Obama Proposes Changes to Retirement Plans for Small Business
Building a nation with a strong economy is not easy to achieve. So, keeping the workers that maintain the economy, on a financial solid ground is a great part of it.
For many Americans, investing and saving means a better future. We get bogged down by the banality of day-to-day bills to focus on things such as saving for retirement and planning for our futures. This is why it shouldn’t come as a surprise that retirement is at the forefront of the minds of policymakers.
President Obama recently proposed several changes to employer-sponsored retirement plans that might help over 30 million workers gain access to savings and retire on more financially stable footing than they would otherwise.
What To Expect From Obama’s Retirement Proposal for Small Businesses
Legislative changes proposed in this plan won’t be announced until President Obama submits the 2017 proposal next month. We know that there are a few outlines that will be included.
Many companies impacted by the changes to employer-sponsored retirement will most likely receive tax credits – particularly small businesses that automatically enroll their employees in 401(k)-style plans. This provides an incentive for smaller businesses that may find it difficult to manage pension plan structures, while ensuring that their employees have a way to save for the future.
This plan will also include part-time employees, by requiring companies to offer their long-term part time employees an opportunity to participate in a company-sponsored retirement plan. This move is necessary to ensure that everyone has access to education about retirement and the option to save for their futures.
Additionally, these proposed changes will strive to address one key concern for retirement. How are companies going to incorporate and supply retirement plans for small business at a low cost? Proposed changes to employer-sponsored pension plans for 2017 will allow companies to use multi-employer retirement plans, which brings down costs by pooling retirement resources.
These adjustments will provide to American a tax cut. It will allow them to defer their taxes on their retirement savings vehicles and cuts for businesses offering retirement plans for small business. The American society can expect these proposals to have a budgetary impact.
Why Change Retirement Plans for Small Business?
With so many Americans unprepared for retirement and the looming threat of Social Security benefit reduction. A need for change of retirement structure is necessary.
These proposals go along with the economic security agenda President Obama detailed in his State of the Union. The idea behind the change was that individuals between jobs of those changing jobs can save for their future. This, calls to grow unemployment benefits.
The good news is there isn’t a lot of polarization on these proposals. In fact, Republicans and Democrats both have proposed and supported the idea of auto-enrollment in a retirement plan. This also includes the Heritage Foundation (which leans conservatively) and the left-leaning Brookings Institute.
Small businesses worry about the cost and administrative maintenance required to offer a retirement plan. The idea of these proposals is to reduce the financial burden of offering pension plans and to provide for employees.
Congress still needs to fully approved this plan. Many people see this as a step in the right direction for Americans that are struggling to save for retirement.
Building a solid retirement structure should be easy for Americans. Lack of knowledge and the cost of putting retirement systems into place, complicates many individuals to prepare for their future.
We believe it sould be simple and accessible for Americans to save for their post-working years. American’s priority should be the to inform themselves wisely to develop the ability of starting to save efficiently. In fact, that’s part of the reason we began this blog; to help our readers understand the complexities of pension plans and the importance of contributing to their own.
The good news is you don’t have to wait for Obama’s retirement changes to be approved to start saving. If your employer doesn’t offer a retirement plan, you can begin saving on your own. You just need to call a financial adviser to start as soon as possible.
Insured customers can also give us a call to see how these changes may impact your retirement plan. We can help you find a plan that protects you, your business, and employees for the future.