SECURE ACT 2.0

The U.S. House of Representatives and the U.S. Senate have both passes bills that are commonly known as the ‘SECURE ACT 2.0'. The Bills that were passed in each chamber are a little different, so a reconciliation process will occur. However, some of the common items in each bill include the following:

1. An increase in the age for the Required Minimum Distribution (RMD). Currently the age for the RMD distribution is 72 but the Secure Act 2.0 increases this age to 75. This age increase would be phased in over a 10-year period so that by 2032 the age would be 75.

2. Make it mandatory (there is an opt out provision) for employers to enroll their employees in a 401k retirement plan. This would require any employer with 10 or more employees to enroll their workers in a 401k retirement plant and have the employee contribute a minimum of 3%. However, an employee would be able to opt-out of this automatic enrollment.

3. There will be larger catch-up contributions for individuals between the ages of 62 to 65. These individuals would be able to make catch up contributions up to $10,000

The basic overall goal of the SECURE ACT 2.0 is to make it easier for individuals to save money retirement.