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Biden  – Expected Changes to Retirement

  • A single filer in the top 37% tax bracket earning $600,000 currently gets a tax deduction of $370 for each $1,000 she contributes to a 401(k) plan, compared with a single filer earning $60,000 and in the 22% tax bracket, who only gets a $220 tax deduction for every $1,000 contributed. With a flat tax credit, using the same example as before, the individuals who earn $600,000 and $60,000 would both get a $260 tax credit for that $1,000 contribution.
  • He would repeal the current tax deferral of traditional retirement plans such as 401(k)s and individual retirement accounts and replace it with a tax credit.
  • “Automatic 401(k)”
  • Biden has also said family caregivers should be allowed to make “catch-up” contributions to retirement accounts, as their careers and retirement savings journeys are often disrupted when they leave the workforce to care for a sick or elderly loved one. Workers who take on these familial responsibilities face numerous hurdles, including pausing or reducing their own income, which could also mean losing access to a workplace retirement plan. Biden said they should be able to make “catch-up” contributions even if they aren’t “earning income in the formal labor market” — a proposal introduced with bipartisan support. His plan also mentions tax credit for informal care-giving and tax benefits for older Americans who buy long-term care insurance.

2020 changes

Accredited Investor Status

In August 2020, the Securities and Exchange Commission expanded the pool of sophisticated investors qualified to purchase unregistered securities. This expanded definition now includes people who have professional certifications. Anyone holding Series 7, Series 65 or Series 82 securities licenses would qualify as an accredited investor.  In addition, employees of a private fund who invest in that fund, limited liability companies and family offices with at least $5 million in assets, Indian tribes, and spouses of accredited investors. The SEC might add more certifications, designations, or credentials in the future.


CRD – Coronavirus Related Distribution:  The coronavirus-related distribution is a distribution that is made from an eligible retirement plan to a qualified individual from January 1, 2020, to December 30, 2020, up to an aggregate limit of $100,000 from all plans and IRAs.

401(k) –  section 2202 of the CARES Act provides for expanded distribution options and favorable tax treatment for up to $100,000 of coronavirus-related distributions from eligible retirement plans (certain employer retirement plans, such as section 401(k) and 403(b) plans, and IRAs) to qualified individuals, as well as special rollover rules with respect to such distributions. It also increases the limit on the amount a qualified individual may borrow from an eligible retirement plan (not including an IRA) and permits a plan sponsor to provide qualified individuals up to an additional year to repay their plan loans.

IRA – The 10% additional tax on early distributions does not apply to any coronavirus-related distribution.

Paying Tax on IRA Distribution – The distributions generally are included in income over a three-year period, starting with the year in which you receive your distribution. For example, if you receive a $9,000 coronavirus-related distribution in 2020, you will report $3,000 in income on your federal income tax return for each of 2020, 2021, and 2022. However, you have the option of including the entire distribution in your income for the year of the distribution.


CARES Act, waives required minimum distributions (RMDs) during 2020 for IRAs and retirement plans, including beneficiaries with inherited accounts.

What if you already took your RMD?

Many people had already taken their RMD before the ACT was passed into law. In Notice 2020-51 , the IRS is allowing someone who has already taken their 2020 RMD to put it back into their retirement account. This is permitted even if the 60-day window period has lapsed.  If you have already done a 60-day Rollover in the past 12 months you normally could not do another one, but with the new rule you have until August 31st, 2020 to put the funds back in the account.  The funds must be returned to the account they came from.

SOLO(k) formations

Section 201 of the SECURE Act, for taxable year 2020, you can establish the plan up until your tax filing deadline plus extensions.  So that means you can make a 2020 contribution in 2021, up until the tax filing deadline in 2021 (which is usually April 15th).’

“Secure Act 2.0”

A new bill that would expand auto-enrollment, provide incentives for small businesses to offer plans, increase the  (RMD) age to 75, allow for bigger catch-up provisions—there is a lot in so-called SECURE Act 2.0. … The bill builds on the SECURE Act passed late last year to further improve workers’ long-term financial well-being.


uDirect IRA Services staff is working both from home and from our offices in response to COVID-19. Rest assured, we are fully operational and ready to help with your retirement needs.