The Senate’s retirement-related legislative proposal, the Enhancing American Retirement Now (EARN) Act, calls for raising the age at which required minimum distributions (RMDs) start from 72 to 75. The proposal is expected to become part of the Senate’s ”Secure Act 2.0″ legislation.
The increased age limit would essentially allow Americans to take advantage of three additional years of tax-free growth within traditional retirement accounts, such as IRAs and 401(k)s.
The EARN legislation would also allow taxpayers to contribute an additional $10,000 per year to these accounts between the ages of 60 and 63. Critics of these proposals claim that the changes would only benefit wealthy Americans, while the law largely ignores the needs of working-class savers.
We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about whether the latest Senate proposal to raise the RMD age unfairly benefits wealthy taxpayers.
Here is a summary of the debate that ensued between the two professors.
Bloink: The latest proposal absolutely favors wealthy Americans. Raising the age when RMDs must begin will provide a benefit to only the wealthiest Americans. Most average taxpayers must start emptying their accounts well before their required beginning date.
The EARN Act would also allow taxpayers to deposit an additional $10,000 into retirement accounts between ages 60 and 63. Again, only the wealthiest Americans will actually be able to take advantage of these new rules.