The House Ways and Means Committee on May 5 passed by voice vote H.R. 2954, theSecuring a Strong Retirement Act of2021, dubbed the Secure Act 2.0, whichraises the required minimum distribution age from 72 to 75, expands automatic enrollment in retirement plansand enhances 403(b) plans, among otherprovisions. The bill now moves to thefull House.
“I am really proud of this bipar-
tisan work,” Committee Chairman
Richard Neal, D-Mass., said during
the markup. Secure Act 2.0, will “help
Americans prepare for a financially
Thanks to the Secure Act, he con-
tinued, “four million more Americans
now have the opportunity to save at
work and an estimated 600,000 to
700,000 new retirement accounts will
In addition to expanding coverage
and increasing retirement savings, the
sweeping Secure Act 2.0 also allows
hardship withdrawals in cases of
domestic abuse and simplifies and clari-
fies retirement plan rules. Provisions
included in Secure Act 2.0 include:
1. INCREASES RMD AGE
Under current law, participants are generally required to begin taking distributions from their retirement plans at age72, an increase ushered in by the SecureAct. 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.
2. EXPANDS AUTO-ENROLLMENT IN
The bill requires 401(k) and 403(b)plans to automatically enroll participants when they become eligible;employees may opt out of coverage. Theinitial automatic enrollment amount isat least 3% but no more than 10%, theneach year that amount is increased by 1%until it reaches 10%. All current 401(k)and 403(b) plans are grandfathered.There is an exception for small businesses with 10 or fewer employees, newbusinesses (i.e., have been in businessfor less than three years), church plansand governmental plans.
3. INDEXES IRA CATCH-UP LIMITUnder current law, the limit on IRAcontributions is increased by $1,000(not indexed) for individuals who haveattained age 50. The bill indexes suchlimits starting in 2023.
Top 9 Retirement Changes in ‘Secure 2.0’
Bill That’s Headed to House
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RETIREMENT PLANNINGBy Melanie Waddell, Janet Levaux and Ginger Szala