Congress wants to overhaul retirement plans. Here's what might be coming.

[mahatmakanejeeves]

BUSINESS

Congress wants to overhaul retirement plans. Here’s what might be coming.

Lawmakers are considering a massive $1.7 trillion spending bill. Folded inside are big changes to Americans’ retirement plans.

By Julian Mark
December 21, 2022 at 1:03 p.m. EST

Tucked halfway down into a 4,155-page spending bill that proposes $1.7 trillion to fund the federal government through much of 2023 are proposed changes to how retirement plans work. Intended to boost retirement savings and access to 401(k) and individual retirement accounts, the Secure Act 2.0 is aimed at low- and middle-income workers, those strapped with student debt and people who may not yet have a long-term retirement account.

Will Hansen, the chief government affairs officer with the American Retirement Association, which advocated for Secure 2.0, told The Washington Post it’s the largest bill covering retirement in more than 15 years. “These provisions will increase the number of small businesses that are offering a plan, as well as increase the savings Americans are putting aside for retirement,” he said.

Here are some of the key proposals for retirement savings.

1 Automatic enrollment

Starting in 2025, most businesses would be required to automatically enroll employees in 401(k) plans. Employers would contribute 3 to 10 percent of their wages. Each year, the contribution would increase by 1 percent until it reaches at least 10 percent, though not more than 15 percent. ... Businesses with 10 or fewer employees and businesses that have been open for less than three years would be exempt, along with church and government plans.

{snip}

Gift Article
https://wapo.st/3YHGN8V

By Julian Mark
Julian Mark covers breaking business and technology news for The Washington Post. He previously worked overnight with The Post's Morning Mix team. Before joining The Post, he covered housing and policing for Mission Local in San Francisco. Twitter https://twitter.com/badjujusf

[marble falls]

1. Yeah, let's privitize the retired's income. Nothing more stable than the stock market.

[mahatmakanejeeves]

2. I might be mistaken, but don't most 401(k) plans offer a variety of options?

You can put the money in stocks. You can put the money in government bonds. You can put the money in a lifecycle fund.

I'll wait for progree to say more.

[Scrivener7]

3. It's already pretty much privatized. But that employer contribution mandate

and the employer matching are pretty awesome.

[Hokie]

4. The proposal also includes more adjustments to the age for RMD's

The age is 72 now since it was last raised in 2019. The proposed change would make the first year for required minimum distributions age 73 for anyone who turns 72 after 12/31/2023 and before 1/1/2030. The age would eventually go up to 75 down the road. That is in both the House and Senate versions so it will likely pass.

[Farmer-Rick]

5. Just a few tweeks to

A pretty sad retirement system.

These few changes may help a few people. We need to go back to defined pension plans and not allow corporations to raid those funds when they merge and buyout each other.

[Warpy]

6. Hey,, Congress! RAISE WAGES!

This sounds like something that "fiscal conservatives," the assholes responsible for allowing Reagan to scrap the progressive income tax screwing up the banking system so it favors only the richest came up with.

There's already a 15% contribution, it's called OASDI. The problem that it already duts into wages that are below subsistence. Does Congress know what those words mean? They mean you can't afford a place to live and food to eat. It means our hard work doesn't allow us the pay on which to live. It means a slowly starving, ill population of working people. It means disaster.

How dare workers who already don't have enough to eat not save for their retirement?

This whole idea is insulting, a pipe dream of upper middle class types who don't know what it's like to skip meals to make the rent.
,
Any retirement plan that enforces savings in addition to OASDI needs to start with raising the minimum wage to a living level, otherwise it's just more mealy mouthed feel good crap for the upper middle class who want their kids to spend less on cosmetics and new phones and think about their distant future.

Nothing but raising wages at the bottom is going to work. Period.

[peppertree]

8. And the Payroll Tax cap

The Apartheid Ape, as you know, pays the same payroll tax, as many of his engineers working 60+ hours a week.

Our Payroll Tax is like Thatcher's Poll Tax: the same 400 pounds or so, no matter if you were a 'City Slicker' (a London money launderer), or his janitor.

It did not end well for the Maggot.

[bucolic_frolic]

7. Critters should go out and study some actual old people and how they live and budget.