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Regulation and Compliance > Legislation

Senators Release Final Text of EARN Act Retirement Bill

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What You Need to Know

  • The bill will be part of the Senate's Secure 2.0 package, which must be reconciled with the House version.
  • The RMD age would be raised to 75 from 72.
  • The bill would also allow emergency retirement plan withdrawals without penalty.

In the Senate Finance Committee, Chairman Ron Wyden, D-Ore., and Sen. Mike Crapo, R-Idaho, introduced late Thursday the final text of the bipartisan Enhancing American Retirement Now (EARN) Act, which passed the committee in June.

The final text includes the amendments the committee approved as well as technical corrections that may have been needed.

Senate Finance’s EARN Act and the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg, or Rise & Shine, Act, which passed the Senate Health, Education, Labor & Pensions Committee by voice vote on June 14, “will become the baseline text for the Senate to negotiate a final Secure 2.0 bill with the House between now and the end of the year,” said Dan Zelinski, spokesman for the Insured Retirement Institute in Washington.

Wyden said Thursday in a statement that the EARN Act “includes policies put forward by members on both sides of the aisle, and I appreciate the collaboration of Senator Crapo every step of the way. I look forward to working with Senator Crapo and our counterparts in the House to get the EARN Act signed into law.”

The EARN Act encourages small businesses to adopt retirement plans, makes it easier for part-time workers to participate in retirement plans, and expands the saver’s credit for low- and middle-income workers.

The EARN Act would also allow withdrawals for certain emergency expenses, according to a section-by-section summary of the bill.

Under present law, an additional 10% tax applies to early distributions from tax-preferred retirement accounts such as 401(k) plans and IRAs. “This provision would provide an exception for certain distributions used for emergency expenses, which are unforeseeable or immediate financial needs relating to personal or family emergency expenses,” the summary states. “Only one distribution would be permissible per year of up to $1,000, and a taxpayer would have the option to repay the distribution within 3 years.”

The EARN Act would also allow for penalty-free withdrawals from retirement plans for individuals in cases of domestic abuse.

The bill also increases the age for required minimum distributions to 75 from 72, effective after 2031, and allows for indexing the limit on IRA catch-up contributions.

“Present law permits an IRA owner to contribute an additional $1,000 (unindexed) annually to the IRA beginning at age 50,” the summary states. “This provision would index this catch-up limit, effective for years beginning after date of enactment.”


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