6 RMD Changes We Could See This Year

Congress is considering two bills that would make major changes to required minimum distributions. Could your RMDs be affected?

picture of three post-it notes with R-M-D written on them
(Image credit: Getty Images)

Congress is on a bit of a roll these days. Despite deep political divisions within the country, they've managed to send several major bills to the president's desk so far this year addressing semiconductor manufacturing, veterans' benefits, gun safety, climate change, and more. And they might not be done yet. Lawmakers in Washington are currently considering two separate bills that would make substantial changes to how Americans save for and are taxed in retirement. And one of the major areas of focus in these bills is reforming RMDs (i.e., required minimum distributions).

The SECURE Act, which was enacted in 2019, extended the age at which you must start taking RMDs from 70½ to 72. That was a big boost for seniors, who can now keep money in their tax-free retirement accounts longer. But that wasn't enough help for retirees in the eyes of many lawmakers. So, as soon as the ink was dry on the SECURE Act, a few key members of Congress began planning additional legislation to help more people save for retirement and hold on to their money longer in retirement.

Those efforts resulted in two bills that are now before Congress: the SECURE Act 2.0 and the EARN Act. The SECURE Act 2.0 was passed by the House of Representatives in March with a 414 to 5 vote. The EARN Act was introduced in the Senate in September. Both bills would make significant changes to RMDs, but there are differences in the two bills' RMD provisions.

Many experts believe the odds of passing a major retirement bill before the end of the year look promising. But we don't know yet which bill, if any, has a better chance of actually make it through Congress and becoming law. (The bills could also be revised or even combined into another bill.) So, the wise move at this point is to familiarize yourself with the potential changes in both bills. And for retirees or those approaching retirement who are worried about mandatory retirement account distributions, that means getting up to speed on the six possible RMD changes included in the two bills. Check them out now, so you're not caught off guard if RMD reform is passed in 2022.

Rocky Mengle
Senior Tax Editor, Kiplinger.com

Rocky is a Senior Tax Editor for Kiplinger with more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, he worked for Wolters Kluwer Tax & Accounting and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky has a law degree from the University of Connecticut and a B.A. in History from Salisbury University.