In May, the House of Representatives passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act with a vote of 417-3.
If the bill passes the Senate and is signed by the president, it will mean big changes for the U.S. retirement system.
The Retirement Industry Trust Association (RITA) applauds the bill’s efforts to increase small business employers’ access to retirement plans, the increase of the dates for required minimum distributions (RMDs) to the age of 72, and the elimination of age limitations on IRA contributions.
“RITA is dedicated to the expansion of opportunities for all Americans to save and invest for retirement,” said Tom Anderson, President of RITA. “We always have and will continue to advocate for measures that help Americans secure a better future.”
The SECURE Act contains some great benefits for individual retirement accounts (IRAs) specifically.
Currently, retirement account holders cannot contribute to a traditional IRA after the age of 70 ½ years old. SECURE will remove that age cap entirely. Academic income, such as stipends and non-tuition fellowship payments, will be treated as income for IRA purposes, making it easier for some students to contribute to an IRA. The legislation also permits withdrawals for qualified birth and adoption expenses. New parents will be able to withdraw funds from traditional IRAs and 401(k)s without facing penalties.
“As active members of the self-directed retirement industry, we’re excited for the new opportunities this legislation provides,” said Mary Mohr, Executive Director of RITA.