The new decade is bringing on a variety of changes. Some are exciting: new technology, new ways of living, new people in the spotlight. But some are not so glamorous. It seems that the days of social security are swiftly fleeting and retirement is only becoming more of a guessing game. We are here to help you feel confident while facing these modern challenges. We understand that most new legislation, changing politics, and complicated economics that impact retirement, are not easy to interpret. That is why we are here to do it for you, that way you can plan ahead for whatever the future may hold. Here are 3 acts that will affect your retirement:
1. The Social Security 2100 Act
As of 2020, the government expects the social security fund to reach its end in 2035. This is not as scary as it sounds, social security funds will be limited but not nonexistent. This act is congress’s solution to the finite funds. They plan on raising payroll taxes to 7.4% by 2043, to ensure social security lasts until 2100. This could mean a small increase in benefits for retirees. The key to saving social security is, “making retiring on Social Security alone a thing of the past for most workers”, according to Forbes. So, establishing multiple ways to retire comfortably is the safest way to go.
2. The Secure Act
This act is focused on how accessible retirement funds are to retirees. It will change the way retirement accounts are taxed.
Details from the Secure Act are:
- The Secure Act puts a 10-year time limit on how long non-spouse beneficiaries can stretch out an inherited IRA.
- It opens MEP to help small businesses. It removes the commonality requirement allowing small businesses to join together easier.
- It includes lifetime income and expanded tax credits.
- It allows businesses to offer part-time employees retirement plans.
This act, in summary, encourages small businesses to set up retirement plans for employees.
3. The Health Savings for Seniors Act
One of the most overlooked expenses in retirement is medical expenses. Everyone thinks that it will not happen to them, but in reality, it is just a cruel part of growing older. Chances are you will experience medical expenses throughout retirement, so it is best to be prepared. This act was formed to reward the people that do prepare by giving them a tax break. Currently, once a person is enrolled in Medicare, that person must cease from putting money in those tax-advantaged accounts. The Health Savings for Seniors Act allows Medicare beneficiaries to continue this, under the condition that said person would not be able to use HAS withdrawals to pay for Medicare premiums. It also eliminates the access to withdraw for non-medical reasons tax-free if you are over 65.
We hope this produced some clarity on what to expect from upcoming retirement acts. The legislation is always changing. With the new decade, we expect many things to change over the years to come. You can always keep up to date through our website and consumer news portal. It is essential to stay on top of what is happening with our laws and retirement additions and restrictions.