Politicians Are Considering Changes to Your Retirement Plans!

Considering all the time current lawmakers have wasted bloviating, lobbying, and generally spinning their wheels but going nowhere, it is interesting to see the optimism being expressed regarding a couple of closely linked private retirement reform bills, one coming from the Senate Finance Committee and the other from the House Ways and Means Committee. Eventually the bills will be merged and sent to the President for approval. There are a wide variety of provisions being discussed, but ultimately four key elements are likely to appear in the final draft, including Senator Chuck Grassley’s “centerpiece” policy set to increase access to 401(k) plans for small business employees, which is an elephant in the room that’s easily been ignored for decades.

The President signed an executive order last year encouraging multiple-employer plans (MEPs), which would permit small business employees to join plans with companies in different industries. According to a summary provided by the Senate Finance Committee, open MEPs would permit small business employees to “obtain more favorable pension investment results and more efficient and less expensive management services.” Another element being discussed pertains to extending 401(k) matching contributions to include equal contributions covering student loan repayments at the same time. The match would be mandatory, but the percentage of employee annual salary being matched would be entirely up to the employer.

More than a third of Americans between 70 and 74 are working now, than the same segment working twenty years ago. So, lawmakers are discussing the possible elimination or postponement of required minimum distributions at 70½. Along the same vein, there are discussions to increase opportunities for Baby Boomers who have “fallen behind” with savings and are interested in catching up with increased contributions, as they approach retirement age. The final element being discussed by the plans involves provisions that would lower some of the barriers responsible for non-participation in currently offered plans. A recent Pew analysis discovered that 28% of employees with companies offering some type of defined contribution plan are simply not being utilized.

I’m sure that all of this discussion will provide great opportunities for increased party extremism and polarity, but through all of this activity – it appears that the true behemoth in the room is destined to remain completely innocuous and unaddressed. I’m talking about a recent social security trustees report, indicating that the social security program’s reserve fund could be utterly depleted in 16 years if no action is taken. Failure to plan is a plan to fail. Physical precious metals are probably a more important component of a successful retirement plan today than ever before, for safety, security and long-term profitability. Today’s lower metal prices are just another bonus. For professional and award-winning customer service, call American Bullion today, at (800) 653-GOLD (4653). But no matter what, make a plan not to get caught without a chair when the music stops!