The Act Paves the Way for Multiple-Employer Pension Plans.
It’s no secret that Americans struggle to save enough for retirement, especially with employer pension plans vaporizing. Legislation from 2016 was recently reintroduced by Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Oregon), called the Retirement Enhancement and Savings Act of 2018. This Senate bill, S. 2526, authorizes multi-employer plans (MEPs) and other savings mechanisms to make it easier for smaller employers to band together to sponsor one retirement plan for their workers, and for millions of Americans to save for retirement.
Among the other savings tactics included in S. 2526 are allowing seniors older than age 70 to make tax-free contributions to their IRAs and providing access to lifetime income solutions like annuities. Another section of the bill benefits graduate students by treating certain taxable non-tuition fellowship and stipend payments as compensation for IRA purposes; currently, stipends and non-tuition fellowship payments that graduate and postdoctoral students receive are not treated as compensation and therefore cannot be used as the basis for IRA contributions. The bill will help these students begin saving for retirement and accumulate tax-favored retirement savings earlier in their lives.
A provision in the bill also creates a new tax credit of up to $500 annually for employers who defray startup costs for new 401(k) plans and SIMPLE IRA plans that include automatic enrollment.
Create your own enhanced savings through self-direction
If you’re earning money you can start saving for retirement, whether you open an IRA or participate in an employer-sponsored plan.
Better yet, you can open a self-directed IRA and really enhance your retirement savings. Why wait for employers to pull together multi-employer plans when you can get started any time on your own? And, if you are comfortable making your own investment decisions and are interested in going beyond the typical stocks, bonds and mutual funds, self-directed plans could be a great fit for you.
A self-directed retirement plan allows you to include a broad array of alternative assets that are not allowed by typical broker-dealers, banks or other custodians. You can build a much more diversified retirement portfolio by investing in what you already know and understand.
Ready to explore the opportunities and take advantage of your own retirement enhancement and savings? Contact the professionals at Next Generation for answers to your questions at Info@NextGenerationTrust.com or 1-888-857-8058. You can also go straight to our Starter Kits to open a self-directed IRA (and we’re always here to walk you through it).