By Monday, Changes To Retirement Plans? December 22, 2022

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WASHINGTON—Senators passed a $1.65 trillion spending bill just ahead of the Christmas holiday and a gathering winter storm, after breaking an impasse related to immigration policy and racing through more than a dozen amendments.

The bipartisan bill was approved in a 68-29 vote. The legislation will now go to the House, where it is expected to pass, before heading to President Biden’s desk.

The omnibus legislation includes $858 billion in military spending, $45 billion more than the White House had requested and up about 10% from $782 billion the prior year. It also includes $772.5 billion in nondefense discretionary spending, up almost 6% from $730 billion the prior year. The overall discretionary price tag works out to about $1.65 trillion, compared with $1.5 trillion the prior fiscal year.

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Tucked into the $1.7 trillion government spending bill for 2023 lawmakers unveiled Tuesday are a range of significant reforms to help Americans save more for retirement.

These include increasing the age for required minimum distributions from retirement plans to pushing businesses to get more employees enrolled in plans. The bill also includes ideas that may help younger people save more earlier in life.

The measures — which begin on page 2,046 of the massive 4,155-page bill — mean that long-delayed retirement reform legislation known as SECURE 2.0 is now likely on a path to becoming law as soon as this weekend and would start to address what is becoming a retirement savings crisis in the U.S.

In a note Tuesday morning, Stifel Chief Washington Policy Strategist Brian Gardner explained how “the bill would expand retirement saving options by allowing a deferral on mandatory withdrawals, an increased catch-up contribution to 401(k) plans, and provide new options for small businesses to offer retirement plans to employees.”

Another key part of the bill would change the age when people must start taking mandatory distributions from their private retirement plans.

The SECURE Act increased the required minimum distribution age to 72 from 70.

Now, under the spending bill introduced Tuesday, the age requirement would raise again to 73 starting on January 1, 2023 and then to 75 by 2033.