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...

 I’ve been writing a weekly column (and then some) for more than two decades now. Some are easier to write (and read)—and some hold up better (and longer) than others. These are some of my (and perhaps your) favorites from 2022. Let me know what you think in the comments below… particularly if I have missed one of your favorites…   7 Things to Know About the New ESG Regulation There’s a lot to unpack in that regulation (and the rest of the 236-pages that help explain its process and rationale), but here’s a few things that seem particularly important to note at the outset. https://www.napa-net.org/news-info/daily-news/7-things-know-about-new-esg-regulation ‘Damned’ (Even) If You Do The flurry of lawsuits unleashed on holders of the BlackRock LifePath target-date funds is not without precedent—but it’s surely a head scratcher. https://www.napa-net.org/news-info/daily-news/damned-even-if-you-do Things to Ponder In the course of my day, I talk t...

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...

Last week, Senate Democrats unveiled a bill that would, among other things, enhance the Saver’s Credit – a provision which retains bipartisan support, even as the take-up rate disappoints. Here are six things that people who don’t get the Saver’s Credit often don’t “get.” The Saver’s Credit is, of course, a tax credit from the federal government for low- to moderate-income workers who are saving for retirement. For those who qualify, 1 in addition to the customary benefits of workplace retirement savings, the amount of the credit is 50%, 20% or 10% of retirement plan (or IRA or ABLE account) contributions depending on adjusted gross income. Credit ‘Limits’? And yet, some of the things that seem to be holding back the take-up rates could surely be addressed with a legislative “fix” – and here we’re talking about the relatively low income thresholds to which it applies, the fact that while it’s a credit, it’s not a refundable credit (and thus you have to have a fe...

Beyond the tax advantages to saving for retirement on a pre-tax basis, the ability to watch those savings grow without paying taxes until they are actually withdrawn, there is another savings incentive with which many are not as familiar. It’s the so-called Saver’s Credit, and 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! That said, just 24% of American workers with annual household incomes of less than $50,000 are aware of the credit, according to the 15th Annual Transamerica Retirement Survey. However, that’s twice as many as found by the 11th Annual Transamerica Retirement Survey. Here are some things you may not know about the Saver’s Credit: The official name for the Saver’s Credit is actually the Retirement Savings Contributions Credit. A wide v...