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Securing a Strong Retirement Act of 2020

The following key retirement plan provisions are included as part of this recently introduced Bill, also known as the SECURE Act 2:

  • The age at which Minimum Required Distributions (MRDs) would be required from employer-sponsored defined contribution plans and IRAs would be increased from 72 (in accordance with the SECURE Act) to 75. This would be waived for individuals with less than $100,000 invested in retirement plans and IRAs on December 31 of the year before they turn 75.
  • IRA catch-up contributions would be indexed to inflation beginning in 2022; currently they are capped at $1,000 per year.
  • Individuals making student loan payments in lieu of contributing to a 401(k) plan would still be eligible to receive an employer match in their employer’s retirement plan
  • 401(k) and 403(b) plans would be required to automatically enroll employees once eligible, with an initial enrollment amount of 3% but no more than 10%, and an annual increase amount of 1% (until the 10% limit).

www.thinkadvisor.com; October 27,2020.