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WASHINGTON, D.C. – Congressman David Schweikert (AZ-06) introduced two pieces of legislation that were included in the Ways and Means Committee markup of H.R. 2954, the Securing a Strong Retirement Act of 2021, or “Secure Act 2.0”. The pieces of legislation will strengthen the bipartisan Securing a Strong Retirement Act, legislation to help Americans successfully save for retirement.
“The Securing a Strong Retirement Act of 2021 is an important piece of legislation that will improve retirement security for every American. I am pleased that two of my bills were included in this final, bipartisan package. My legislation will allow independent contractors and sole proprietors to have additional flexibility in setting up a retirement savings plan, and the other would allow many more Americans to take charge of their own retirement finances earlier to meet their retirement goals. Arizona has been a welcoming state for Americans planning for retirement. I look forward to continuing to advance legislation to ensure strong, and secure retirement is achievable for all Americans.”
Background:
The Securing a Strong Retirement Act of 2021 will:
Promote savings earlier for retirement by enrolling employees automatically in their company’s 401(k) plan, when a new plan is created;
Create a new financial incentive for small businesses to offer retirement plans;
Direct the Internal Revenue Service to promote the Saver’s Credit to increase utilization;
Expand retirement savings options for non-profit employees by allowing groups of non-profits to join together to offer retirement plans to their employees;
Allow individuals to save for retirement longer by increasing the required minimum distribution age to 75;
Offer individuals ages 62, 63 and 64 more flexibility to set aside savings as they approach retirement;
Allow individuals to pay down a student loan instead of contributing to a 401(k) plan and still receive an employer match in their retirement plan;
Make it easier for military spouses who change jobs frequently to save for retirement;
Allow individuals more flexibility to make gifts to charity through their IRAs;
Allow taxpayers to avoid harsh penalties for inadvertent errors managing an IRA that can lead to a loss of retirement savings;
Protect retirees who unknowingly receive retirement plan overpayments; and
Make it easier for employees to find lost retirement accounts by creating a national, online, database of lost accounts.
Congressman Schweikert’s two pieces of legislation included:
H.R. 2942, to allow those aged 62, 63, and 64 to have higher allowable catch-up contributions, with up to an additional $10,000 per year for employer-sponsored plans generally, and $5,000 for SIMPLE plans. Both limits would then be annually adjusted for inflation, and would be effective for tax years beginning after 2020. This would double the amount of catch-up contributions allowed under current law, allowing Arizonans to save more as they approach retirement age.
H.R. 2943, fixes an unintended consequence from the original Secure Act, and would allow 401(k) plans established by a sole proprietor or a single member LLC extra time for contributions during the first year of the plan. Currently, the employee side can only be funded through 12/31, while employer side could be funded through April 15. This legislation would correct that and would allow the business owner to fund the plan with both the employer and employee side contributions by April 15th of the following year, the typical due date for individual tax returns. For Arizona entrepreneurs and small businesses that typically have to manage through ups and downs and unpredictable cash flows – which has only been heightened due to shutdown orders and other pandemic challenges – this will help many Main Street businesses start setting aside the funds they will need to prepare for retirement.
To read text of the legislation introduced by Congressman Schweikert, click HERE.
To read text of the Securing a Strong Retirement Act of 2021, click here HERE.
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