Weekly Column: Creating Stronger Footing For Retirement Savings
Guest column submitted by U.S. Senator Mike Crapo
In recent years, we have seen press reports about Americans being unprepared for retirement with too little savings to provide a lifestyle during retirement similar to their pre-retirement standards of living. The long-term benefits of the Tax Cuts and Jobs Act, which will continue to be felt throughout the years ahead, are setting the stage for improved retirement savings opportunities.
Preparing for retirement years is often difficult, especially when paychecks have to cover mortgages, rent, car payments, food, utilities, gas, college and other important obligations. Even unexpected medical expenses or car repairs can become a major hurdle in well thought out retirement strategies.
The Tax Cuts and Jobs Act, which Congress passed and the President signed into law late last year, is helping to improve the conditions for retirement. The law provides enhanced investment benefits allowing retirement portfolios to increase in value, as market conditions continue to improve. Last year at the Senate Finance Committee markup of the tax reform law, Thomas A. Barthold, Chief of Staff for the Joint Committee on Taxation, confirmed an increased share of corporate ownership is being held not by wealthy CEOs and stockholders, but by workers through their retirement portfolios. The discussion I had with Mr. Barthold can be viewed here https://www.youtube.com/watch?v=Iwxac5BzddM&feature=youtu.be. Idahoans are seeing a significant increase in their retirement portfolios over the past year as overall market value continues to increase and the overall economy continues to grow.
Retirement portfolios are improving, even before the benefits of tax rate reductions and simplifications take full effect, not to mention the wage and bonus increases Idaho workers are receiving. Both the decreased tax liability and increased wages assist Idahoans with keeping more of their hard earned income for retirement savings and other expected and unexpected expenses. These direct and indirect effects of tax reform increasing retirement portfolios are not one time events, but will continue and multiply over time.
A growing number of Idaho companies are creating Employee Stock Ownership Plans (ESOPs). ESOPs enable employees to obtain ownership interest in companies they work for, and these vested holdings become available upon retirement or when they leave their company as provided in the terms of the ESOP agreement. The media and others continue to report on the benefits ESOPs provide as one of many enhanced retirement opportunities for Idaho workers.
I also strongly support enactment of S. 2526, the Retirement Enhancement and Savings Act. This bipartisan legislation introduced by the Chairman and Ranking Member of the Senate Finance Committee, on which I serve, contains many provisions to expand and encourage retirement savings opportunities. Many of these provisions have previously been approved by the Finance Committee with overwhelming bipartisan support in the last Congress, but they have not yet been enacted into law.
While I fully understand preparing for the future is hard and vital, Congress has taken steps to assist with options and benefits for hard working Idahoans to increase their retirement accounts. I continue to push for action to take additional steps forward to make it easier for Idahoans to save for retirement.
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