A new type of payroll deduction?
Idea for building emergency savings at work gaining steam
Job loss, health emergencies or a fall in income can destabilize households, and having a backup can mean the difference between keeping a roof overhead and facing crushing debt or bankruptcy. Such financial jolts also force workers to make premature withdrawals from retirement accounts, incurring penalties and taxes and hurting their long-range retirement prospects.
There is growing consensus in Washington that the inability of many American families to cope with economic blows is a serious problem that needs fixing. The most efficient, robust solution would be to strengthen our key social insurance programs: Social Security, health insurance and unemployment insurance.
But we do not have national political consensus to do that – and insurance cannot address every emergency spending need. So support in Congress is coalescing around a different, more modest approach: make it easier for workers to set aside savings to meet short-term needs through payroll deductions.
The Strengthening Financial Security Through Short-Term Savings Plans Act is part of a package of proposals aimed at improving retirement security that is making its way through the legislative process. The bills have garnered bipartisan support, and also include provisions that would make it easier for small business owners to band together to offer professionally managed, pooled employer saving plans, along with some refinements of the existing 401(k) and savings system.
The short-term savings bill would permit employers to automatically enroll workers for accounts that deduct small amounts from pay into special savings accounts. These could be standalone accounts at banks or credit unions, or so-called sidecar accounts alongside 401(k)s. But in contrast to retirement accounts, funds in these accounts would always be readily accessible.
Learn more in my column this week at Reuters Money.
Advice on 50+ job searches from a recruiting expert
When you’re trying to find a new job after 50, you face unique challenges that can get in the way of a prospective employer understanding just how perfect you are for the role. Your job-hunting skills may be rusty. Your industry could be changing or contracting. And then there’s the Big One: good, old-fashioned age discrimination.
Fortunately, says Jo Weech, founder of Exemplary Consultants in Washington, D.C., there are smart strategies you can use to push past those obstacles and nail that dream job. With more than 15 years in senior leadership roles in recruiting, human resources, and employee engagement, Weech regularly speaks and conducts workshops on career transitions for older workers. Via Considerable.com.
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August 20, 2018