes at saveday offer tools to help you decide which approach aligns with your goals. Play around, see your savings potential, and craft your perfect strategy.

To wrap up this savings showdown: By strategizing your retirement contributions, not only are you paving the way for a luxurious retirement, but you’re also tactically minimizing the tax bite. 

Curious about more wealth-building strategies? Saveday’s blog has got you (and your wallet) covered. 

Happy saving!

-Emma

P.S. Next week, we’re taking on the world of “Catch-Up Contributions”. Ever wondered how you can boost your retirement savings if you started a bit late? Don’t miss the next post’s tips and tricks!