Proposed new legislation has the potential to alter the way many Americans save for retirement.
Provisions around retirement in the new proposed Secure Act 2.0 could help both working and retired Americans get or stay on track to hitting their financial goals. For financial professionals, understanding how this proposed legislation could change the rules for different types of clients is important to helping those clients achieve a more successful retirement.
The bill, which is still making its way through Congress, could be beneficial to clients in a variety of ways. It builds on the 2019 Secure Act with the intent to get more people to save and improve retirement preparation.
The good news is, it seems like legislators were really listening to the public when drafting the Secure Act 2.0 because as of this writing, it reflects consumer sentiment about retirement planning from the recent Allianz Life 2022 Retirement Risk Readiness Study. The study, conducted in January surveyed three categories of Americans to get different perspectives on retirement: pre-retirees (those 10 years or more from retirement); near-retirees (those within 10 years of retirement); and those who are already retired.
The study found that workers who feel confident about their financial preparation for retirement are in the minority with 63% of non-retired respondents saying they fear running out of money more than death. In addition to highlighting the disparity in retirement confidence among retired and non-retired Americans, the 2022 study identified how the pandemic has caused financial fatigue, potentially putting non-retirees’ financial future at risk.
Thankfully, the new bill has provisions that can help address these challenges for working Americans and also for those who are already in retirement. Here are a few highlights from the House of Representatives version of the proposed Secure Act 2.0 you may want to be aware of.