Passage of New Retirement Bill a Win for GOP and Working Americans

The new SECURE ACT (Setting Every Community Up for Retirement Enhancement) signed into law by President Trump is the most important retirement legislation in years. It offers critically important tools for retirement readiness.

For example, this law now enables small business employers who don’t currently provide 401Ks the opportunity to offer employees participation through multiple employer plans. Small business employees will be eligible for employer sponsored retirement plans next year and this change could potentially add $1 trillion to the market over the next five years.

But while the Trump administration acts, retirement issues are not getting top billing in the Democratic debates. CNBC’s Jim Cramer accurately observed last week that Democratic candidates do not seem to care about American’s retirement savings accounts.

The Democratic debates have failed to raise senior issues to any prominence.

This offers conservatives an opportunity to zero in on retirement challenges and practical solutions.

The political depiction of seniors has long been portrayed as older folks worried about Social Security.

This presidential election is an ideal time for conservatives to make it clear how their ideas are enabling Americans to better save for a productive and longer-life future.

Only 50% of Americans own a 401K. The SECURE act allows us to highlight this valuable vehicle so a larger majority of Americans understand solid retirement options.

If you are a soon to be senior or in retirement, there are key items in the SECURE act that will impact your nest egg.

1. The Minimum Distribution age for IRAs and 401Ks has been increased. You no longer have to face mandatory withdrawal of your funds until age 70 1/2. You can wait until 72. That’s more time to grow your savings by staying invested in tax advantaged vehicles.

2. Retirees or those who continue work into their 60s and early 70s can now contribute into their IRA until age 72. People who are lacking in retirement savings have additional funding flexibility for a few more years.

3. You now have an additional opportunity to execute a Roth IRA conversion. Unlike traditional IRAs, Roth IRAs are tax-free at withdrawal, which is a sensible plan if one expects higher tax rates in the future.

4. Employees will soon have the option to select guaranteed lifetime income products or annuities in their retirement plans. Employers will be exempt from lawsuits (called safe harbor) if the insurer does not pay future claims.

5. The SECURE Act eliminated the “stretch” provision for IRA or 401K beneficiaries. Previously, a traditional IRA beneficiary had a lifetime to “stretch” the tax advantaged benefits of a bequeathed fund. Now that time frame to distribute the entire inherited retirement account has been reduced to 10 years after the death of the owner. Special exemptions still exist for the surviving spouse and minor children.

This economy is solid, growing, and offering employment opportunity to every age group in historic numbers. The workforce participation of Americans over 65 is rising. Whether they work out of choice or necessity, senior employment is at an all-time high of 20.2%.

Trends like these require more political visibility. The Left has its own strategy. AARP has made its presence felt at many Democratic candidate town halls by focusing on the price of prescription drugs.

But conservatives can counter that by sharing details about the advantages of the SECURE Act as well as private-sector opportunities for retirement readiness.

These prospects offer much more to Americans than government handouts.

Clara Del Villar is Director of Senior Initiatives at FreedomWorks Foundation. Her financial industry career included senior roles in Investment Management, Private Asset Management, and Capital Markets. Her entrepreneurial ventures involved digital media as Founder, CEO of The Hispanic Post; energy tech as founder of InEnergy and health tech. She is a former advisor at 60Plus Foundation. Currently, she is a Board Director at General American Investors Co. and Executive Committee of Weill Cornell Women’s Health Symposium. She earned a BSFS at Georgetown University. To read more of her reports — Click Here Now.