America's retirement crisis
Congress recently passed the Securing a Strong Retirement Act 2022 or Secure 2.0. The proposal is a result of the observation that more than half of the retired or retiring population in America do not have a retirement plan or sufficient savings. According to a new Allianze Life Study, 6 out of 10 retirees fear running out of money more than death.
The bill has 5 major suggestions which will eventually secure life after retirement. One of the major pitfalls of the current system is that many times workers don't participate in employer-sponsored retirement programs. The bill addresses this issue by making automatic enrollment mandatory for all businesses with over 11 employees. As per the bill, about 3% of the employee's salary would automatically be shifted into their retirement fund, this percentage will increase every year capping it at 10%. "Pre-retirees" or older workers who are just a few years away from retirement can supercharge their retirement savings under Secure 2.0. So that by the time they retire, they have a significantly large nest egg.
The bill also makes changes to the RMD or reacquired minimum distributors or RMDs. This is the mandatory amount that retirees have to withdraw every year. Secure 2.0 will delay RMDs to when retirees turn 75 rather than 72 as specified by the current law, therefore providing more flexibility. The new bill states that employers could help with student loan payments by considering them as elective deferrals to their retirement account, this helps employees who aren't able to save for retirement due to student loan repayments. Employers could also put up matching contributions into an employee's Roth IRA.
Source: CBS News
Category
Benefits
Career Development
Whistleblowing
Business Acumen
Remote & Hybrid Work
Employment Testing
Disability Accomodations
Investigations
Employment Offers
Open Enrollment
Intellectual Property
Fiduciary Duty
Job Descriptions
Retention
Educational Assistance
Workplace Culture
Family & Medical Leave
Sexual Orientation
Downsizing
Disability Benefits
Teamwork
Performance Management
Work Life Integration
Affirmative Action
Health Care Benefits
Closing
Overtime Eligibility &
Emergency Response
Labor Relations
Consultation
Bonuses & Incentives
People Management
Compensation & Benefits
Retirement Benefits
Talent Acquisition
Organization & Employee Development
Mental Wellness
HR Careers
Disaster Preparation & Response
Employee Handbooks
Flexible Spending Account
Leave Management
Recruiting
Communicable Diseases
Eligibility Verification (I-9)
Organizational Structure
Employee Engagement
Sexualy Harassment
Workplance Violence
Employee Data Privacy
Tags
Article
A Quick Look at The Great Resignation
The Great Resignation, as experts call it, is a rather fitting term for a phenomenon where millions ...
Top 5 Challenges of HR Professionals During COVID-19 Pandemic
When it comes to the talks of the unemployment rate due to COVID-19, experts compare it to the Grea ...
With Manufacturing Jobs Returning to America, What Does It Mean for Manufacturing Job Seekers?
Reshoring is on its way for the US, due to the ongoing COVID-19 crisis, especially for the tech man ...
Tips to Write Job Descriptions That Will Attract the Best Candidates
Just as the candidates need the right jobs to secure their future, the companies also need the righ ...
Comments