The second major piece of retirement legislation in little more than two years advanced in the House on Tuesday, putting required minimum distributions in line to rise to age 75 over the next decade and increasing the limits on catch-up contributions to retirement accounts for older Americans.
The House of Representatives passed the Securing a Strong Retirement Act, sometimes called the Secure Act 2.0, by a vote of 414-5. Key provisions also include expanding automatic enrollment of workers in qualified retirement plans like 401(k)s and indexing catch-up contribution limits for individual retirement accounts to inflation.
“These changes will make it easier for American families to prepare for a financially secure retirement,” Rep. Richard Neal (D., Mass) said on the House floor. “This is transformative legislation.” Neal introduced the bill with Rep. Kevin Brady (R., Texas).
Earlier Tuesday, the Senate Committee on Health, Education, Labor, and Pensions held a hearing on retirement security. Committee Chairwoman Sen. Patty Murray (D., Wash.) said she and ranking member Richard Burr (R., N.C.) “are now working to pull together bipartisan ideas in this space and move a retirement legislative package later this spring.” Last May, Sens. Rob Portman (R., Ohio) and Ben Cardin (D., Md.) introduced legislation similar to the Secure Act 2.0 called the Retirement Security and Savings Act, but that bill hasn’t advanced through the Senate Finance Committee.
Key Provisions of the House Bill passed Tuesday include:
● Raising the age at which seniors must take required minimum distributions, or RMDs, from their retirement savings accounts to 73 from 72, effective next Jan. 1. The bill will raise the age to 74 starting in 2030 and to 75 starting in 2033.
“For high-income individuals, the required-minimum-distribution age being pushed out further is going to be very attractive,” said Lisa Featherngill, national director of wealth planning at Comerica Bank.
Continue reading about the Secure Act 2.0 here.