Retirement security is again on the congressional agenda. And for good reason. Here are two key legislations to know that are designed to make it easier for Americans to plan for their golden years.
Retirement reform legislation seems to be about the only thing all parties can agree on these days, and it’s leading to a flood of new legislation being introduced on Capitol Hill. The SECURE Act 2.0 and Cardin-Portman retirement bills currently have some of the strongest bipartisan support in the House. Two bills, at the federal level, could change a number of retirement-related laws. These changes would simplify plans by raising the required minimum distribution age, and raising catch-up contribution limits.
These bills could form a stable foundation to help America’s workers and retirees build economic equity, strengthen their financial security, as well as protect their income to sustain them throughout their retirement years.
The Retirement Security and Savings Act includes a broad set of reforms designed to strengthen Americans’ retirement security—and not coincidentally it should be noted that there are several overlapping components of the Portman-Cardin bill and the Securing a Strong Retirement Act.
The Portman-Cardin Bill addresses four major opportunities in the existing retirement system:
- Allowing people who have saved too little to set more aside for their retirement.
- Helping small businesses offer 401ks and other retirement plans.
- Expanding access to retirement savings plans, including for low-income Americans without coverage.
- Providing more certainty and flexibility during Americans’ retirement years.
“Americans need to save more so they can retire with the dignity and stability they deserve. It’s an ongoing struggle, especially during the pandemic when millions of Americans were without work for months or longer and small businesses struggled to make ends meet,” Senator Cardin said. With high bipartisan support and the lack of controversial issues with each of the bills mean that each has a good chance of passing.
The last comprehensive retirement package that was passed was back in 2001. The House has since then seen more Americans participate in 401ks and IRAs to save for their retirement, but the Nation’s savings rate still remains too low. There are far too many Americans with no retirement account at all.
This legislation would help Americans save more for retirement by allowing people who have saved too little to set more aside for their retirement, helping small businesses offer 401ks and other retirement plans, expanding access to retirement savings plans for low-income Americans without coverage, and providing more certainty and flexibility during Americans’ retirement years. The bill has the backing and is supported by the American Benefits Council, AARP, the Insured Retirement Institute, Fidelity, Nationwide, T. Rowe Price, Vanguard and more.
- Increase the required minimum distribution age, when retirement account users have to begin taking out cash, to 75, from 72, by 2032.
- Let nonprofit employers’ 457 defined contribution retirement plans, as well as nonprofit employers’ 403(b) tax-sheltered annuity plans, into the multiple employer plans, or MEPs, that were created by the Secure Act.
- Make it easier for people to use “qualified longevity annuity contracts,” or deferred income annuities designed to meet government standards, to provide guaranteed streams of lifetime income once they are older.
- Help employees find lost retirement accounts by creating a national, online database of lost accounts.
- Create a new, three-year, $500-per-year tax credit tax credit for small businesses that automatically re-enroll plan participants into an employer-sponsored defined contribution retirement plan at least once every three years.
- Enable employers to put matching contributions into workers’ 401(k) plan accounts and other defined contribution retirement plan accounts when the workers make student loan payments, as well as when the workers make contributions to the plans.
The bill passing would be a significant win for Americans everywhere. Planning for retirement would be made a bit easier for all. Start by connecting with a financial advisor who can help you plan for your retirement future (and keep you laser focused along the way).
At CKS Summit Group, our focus is to bring you fresh new ideas for your retirement income, whatever the political climate. What’s more, every Strategy Session with us is complimentary. Contact us here today to get started.