Secure 2.0 Act


The Secure 2.0 act is not just a single bill, it is the combination of three bills that are expected to come together into the Secure 2.0; in an attempt to help Americans with the retirement Crisis. It is a legislation that is built on and expands the SECURE Act of 2019 to improve retirement savings accounts.

The Secure 2.0 Act is expected to be out of congress and on the president’s desk before January; SECURE 2.0 is something both chambers of Congress want to see become law. Bipartisan support is integrated into both versions of the bill. The 103 sponsors of H.R. 2954 consist of 55 Democrats and 48 Republicans. On the Senate side, six Republicans and five Democrats are co-sponsors of S. 1770. SECURE 2.0 tries to accomplish three goals: Get people to save more for retirement, improve retirement rules, and lower the employer cost of setting up a retirement plan.

There are still plenty of negotiating to be done on the specifics of this bill, but we can expect things to be hashed out by early 2023.

Examples of Changes that will be made after Secure 2.0 passes

RMD Penalties will be decreasing. The SECURE Act 2.0 would decrease the liability to 25% (formerly 50%), and if the mistake is promptly corrected, it drops to 10%.

Catch up limits for IRA and Roth IRA owners ages 50 and older would be indexed for inflation. Since 2006, the $1000 extra hasn’t increased, regardless of inflation.

Contributions to a designated SEP or SIMPLE Roth IRA
would be permitted for taxable years beginning after 2022.

Allow aggregation of RMDs when account is partially
annuitized. Current regulations treat as two separates
accounts in year following year of purchase.

While the SECURE Act 2.0 hasn’t become law, it will impact investors differently depending on their situation. Stay up to date so you can provide the most current knowledge for your client!