Secure Act 2.0: How the House and Senate Bills Compare in 5 Key Areas

For IRAs, the current catch-up limit is frozen at $1,000. Both bills would allow that limit to increase based on the cost of living. The House bill would be effective in 2024; the Senate bill would be effective in the year following the year the bill is signed into law.

Both bills require that any plan catch up-contributions for those over age 50 would have to be made as Roth contributions beginning in 2023 (the House bill) or 2024 (the Senate bill). In addition, plans could allow employees to have employer matching contributions made as Roth contributions. (Currently, employer contributions are made pretax.) The House bill is effective after the date the bill is signed into law, while the Senate bill is effective in 2024. These changes are designed to help pay for other provisions of the bills.

3. Qualified Charitable Distributions

In both bills, the limit on "qualified charitable distributions," which are tax-free direct transfers from traditional IRAs to charities, would be indexed for inflation. That limit is currently $100,000 per person, per year. This provision would be effective in the year the bill is signed into law under the House bill, or the year after the bill is signed into law under the Senate bill.

Employers would be allowed to make matching contributions to company savings plans and SIMPLE IRAs on student loan payments beginning in 2023 under the House bill or 2024 under the Senate bill.

4. Saver's Credit

In both bills, the Saver's Credit, a federal tax credit for middle- and low-income taxpayers who contribute to an IRA or company plan, would be expanded but not until 2027.

5. Early Distributions

Both bills create a new exception to the 10% early distribution penalty for IRA and plan withdrawals by victims of domestic abuse. This would be effective immediately after the provision becomes law. The Senate bill (but not the House bill) would create another exception to the 10% penalty for emergency withdrawals beginning in 2024.

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