Almost half of households led by someone 55 or older hasn't set aside savings for retirement, according to a report released in March by the Government Accountability Office. About 20 percent of households does have access to a pension or other defined benefit plan. But 29 percent of older Americans has neither a pension nor assets in another retirement account.
The problem is in part a result of a shift away from traditional pensions to a do-it-yourself savings system.
And — in a trend I’ve missed — Congress is working to do something about it.
A CNBC article over the weekend alerted me to a bill called the SECURE (one of those acronyms lawmakers love — for Setting Every Community Up for Retirement Enhancement) Act that passed the House May 23 on a 417-3 vote.
Some analysts say the bill would bring the most important potential changes to retirement rules in 13 years.
Its highlights include a provision to make it easier for small businesses to join together to offer retirement plans to employees. It also opens the door for long-term part-time employees to get access to workplace retirement plans. It would raise the age that Americans are required to start drawing from retirement savings, known as the required minimum distribution age, from 70½ to 72, as people live and work longer. It also provides for more years for people to contribute to individual retirement accounts, for the same reason.
Other legislation:
— The House passed the Rehabilitation for Multiemployer Pensions Act on July 24 on a 264-169 vote. It would let pensions borrow money to stay solvent so they can continue to pay retirees.
— In July, the House Ways and Means Committee held a hearing on a bill introduced by Rep. John Larson, D-Conn., chairman of panel’s Social Security Subcommittee, called the Social Security 2100 Act. It aims to extend the solvency of Social Security into the next century.
— The Health Savings for Seniors Act, a bipartisan bill introduced by Reps. Ami Bera, D-Calif., and Jason Smith, R-Mo., in July, would allow people who are on Medicare to continue to contribute to health savings accounts or to open new ones. Seniors covered by Medicare aren't eligible for HSAs under current law.
— A bill by Rep. Kevin Brady, R-Texas, the Equal Treatment of Public Servants Act, would enable public workers to get bigger Social Security benefits. A current rule, the Windfall Elimination Provision, reduces their benefits based on how much pension income they get.