Your 401(k) could soon include new types of investments
January 1, 2020 by CBS/AP
Major changes could be coming to your retirement plan.
The Senate on Thursday passed the Secure Act as part of its massive spending package. The House passed it earlier this week and it now heads to President Donald Trump, who is expected to sign it into law.
The Secure Act — which stands for Setting Every Community Up for Retirement Enhancement — is designed to help more people set aside more money for retirement. It does so primarily by removing some of the hurdles that keep people from saving. It also opens the doors to new types of products, such as annuities, that could help workers secure reliable income streams in retirement.
Among its highlights is a provision that would make it easier for small businesses to band together to offer retirement plans to their employees. It also opens the door for long-term part-time employees to gain access to workplace retirement plans. Investment advisors applauded the bill’s passage, which comes at a time when 22% of Americans have less than $5,000 saved for retirement, according to Northwestern Mutual.
“The legislation includes meaningful changes that will allow more people to participate in workplace savings plans and should have positive impact on retirement for millions of Americans,” investment management firm T. Rowe Price said in a statement.