The Secure Act

A retirement bill backed by both Republicans and Democrats has been passed by the House of Representatives and is moving closer to becoming law. The aim of the Secure Act is to improve the nation’s retirement savings and help both individuals and businesses get our nation’s retirement savings more in line with where it should be.

The reason the Act is good for companies, especially smaller employers, is that they will be able to offer retirement plans by pooling retirement plan providers with other small companies. These plans could have features and low-cost funds that up until now have only been made available to larger retirement plans with bigger assets, which translates to more purchasing power. The bill will also offer tax credits to small employers if they were to join a pooled program, which in turn benefits the individuals who work for them.

Another benefit from the bill is it seeks to eliminate the maximum contribution age on traditional individual retirement accounts which means that you will be able to keep saving even after the previous cap of 70½. This new bill will up the age when retirees are forced to begin taking taxable withdrawals from their retirement accounts and IRAs to 72. 

If it gets passed into law, the Secure Act will be the largest change to retirement plans in over 12 years. The last change of this size was in 2006 when Congress allowed for automatic enrollment and target-date funds.

The fact that both parties are agreeing to move it forward shows promise that it could make it into law, and if that does happen, it could be good for everyone, not just small business owners. [4] Data from the Federal Reserve shows that Americans are way behind on saving the amount that they need for retirement. In fact, a Survey by Bankrate said that most Americans were 48 percent short of what they would need to have saved if they were to retire.

Make sure that you keep up-to-date with what happens with the Secure Act whether you are an employee or a small business owner. Change is on the horizon, and it could be a life-changer for many folks out there.

 

 

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