The unanimous passage by the House Ways and Means Committee on May 5 of thesweeping retirement bill, H.R. 2954, theSecuring a Strong Retirement Act of2021, dubbed the Secure Act 2.0, spurredrounds of applause in the retirementplanning community, but some provisions left advisors scratching their heads.
Secure 2.0 raises the required minimum distribution age from 72 to 75 over10 years, expands automatic enrollmentin retirement plans and enhances 403(b)plans, among other provisions, and isnow on its way to the full House.
Committee Chairman Richard Neal,D-Mass., said May 5 during the markupthat he is “really proud of this bipartisanwork,” that went into Secure Act 2.0,noting a special thanks to CommitteeRanking Member Kevin Brady, R-Texas.
The bill, Neal said, will “help Americans
prepare for a financially secure retire-
ment,” and builds on “the landmark pro-
visions” in the Setting Every Community
Up for Retirement Enhancement
(Secure) Act of 2019, which Neal called
“the most significant retirement legisla-
tion to become law in over a decade.”
The Bipartisan Policy Center in
Washington noted after the bill’s pas-
sage that saving for retirement “consis-
tently ranks as Americans’ top financial
worry. With reserves in Social Security’s
trust fund dwindling, life expectancies
generally increasing, and health care
costs rising, policymakers must remain
focused on these critical issues.”
Secure 2.0 “is an important step, but it
cannot be the last one,” said Shai Akabas,
director of economic policy for the BPC.
“I hope this promising legislation will
continue to be refined and improved as
it advances toward passage.”
IRA and tax specialist Ed Slott of Ed
Slott & Co., said that the unanimous
passage of the bill by Ways and Means
signals likely passage by the full House.
“There’s nothing politically controver-
sial in here,” he said.
One of the most talked about provisionsof the bill is the increase in the requiredminimum distribution age from 72 to
75. Under current law, participants aregenerally required to begin taking distributions from their retirement plansat age 72, an increase ushered in by theSecure Act.
Secure 2.0 increases the RMD agefurther to 73 starting on Jan. 1, 2022; to74 starting on Jan. 1, 2029; and 75 starting on Jan. 1, 2032.
Eric Walters, managing partner and
founder of Summit Hill Wealth Partners
in Greenwood Village, Colorado, told me
in an email that he believes Secure 2.0 “is
a good step towards helping American
save more for retirement and adjusting
our system for increases in lifespan and
Walters opined that “slowly increas-
ing the start date of required mini-
mum distributions from 72 to 75 allows
workers to continue to work and earn
money towards retirement while con-
trolling when and how they use their
Slott, however, reiterated his view that
raising the RMD age is confusing. “This
whole business with raising the RMD
age — it went from 70 ½, the Secure Act
put it to 72, that confused a lot of people;
… then they [Congress] say they’re going
to go to 73, then 74, then 75 in 10 years —
THE PLAYING FIELD
By Melanie Waddell
Reactions From the Front to Secure 2.0
The sweeping retirement bill still has to be passed by Congress, yet manyprovisions have caused confusion, say experts.
IRA and tax specialistEd Slott of Ed Slott
& Co., said that theunanimous passageof the bill by Waysand Means signalslikely passage by thefull House. “There’snothing politicallycontroversial in here,”he said.