Americans Prepare Ahead of Election for Impact on Plans for Retirement

A new study by Wealth Enhancement Group LLC shows that Americans are increasingly concerned about investment performance, inflation, taxes, Social Security, and Medicare as the U.S. election draws near.

The study found that:

80% of Americans are preparing for potential changes to their retirement plans based on the political outcome, including 73% of those already retired.
23% said they worry about the election’s impact on their retirement portfolios.

Inflation concerns are a significant focus heading into the election, with:

49% of respondents worried about the rising cost of goods and services.
39% are anxious about future tax implications.
31%, including 38% of Baby Boomers, reported concern about future stability.
55% of unretired Americans fear inflation has delayed their retirement goals, with the average setback estimated at more than eight years.

Generation Z is particularly anxious, with 29% fearing the election will affect their retirement timeline.

What can plan sponsors do?

Partner with your financial advisor to educate employees about financial readiness topics.
Contact your recordkeeper about their existing financial wellness programs and ways to promote them.
Communicate regularly with employees about their financial needs.

If you’d like more ideas about addressing participant concerns, contact your SRC account representative.

–Chris Oneal, President, Stones River Consulting

DOL AND LEGISLATIVE CORNER
Key SECURE 2.0 Provisions Are Becoming Effective

SECURE 2.0 contains 92 new provisions, with some taking effect immediately while others will be effective in the coming years. Notable provisions that plan sponsors should review with SRC or their financial advisor, include:

Automatic Enrollment for New 401(k) and 403(b) Plans: An EACA-type automatic contribution arrangement will be required for all new 401(k) or 403(b) plans. Generally applies for plan years beginning after Dec. 31, 2024.
Emergency Savings: This new savings vehicle provides for an additional hardship-type withdrawal of up to $1,000 per year for emergency savings as well as the addition of a “side-car” emergency savings account. Effective after Dec. 31, 2023.
Reduction of Long-term Part-time Employee Period of Service: SECURE ACT 1.0 required that long-term part-time employees be included in retirement plans for salary deferral purposes if the employee works 500 hours in a consecutive three-year period. SECURE 2.0 reduced the years from three to two years and extended this requirement to 403(b) plans. Generally effective for plan years beginning after Dec. 31, 2024.

SRC has created a handy guide on the most important provisions affecting retirement plans.

Download the guide here>>

If you have any questions about SECURE 2.0 and its provisions, please get in touch with your SRC consultant.

COMPLIANCE CALENDAR
Important Deadlines to Remember

October:

1: IRS deadline to establish a new Safe Harbor 401(k) plan with Employee Deferrals for the current 2024 calendar plan year.
15: Final Filing Deadline for 2023 Form 5500. After this date, Plan Sponsors are subject to a filing correction program, which results in additional fees/penalties.
15: IRS deadline for adopting a retroactive amendment to correct a 410 (b) Coverage or 401(a)(4) Nondiscrimination failure.
15: Deadline to remit Employer Contributions for C Corps and Sole Proprietors on tax extension to take a tax deduction.
15: Deadline to adopt a profit sharing plan for 2023 for C Corps or Sole Proprietors with tax return extension.

November:

1: Begin reviewing and gathering required Annual Notices to distribute to all eligible participants before December 1st.
30: Deadline to convert existing 401(k) Plan to Safe Harbor plan using 3% nonelective contribution.

FRESH INSIGHTS

7 Signs Your Retirement Plan Needs an Upgrade

Retirement plans can be very complex if plan sponsors don’t have the right partner by their side to help navigate the ins and outs.

Stones River Consulting created a new guide titled, 7 Signs Your Retirement Plan Needs an Upgrade, that helps plan sponsors understand:

What the four critical areas of a retirement plan are that need to be properly managed to maintain a successful retirement plan.
Warning signs that a plan may be in danger of falling outside of compliance.
How to get help to maintain a compliant retirement plan that benefits both the plan sponsor and its employees.

To request this guide, click here>>