We thought you would want to know about a potential change in tax law that could become effective this year. Earlier today, with a vote of 414 to 5, the House of Representatives passed the Securing a Strong Retirement Act of 2022, H.R. 2954, which has been dubbed the “Secure Act 2.0.”
The follow-up bill to the Secure Act of 2019 now moves to the Senate for a vote, where additional changes could be made. It’s important to note that there are items in the bill that could potentially impact taxpayers as early as this year.
The first important proposed change is an increase in the maximum catch-up contribution limits to IRAs for those that are age 62, 63, or 64. This limit would move up to $10,000 per year. The most important proposed change this year is the increase in age for starting Required Minimum Distributions (RMDs) to 73 for this year. This would mean that if you turn 72 in 2022, next year—rather than this year—would be the first year in which you must start taking your RMDs.
Again, this bill has only passed in the House and has not been signed into law. But, depending on your age and circumstances, we would encourage you to reach out to us to discuss what action you should be taking and how this potentially impacts your financial plan going forward. We will be updating you as more develops on this subject.
This communication is for informational purposes only and should not necessarily be regarded as legal, tax, or customized financial advice or comment or as an official statement of the firm, or any agents thereof. J.L. Bainbridge & Co., Inc. is not a broker dealer and does not offer tax or legal advice. Please consult your tax or legal advisor for assistance regarding your individual situation. The views expressed in this material and in any attachment are those of the sender and do not necessarily reflect the views of the firm.