By Keelie Bishop firstname.lastname@example.org
Many individuals, regardless of generation, face the overwhelming question as to if they will ever be able to afford to retire. Too often many people do not save enough to retire. According to a U.S. Government Accountability Office review, about 48% of households had no retirement savings in 2016 and even when people are saving, their retirements won’t last very long (10-20 years). In response, Congress has made it a point to focus on retirement legislation.
For the first time in over a decade, lawmakers are working on passing comprehensive retirement reform. For example, on May 23, 2019 the U.S. House of Representatives passed the SECURE (Setting Every Community Up for Retirement Enhancement) Act by a margin of 417 to 3. This is legislation that aims to encourage retirement savings by increasing access to retirement plans.
The changes currently include: making it easier for small businesses to band together to offer 401(k) plans, requiring businesses to let long-term, part-time workers become eligible for retirement benefits and repealing the maximum age for making contributions to traditional individual retirement accounts (right now, the age is 70½), and changing the required minimum distribution age to 72 for certain retirement accounts.
The bill is intended to increase the amount of tax credit that the government will give to small businesses for having plans up to a maximum of $5,000 per year, from $500 per year. For businesses that automatically enroll employees, the maximum is $5,500.
This particular bill is now in the Senate, but is not the only bill aiming towards retirement reform. In addition there is also the RESA (Retirement Enhancement and Savings Act) bill and the Social Security 2100 Act currently being worked on. As a result it is expected that there will be significant changes to come.