From Birch Gold Group
On May 23, the House passed a bill known as the “SECURE Act” (HR 1994). The clever acronym stands for Setting Every Community Up for Retirement Enhancement.
The Senate has yet to pass the bill though, and seem to have delayed it pending some proposed revisions.
According to a Forbes piece, the bill “essentially has 29 provisions” aimed at making saving for retirement easier by providing enhanced access to 401(k) plans.
But that same piece also highlights a downfall that could mean it won’t help retirees that much (emphasis ours):
While the bill does smooth out some minor roadblocks to retirement savings – like removing the IRA age limitation, expanding the start date for RMDs, increasing annuity options, and potentially increasing the likelihood of small employers starting retirement plans – there is still a strong argument that these changes, while positive, won’t move the retirement security needle much or at all.
This is par for the course for most legislation aimed at retirement security, the illusion of tackling an understandably complex issue, but providing little tangible traction.
A CNBC article shines light on another potential downfall (emphasis ours):
By making it easier and cheaper for small businesses to offer 401(k) plans, if the bill becomes law, “millions more people, hypothetically, should have access to the ability to save at work,” says Parks.
Politicians generally like to “sell” the ideas behind a piece of legislation with the number of people who “could” be impacted by it. Plus, the “ability” to save at work may or may not prove useful for future retirees.
Even the AARP, who seem to support the bill, only go so far as to say it “would make more retirement saving options available to more Americans.” But if you go to a restaurant, and can’t afford to buy what’s on the menu, having “more options” doesn’t really mean much.
It remains to be seen if “millions” more would benefit from the SECURE Act. That said, the Forbes piece also revealed a number of potential impacts on your retirement if it did pass as written. For example:
- Removal of the age limitation for contributing to a traditional IRA (different from a ROTH IRA or other types).
- A small tax credit of $500 to incentivize small businesses to enroll people in 401(k) plans.
- An increase in “required minimum distribution ages” to 72. (The age you would be required to take out minimum distributions).
Of course, there are other provisions listed on the bill’s draft. The Senate has also proposed a similar bill called the RESA Act.
However, neither bill may work as well as it says on the “packaging.”
The New York Times: This Legislation “Could Cost You”
Retirement policy that sounds good “on the surface,” may turn out to be confusing and costly according to a New York Times article summarizing the SECURE Act:
But the same bipartisan bill could also make retirement planning even more confusing, particularly for workers hoping to recreate the pensions of a bygone era.
Problems with both public and private pensions are fairly common knowledge. Legislation that enables someone to recreate the “pension problem” with something as important as their retirement doesn’t make sense.
The same article also warns consumers about the potential for this legislation to enable risky high-cost annuity options as part of a 401(k) “retirement package.” It quotes Barbara Roper, director of investor protection at the Consumer Federation of America, on her take about this option:
There will come a time where we will point back to this as the start of a trend toward high-cost annuities being offered in 401(k) plans to the detriment of retirement savers.
If what Barbara Roper says is true, and the door for these annuities is opened, the SECURE Act could cost retirees more than it’s worth. That’s because the companies selling these annuities want to sell complex “variable annuities,” which are far more expensive for the average person than simple annuities.
Speaking of cost, these pieces of legislation could face costs that may kill either or both of them, according to a piece at Think Advisor:
Members of Congress are supposed to try to keep most bills from increasing the federal budget deficit. In the past, many retirement savings bills with broad, bipartisan support have died after going through the federal budget analysis process, and fights over the budget cuts and revenue increases needed to offset the retirement savings bills’ projected effects.
You can wait for bureaucrats to fight over budget issues, or you can create your own “retirement security.”
Don’t Rely on Lawmakers to Legislate Your Retirement
Who knows whether the SECURE Act, or an amended version of it, will pass. Not to mention, the Senate’s RESA Act may pass instead. Whatever happens, it won’t matter how many changes to the retirement system take place.
What will matter is the quality of those changes for retirees. But you can’t wait for lawmakers to make up their mind, nor can you wait for the actual impacts of their legislation to be felt. By then it will be too late.
Don’t wait for lawmakers to legislate it for you. You can take action now by diversifying your portfolio with physical assets such as gold and silver, and add some much needed security to your plan.
It is my sincere desire to provide readers of this site with the best unbiased information available, and a forum where it can be discussed openly, as our Founders intended. But it is not easy nor inexpensive to do so, especially when those who wish to prevent us from making the truth known, attack us without mercy on all fronts on a daily basis. So each time you visit the site, I would ask that you consider the value that you receive and have received from The Burning Platform and the community of which you are a vital part. I can't do it all alone, and I need your help and support to keep it alive. Please consider contributing an amount commensurate to the value that you receive from this site and community, or even by becoming a sustaining supporter through periodic contributions. [Burning Platform LLC - PO Box 1520 Kulpsville, PA 19443] or Paypal
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So they are making more options available to line the pockets of more Wall Street investment firms and similar. Typical. Meanwhile, it is the goal of the Federal Reserve to DESTROY the purchasing power of the dollar as close to 2% annually as possible. Yes, that is inflation. They DESIRE a goal of 2%. Would it be YOUR goal that prices increase 2% every year if YOU were planing for retirement (or just trying to live at any level)?
Just imagine if our currency were sound, if the purchasing power of the currency INCREASED over time as advancements in productivity, cost-cutting improvements, etc. came into play. Instead, the harder we work, the more productive our output gets, the more the government STEALS that wealth and hands it to others.
There was a time before the Fed, when savings alone could provide a sound retirement for everyone, when the purchasing power of the currency either stayed consistent over decades or increased thanks to the industrial revolution and its improvements to our lives.
This is all just more government “solutions” to the very problems THEY created in the first place.
As Ron Paul has famously said “End the Fed!”
Buy a fucking shack and quit worrying about your credit score. All the fed has to offer is economic armageddon.
The reason people don’t save money for retirement is because people don’t have money to save.
Delaying RMDs to age 72 may actually increase taxation on your distributions by putting you in a higher bracket, and those brackets are not going to go down. Consider the effect of pre RMD age withdrawals to reduce your taxes.
It is all “BULLSHIT” from the circle jerk of Wall Street to K-Street To Capitol Street !
The only way to secure Americans retirement savings and investments is to keep all savings and earnings free from fees and taxation at all levels and at age 65 those collecting payments are tax free at all levels including sales tax and property tax .
401k plans are as big a rip off as was any retirement defined benefit plan allowed to be underfunded and bankrupted our from under those owed the benefit
401k the Brain child of the circle jerk where the working person puts up all the Capitol , assumes all the risk absorbs all the loses but in the end receives about 30% of any gains . We know which end the working person gets , either the shitty end or in their shitty end .
When all government pensions pay out what is realistic rather than the pie on the sky promise that only assures payment as long as non government working people allow the three wolves of government to either sheer or devour by tax theft .
A change must come , it could have been done 25 to 30 years ago but now only total collapse appears to be immanent !