Oct 29, 2021
In this episode of “Inside the Plan with the 401(k)
Brothers”, Bill Bush and Andy Bush, advisors at Horizon
Financial Group, talk about and review some legislative moves made
right before the Pandemic as the Secure Act was passed. They
also look forward to and discuss several proposals on the board,
which could affect individual savings and retirement plans
including 401k, IRAs, IRAs, etc.
- 02:40 – The hosts discuss about the ‘Secure Act’ which was
passed in December of 2019. Under this act now that once you hit
72, you are required to take a minimum amount from all of your
retirement accounts or you can take it from all only one, but you
have to consider the value of all of your retirement accounts.
- 05:15 - Bill says that the ‘Secure Act’ that was passed in 2019
did in the maximum age for contributing to a traditional IRA.
- 06:30 – Andy states about the inclusion in the Secure Act which
is that they allow for a penalty free withdrawal up to $5,000 from
retirement accounts for funds that are used for qualified birth or
adoption expenses. He encourages people to not take out of their
retirement account if they possibly could but as an option he would
like folks, because it really is a pretty common experience.
- 09:05 – As per Bill, “Another change potentially is Catch-up
- 11:10 – Andy mentions that he would be interested to see what
the percentage of people are that actually take advantage of the
$6500, let alone who will take advantage of the extra $3500 for the
- 13:15 – He explains about ‘Roth Match’ - so what would happen
here is if you did a Roth contribution, you would show that income
coming in, pay the taxes on it, and then you're going to have to
pay the taxes on the ‘Roth Match’.
- 15:30 – Andy reveals that some companies have already put
things like ‘Student Loan Match’ in place. He thinks that such
proposals would probably pass because a lot of people are
accumulating pretty big amounts of student loan debt, and they need
to pay those things off.
- 18:00 – Bill points out that “Napa National Association of
Plant Advisors” had conference annually and they are proposing for
sort of legislation based on, if an employer has five employees or
more, they need to have available some way for those employees to
save whether it's through an IRA or something as simple as
- 21:30 – Andy says that some of the credits they may be allowing
for upstarting 401k plans with young companies is that they'll give
them extra credits for doing auto enrol.
3 Key Points
- Besides talking about the upcoming acts that are proposed to be
passed, the hosts also discuss about the impact of the ‘Secure Act’
which was passed back in late 2019. They both talk about the
various inclusions and clauses of this act.
- They talk about the proposed acts and clauses including the
first one being mandatory enrolment for defined contribution plans.
The reason why this is proposed is because the behavioural
psychology suggests that there're a lot of folks that would not
save if they weren't forced to.
- The other thing that they're proposing out not passed yet is
some help to employers who want to start up 401k plans, a little
bit better credit there for them. So, not just for the savers
themselves, but also for the employers who may be opening and
they're trying to really enforce a little more strictly that, if
you've got X amount of employees, at least X number of employees,
you're going to probably need to offer a retirement plan.
- “These aren't proposals that have passed yet, right but it is
kind of good to at least familiarise yourself with, what's being
discussed out there? What are the possibilities?” - Bill Bush
- “Particularly if you are not an owner or a less than 5% owner,
and you're still working, you're not required to take out of your
401k.” – Andy Bush
- “So the next one allows parents to make withdrawals.” - Andy
- “Even if you don't have to wait till your birthday, you if your
birthday is in December, you can plan for the year that you're
going to turn 50.” - Andy Bush
- “Another interesting one is ‘Roth Match’, that's kind of a
change because usually an employer's contribution and match is not
characterised as Roth.” - Bill Bush
- “Here's another one that we mentioned this back in 2019,
increase the age for RMDs. The proposal on the table would scoot
that out even a little further.” - Bill Bush
- “Other things being discussed for ‘Secure Act’ 2.0, again
proposed not led or acted upon yet or approved yet, would be to
establish a National Database, kind of to help people track down
lost or missing retirement accounts.” - Andy Bush