People who have part-time jobs or are part of the gig economy have historically had difficulty saving for retirement. Part-time workers, independent contractors, and gig workers can now contribute to retirement savings through the SECURE 2.0 Act, which was signed into law in December 2022. The new regulations give employees without full-time benefits or a pension plan other options for retirement savings. There will be adjustments for workers in the upcoming year and years.

Changes made by the SECURE 2.0 Act for part-time employees include:

• Less rigorous eligibility standards for enrollment in 401(k) plans.
• There will be saver’s match accessible.
• Retirement accounts that are portable.
• Retirement plan enrollment that happens automatically.
• Strategies for setting savings as a top priority.

Easier for Part-Time Employees to Contribute to a 401(k)

Before the SECURE 2.0 Act, companies had to let employees join their 401(k) plan if they had worked for at least a year and 1,000 hours, or for three years in a row and 500 hours or more each year.

Employers will need to modify their plan criteria in order to comply with the new requirement. According to a certified financial advisor in New York City named Bryan Kuderna, “long-term, part-time workers will see some assistance even sooner,” in an email. The three-year rule will be reduced to two years starting after December 31, 2024, thanks to provisions of the SECURE 2.0 law.

There Will Be Saver’s Match Available

Americans with lower and moderate incomes who fund retirement accounts are eligible for the saver’s credit. This pertains to those who, in 2024, earn $38,250 or less in adjusted gross income (or $76,500 or less for married couples filing jointly). A tax credit of up to $1,000 for individuals and $2,000 for married couples is available.

The saver’s match will take the place of the saver’s credit under the SECURE 2.0 Act. Those who qualify should anticipate a donation to their retirement account rather than a credit against their tax liability. Participants in IRAs and 401(k) plans are eligible for a matching contribution from the federal government.

In 2027, the saver’s match will become operative. A 50% matching contribution is anticipated for the first $2,000 that an individual deposits into a retirement account. The federal government may contribute up to $1,000 to people filing alone, and up to $2,000 may be awarded to married couples. For qualified independent contractors and freelancers who feel they lose out on company matching but can now receive something comparable from the government, Kuderna said, “this can be a great incentive.”

Accounts for Portable Retirement

Guidelines for employees to take their retirement accounts with them when they leave an employer are provided by the SECURE 2.0 regulations. In an email, Brian Colvert, CEO of Bonfire Financial in Colorado Springs, Colorado, and a certified financial advisor, stated, “This is especially important for part-time workers who are likely to change companies.”

Accessing a retirement account was frequently challenging for hourly workers before to the SECURE 2.0 Act. Colvert stated, “These provisions ensure that part-time workers’ savings grow and are protected over time and help them start saving for retirement early.”

Retirement Plan Enrollment on an Automatic Basis

Before the SECURE 2.0 Act, companies offering retirement plans had the option to allow workers to enroll automatically. Most large corporations will need to implement automatic enrollment in order to comply with the new regulations. After December 31, 2024, this will be applicable to newly created 403(b) and 401(k) plans.

Deferred payments must begin at least 3% of base pay and cannot exceed 10% of total compensation. The deferrals shall grow by at least 1% of salary with each succeeding plan year. This will go on until the contribution total hits 10% of the pay or a maximum of 15% of the salary.

Plans such as 401(k) and 403(b) that are already in place will not have to adhere to the new automatic enrollment regulations. An employee has the option to choose not to participate in automatic enrollment.

Ways to Make Savings a Priority

Part-time and gig workers now have an easier time setting money down for the future thanks to the provisions of the SECURE 2.0 Act. “People are living longer due to advancements in technology and medicine,” stated in an email Melissa Murphy Pavone, director of investments at Oppenheimer & Co. Inc. in Westhampton Beach, New York, and certified financial planner. “We must make plans for an extended retirement. It is preferable to save more and to start saving early.

Think about putting up automated withdrawals or setting aside a portion of each paycheck to increase your savings. Additionally, you can keep an eye on your accounts to track balance increases. Every year, set aside some time to assess your retirement assets and make plans for the upcoming year.