Trever Christian and John Schwalbach, Partners
April 12, 2022

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According to the calendar, spring is here! Not unlike the weather changes that we’re experiencing, legislative and market changes appear to be following suit. To keep you up to date with the most relevant information, we have highlighted two areas of focus. The first is a brief overview of pending legislation to be included in the SECURE Act 2.0 and the Build Back Better Act. Additionally, we would like to recognize the global events that are taking place and the impact they have had on markets. In these times, it’s understandable that we may fear losses in our retirement accounts. However, sticking to a long-term investment plan, versus trying to time the market, can lead to better outcomes.

Please enjoy this friendly reminder article titled “The Case For (Always) Staying Invested”, as it’s a timely read.

Pending Legislation
In May of 2021, the House Ways & Means Committee passed the “Securing a Strong Retirement Act of 2021” bill.  As of March 29, 2022, SECURE Act 2.0 (as it’s most referred to) has been passed by the House of Representatives as what’s also known as the “Securing a Strong Retirement Act of 2022.” The pending legislation, with proposal details outlined below, will now need Senate approval before a bill is signed into law by President Biden. While we can’t determine a precise time as to when this may happen, positive momentum suggests that it could happen this year. Here’s how the SECURE 2.0 and Build Back Better Acts could impact your retirement plan:

Securing a Strong Retirement Act of 2022 (SECURE Act 2.0)
(Status: Passed by the House of Representatives, pending introduction to the Senate)

  • Promotes saving for retirement earlier by expanding automatic enrollment in 401k and 403b plans
  • Small businesses will be presented with financial incentives to offer retirement plans
  • The required minimum distribution (RMD) age would be raised to 75 years old, giving Americans more time to save for retirement
  • Improved coverage for part-time workers in 401(k) plans
  • Catch up contributions for participants ages 62-64 would be increased from $6,500 to $10,000 per year
  • Gives younger participants with student loans the choice to pay down loans instead of contributing to a 401(k) plan, yet receive a match that is contributed to their retirement account
  • Establishes a “Retirement Lost and Found” database at the DOL to help workers locate their savings as they move from one job to another

Build Back Better Act
(Status: Passed by the House of Representatives, pending  introduction to the Senate)

  • Prohibits employee after-tax contributions in qualified retirement plans and after-tax IRA contributions from being converted to Roth
  • Eliminates Roth conversions for single taxpayers with income over $400,000, married taxpayers with income over $450,000 and heads of households with income over $425,000
  • Requires minimum distributions for high-income taxpayers with large account balances if a retirement balance exceeds $10 million
  • Requires annual reporting for account balances of at least $2.5 million to the IRS

Do you have questions or feedback?  We’re always here to help or listen!