Only 16% of Americans think they will be able to retire
FinanceBuzz, a Delray Beach, Florida-based personal finance firm, looked into how people are planning for retirement in the face of high inflation, a possible recession, and the high cost of living.
The study found:
- 16% of Americans think they will be able to retire when they want
- 13% of people with retirement accounts have decreased their monthly contributions as a result of current market conditions
- 15% of Americans have already withdrawn from their retirement accounts
What can plan sponsors do?
- Withdrawing funds from a retirement account can have devastating consequences. Partner with your financial advisor to educate employees about smart ways to combat inflation.
- Contact your recordkeeper about their existing financial wellness programs and ways to promote them.
- Communicate regularly with employees about their financial needs.
If you’d like more ideas about helping to address participant concerns, reach out to your SRC account representative.
–Chris Oneal, President, Stones River Consulting
DOL AND LEGISLATIVE CORNER
SECURE Act 2.0 seems likely to pass in 2022
The House of Representatives passed H.R. 2954 ‘‘Securing a Strong Retirement Act of 2022,’’ also known as SECURE 2.0, in late March of 2022.
Though it remains unclear exactly what changes the Senate may propose, there are several notable provisions, including:
- Requiring all new defined contribution plans (e.g., 401(k), 403(b), and SIMPLE plans, etc.) to automatically enroll participants with at least a 3% contribution rate and increase the rate by 1% per year to at least 10%, but no more than 15%.
- Providing tax incentives to small businesses to encourage them to offer plans to their employees.
- Creating a national online database to monitor lost retirement accounts.
The mandate of automatic enrollment is significant and may have real implications for small businesses.
Stones River Consulting will closely watch the movement of this legislation and keep you informed.
Important Deadlines to Remember
- 31: All required annual data is due to Stones River Consulting. Plans with incomplete data submitted to SRC will be assessed an additional $250 rush fee.
- 15: For S Corps or Partnerships with a tax extension, employer contributions must be remitted in order to take tax deduction. (TPA, Plan Sponsor)
- 15: Deadline to adopt a profit sharing plan for 2021 for S Corps or Partnerships with a tax return extension. (TPA, Plan Sponsor)
- 30: IRS deadline for distributing Summary Annual Reports (SARs) to participants unless Form 5500 was extended. If extended, it is due December 15. (TPA, Plan Sponsor)
- 1: IRS deadline to establish a new Safe Harbor 401(k) plan for the current calendar year. (TPA, Plan Sponsor, Advisor)
7 Signs Your Retirement Plan Needs an Upgrade
Retirement plans can be very complex if plan sponsors don’t have the right partner by their side to help navigate the ins and outs.
Stones River Consulting created a new guide titled, 7 Signs Your Retirement Plan Needs an Upgrade, that helps plan sponsors understand:
- What the four critical areas of a retirement plan are that need to be properly managed to maintain a successful retirement plan.
- Warning signs that a plan may be in danger of falling outside of compliance.
- How to get help to maintain a compliant retirement plan that benefits both the plan sponsor and its employees.
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