The biggest legislative changes to America’s retirement system in 13 years are on their way.
The Senate today approved a spending bill that includes the bipartisan Secure Act, which aims to increase the ranks of retirement savers and the amount they put away, CNBC reports.
The measure, which passed the House earlier this week, now will head to President Donald Trump, who is expected to sign it into law.
Changes in the act include making it easier for small businesses to band together to offer 401(k) plans and offering tax credits to those firms that do; requiring businesses to let longterm, part-time workers become eligible for retirement benefits; and repealing the maximum age for making contributions to traditional individual retirement accounts (currently 70 years, six months).
It also would raise the age when required minimum distributions, or RMDs, from certain retirement accounts must start to 72, up from 70 years, six months.
Additionally, the measure aims to allow more annuities in 401(k) plans by eliminating companies’ fear of legal liability if the annuity provider fails or otherwise doesn’t deliver. While companies already can offer annuities in their 401(k) lineups, just 9% do, according to the Plan Sponsor Council of America.
Other changes include allowing money in 529 college savings plans to go toward student loan debt (with a $10,000 limit) and letting workers with 401(k) plans withdraw up to $5,000 from their account, penalty-free, to cover the cost of having a baby or adoption. Read the full story.
