2015 saw the introduction of a new retirement account by the name of myRA and there was a lot talked about the account as well. In the budget that is set to hit center stage in 2017, President Obama plans on making some changes in the retirement accounts as well:
How retirement accounts will change in 2017:
- Automatic IRAs: Employees are almost all the times automatically added to the workspace’s 401(k) plan unless they vote out of it. In the coming budget, the President intends to automatically enrol all of the employees into individual retirement accounts. This is indeed a great initiative.
- Employers will have larger tax breaks: Small businesses and their owners are liable to receive tax credit whenever they set up a new retirement plan. The President wants to triple this credit and make the amount go up to 1500 dollars per year for as much as 3 years for small companies that offer retirement plans.
- Port your benefits: The budget will also make the proposal to allow the funding of pilot programs that will be helpful in making benefits portable for those people who would like to change jobs.
- Participate part time: Employers will have the authority to not include the part-time employees in the retirement plans of the country. To be considered eligible for a retirement plan, you would have to work at-least 500 hours per year for 3 or more years.
- 401(k) plans but pooled: Small businesses find it excessively hard to set up and then manage the 401(k) plans. Currently employers that have a “common band” can establish 401(k) plans. Obama intends to remove the common bond requirement.
These alterations are looked forward to by many of the retirees and they can help the federal government in making the post-retirement lives of retirees a lot better.