4 Ways the Secure Act Could Help You Save for Retirement

Retirement Income

4 Ways the Secure Act Could Help You Save for Retirement

Posted by
3 months ago | June 4, 2019

We all know that retirement planning is a challenge for many American workers, and little has been done to address those challenges since the last set of reforms back in 2006. That’s why we’re excited to bring you news of the Secure Act, which passed the House with a vote of 417-3 in late May, and is now being debated in the Senate. If the Act passes, we are likely to see changes in the following four areas.

Small business employees could gain access to 401(k) accounts. Typically enjoyed by employees of larger companies, 401(k) accounts could become more widely used if the Secure Act passes. The bill includes tax provisions to encourage small business owners to extend this benefit to their workers.

Part-time employees might also see increased retirement planning opportunity. A similar bill is currently moving through the Senate, and includes language that allows part-time employees to access 401(k) plans after completing 500 hours of employment in two consecutive years. It is reasonable to assume that the Senate might add a similar provision to the Secure Act as they evaluate it.

Matching retirement funds for student loan payments. It’s no secret that younger workers tend to put off retirement savings while working to pay down student loans. The Secure Act would allow employers to make matching contributions to retirement accounts, in the amount of student loan payments. This way, workers can pay down debt without neglecting their futures.

The age for contributing to an IRA might be extended. Currently, you can only contribute to an IRA up to age 70 ½, at which point you are required to begin minimum distributions. Older workers might be excited to learn that the Secure Act proposes to lift that age limit to 72, allowing them to prepare for retirement a bit longer.

We’d like to point out that the Secure Act does address 401(k) and IRA plans, but does not seek to remedy the issues within Social Security or our failing pension plans. The bill is exciting and could help many workers if it passes, but you should continue meeting with a financial planner regularly and stay faithful to your plans. Give us a call if you have any questions about changes in store, and we’ll help you reevaluate your retirement plan if and when it becomes necessary.

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