Important bills in Senate/House that change/broaden retirement plans...

[Fijimn]

Let's see if the adults in the House and Senate can take over and get aspects of these bills passed:

SECURE 2.0 (passed House) - the Senate has a similar bill (Retirement Security and Savings Act)

For the most part, the bills do good things (IMO).

Here's how the Senate could change your 401(k) plan

The US Senate has retirement on the brain, and it's not because the average age of the legislative body is 64. A group of new bills that could change the way Americans save for retirement have landed on lawmakers' desks this spring.

www.cnn.com

 

[MepoDawg#]

Have questions on the last part below. Can employees opt out of the automatic 1% increase? My company already does the 3% (safe harbor) automatically whether you choose to participate or not and enrolls you in automatic 1% increase though it can be changed.

• Require employers to automatically enroll all eligible workers into their retirement plans at a savings rate of 3% of salary. (Many employees currently have to opt in and then choose their contribution level.) Enrolled workers' contribution rates will be automatically increased each year by 1% until their contribution reaches 10% annually.

 

[CLUB215]

Have questions on the last part below. Can employees opt out of the automatic 1% increase? My company already does the 3% (safe harbor) automatically whether you choose to participate or not and enrolls you in automatic 1% increase though it can be changed.

• Require employers to automatically enroll all eligible workers into their retirement plans at a savings rate of 3% of salary. (Many employees currently have to opt in and then choose their contribution level.) Enrolled workers' contribution rates will be automatically increased each year by 1% until their contribution reaches 10% annually.

Yes you can decide your contribution level.

 

[lucas80]

So, who is against this and why?

 

[The Tradition]

This is nice, but they need to get rid of ADP/ACP testing rules so that everyone can get an employer match.

 

[ATLNole1]

Most of the changes seem reasonable. I just hope they do not do anything that prohibits backdoor Roth contributions.

 

[Titus Andronicus]

So ... if you are saving say 5% of your income in order to have a down payment on a house ... going forward you will be saving 2% of your income and contributing 3% to a mandatory retirement plan ... managed or supervised at least, by some government entity? The house you were intending to buy will likely appreciate by more than 3% a year during your initial years of contributing to your 401-k. How does this help anyone who is attempting to build assets on their own?

.....................................................

From my experience, everyone WANTS a 401-k. The problem in most families is that they simply do not have the money, even if there are matching funds available.

............................................

During the initial phases at least, of one's peak earning years, most people are raising families, clinging to the dream of home ownership, and paying off student loans. Now the federal government is stepping in and rerouting most if not all of these expenses (the payments anyway) into retirement plans. No more football for junior? No more senior trips? no more limos to the prom ... postponement of the new house?

In the meantime, real incomes are dropping, making those 3% contributions ever more difficult.

Huh?

I must be missing something. It appears to me that the folks backing this are taking up the Fiddle.

 

[praguehawk]

So ... if you are saving say 5% of your income in order to have a down payment on a house ... going forward you will be saving 2% of your income and contributing 3% to a mandatory retirement plan ... managed or supervised at least, by some government entity? The house you were intending to buy will likely appreciate by more than 3% a year during your initial years of contributing to your 401-k. How does this help anyone who is attempting to build assets on their own?

.....................................................

From my experience, everyone WANTS a 401-k. The problem in most families is that they simply do not have the money, even if there are matching funds available.

............................................

During the initial phases at least, of one's peak earning years, most people are raising families, clinging to the dream of home ownership, and paying off student loans. Now the federal government is stepping in and rerouting most if not all of these expenses (the payments anyway) into retirement plans. No more football for junior? No more senior trips? no more limos to the prom ... postponement of the new house?

In the meantime, real incomes are dropping, making those 3% contributions ever more difficult.

Huh?

I must be missing something. It appears to me that the folks backing this are taking up the Fiddle.

Automatic enrollment does not equal mandatory participation.

 

[Titus Andronicus]

Automatic enrollment does not equal mandatory participation.

So, enrollee's will have the option of dropping out? and their initial payments returned with no penalty?

This sounds like a squirrely setup to me.

 

[praguehawk]

So, enrollee's will have the option of dropping out? and their initial payments returned with no penalty?

This sounds like a squirrely setup to me.

You would not get already made contributions back. Nothing squirrely about it.