# This bill aims to give Americans ‘confidence and dignity’ as they approach old age

“This bill will help Americans approach old age with the confidence and dignity they deserve after decades of hard work and sacrifice,” Neal said in a statement announcing the bill.

There are a handful of provisions in the latest proposal, including automatic enrollment into 401(k) plans, financial incentives for small businesses to offer retirement accounts and the expansion of the existing federal tax credit for contributions to a retirement account. 

Other parts of the proposal include: 

• Increase the required minimum distribution to age 75, instead of 72 as it is now. As it stands, individuals need to begin withdrawing from many of their retirement accounts when they reach 72 years old or they face a penalty charge. Increasing the age will allow retirees who do not need the money to delay paying taxes on distributions they may not want to take, as well as continue to save in these accounts longer.
• Allow individuals to pay down a student loan instead of contribute to a retirement account but still get the company’s match toward their retirement savings. 

• Expand rules for certain employers to band together to give their employees retirement benefits. 

• Make it easier for military spouses to save for retirement, since they can struggle to do so because of frequent job changes. 

• Implement changes to individual retirement accounts, such as providing more flexibility to give to charity through that type of account and avoid penalties for mistakes made when managing an IRA. 

• Create a national database for Americans to find lost retirement accounts. 

This legislation would be the latest attempt at improving retirement security in the country. Congress passed the SECURE Act in December, which increased the age for required minimum distributions to 72 from 70 ½ and allowed greater flexibility for 401(k) plans to include annuities. The SECURE Act also eliminated the stretch IRA, where beneficiaries of retirement accounts could prolong the distribution of funds from inherited accounts, and widened access to multiple employer plans for small businesses. 

“Our legislation will make it easier for folks to save, protect Americans’ retirement accounts, and give workers more peace of mind as they plan for the future,” Brady said.

Many Americans already needed help preparing for retirement, but the pandemic has made it worse. Millions have lost jobs, seen a reduction in hours and wages or became ill (or had a loved one become ill). All workers — both low- and high-earners — will feel the impacts of the pandemic on their retirement security, either through short-term wage losses or through investment returns, according to a report from the New School’s Schwartz Center for Economic Policy Analysis. 

“COVID-19 has only exacerbated our nation’s existing retirement crisis, further compromising Americans’ long-term financial security,” Neal said in a statement when introducing the proposal. “In addition to meeting workers’ and families’ most pressing, immediate needs, we must also take steps to ensure their well being further down the road.”