In all the commotion over political speculation, there is a segment of the marketplace that is in need of triage. Those about to retire in the next ten years. The retirement crisis is very real and it is gaining speed. So what can you do as a plan sponsor to cushion the impact?
Hot on the heels of the Health Reform legislation getting pulled off the table at the eleventh hour and the retirement market doing a double-take, plan sponsors are likely feeling a bit on-edge, not to mention plan participants. If the healthcare uncertainty was not bad enough, it appears that the Trump administration will look next to tax reform.
Any consideration of tax reform has a very good chance of resulting in the modification of the rules regarding tax deferrals in retirement plans. This is more likely to be good news than bad. This would be an easy one for Mr. Trump to bail-out seniors. I am guessing it will happen.
Trump has repeatedly held fast on the notion that Social Security is “untouchable”, that much was pretty-much baked-in. However, with the profound shortfall of babyboomer moving into retirement and the Gen-X’ers not far behind, a crisis may soon start to crater a yet fragile recovery.
At the very least, the fuse has been lit on this bomb and according to many reports and in-depth research, it’s no secret that Americans on the verge of retirement are woefully unprepared. For many it’s a matter of closing the barn doors after the horses have run out. However, the old adage “it’s never too late”, may hold hope for a large segment.
There is no way to tell what will happen, the political landscape is as unpredictable as it has ever been. However, for those lagging behind, a late surge into an HSA may be a prudent plan. Participants can accrue significant balances for health care costs beyond Medicare reimbursement. When it comes to tax reform, if I had to handicap this one, I’d say that it is likely that republicans will rally around a Trump tax cut proposal.
