Retirement savings changes could be on the horizon as Republicans look to make it easier for middle-class workers to save.
Lawmakers are working on a bipartisan bill, the Retirement Enhancement and Savings Act of 2018 (RESA), that would offer an opportunity for small employers to band together to obtain more favorable and less expensive pension investment options.
“It would make it easier for your employer to offer you a 401(k) by allowing small employers to pull their resources and reduce cost,” said Groom Law Group principal Michael Kreps during an interview on FOX Business’ “After the Bell” on Tuesday.
The possible provisions will include universal savings accounts and make it easier to offer annuities that turn savings into guaranteed income.
Republicans are also working on a ‘tax reform 2.0’ plan that could include retirement and savings provisions. President Trump on Tuesday met with House Ways and Means Committee Chairman Kevin Brady (R-Texas), who said he expects the House to vote on the second phase of the Tax Cuts and Jobs Act by September.
“We are here to talk to you about making permanent this tax relief,” Brady said. “One, so they can continue to grow. Two, so they can add 1.5 million new jobs and three, we can protect them against a future Washington trying to steal back those hard-earned dollars.”
According to Northwestern Mutual, 21% of Americans say they have no retirement savings.
Kreps hopes the new rules in the retirement bill will help more Americans save for retirement and assist employers who are looking to provide guaranteed retirement options.
“With some of these rules, you’ll be able to for example be more likely to have a 401(k) plan, which is the best way for Americans to actually save for retirement,” he said.