Bill would expand retirement savings options.
Big changes could be coming to 401(k), IRA, and other retirement plans under a bipartisan program introduced this week in the House. From increasing the required minimum distribution and catch-up contributions to expanding automatic enrollment and the Saver’s Credit, the legislation is intended to expand retirement savings options for millions of Americans.
Referred to as the Secure Act 2, it follows a law that was passed last year.
The law would expand automatic enrollment of employees in retirement plans. The Saver’s Credit currently provides a credit of up to $1,000 for low and middle-income individuals; the new legislation would simply the rate structure by implementing a single rate of 50% and increase the credit to $1,500 per person. The age at which minimum distributions from retirement savings would be raised from 70.5 to 72 with a “must begin” by age 75.
So-called “catch-up” limits on IRAs and 401(k)s would rise and student loan payments would qualify for matching contributions in employer-based plans. The proposed bill does not address pensions.
The sweeping package lays the groundwork for action next year if not in a post-election lame-duck session.
As the Lord Leads, Pray with Us…
- For Congress as legislation to reform retirement savings programs is considered.
- For members of the House Ways and Means Committee as debate begins on the proposed bill.
- That God’s will would be accomplished through the U.S. government.
Sources: Forbes, The Hill, Bloomberg News
