Tax Reform 2.0 will help more workers get on track for retirement

Tax Reform 2.0 will help more workers get on track for retirement
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Last year’s historic passage of tax reform, coupled with a modernized approach to financial regulation, has jumpstarted economic growth and increased opportunity in communities across country.

For the first time ever recorded, middle-class American income rose above $61,000, and small-business optimism continues to surge with seemingly each new survey.

Policymakers on both sides of the aisle should cheer these gains and work together to help even more Americans get ahead financially.

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The House Ways and Means Committee is right on track with the introduction of so-called “Tax Reform 2.0," which includes a package of new ideas to help even more Americans benefit. 

Perhaps one of the most important policy changes introduced in this package is the inclusion of the Family Savings Act of 2018, a common-sense proposal that would encourage retirement savings and provide incentives for small businesses to offer retirement plans to workers.

Too many hard-working folks have no savings at all, are not ready to retire or feel like they will retire broke. Access to a retirement plan continues to remain a problem for many individuals and families, especially employees of small businesses, the backbone of America’s economy. Shoring up retirement planning options needs to be a priority.

Just how dire is America’s retirement security problem? According to a report released this month from the National Institute on Retirement Security, “the median retirement account balance among all working individuals is $0.00,” while a whopping “four out of five working Americans have less than one year’s income saved in retirement accounts.”

Policy changes in this space are long overdue and will require thoughtful solutions from both sides of the aisle.  

By modernizing and simplifying retirement planning, the Family Savings Act will make it easier for small businesses to band together through open multiple employer plans (MEPs). These plans would result in more options for small business owners who are often concerned about the cost and complexity of offering a plan on their own.

Ultimately, pooled plans will help more employees of small businesses access a retirement plan so they can begin saving for their future.

This important legislation would also aim to incentivize additional investment opportunities for Americans to save for emergencies, a down payment on a home or retirement. Reducing costs, increasing investment options and making it easier for Americans to save for the future are all no-brainers that congressmen and women from both parties support.

As Congress takes another shot at tax reform, the pro-retirement and pro-small businesses policies in Tax Reform 2.0 are a positive development and crucial first step to help improve the lives of millions of Americans across the economic, political and geographic spectrum.

The American Securities Association (ASA) looks forward to acting as a helpful partner in implementing these policy goals. We urge Democrats and Republicans to help small businesses grow and increase prosperity for generations of Americans by championing retirement security.    

Christopher A. Iacovella is the chief executive officer of the American Securities Association, a trade association that exclusively represents the wealth management and capital markets interests of regional financial services firms.