The House of Representatives could vote this week on legislation that would increase the retirement savings system of U.S. workers.

On Tuesday, the House could vote for Secure Act 2.0 (Securing a Strong Retirement Act)

StenyHoyer, D.Md., House majority leader, said that the legislation would increase automatic enrollment in retirement plans offered by employers, reduce regulations for small businesses, and assist those who are near retirement to save more and last longer. This will allow Americans to have greater access and better prepare for retirement. wrote in a Friday letterAbout the Secure Act.

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This bill is a continuation of the 2019 Secure Act. The House Ways and Means Committee voted unanimously to approve the bill on 2021.

Lisa Featherngill is the national director of wealth planning for Comerica Bank. “It contains some provisions which are fairly favorable in terms allowing individuals to contribute more for retirement,” she said. The provisions are especially helpful for young savers.

Highlights of this bill

Employers and retirement savers will both benefit from the Secure Act 2.

The employer would have to auto-enroll eligible workers into 401(k), at a rate of 3 percent of annual salary. It would then increase each year until they contribute 10%. Employers could elect to withdraw or choose a different level of contribution. Employers with fewer than 10 employees and businesses less than three years of age would not be eligible for the mandate.

It would make it easier for savers to increase their retirement savings, or to withdraw funds from accounts. The catch-up contribution limit for individuals over the age of 62, 64, and 63 could increase to $10,000 from $6,500.

This would increase the minimum age to be eligible for distributions, which will go up from current 72 years.

The legislation would allow student loan borrowers to receive a retirement boost. Employers would be allowed to contribute to their retirement by matching the payments of student loans.

Featherngill said, “Let’s assume you have someone who has significant student loan debt and can’t make much contribution to their 401k.” This would give them an opportunity to get an employer match for the student loan amount.

Featherngill stated that another potential benefit for young workers could be that the employer match would be applied to Roth 401(k) and that this would offer a tax-benefit when they reach retirement.

The legislation will also make certain changes to the tax credit system for domestic abuse survivors, small business owners, and low-wage workers. This legislation will also establish a national database to allow Americans to recover their lost retirement funds.

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