Nevin's Data "Points"

Of  all the promising provisions in the SECURE 2.0 Act of 2022, one of the most expensive (as the federal government does math, anyway) is likely to be one of the most challenging to implement. It’s not effective till 2027, so there’s still some time to figure it out—but I’m talking about the new Saver’s Match—a significantly retooled and expanded version of the Saver’s Credit (which is more properly referred to, at least by the IRS, as “ Retirement Savings Contributions Credit ”).  As with the precursor Saver’s Credit, the Saver’s Match is focused on increasing the savings of lower-income workers by—in addition to what an employer may match—making a matching contribution from the federal government. The match has a maximum value of $1,000 at a rate of $0.50 per dollar contributed by a worker, up to $2,000 annually.  The Employee Benefit Research Institute (EBRI) has  estimated  (from tabulations of tax filers with W-2 (wage) income) that 69 million had inc...

There’s no one silver bullet likely to close the nation’s retirement plan coverage gap—but the target is pretty easy to spot. As it turns out, the nation’s retirement plan access coverage gap is almost exclusively found among small businesses, and it’s not hard to imagine why. The failure rate for small businesses is daunting—and those who’ve managed to avoid that fate are doubtless focused on trying to avoid becoming a statistic. Under those circumstances one can well appreciate that offering benefits, much less RETIREMENT benefits, probably seems like a luxury for another time, if not another business. A recent issue brief by Anqi Chen and Alicia Munnell of the Center for Retirement Research (CRR) at Boston College examined the issue, and drawing on previous research [i] cited the following three main barriers: uncertain revenues that make it hard for a firm to commit to a plan; employee preferences for wages and other benefits; [ii] and the cost associated with esta...

As I was pulling together tax information this weekend, I was reminded that, in addition to the benefits of pre-tax savings and deferred taxes on retirement savings, there’s another tax benefit—but one of which many aren’t aware.  It’s called the Saver’s Credit—but only 43% of workers are aware of the credit, according to the  20th Annual Transamerica Retirement Survey  of workers. It’s available to low- to moderate-income workers who are saving for retirement. For those who qualify, in addition to the customary benefits of workplace retirement savings, it could mean a $1,000 break on your taxes—twice that if you are married and file a joint return! Now, there are some  limitations [i] —both regard as to who is eligible, and the income levels to which it applies. But in a year when household income levels might be impacted by COVID—well, it’s worth revisiting the option even if it hasn’t been available in the past.   Here are some things y...

 Some numbers were put in front of the Senate Finance Committee last week—numbers that even the chairman of that powerful body called “jaw-dropping.” The numbers were 51 million and $6.2 trillion—the former the potential number of new retirement savers, the latter a separate projection of the potential new retirement savings (over a 10-year period) that could result if two pieces of existing retirement legislation were implemented, specifically the combination of some key provisions of the Automatic IRA Act and the Encouraging Americans to Save Act. Those projections—presented in  testimony  by American Retirement Association CEO Brian Graff—were the work (and rework) of many late (and early) hours by a number of individuals over a period of months. Key Assumptions  Now, predicting the behavior of human beings decades into the future may seem like the stuff of science fiction, but it can be parameterized. However, the key to a proje...