This week the House Ways and Means Committee UNANIMOUSLY passed the Secure Act which will make it easier for Small Employers to set-up 401(k)s for their employees. The bill offers various incentives to firms to expand 401(k) access and to pay for part-time employee retirement benefits. Congress is doing this to combat a retirement crisis in America. "Americans currently face a retirement income crisis, with too many people in danger of not having enough in retirement to maintain their standard of living and avoid sliding into poverty" according to Richard Neal Democratic Representative from Massachusetts and Committee Chairman. The bill would also repeal the maximum age that contributions could be made to IRAs. The plan would also raise the age to mandatory withdrawals to 72 from its present 70 1/2. The bill would also expand savings in 529 plans from just college related expenses to include home schooling expenses as well as to help pay for student loans.
https://www.cnbc.com/2019/04/02/house-committee-passes-secure-act-for-401k-plans-amid-retirement-income-crisis.html
2 comments:
I am curious as to whether the US government will look at Social Security much when reviewing their retirement security plans. Could they seek to expand the program in their efforts?
I like your comment, Will. I too think that is interesting. I think Social Security is in a tricky situation. There used to be a 3-1 ratio, so three workers for 1 beneficiary. That is now 2-1 and I think that may drop to 1-1 in the future, and that's just due to the number of people in a specific generation. When SS was first created, the government didn't think people would be living 20-30+ years after retiring, and the average life expectancy is increasing so it will be interesting to see how SS plays out. Privatize it? Put funds in equities markets to try and yield some returns?
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