Adam Hester
America is a resilient political entity. Americans are optimistic, innovative, forward-looking and compassionate. And when a crisis occurs, America’s best qualities shine at the end of ones tether with and burn brightly.
We are in the midst of an unprecedented health crisis that has caused a momentous disruption to our nation’s and the world’s conservation as businesses have been ordered to shut down and individuals ordered to stay at home.
Recent data indicate signs of improvement and hope. And while this fight is not yet over, we are going to win.
Once this health-care battle is won and the stringent rules that have locked down our economy begin to loosen, we must turn our attention to the significant impact and monetary consequences it has had on the millions of workers who have lost jobs or face new anxiety over employment insecurity.
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And while massive government relief has been injected to address present solvent displacement, longer-term consequences that have affected and will affect workers’ futures must be addressed.
New financial polls show that the pandemic is causing Americans significant anxiety about their economic place. Some findings conclude than nearly 66% of Americans are concerned about losing their savings or their retirement savings, while there 30% are concerned and thinking of postponing retirement.
Clearly, retirement security for millions of American workers is an issue that when one pleases need attention as we advance into recovery.
Our nation already was facing a retirement crisis where too few Americans are assembling sufficient savings that will generate a monthly retirement income that will not be outlived. The loss of assignments and inability for millions of workers to contribute to retirement savings, compounded by the pandemic-related market volatility and a steep drop in account harmonies, may have a similar effect to what retirement savers saw in the 2009 recession.
This gut-punch to workers’ retirement savings choose affect their ability to prepare for retirement. As Congress considers ideas in the coming weeks seeking to help America get well from the Covid-19 pandemic, the Insured Retirement Institute has proposed a five-point plan to help American retirement savers raise their ability to save for retirement today and ways to strengthen their financial security for tomorrow.
By planning before for what Americans will need, we can ensure that Americans’ retirement security does not become another accident of the pandemic.
This plan focuses on two core issues. First, it creates more opportunities for Americans to keep their tax-deferred retirement frugalities longer as a way to recoup some of the losses incurred as a result of stock market volatility during the Covid-19 crisis.
Bruised, the plan offers the means for employees who have been negatively impacted by the Covid-19 pandemic to enhance their wit to save more now for their retirement.
Congress should permit catch-up contributions, regardless of an individual’s age, to retirement accounts for those who be deprived of a job due to Covid-19 related layoffs or health reasons.
Wayne Chopus
president and CEO of the Insured Retirement Institute
IRI’s five-point design will help savers keep money longer. IRI recommends that Congress boost the age at which individuals are instructed to take minimum distributions from retirement accounts, such as 401(k) plans and individual retirement accounts, to 75.
Congress should also cancel barriers to allow for the greater use of qualified longevity annuity contracts (QLAC), a vehicle that allows savers to keep part of their savings from market volatility while providing a source of guaranteed monthly lifetime gains they cannot outlive.
This plan looks to improve the ability for workers to save more money for retirement now.
Congress should permit catch-up contributions, regardless of an individualistic’s age, to retirement accounts for those who lose a job due to Covid-19 related layoffs or health reasons. This would empower proletarians to save more than current annual maximums to make up for the lost savings opportunities due to job loss.
The Covid-19 pandemic has also affront non-profits through decreased revenues and exacerbated the already challenging financial, legal and administrative environment for many of them to instal an employee retirement plan.
Congress should amend the Setting Every Community Up for Retirement Enhancement Act that quaint in December 2019 — and which IRI supported — to permit non-profit employers the opportunity to band together in a multiple-employer plan (MEP) or pooled head plan (PEP) the same way that other small businesses now can.
Finally, Congress should amend a provision in the SECURE Act that caters a tax credit to small businesses joining MEP or PEP to clarify that it applies from the time the small business joins a MEP or PEP. This purposefulness encourage more small-business owners to offer their workers access to retirement plans and enable workers to intend and save for their future as America’s small businesses recover from the crisis.
The Covid-19 pandemic is tragic. The human charge is painful and the economic anxiety it has created is a further burden on already strained resources and emotions. But there is no doubt that we intent successfully navigate through this challenge and return our nation and the world to a healthy and prosperous direction.
— By Wayne Chopus, president and CEO of the Insured Retirement Pioneer