While the Securing a Strong Retirement Act of 2022, or Secure Act 2.0, is likely to become law this year, the current version of the bill contains provisions that are “unnecessarily complicated” and others that are downright odd, retirement experts said Wednesday during a ThinkAdvisor webcast. (Check out the replay here.)
Jamie Hopkins, managing partner of Wealth Solutions at Carson Group, was joined by Jeffrey Levine, chief planning officer at Buckingham Wealth Partners and Bonnie Treichel, chief solutions officer of Endeavor Retirement, a consulting firm for retirement plan sponsors, advisors and service providers.
They also offered their views on how the Senate version of Secure Act 2.0 may differ, and agreed that some version of the bill will likely be passed into law this year.
“I don’t see a reason that this [Secure Act 2.0] doesn’t pass this year,” Hopkins said. “You put this in the ‘as likely as possible’ category of legislation.”
Hopkins warned attendees that clients are going to ask about Secure 2.0, “so be prepared for those questions.”
Also, prep your colleagues on the bill. “I was surprised that some people in offices knew a lot [about the bill] and somebody else knew almost nothing,” Hopkins relayed. “So you could be a huge lift to your firms, the others around you by taking those couple minutes” to educate them.
As it stands now, the foundation of the Senate’s version of Secure 2.0 is the Retirement Security and Savings Act, introduced by Sens. Rob Portman, D-Ohio, and Ben Cardin, D-Md. But provisions from other bills will likely be added to the Senate’s bill.
“We don’t know if we’ll get the pure House version as it moves through or we get some variations from the Senate version,” Hopkins said.
“One-third” of the provisions in the Retirement Security and Savings Act are identical to those in the House version, but the bills are not the same, Hopkins said.
‘Complicated’ RMD Changes
Required minimum distributions have gone through major changes in recent years.
They “mostly got suspended” in 2020, and the IRS released new life expectancy tables in January, Hopkins relayed. And that’s after the original Setting Every Community Up for Retirement Enhancement Act raised the RMD age from 70 1/2 to 72 in 2020.
The Secure Act 2.0 would raise the RMD age further, to 75.
“People don’t understand the required minimum distribution rules now,” Levine said, “and the House version contemplates gradually pushing back that required beginning date, so beginning next year, it would be those turning 73; then we push it back again in 2030. It is so unnecessarily complicated.”
The Senate version “simply says ‘at 2030 let’s just go to age 75 then,’” he said. “While I’m not fond of betting on what Congress will do, I think they will err toward the simpler version.”