Now that the House has tabled their witch hunt of impeachment, they are attempting to fast track some bills before the Senate in order to improved their flailing incompetence and justify their salaries. One such bill is making headlines as the mainstream media lavish in promoting a false interpretation. The SECURE Act – which stands for “Setting Every Community Up For Retirement”.
Of course a community doesn’t retire – but they might collectively under a Marxist regime. I digress.
One of the main precepts in the Act is the push of annuities. Brokers and advisors typically love selling annuities because the commission is far higher than any other classic investment. Annuities are sold by life insurance companies not investment houses. Commissions on annuities vary but can be as high as 10% with higher than average annual management fees. The younger the client, the higher the fee passed to the agent given an annuity has a minimum term, much like a CD and the longer the term, the greater chance the insurance company has of making big bucks. In essence you are loaning your money to the insurance company, pay a commission to do so, and are charged a management fee for your money whether it increases or decreases in value.
The Bill encourages placing an annuity inside a 401(k) or IRA. Why? They are already tax deferred until you draw the money and are then taxed just as an IRA or 401(k), so this part of the Bill is actually quite nonsensical. Of course it is no coincidence that the insurance industry threw all of its weight behind this bill – they stand to make a fortune as people are led to believe an annuity has some financial benefit!
It is a bit disconcerting that the Act claims it sets up communities for retirement instead of individuals…
Another point within the Act is that it pushes the age of retirement savings required withdrawal to 72 vs. 70.5 which means people will be required to work longer before they can tap their resources without a penalty. Not sure why that deserves an applause.
Beneficiaries of trusts will have a potentially higher tax liability as the trust will have a ten year provision instead of a lifetime provision for the beneficiary. Obviously this has zero impact on boosting retirement savings at all for those the Act was supposed to be helping and targeting, but then it is government.
A provision allows parents to withdraw up to $5000 from their retirement account to pay for adoption or new birth expenses. Of course, this has absolutely no positive impact on retirement savings either – but it’s in the Bill!
“Millions more people will hypothetically have the ability to save at work.” Is the rhetoric being spouted by people with degrees in liberal art. Theoretically, savings will increase as taxable income will drop as they put away more $$$$ into their 401(k). Problem is, most people put in nothing because they are spending every dime they make. One third of Americans have less than $5000 in a retirement savings account. The primary reason is that real wages have remained stagnant for decades. Nothing in the Secure Act addresses that fact.
In essence this is simply an insurance company’s heaven. And given that members of Congress have a penchant for profiting off legislation they pass, it would seem this might be just another attempt. For Example:
In 2008, Pelosi made a fortune when VISA offered her shares of its IPO at $44 per share within the range of $1-$5 million total. Today the price is over $188. While it sounds like she simply made a good investment, companies of that size typically sell their IPO’s to institutional investors and mutual funds. However, in order to gain favor, sometimes they will offer an ‘incentive’ to members of Congress. In this case, the incentive was to quash a Bill in Congress that would have had a hugely negative impact on VISA’s bottom line – The Credit Card Fair Fee Act. The Bill sits idly on the House calendar 11 years later…
Another House passed Bill sitting on the Senate desk is “Voting Rights Advancement Act” which would essentially give the feds the right to infringe on state laws requiring voter ID and require states to get fed approval before they can adopt any law deemed to infringe on the right of voters who have no ID.
Another one Pelosi favors is “For The People Act”. This one’s a Beaut! Specifically, the bill expands voter registration and voting access, makes Election Day a federal holiday, and limits removing voters from voter rolls. The bill provides for states to establish independent, nonpartisan (an oxymoronic moron) redistricting commissions. It calls for establishing in the legislative branch the National Commission to Protect United States Democratic Institutions, and other provisions to improve the cybersecurity of election systems. It enumerates a code of ethics for all federal employees and the creation of a legislative body to ensure compliance. And lastly it requires the President and Vice President to provide 10 years of tax returns.
“The Climate Action Now Act” which would essentially mandate/require the President to contribute to the Paris Accord.
“The Equal Pay Act” which would require ALL employers to provide to the Equal Opportunity Commission the sex, race, and national origin of employees as well as their pay data so that they might enforce penalties and civil suits for unequal pay.
These are a sampling of Bills that the House claims the Senate is sitting on despite their feverish efforts. Many have been sitting on McConnell’s desk for over 150 days… hopefully they will find their way into the shredder. But then the VISA bill that would have cost Pelosi millions in profits – is still active and waiting desperately for Pelosi’s approval… since October 8, 2008.