This bill makes it easier for people age 50 and older to move money from their employer retirement plans into individual retirement annuities while they're still working. Currently, you typically can't do this until you leave your job or retire, but this law would allow you to make that move earlier if your plan permits it.

The bill also requires that when you're considering taking money out of a retirement plan, you get a clear, easy-to-understand explanation of your options. This explanation must cover important details like the 30-day window you have to decide, what taxes you might owe (including a potential 10% penalty if you're under 59½), and how much will be withheld from your distribution. It explains which types of distributions can be rolled over to another account and which cannot, and it makes clear that you can ask your plan administrator for help understanding your specific situation.

The law also clarifies the rules around direct rollovers—when money goes straight from one retirement account to another without you touching it. These direct transfers avoid the automatic 20% tax withholding that normally happens when you receive money directly. If you do receive money directly, you have 60 days to roll it over to another retirement account. These changes take effect for tax years starting after December 31, 2025.