Executive order on retirement savings a win-win
On Fri Aug 31, 2018, President Trump signed an executive order to review the Retirement Enhancement and Savings act of 2018 (RESA). The bill, originally proposed in 2016, was introduced to the Senate in March 2018. The aim of the Act, referred to as Tax Reform 2.0 is to allow retirement money to be spread out over a longer period and make 401(k) plans more accessible to small businesses. Employers will obtain greater freedom in terms of plan administration. In exchange, they will provide more flexibility to employees and better communicate to them all aspects of their retirement savings.
The plan is to overhaul a number of existing rules impeding the growth of deferred compensation and putting a barrier to use of the funds in case of hardship.
- Created one deferred saving vehicle for all needs. Now there are 3, each for a different purpose: 401 for retirement income; 529 for education and HSA for medical spendings. Trump wants to combine one that can be used for all purposes.
- Revoke required minimum distributions after 70 1/2 to let people continue investing
Whole Story at TFX.