SmartTip for Retirement You make decisions every day lots of them. Many have little or no lasting significance. But some of the choices you make now could have a significant impact later when you retire.
An automatic contribution arrangement (also known as automatic enrollment) is a feature in a retirement plan that allows an employer to “enroll” an eligible employee in the employer’s plan unless the employee affirmatively elects otherwise. “Enroll” in this context means that part of the employee’s wages are contributed to the retirement plan on the employee’s behalf. Most commonly, this feature is in 401(k) plans
To preserve its tax-exempt status, a qualified retirement plan must comply with numerous legal and regulatory requirements, both in form (the plan documentation) and in operation (how the plan is operated in accordance with the plan document). Plan sponsors must work with their service providers to ensure that plans are properly maintained and to limit plan defects.
The end of a year is always a good time to take stock of one’s life: Not only what we’ve accomplished over the past 12 months, and where we currently are … but also what the future holds. For that reason, I thought that some suggestions about retirement were in order as we get ready to greet 2015.
Introduced on October 27, 2020 by House Ways and Means Committee Chairman Richard E. Neal (D-MA) and Ranking Member Kevin Brady (R-TX), the SSRA contains provisions that are pro-retirement plan, pro-plan participant, and pro-plan sponsor. The bill builds on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 to further improve workers’ long-term financial wellbeing.
403(b) plans are commonly used by tax-exempt organizations to provide retirement benefits for their employees. Generally, plans that are established or maintained by private tax-exempt organizations are subject to ERISA (governmental and non-electing church plans are always exempt).
All of us could use a little extra money, either to purchase gifts for family and friends outright, or to pay the bills. One seemingly simple way to raise some quick cash is to borrow money from your 401(k) … which, as you may suspect, is something that I strongly discourage.
As the first wave of baby boomers (those born between 1946 and 1950) attain “normal” retirement at age 65, an important question has been raised: will all these present and future boomer retirees depress the stock market as they cash in their savings? After all, boomers (i.e. those aged 46-64) have been estimated to own nearly 50% of the U.S equity market.
In a world turned upside down by COVID-19, it can be difficult for retirement plan fiduciaries to make sure that they are following the rules – especially since a number of them have been altered by the Internal Revenue Service (IRS), Department of Labor (DOL) and other entities as a means of helping plan sponsors and participants navigate the pandemic.
There has been a flurry of recent activity surrounding the Setting Every Community Up for Retirement Enhancement (SECURE) Act as we near its first anniversary.
The very idea of “going digital” has become so commonplace that most people probably don’t even think about it anymore. While there will always be a few of the technology-resistant (or, in some cases, simply “tech-challenged”) among us, the use of such communications tools as websites, email and smartphone texting is rarely even worthy of comment.
While there was some good news for the retirement industry during the annus horribilis (as Latin speakers would have it) of 2020, there were more than enough misfortunes and setbacks for most of us. Nevertheless, “Perpetual optimism is a force multiplier,” according to Colin Powell. So it is that we start this year by expressing a few of our greatest hopes for 2021.
Every year is a notable one for various reasons, but 2020 certainly will go down in the history books as one of our most momentous. The COVID-19 crisis; widespread protests over racial and social inequality; and the contentious November elections (with control of the U.S. Senate still undecided) were just a handful of the stories that made headlines this year.
The uncertain times we have been living in for the past year-plus may – and I emphasize “may” – finally be on the decline. While we are plainly not out of the woods yet, I believe the time has come to at least consider, if not act upon, five retirement-related “to-do” items for this year.
Over the course of the last year there have been seismic shifts in the retirement plan landscape – SECURE Act, CARES Act, numerous additional notices from the IRS and DOL, not to mention recently proposed new legislation.
Both 401(k) and 403(b) plans are retirement plans that are sponsored by an employer. Both must meet IRS requirements to allow tax-free contributions. However, 401(k) plans are offered by for-profit companies whereas 403(b) plans are offered by not-for-profit organizations that are tax exempt under IRS Code 501(c)3, such as educational institutions, school districts, governmental organizations, religious organizations and hospitals.
Now that we seem to be emerging from the COVID-19 crisis emphasis on “seem” it is time for the retirement savings industry to begin the long process of assessing where things stand. According to a new consumer survey, things are standing a little wobbly, as you would probably expect. The survey, conducted by Voya Financial and released on April 26, 2021, found that nearly half (47%) of individuals who took a loan or withdrawal from their retirement plan,
Question: “When is it time to rethink your strategy?” Answer: “Always!”
Self-evident? Perhaps, but a recent PwC study entitled “Retirement in America: Time to Rethink and Retool” provides some intriguing insights into where our industry stands now, and what it can do to improve the situation.
Momentum for government-facilitated automatic Individual Retirement Account (auto-IRA) savings programs appears to be growing – and, in our opinion, that is a very good thing. The programs are aimed at private sector workers without access to an employer-sponsored retirement plan to instead have access to a state-facilitated plan.
Introduced on June 7 by U.S. Senator John Kennedy (R-LA), the pair of bills are designed to encourage more Americans to save for their retirement, and maintain greater control over those savings. The Keeping Your Retirement Act would raise the required minimum distributions (RMD) age from 72 to 75 for certain retirement accounts.
The breakneck pace of enacting and/or amending federal legislation and regulations in 2020 is back in full force with the passage of the American Rescue Plan (ARP) Act of 2021. ARP is the federal government’s latest economic stimulus package and the first under President Biden.
In my June 2016 Current Thinking post Wage Growth in the United States-Positive Factors and Counterweights, data confirmed that real (inflation-adjusted) wages in the U.S. were relatively stagnant over the prior 15 years. While there was movement both up and down, there was no clear long-term upward trend in overall real wages
Implicit in planning for retirement is looking ahead. But thanks to the SECURE Act and the Internal Revenue Service (IRS), it can pay to look to the past as well.
This is a potentially exciting time for our industry, as several bills wending their respective ways through Congress may have far-ranging impacts on how people save for retirement – and how the government can help them.
Cybersecurity is defined as the state of being protected against the criminal or unauthorized use of electronic data, or the measures taken to achieve this. What does this mean for your employer sponsored retirement plan?
