When the SECURE Act was signed in late 2019 and introduced at the beginning of 2020, it marked the first significant retirement legislation in quite some time.
Now less than two years later, the administration is eyeing additional changes that could have an even greater impact on your retirement planning. In this episode of the Money Wisdom podcast, we’ll fill you in on what’s being discussed by taking you through six key proposals. We’ll run through each in more detail on the podcast, but here’s what we’ll be talking about.
If you remember, the SECURE Act increased the required minimum distribution age from 70 to 72. Now the age could be increased even further to age 75. This is a good thing because it reflects the longevity that we’re enjoying as a nation, and it also means that our clients will have more time to save before having to start taking withdrawals from their retirement accounts.
Typically, when you begin working for a new employer that offers 401(k) options, you have to opt into the account and then begin contributing. The new proposal would flip that and have your employer auto-enroll you. Meaning you’d only have to take action if you want to opt-out. As an employer, Joel doesn’t know if it’s something he’d be in favor of but there are definitely benefits to promoting this savings tool.
We all would love the ability to save more in our retirement accounts if the money is there, and this catch-up amendment could help with that. It would allow people aged 62-64 to add another $10,000 each year to a 401(k) account. That age range shows you that the government is trying to help people backload their retirement, and it can be a big help to those that are trying to play catch-up.
With all the discussion around student loan debt, this is a very interesting proposal. It would allow employees to earn their company’s 401(k) match by paying their student loan debt payments each month. This could really help those that are falling behind without the extra money to contribute each month to still take advantage of the matching benefit.
This last one will help people that lose track of old accounts that they had with former employers. Hopefully, this won’t be something you’d need to utilize, but the government could create a database to quickly search through accounts under your name.
None of these is a certainty at the time of this blog, but these could very well be in place for 2022 so make sure you’re having discussions with your advisor.
1:00 – Housing market update
4:19 – Raising RMD age to 75
6:32 – Auto-enrolled into 401(k)
7:46 – Increasing catch-up contributions
8:53 – Student loan payments for an employer match
10:39 – Finding old 401(k) accounts more easily
12:29 – Tax reduction planning
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