New Executive Order Could Help Retirees Stretch Out Savings

Posted on September 4, 2018 by Jodi Boyne

Nearly half of all Americans are concerned that they will not have enough money to live on during retirement. President Donald Trump last week signed an executive order that could help expand access to workplace retirement plans for workers and extend their retirement savings. 

Strengthening Retirement Security for American Workers seeks to identify if retirees can keep more money in their 401(k) and IRA accounts for a longer period. It also calls on the Labor Department to consider options for small businesses to band together to provide 401(k) plans to their employees. 

One-third of workers in the private sector have no access to workplace retirement plans. Only 53 percent of workers at establishments with fewer than 100 workers are offered a workplace retirement plan, as compared to the 89 percent of workers at establishments with 500 or more employees. 

The high cost of offering workplace retirement plans has been identified by employers as a barrier to offering this much-needed benefit to employees. The executive order calls upon regulators to make it easier for businesses to join together to offer Association Retirement Plans, also known as Multiple Employer Plans, that would cut expenses and help more businesses offer savings plans. 

These plans, which would eliminate the need for businesses to have common interests to pool their retirement assets into a single 401(k), have bipartisan support in Congress.