Time is of the Essence
The Secure Act 2.0, which aims to expand access to retirement plans, needs to pass before January 3rd; otherwise it will need to be re-proposed to both houses. Although it is likely to pass eventually, due to its bipartisan support, a failure to pass it soon could result in serious delays.
Members of the house and senate have expressed optimism about passing the act. Speaking at a recent conference Democrat senator Ben Cardin from Maryland reiterated this sentiment, saying that there was no ‘controversy on substance’, the only issue it seems is time.
According to Cardin the Secure Act’s best chance of passing is via a must-pass budget bill. This will expedite the process, and put it higher up the governments very long to-do list. However even this might be too ambitious as there is a lot to do before January and retirement planning might not be a major priority for legislators.
The Secure Act will of course not have to be entirely rewritten if it is eventually re-proposed, much of the current version can be reused. The issue is how long it will take to come into law once they go back to square one of the legislative process; not to mention the unpredictability of debating it again.
What is the Secure Act 2.0?
The Secure Act 2.0 is an important piece of legislation, not simply because it is a bipartisan rarity, but because it could help millions of American workers prepare for a better retirement. Currently the House version includes automatic enrollment, lower plan costs for small businesses and benefits for those with student loans.
The Senate bill is similar but also includes a 401(k) emergency access fund.
Critics of the Secure Act 2.0 point out that it will be of little help to the, around, 50% of Americans who don’t save at all for retirement. According to them it is not addressing the looming crisis that many Americans are facing regarding their life after work.
Admittedly this piece of legislation is not a silver bullet nor does it go far enough to help those who might fall through the cracks of society. However it does address numerous inequities in the current system. For some ordinary Americans, at least, it does offer a better retirement.
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