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SECURE? Retirement reform legislation has some good, some bad

SECURE? Retirement reform legislation has some good, some bad

June 17th, 2019 by Gazette Staff in Texarkana News

As more and more Baby Boomers move into retirement and the generation that followed sees that age moving ever closer, a lot of us are wondering if they will ever be able to leave their jobs.

It's a valid question. According to the Government Accountability Office, nearly half of all American families where the primary breadwinner is 55 year of age of older had nothing put away for retirement.

That's scary. When there's no income to look forward to in your golden years other than Social Security it's a bleak prospect.

Last month, The U.S. House of Representatives took aim at the situation with the Setting Every Community Up for Retirement Enhancement Act, popularly known as SECURE. It passed overwhelmingly 417-3 and now awaits approval by the Senate.

There are some good things in the bill. It would give small businesses incentives to set up 401-K plans and help them ease the process of doing so. And it would provide a tax credit for automatic enrollment of employees into the plan. This is good since if they money is taken out first there is a greater chance it will remain invested for the future.

The bill also eliminates the current age limit of 70 for Individual Retirement Account contributions and raise the age to start taking distributions from 70 to 72.

But all is not so rosy. SECURE gives insurance companies liability protection for selling annuities within tax-deferred retirement accounts—meaning consumers lose legal rights in case they are sold truly bad products.

And rule changes mean in some cases heirs who inherit tax-deferred retirement accounts could face higher taxes on distributions.

Perhaps the Senate could negotiate a better deal. In any case, SECURE is only a start. We would like to see Congress do more to encourage saving by all Americans. Raising the amount that can be contributed in tax-deferred plans each year is one way.

Our population is aging and without retirements savings, we can see a big problem on the horizon.

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