Legislation currently held up in the U.S. Senate offers sweeping changes addressing the nation’s retirement savings crisis. The Setting Every Community Up for Retirement Enhancement Act of 2019 – known as the SECURE Act – looks to prevent older Americans from outliving their assets.
A report by the federal Government Accountability Office (GAO) says 29% of older households have no retirement savings, including an IRA or 401(k), while 48% have limited retirement funds from a defined benefit plan, such as a pension.
The SECURE Act lists 29 provisions
The bipartisan bill overwhelmingly passed the House to provide relief for the current retirement system, which relies heavily on retirees receiving Social Security benefits and accessing personal savings. The SECURE Act would address this issue by:
- Allowing small business owners to set up “safe harbor” retirement plans that are easy to administer and are less expensive
- Increasing the automatic enrollment cap from 10% of wages to 15%
- Including part-time workers in employer-sponsored retirement plans
- Pushing back the age from 70 ½ to 72 at which time retirement plan participants must take minimum distributions
- Allowing the use of 529 accounts for qualified student loan repayments up to $10,000 each year
Bill’s passage uncertain in Senate
While the House passed the SECURE Act by a 417 to 3 vote in May, two Republican Senators, Ted Cruz of Texas and Mike Lee of Utah, placed a hold on the legislation saying specific provisions need some adjustment. Supporters are optimistic that it will still be passed based on the bipartisan support already displayed, but it may not happen until later in 2020.
Consult an elder law attorney
Medical costs are one of the most significant reasons why so many Americans find themselves struggling financially as they get older. An experienced and compassionate elder law attorney here in Georgia can help you protect valuable assets and take advantage of Medicare and Medicaid benefits and long-term care planning options, helping you keep as much of your savings as possible and providing peace of mind for you and your family.