We here at the Council for Retirement Security have been talking about the Secure 2.0 bill for a while now. It’s a bill that would offer retirement reform by increasing the contribution limits and withdrawal ages for savings accounts like 401(k)s and IRAs. There are benefits from this bill, should it pass the U.S. Senate, but there is also a lot left to do when it comes to retirement reform. Taylor Tepper from Forbes helps us weight the pros and cons retirement reform and Secure 2.0.
As we’ve discussed in this series, the pros of Secure 2.0 would increase the contribution limits for retirement accounts. This lets more people save more. Additionally, the required minimum distribution (RMD) age would increase from 72 to 75 years old. Seniors could earn more on their investments.
Other benefits include making it easier for employees to enroll in retirement accounts to begin with, letting them get a jump on saving for retirement. This may not seem like it immediately applies to seniors, but bear in mind that there are no age restrictions to starting new Roth accounts. Seniors who are still earning income can have their new contributions matched, or potentially roll over old accounts into new a Roth, lowering tax liabilities.
The main cons with Secure 2.0 has to do with what the bill doesn’t cover. While Secure 2.0 is a step in the right direction, we’re in need of more reform than Congress might realize. For instance, Social Security still faces an insolvency crisis that Secure 2.0 completely overlooks.
The Social Security Trust needs to be protected. While organizations like the Council for Retirement Security do good work, Congress needs to sign those protections into law. If we don’t do anything, insolvency will force our benefits to be cut by 30 percent. Secure 2.0 is a good bill, but it should make Social Security more of a priority.
The Challenge of Retirement Reform
The Council for Retirement Security has made it its mission to protect the Social Security Trust. If we band together, we can make our united voice heard loud and clear in Congress. We need to let our elected representatives know that our benefits must be kept safe. Looking at the pros and cons of retirement reform shows us Social Security needs to be updated, but we cannot let it be unprotected or forgotten. Follow the Council on Twitter and Facebook for more updates on this legislation and more.