The proposed change in the retirement account rules is one of several in the Securing a Strong Retirement Act of 2022, which passed the House in a 414-5 vote Tuesday. The bill raises the required minimum distribution age for employer-sponsored defined contribution plans like 401(k) accounts and traditional (non-Roth) IRAs from 72 years to 73 on Jan. 1, 2023, 74 in 2030, and 75 in 2033. The distribution requirements are meant to discourage savers from using the tax-deferred accounts for estate planning, rather than for their own retirement, House Democrats said in a summary of the legislation. The legislation would also provide a tax credit for small businesses offering retirement plans to their employees, increase the yearly contribution catch-up limits for older workers to $10,000 in some cases, and expand automatic enrollment requirements for company 401(k) and 403(b) programs. “These changes will make it easier for American families to prepare for a financially secure retirement,” said the bill’s lead sponsor, House Ways and Means Committee Chairman Richard E. Neal (D-MA), in a statement. The legislation still has to pass the U.S. Senate and be signed by the president. Have a question, comment, or story to share? You can reach Terry at tlane@thebalance.com. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
