Two years ago Americans saw a number of changes to their retirement plans when the Secure (setting every community up for retirement enhancement) Act was passed. The House Ways and Means Committee recently approved a second bill, the Securing a Strong Retirement Act of 2021, that would continue to modify the rules for contributing to and withdrawing from your retirement accounts. Nicknamed the SECURE Act 2.0, the legislation aims to encourage Americans to save more for retirement by making that process easier. It’s expected the bill will pass either this year or in 2022, given its strong bipartisan support.
With the proposed legislation you would be able to wait longer to take RMDs (required minimum distributions). It would raise the age to begin taking RMDs to age 75 over a decade. Also, the penalty for failing to make a mandatory withdrawal would be greatly reduced.
Some advantages of the proposed legislation are highlighted below:
- Employers could auto-enroll you in a retirement savings plan
- You could earn extra incentives for contributing to a retirement account
- You would be able to make bigger catch-up contributions
- You could earn employer matching funds on your student-loan payoffs
- You could contribute to Roths in more ways
- As a part-time worker you would have a shorter path to retirement plan eligibility
- Savers in 403(b) plans would get better investment options
- Workers at small businesses would be more likely to get access to a retirement plan
At First Class Counsel our job is to keep you informed of all the estate and financial planning developments and proposed legislation. Contact our firm today for a review of your estate and financial plans. We are here to serve you.