Month: July 2025

Putting a chunk away for retirement in 2025 – perhaps it was a New Year’s resolution, or, more likely, it’s simply a goal you have every year. In either case, now that we’re more than halfway through 2025, how are you feeling about reaching that goal?

Being as it is that life rarely follows a predictable pattern year over year, it’s common that one may fall behind in their retirement savings plan over the course of a year or a few. This means in order to stay on track with your retirement planning goals, you’d need to have a period of a year or a few to catch back up, to compensate for.

Whether this year is one where you may fall behind or one in which you have the means to catch up from a “behind year” in the recent past, there are a few important changes to be aware of in the year 2025.

Depending on your financial and/or employment situation along with your age, being aware of the opportunities presented by these changes potentially puts you in a better position to retire earlier, retire more comfortably, or leave a larger legacy behind for your loved ones – whatever your individual goals may be.

So over the next few weeks, we’ll take a look at three important changes stemming from the SECURE 2.0 act, enacted Dec. 29, 2022. We’ll look at each change one at a time, detailing how they work so you can gain clarity, more so than reading the often convoluted official IRS release (stimulating as that may be). Finally, we’ll consider who could benefit from incorporating one, two, or even each of them into their retirement savings strategy.

Let’s start with the new auto-enrollment feature for recently established retirement plans.

Retirement Plan Auto-Enrollment

One of the fundamental goals of the SECURE 2.0 act is to encourage more people to save more with a view to retirement. One of the ways the act accomplishes this is through a new regulation requiring newly established employer-sponsored retirement plans – like 401(k)s & 403(b)s – to auto-enroll employees. The official name given to this regulation is the eligible automatic contribution arrangement (EACA).

Each qualified employee has the ability to opt out. If they don’t, they’ll be enrolled (thus, “automatic” enrollment).

How It Works

• If a qualified employer sets up a new 401(k) or 403(b) plan, then all employees who qualify for enrollment will be automatically enrolled in the plan.
• For employees automatically enrolled, their year 1 default contribution rate (that is, the percentage of their pre-tax paycheck that will be allocated) is 3%.
• There is a 1% mandatory annual escalation to the default contribution. That is, for employees who’ve been auto-enrolled in the plan with the default 3% contribution rate, that contribution rate will increase by 1% each year up to at least 10% but not more than 15%.

Here’s a quick example of how that might work over the course of an individual’s employment:

• Year 1: Employee doesn’t opt out and therefore is auto enrolled at the default contribution rate, 3% of their pay.
• Year 2: Employee hasn’t set a custom contribution percentage, so their deferral automatically increases to 4%.
• Year 5: The same pattern continues and so the employee’s salary deferral into their retirement plan increases to 7%.
• Year 8: Contribution increases to 10% of employee’s pay (this is the minimum a plan may set for automatic contribution increases).
• Year 13: Let’s assume the 401(k) or 403(b) plan is set up so that instead of the minimum automatic contribution increase limit of 10%, it goes to the maximum limit of 15%. In that case, if the above pattern continues, the employee’s contribution increases to 15% in year 13 of their employment. It will remain at that rate until the employee sets a custom percentage.

Here’s an important note for clarity: employees who are auto-enrolled don’t need to automatically make the 3% contribution. Each employee can choose a different contribution percentage.

Remember these contributions are pre-tax – that is, they lower your taxable income, up to established limits. Speaking of those established limits, that’ll be key to Part II of the retirement plan changes we’re discussing, so be sure to catch that next week.

Exemptions – Who Aren’t Included?

401(k) or 403(b) Plans Established Before Dec. 29, 2022

The auto-enrollment feature of this act applies only to plans that were established on or after the enactment date of the SECURE 2.0 act.

Small Businesses

Employers with 10 or fewer employees are allowed an exemption from the above-stated auto enrollment requirement.

Let’s look at a simple example for clarity, using the fictional company Smith & Co. Snow Shovels & Snow Blowers, LLC (sorry to remind about the inevitable for our northern readers), which was incorporated in 2023.

• This company has 8 employees.
• Last year, in 2024, they set up the Smith & Co. Snow Shovels & Snow Blowers 401(k) Plan as an incentive to their employees.

Although the plan was established after the auto-enrollment regulation was enacted (Dec. 29, 2022), since they have 10 or fewer employees, they are exempted from the EACA.

Here’s an important note: Although this company’s 401(k) plan isn’t mandated to offer auto-enrollment nor the automatic annual escalation for employee contributions, they still can choose to set these features up within the plan.

Let’s say this company brought on 6 more employees in 2025 and now employed more than 10 individuals. What then? In that case, they will have to restructure the 401(k) plan so as to offer the auto-enrollment feature, if they didn’t already have it. However, they won’t have to do this right away. Why not? That brings us to the next exemption.

New Businesses

Another exemption to the EACA is held out for newer businesses. Businesses that qualify for this exemption related to their employer sponsored plans are ones that have been in existence for less than 3 years.

Again, let’s take a look at a simple example to put this into practice. We’ll use our fictional company above to help us.

• We already know they set up the Smith & Co. Snow Shovels & Snow Blowers 401(k) Plan in 2024, which is after SECURE 2.0 was enacted.
• We also stated that now, in 2025, they brought on 6 more employees, bringing the total to 14. This means the small business exemption under this law no longer applies to them.
• However, we did state that the company was incorporated in 2023. Therefore, since this company has only been in operation for two years in 2025, it is exempted from the auto-enrollment regulations detailed above.

What happens next year when the company reaches its 3 year mark (assuming it keeps more than 10 employees)? Then it will have to restructure its 401(k) plan to offer auto-enrollment since neither this nor any of the other exemptions would apply any longer.

How You Can Benefit

Do you work for a company that has only been in existence for a couple of years or less? If so and you haven’t stayed on top of your retirement plan opportunities there, it may be worth taking a bit of time to see if you’ve been auto-enrolled and already have some retirement funds being saved up for you through your employer. If that is the case, it would be worthwhile to take a look at what your current contribution percentage is.

And, as always, you should take advantage of employer matching to the extent possible. If you are new to an employer plan that offers auto-enrollment, it may be that the max employer matching percentage is more than you’re currently contributing. In that case, you may well consider increasing your contribution rate from the automatic contribution rate so you can hit that max matching percentage.

As in the case of all retirement plans, whether they fall under the SECURE 2.0 act or not, a periodic review of your retirement savings strategy is always beneficial. Doing so will help you find out if you’re on track to meet your retirement goals or if some changes are in order.

Of great help when doing a periodic review of your retirement savings strategy is through the use of these Financial Planning Tools:

• Investment Risk Questionnaire
• Investment Calculator
• Budget Worksheet
• Life Insurance Calculator

If you’d like a full-scale review of your retirement plan that includes tax minimization, Social Security maximization, and Estate Planning guidance – especially if retirement isn’t many years away, book a no-obligation chat with a retirement plan design professional to find out what your next steps should be.

Retirement Plan Account Change Part II – What’s Next?

Next week we’ll be considering how the SECURE 2.0 act includes a new regulation that bolsters the catch-up contribution feature of retirement account saving limits for savers who are getting close to retirement.

If you’d like a refresher on what catch-up contributions are and how they work, take a look at our article, Catch-up Contributions – a Provision to Supercharge Age 50+ers Retirement Plan.

Also read, Are You Leaving Money on the Table by Claiming Social Security Too Soon?

Let’s Have a Conversation:

If you are retired, how do 401K savings help your income? If you still have a few years until retirement, what are you contributing to your 401k or 403b plans?

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Originally posted at: Bronwyn Newport’s Black Polka Dot Dress

What happened?

Pearlette Ramos created a film set in nature to encourage more of us to tell our stories. Whether we create films like Three Extraordinary Women or not, Pearlette Ramos wants you to really seek out the power and growth of sharing your stories so that they can be impactful for others.

In my recent podcast conversation with Pearlette Ramos, she said:

“So often people will see where you end up – for example I am a lawyer – I live here and do these things – but they don’t know the journey you took and the struggles that you have gone through to get here. So often we just don’t share that. In sharing our stories is often where the blessing and the growth comes.”

Three Women Share Their Story as The Climb Mount Kilimanjaro

In the film Three Extraordinary Women three women share their stories with one another as they climb Mount Kilimanjaro, the tallest Point on the African continent.

Who Is Terri?

Terri was 64 when she climbed Kilimanjaro. She grew up in Ramala and tells of her experiences of wanting to be pro-Palestinian in that environment. Her mom was afraid for her safety so shipped her to the US against her will when she was 14 years old. When she came to the US she was not told by her mom that she would have to quit school and go to work. She did this for the next 10 years. After that Terri went on to become a human rights advocate.

Tammy’s Story

Tammy’s mother was followed by a stalker and was murdered in front of Tammy. After this trauma, she and her sisters went to live with their father who was not too happy having to raise three daughters by himself. Tammy endured these challenges. She reflects on this idea of not feeling like she is enough in life and struggles with a sense of not being worthy.

Finally, Pearlette

Pearlette, the film’s director, was born in poverty and raised in the projects. Pearlette’s home environment was riddled with alcoholism, mental illness and domestic violence. Due to the trauma, Pearlette fled her parents’ home when she was 15 years old and moved in with an older brother.

Within 12 months she was pregnant, married and a high school dropout. Tragically, after living four short months, Pearlette’s baby girl, ChaviElle, died of acute bronchial pneumonia. Devastated by her daughter’s death, she channeled her heartbreak into studying.

She went to law school and after practicing law for 11 years, Pearlette went back to school and obtained a doctorate degree in psychology. She has raised two daughters, ages 27 and 36. She has now visited the seven continents and more than 80 countries. 

Post Traumatic Stress

In our conversation, Pearlette shared:

“I don’t think most people know what post traumatic stress is. We live such highly stressful lives that we can desensitize ourselves to past trauma. Terri, Tammy and I – and I think many others in the world – were emotionally stuck in body – always guarded, always alert.

“Post traumatic growth is what we centre on in the film. We tell the story of what happened to us and also about what we made it mean. The transformation that happened after the trauma when we began to claim our voices, claim our power, and really live into our purpose. And how we make meaning of things/situations to honor our own lived experience. And how we can consciously narrate that as centring ourselves as hero.”

Make Meaning Out of Trauma

When I briefly referred to my lupus story, in our podcast discussion Pearlette circled back, “you mentioned what happened to you at 60 with your disease diagnosis. And then how did you make meaning of that? Well, you created a whole mechanism around that to help encourage and engage others. And we all have the capacity to do some form of that.”

Using The Power of Story

Ramos says that sharing stories inspires change “from Terri and Tammy perspective not just mine – the goal was to realize we can have an honest dialogue with one another, one where we can self-reflect in meaningful ways so that we can become the conscious narrator in our own story so we can help heal ourselves and help heal one another.”

Pearlette’s Personal Connection with Nature

When I asked her about her personal connection with nature, Pearlette replied:

“I grew up in poverty and had a TV. I was about 10 years old when I saw the legendary film maker Jacques Cousteau. Jacques was a researcher and environmentalist and filmmaker who had visited Antarctica in the ‘70s. I saw that documentary, and it catapulted me out of my child abuse and domestic violence life and allowed for me to hope and believe. I could see myself there. There was a lasting impression.”

Reaching Antarctica and a Deeper Level of Service

Ramos told my podcast audience:

“It took me 40 years but I reached Antarctica in 2018 – just shy of my 50^th birthday, and it was there that the vision of the documentary was born. I became interested in a deeper level of service. I became a lawyer because I was interested in social justice and passionate about women’s rights issues.

“I was doing this around the world, but felt a deeper calling in a way. Gave myself the challenge to live life more deeply through what my mind and body were trying to tell me. Giving spaciousness to what this chapter in my life might be. And from that the desire to create a film was born. It really wasn’t about the film, it was about telling our stories, sharing our stories through the perspective of the challenges that we have.”

In the film, Ramos highlights the mountain as a character. The film shows the beauty, the rainforest at the bottom and glaciers at the top. Pearlette’s idea is to show how this experience helps us to connect more deeply with oneself and with nature.

Personal and Collective Kilimanjaro in Manitoba During the Forest Fires

The film is an invitation for you to reflect on your Kilimanjaro and ask yourself the question: “What is my personal Kilimanjaro?” Because we are so busy, we often don’t take the time.

In preparation for the podcast interview I reflected on this question and then shared that my personal Kilimanjaro is that I am in Manitoba, Canada today and there are forest fires all around us. So, there is loss, pain and heartbreak here. These days when I go outside, I find a tree, and I remember that this tree is cleaning the air and giving me life. And giving life to others and if it wasn’t for these trees we would not be here.

My collective Kilimanjaro: I recall Diana Beresford-Kroeger’s work that says if each one of us in the world planted just one tree for 6 years that would solve climate crisis.

Profound Connection to Our Own Inner Story

Ramos says, “There is a profound connection to our own inner story whatever that is – 90% of the people around the whole have experienced trauma. Many have experienced several forms of trauma. The power is what we make those experiences mean. How we do that – and create a form of alchemy in our own lived experience is magic. “

Let’s Keep the Conversation Going:

How have you created meaning for yourself and others out of your difficult lived experiences? Have you shared your personal stories with others? If yes, how has this affected your life and the lives of others?

It was one of her iconic looks.