On Thursday night, President Joe Biden signed the $1.7 trillion omnibus spending package which contains the SECURE 2.0 Act—a package of retirement reform that will have widespread implications for the industry and will increase the savings potential for many Americans. The Senate passed the spending bill 68 to 29 on December 22, and the House 225 to 201 on December 23.
Some of the SECURE 2.0 provisions will take effect on January 1, 2023, such as increasing the required minimum distribution age to 73 and increasing the small business startup tax credit from 50% of administrative costs to 100%, up to $5,000. Still others will take effect years in the future, such as requiring automatic enrollment for new 401(k) and 403(b) plans, starting in 2025.
Our overview of the key provisions in SECURE 2.0 can be found here.
SECURE 2.0 is the aggregated and reconciled product of three bills, two of which originated in the Senate and one in the House of Representatives.
The Senate versions, known as the Enhancing American Retirement Now (EARN) Act, and the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg (RISE and SHINE) Act, were proposed in the U.S. Senate Committee on Finance and the U.S. Senate Committee on Health, Labor and Education, respectively. The House version was known as the Securing a Strong Retirement Act, which began in the U.S. House Committee on Ways and Means.
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