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Lawmakers renew push to increase SIMPLE plan contributions

Lawmakers renew push to increase SIMPLE plan contributions The legislation would bump up the annual contribution limit, taking it from the current maximum of $13,500 to $16,500. Sens. Susan Collins and Mark Warne note the proposed increase is the midpoint between SIMPLE plans and traditional 401(k)s. April 21, 2021 Sens. Susan Collins, R-Me., and Mark Warner, D-Va., are again pursuing an update for SIMPLE plans, seeking to expand access and increase how much retirement savers can contribute. On Wednesday, the senators introduced a bill, the SIMPLE Modernization Act, which they also floated in the prior two Congresses. The two prior iterations of the bill died in committee.

Don t confuse wealth creation with retirement saving

Don’t confuse wealth creation with retirement saving Don’t confuse wealth creation with retirement saving Building retirement savings is not the same as wealth creation. Wealth creation, and getting rich quick, are very tempting, especially in an era of high-flying stocks and mega-growth companies. But stock grants and stock options today and the promises of wealth they offer are not a substitute for retirement security in 20 or 30 years. Outside of a retirement account, what is to prevent someone from spending a windfall when it lands? It is unclear how this equates to preparing for retirement. Pensions & Investments on Feb. 8 reported that Tesla Inc. in 2020 did not make matching contributions to its 401(k) plan, and had not for three consecutive years.

Shoring Up Social Security

Shoring Up Social Security © Provided by Kiplinger For years, policymakers and future beneficiaries have been wringing their hands over the prospects for Social Security. And make no mistake: The program is headed for trouble. According to projections that the Social Security Board of Trustees released last April, starting in 2021 the program’s annual costs will exceed its income from employee and employer payroll taxes and interest earnings. Once the program turns that corner, Social Security will begin drawing down assets in its trust funds to continue providing full benefits. Largely driving the shortfall is a decreased birth rate since the baby boom generation, creating a higher ratio of retirees to workers paying into the program.  

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