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Thursday, January 30, 2025
It Just Got Easier for Part-Time Workers to Save for Retirement
Lifehacker: Part-time work is great for increased flexibility, but a significant bummer when it comes to benefits. Luckily, a new rule now opens the door for millions of part-time workers to start building their nest eggs earlier through employer-sponsored retirement plans.
This seems like a really good thing, but I am not finance-savvy. Before the Secure Act in 2020, employers were allowed to exclude working fewer than 1000 hours a year. They could only join their companies 401k after three years of working more than 1000 hours a year. With the seeming slight adjustments in this plan, it can make a huge difference. Now, you only have to work 500 hours per year for 2 years to be eligible to be included in a 401k, which is a full year difference. I think this act was edited because the amount of people who have 401k’s has severely diminished between generations. Not only saving for retirement, but younger generations don’t save as much as older generations do, which has become a huge problem. I’m curious to know how this affects business owners financially.
As a young person preparing to enter the workforce, I feel that I still have a lot to learn as far as financial management, the market, and how these things work overall. Things like Roth IRAs, 401Ks, and other retirement funds I only understand a little in passing. This particular article is definitely something I will keep in mind, especially since a lot of my first paid positions are or will be part time. The reduced waiting period is especially helpful for young people, who will be dealing with reduced social security benefits once they reach retirement age, due to the rapidly decreasing workforce around that time. The earlier we can begin saving money and building our retirement funds the better off we will be in a few decades. The information about stipulations are also important for me to keep in mind, because the fine print could contain details that might screw me over in the future.
2 comments:
This seems like a really good thing, but I am not finance-savvy. Before the Secure Act in 2020, employers were allowed to exclude working fewer than 1000 hours a year. They could only join their companies 401k after three years of working more than 1000 hours a year. With the seeming slight adjustments in this plan, it can make a huge difference. Now, you only have to work 500 hours per year for 2 years to be eligible to be included in a 401k, which is a full year difference. I think this act was edited because the amount of people who have 401k’s has severely diminished between generations. Not only saving for retirement, but younger generations don’t save as much as older generations do, which has become a huge problem. I’m curious to know how this affects business owners financially.
As a young person preparing to enter the workforce, I feel that I still have a lot to learn as far as financial management, the market, and how these things work overall. Things like Roth IRAs, 401Ks, and other retirement funds I only understand a little in passing. This particular article is definitely something I will keep in mind, especially since a lot of my first paid positions are or will be part time. The reduced waiting period is especially helpful for young people, who will be dealing with reduced social security benefits once they reach retirement age, due to the rapidly decreasing workforce around that time. The earlier we can begin saving money and building our retirement funds the better off we will be in a few decades. The information about stipulations are also important for me to keep in mind, because the fine print could contain details that might screw me over in the future.
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