Retirement

Will You Run Out of Money in Retirement? Check Your RISE Score Today

June 12, 2019 By Kathryn Vercillo Leave a Comment

Have you checked your Retirement Income Security Evaluation (RISE) score yet? Most of us do our best to plan for retirement. However, it’s really hard to know whether or not we’re doing enough.

It can seem like we must need an impossible amount to live well in retirement. On the other hand, we generally aim for fairly realistic savings that we can accomplish without compromising our current lifestyle. Yet, we don’t want to reach retirement only to run out of money.

Your RISE score can help give you a realistic picture of your money in retirement.

What is the Retirement Income Security Evaluation (RISE) Score?

RISE is an acronym for Retirement Income Security Evaluation. It’s a new tool available to consumers who are interested in checking the pulse of their future retirement income. If you want to know whether or not you’re going to be able to make your money last through retirement, then it’s a tool that you might want to check out.

After entering some basic information, you’ll receive a score. It looks a lot like a credit score. Over 750 is “excellent,” and under 350 is “very poor.” There’s a reason for that. We all have a solid understanding of our credit score. When it’s bad, we know we need to take action to make it better. The RISE score is the same way. A bad score doesn’t mean that you’re doomed to a future in poverty. It means that you need to take steps to improve your retirement income.

How Does RISE Work?

You can easily go online to access your RISE score. You will anonymously enter basic information including your age, gender, and health (on a four-point scale from very poor to excellent). Then you will enter certain financial information, including:

The amount you have in savings
Current monthly income
The income you expect in retirement from social security, pension, or other sources
Estimated expenses including monthly living costs and medical costs

You can enter these as an individual or choose to enter them jointly with your partner. If you don’t have the exact numbers, you can use the estimated averages that the tool provides. However, you will obviously get the best picture of your own retirement income situation if you enter your own information as exactly as possible.

The more you know about your money, the better the tool can help you. For example, when you enter your estimated monthly living expenses, you have the option to list if the dollar amount you give is current (nominal) or future (real). You also can choose whether or not to adjust for inflation. The more accurate and detailed you can be, the better.

Who Should Get Their RISE Score?

There is definitely a target market for this tool. It’s designed for people who are at least 45 years of age. It’s particularly useful for people who have assets of $75,000 – $2,000,000 that they can invest. That’s because if you discover that you are going to need more money in retirement, your best course of action is to make proper investments now.

The tool isn’t going to be particularly helpful for people who don’t have a fairly steady income. If you don’t have a pension coming, and you can’t anticipate what your social security payments will be, then the tool can’t provide you with very accurate information. Likewise, if you’re wildly off when guesstimating your monthly expenses, then the tool’s score might not be accurate.

That said, you can use the tool at any age from 25-85.

How Reputable is the RISE Score?

This tool was developed by Milliman, which provides a variety of different financial tools. Alliance for Lifetime Income, which is a non-profit organization whose purpose is “helping Americans address the risk of outliving their retirement income,” launched it. The financial services industry backs that organization. Therefore, it’s a fairly reputable tool.

Of course, the tool is new, which means we haven’t been able to see the test of time. We don’t have information yet to reveal whether the information it provides will hold water when retirement time comes. Moreover, it’s just one tool. You certainly can’t bank your entire financial plan on this one score.

Nevertheless, it’s a good starting point. If you’ve ever questioned whether or not you’re going to have enough money in retirement, then the RISE score is a good next step.

RISE Helps You Plan for the Future

The whole point of this tool is just to get a general picture of your retirement income’s health. Then you have to take the information and put it to use. The idea is that this information can assist you greatly in determining how to make smart moves for your financial future.

Choosing Your Investment Approach

There’s actually a part of the tool that helps with this. As you enter your information, you come upon a page that asks you to choose from one of three descriptions that “best describes your current self-determined retirement approach.” They provide some additional supporting information to help you choose. The three choices are:

Conservative, in which you have 20% equity and 80% bonds, and will probably want to minimize risk.
Moderate, which is 60% equity and 40% bonds, and you’re open to some risk in order to get long-term rewards.
Aggressive, the inverse of conservative (80% equity, 20% bonds), where you’re willing to take lots of risk to maximize returns.

Even answering this question can get you thinking about how the choices that you’re making will affect your financial future. The tool itself considers your choice as it helps you plan.

Helping You Figure Out The Effect of Annuities

In a second section, you’ll see a question about how much money you’d be willing to put towards annuities. The tool explains why they are an important part of your retirement portfolio. They note that “the average retired American portfolio allocates 20% to annuities.” However, you can choose any percentage that you would like. You can see how changing the percentage changes your financial future.

Taking Next Steps

Much like with a credit score, when you get your RISE score report, it provides you with some information to help you take the next steps. First, it tells you which category you fall into. For example, a score of 550-649 is considered fair. You’ll get some tips about how people with fair scores can improve things.

You’ll also get some specific tips about how to easily boost your score. For example, mine said that increasing my annuities to 20% would boost me up by about 16 points.

The next step is to take your score to a financial advisor. You can work with them to figure out how to make the right changes to secure your future retirement.

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Healthcare Costs in Retirement Can Add Up

June 5, 2019 By Doug Carey Leave a Comment

It’s no secret that the cost of health care in retirement is probably the biggest unknown hovering above most retirement plans. Pre-retirement, the biggest unknown expense for many families is often higher education for kids. Will they get scholarships? Will they attend a state school (and get relatively affordable in-state tuition)? Or will they get into a great, out-of-state college with no financial help at all, and need help from Mom and Dad or go into extraordinary debt? That’s a tough figure to budget for.

Similarly, most of us can’t know with any reasonable degree of certainty what kind of health issues we’ll run into as we age. We generally need to hope for the best and prepare for the worst, as they say.

To that end, Fidelity Investments has produced a new study about healthcare costs in retirement.

The “too long, didn’t read” summary: Fidelity estimates that a 65-year-old couple retiring today should be prepared to spend $285,000 in medical expenses during retirement. For a single person, it’s in the $135,000-$150,000 range.

Fidelity makes the assumption that you will be covered by Medicare parts A and B, which covers hospital and medical insurance. So that $285,000 figure is in addition to basic Medicare coverage.

Hopefully the fact that you’ll have to pay anything out of pocket even if you’re covered by Medicare is not a surprise. If you want coverage for prescription drugs and dental care and lots else besides the very basics, you’ll likely be paying into a Medicare Advantage Plan (Medicare Part C) on an ongoing basis.

In the study, Fidelity has a hypothetical 35-year-old couple putting away about $2,800 annually in a Health Savings Account (HSA) until they are 65. Fidelity says these contributions, assuming 7% returns annually, would shoulder the anticipated burden. I used WealthTrace’s financial planning application to run Fidelity’s assumptions through a retirement plan, and Fidelity has it right.

To Be Taken With a Grain of Salt—and an HSA

To quote Fidelity’s study, “We recognize that when today’s 35-year-olds retire in 2049 their medical costs could be more than this year’s estimate, and the U.S. health care system could potentially look dramatically different.”

Yes, that’s for sure. A similar sentiment might apply to pretty much anything predicted to happen that many years out. The costs could be more; they could be less. The point is to start to do something to prepare. If you don’t end up needing the money for health care, great–you’ve saved it and it has compounded in value and you can use it for something else.

Fidelity would love it if you opened up an HSA with the company–that’s why they did this study, after all. They want your investment assets. But just because this is something of a sales pitch on their part doesn’t make it a bad idea.

If you’re not familiar with HSA’s, you can get some details about them here. They are similar to IRAs or 401(k)s in that you save the money on a pre-tax basis. But with an HSA, your withdrawals will not be subject to any tax if you use the money to pay health care costs. (If you use the funds to pay for something else, it will be taxed as income and you’ll be hit with a 20% penalty up to age 65; the penalty goes away if you’re over 65.)

If you’re allowed to have an HSA and have the resources to fund one, it’s definitely worth considering. You may not be eligible–you have to have a high-deductible insurance plan, with a $2,700 deductible for a family currently ($1,350 for an individual). It also probably makes sense to first contribute as much as you can to other qualified tax-deferred accounts such as IRAs (currently $6,000 before 50, $7,000 if you’re 50 or older) and 401(k)s ($19,000 before 50, $25,000 if you’re 50 or older). If you have those accounts topped up, and you’re eligible, an HSA should be next on your list.

The future is as unknowable as ever. That applies to health care costs as well as potential health issues down the road. What we do know is that having a plan in place to deal with the unknowable is always preferable to being entirely unprepared.

The Number of Americans Working in Their 70s is Rising

June 3, 2019 By Amanda Blankenship Leave a Comment

Most people dream of retiring someday, even if you love your job. Many of us daydream about what it will be like to live out your golden years without financial worry and surrounded by family and friends. However, many Americans are finding themselves working in their 70s (and not because they love their jobs).

Why Are People Working in Their 70s?

Over the past two decades, the percentage of individuals working in their 70s have increased from 10 percent to 15 percent. Because people are living longer, many of them are outliving their Social Security and retirement savings. This forces them to go back to work or continue to be in the workforce longer than previous generations.

The increase in the number of folks working during their golden years can also be attributed to the types of jobs available as well. There are not many labor-intensive jobs on the market right now, making senior citizens able to return to work than in recent history.

“Which matters more [the choice to keep working or the necessity to do so] depends on what your history up until that point has been in the type of work you’re doing,” said Katharine Abraham, an economics professor.

A Perk for Employers

Employers aren’t totally losing out on this situation. As it turns out, older employees are more likely to be happy in the workplace and more skilled overall. They also have stronger problem-solving skills than their younger counterparts.

Individuals working more physically demanding jobs may be looking forward to retirement. Many of those continuing to work those careers in their old age are doing so out of necessity. But, if you prepare for retirement well enough, you won’t have to.

How to Better Prepare for Retirement

Education and preparation are key to not joining the ranks of those working in their 70s. This 10-point list gives you a few things to consider to better prepare for your golden years.

Build up emergency savings immediately. Having emergency savings will keep you from racking up debt as well as give you the ability to begin saving for retirement.
Budget for your retirement. Think about how much money you’ll need to retire, where you’ll live, and what kinds of activities you’ll want to do. Then construct a budget for your golden years.
Consider your health insurance options. Without work, health insurance can be expensive. Some pension plans will include health insurance, but not all will. Find out what your options are early on so you can budget for it.
Educate yourself about how retirement income is taxed. Social security and IRA distributions are taxed. You need to learn about how much money you’ll be paying in taxes to construct a budget correctly.
Draw up an income timeline for retirement. After figuring out your budget, draw up a timeline for your income. How much will you need each year? How long will it be until you retire? What if you outlive the funds you have set up?
Use a retirement calculator to lay out possibilities (and a Social Security calculator). Check out an online retirement calculator and determine different possibilities. You can also figure out what your social security income may be with one of the IRS calculators.
Make an investment plan and read up on the best retirement investments. Maybe even hire someone to help you with these investments. Determine your risk tolerance and figure out what investments will help you later in life.
Consider hiring a retirement planner. Be sure to interview a few. Retirement planners can be great in helping you get set up and manage your money during retirement. Just be sure you get the right planner for your needs.
Learn how to earn more from your 401(K). If you can roll your 401(K) over into an IRA and you’re nearing 60, it may be in your best interest to transfer the funds.
Analyze the different pension distribution options available to you. Any decisions you make with your pensions cannot be changed. Be sure you know all of your options before you choose.

These 10 things can help set you up for a retirement where you actually get to retire. With more and more Americans working well into their 70s, it is important to be proactive in your financial planning for your later years.

Readers, what do you think about the increase of Americans working in their 70s?

74% of People Aren’t Prepared for Retirement. Are You?

May 13, 2019 By Guest Writer Leave a Comment

Recent research estimates that 74 percent of Americans aren’t prepared for retirement. Even worse, an estimated 42 percent of Americans are likely to retire broke. But there is no reason these dire predictions should come to fruition.

Think of your retirement as a long road trip that you plan to embark on with your family. There’s a lot that goes into the logistics of an extended trip: You must decide what destinations you plan to visit, plot out what routes you’ll take, and figure out where you’ll stay, explore, and eat. The same type of planning must go toward retirement. There are a lot of factors to consider, and you’ll be set up for a great trip if you plan accordingly.

6 Things to Do in 2019 to Prepare for Your Golden Years

Many Americans don’t realize the benefits of having a financial advisor. They think that kind of help is only for the rich, which is not true at all. A financial expert can help create a holistic plan for your financial future, but for those who are not ready to dive in with an advisor, there are some things you could and should be doing right now to set yourself up to be able to afford and enjoy your retirement.

1. Understand (and Get Rid of) Your Debt.

What kind of debt do you have? Look at any bill that you pay interest on—mortgages, credit cards, cars, student loans, and so on—and find out how much you’re paying in interest every year. Research how you could pay these bills off at a faster rate. For instance, if you’re a homeowner, you can shave years off of your mortgage and save thousands of dollars in interest by making just one extra payment annually.

2. Ask Yourself, “How Do I Envision My Life in Retirement?”

To take the first steps toward determining how much money you’ll need to retire, you have to ask yourself what retirement looks like to you: What type of lifestyle do you imagine? Will you want to spend time traveling? Are you planning on staying in your home, or do you plan to relocate? Will you want to stay in the same area but downsize to a smaller home? Are you hoping to quasi-retire early and work part-time after leaving your full-time career? To paint the picture of your life in retirement, these are some of the big questions to consider.

3. Estimate How Much You’ll Need to Retire.

To figure out how much you’ll need to save to live the retirement lifestyle you’re imagining, use a retirement calculator to crunch some numbers. This will give you a realistic picture of your retirement goals. It’s also important to consider inflations rates will change over time and how this should factor into your retirement. Free inflation calculator tools will start to give you an idea of this.

4. Take a Closer Look at What You’re Making and Spending.

Time is the biggest free resource that we have for retirement planning, and the earlier you start saving, the better. A recent survey found that 72 percent of millennials have saved less than $10,000 or nothing at all. To get serious about saving for retirement, you’ll have to take an honest look at your monthly expenses and savings.

Is there a lot of extra spending that you could reduce somewhat painlessly? The little things add up over the years. Maybe those extravagant weekly dinner dates could be reduced to every other week. Or perhaps you can downgrade your cable plan if you don’t watch the channels that are costing you an extra few bucks a month. Scaling down your lifestyle may be necessary if you want to start ramping up your savings.

5. Understand the Investment Options Available to You.

The vast majority of people will only be able to retire with a big enough nest egg if they’ve been investing in places where they’re getting returns. However, research shows that two-thirds of all Americans don’t contribute anything to a 401K or other retirement account available through their employer.

To put it simply, you need to invest your money. And if you think that you don’t make enough to save anything worthwhile, know that compounding interest can turn a small contribution into serious savings over the years. Try using a compound interest calculator to realize the benefits of saving even small amounts at a time.

Find out if your employer offers 401K matching, and get started with your contributions as soon as possible. Even if you can only swing a small amount, it’s a step forward in your retirement savings. If a 401K isn’t an option for you or if you’d like to invest in addition to your 401K contributions, look into starting an IRA that allows you to take advantage of potential tax-deferred or tax-free growth. Remember that 401K and IRA contributions are flexible so you can change how much you’re contributing depending on your life circumstances.

6. Learn How Your Retirement Plan Will Work.

It’s important to know what the pension plan(s) in your household will look like. If you’re relying on a spouse’s pension, it’s vital that you understand what happens in the event that your spouse passes away before you. It’s also key to determine what you qualify for with social security. The government’s benefits calculator tool can help you configure those estimates.

When it comes down to it, there are only a few core options that will help you reconfigure your retirement savings: make more, save more, reduce expenses, or postpone retirement. But don’t get discouraged! Simple changes that lead to better planning can make a big impact on your retirement savings. By gaining a better understanding of your current financial situation and implementing some of the best practices outlined above, you will set yourself on a path to securing your future today.

Are you ready for retirement? Share with us in the comments below!

By Wes Garner, President of TDECU Wealth Advisors

At Texas Dow Employees Credit Union (TDECU), Wes Garner uses his 17 years of experience in wealth management to help people work through the complex issues of financial planning and investment management. He is dedicated to empowering clients to gain control of their financial livelihood and enabling them to take the necessary steps to manage their goals.

Are Seniors Saving Enough to Retire Comfortably?

May 8, 2019 By Tamila McDonald Leave a Comment

Most people have the best intentions when it comes to saving money. However, as they experience financial challenges, tossing cash into a savings or retirement account becomes less of a priority. Instead, immediate needs take priority. For seniors, this mentality can keep them from being able to retire comfortably or, for some, they may have to put off retirement indefinitely.

Putting Off Saving

For many older adults, not saving enough is usually self-described as their biggest financial mistake. This can include anything from not putting money away for emergencies or suitably saving for retirement.

While it is possible to make up for the lost time when it comes to saving for retirement, it does make the situation harder to navigate. Late-savers don’t get all of the benefits of long-term compound interest, so they have to make larger deposits to offset any missed opportunities.

Concerns About Retirement Savings

Most Americans are worried that they won’t have enough to retire comfortably when the time comes. While many will have access to Social Security, providing them with at least some amount of income later in life, that alone typically isn’t enough to cover what they will need in retirement.

In 2019, the average senior who qualifies for Social Security benefits receives $1,461 a month. Over the course of a year, that’s only $17,532 in income. While that amount is $5,042 over the poverty line in the 48 contiguous states and DC, most would agree that living on that amount would be incredibly difficult.

On average, Social Security only replaces around 37 percent of an earner’s pre-retirement income. As of the first fiscal quarter in 2019, the median income for a person working full-time, based on data collected by the Bureau of Labor Statistics, was $905 a week, or $47,060 a year.

Without additional savings, being comfortable in retirement might not be possible.

A “Comfortable” Retirement

Often, seniors need closer to 80 percent of their pre-retirement income covered to live comfortably. While many assume that their expenses will decrease after retirement, many don’t experience a dramatic decrease. In fact, some may see their costs stay the same or even increase, depending on factors like healthcare costs and how much they spend on leisure activities.

Based on the yearly median income amount of $47,060, this means seniors should expect to need at least $37,648 annually after they retire (based on the 80 percent metric). After deducting the average Social Security payment, that leaves a shortfall of $20,116 each year that needs to come from another source.

Those who were born in 1953 are hitting full Social Security retirement age – for them, 66 – this year. With an average life expectancy, based on CDC data, of 78.7 years, that would mean 12.7 years would be spent in retirement, theoretically. That $20,116 annual shortfall, over that period, would total up to $256,108.20. And that relies on the notion that 80 percent of the median yearly income is enough to sustain them and that they don’t live longer than the average life expectancy.

Additional Savings Are a Must

For those with a high-cost medical issue or who wish to have more money available during their golden years, then additional savings is a must. Now, one method to increase income as a senior is to wait until age 70 to begin accessing Social Security benefits. The monthly payment increases by 2/3 of 1 percent for every month that a person waits until they reach age 70 (an 8 percent increase annually).

At age 70, that means the retiree gets 124 percent of their original benefit amount each year. If the person would qualify for the average $1,461 a month at full retirement age, that means they could get about $1,812 a month instead of delaying until age 70, which is around a $351 monthly ($4,212 yearly) increase. However, that is still a far cry from what a senior likely needs to be comfortable.

Planning for a Comfortable Retirement

Making up for the remaining shortfall can be difficult, but it isn’t impossible. If you are age 50 or older, you can save up to $24,500 each year in an employer-sponsored 401(k). Additionally, putting up to $6,500 in an IRA is allowed. Depending on how long the money can sit in the account and the return rate, that can put a serious dent in the shortfall.

However, even if you can’t max out your retirement, every bit you can save makes a difference. It’s always better to sock away something than do nothing.

Additionally, working to pay off debt and reduce your expenses can help you make your retirement more comfortable. If you have fewer costs, you won’t need as much money to maintain your lifestyle. Plus, over time, you might be able to make more space in your budget for additional savings, ensuring your golden years are as bright as possible.

Are you on your way to a comfortable retirement? Are you worried you haven’t saved enough to support yourself in retirement? Share your thoughts in the comments below.

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How the SECURE Act Affects Retirement Plans

May 6, 2019 By Kathryn Vercillo Leave a Comment

The Secure Act recently passed unanimously through the House Ways and Means Committee. It is a small bill in some ways. Nevertheless, it represents the biggest change to private retirement plans that we’ve seen in quite some time. More and more people are reaching retirement age without adequate savings, so it’s important that we take steps like these.

What is the SECURE Act?

The Secure Act is a bill that recently passed through the House Ways and Means Committee. SECURE is actually an acronym. It stands for the Setting Every Community Up for Retirement Enhancement Act of 2019. It’s also known as H.R. 1994.

The primary aim of the bill is to make it easier for people to sign up for 401(k) retirement plans. In particular, it helps ease the difficulty of those working for small businesses to access this crucial component for security in retirement.

3 Ways the Secure Act Helps with Small Business Retirement

If you work for a small business then you might not currently have access to a good 401(k) plan through your employer. The Secure Act should change that. It has three key components to that end:

1. Encourages Benefits

More than anything else, the Secure Act encourages small businesses to offer 401(k) benefits to their employees. Of course, people can get social security after retirement, but it’s not enough to support the average person. Therefore, we each need to have other retirement savings plans. The 401(k) is the most popular of those plans. However, small businesses often don’t offer those benefits. A series of details in the Secure Act should entice small businesses to change that around. Moreover, there are provisions that will make it easier for employees to understand and harness the benefits of these plans.

2. Offers Businesses a Tax Incentive

In order to further motivate small businesses to make those changes, the Secure Act has a built-in incentive. Any small business that creates a 401(k) plan or begins offering automatic enrollment for one may qualify for a brand new tax credit. They’ll get $500 back just for creating that plan, a credit that applies for three years.

Plus, there are a variety of details that make it easier for businesses to offer these plans. For one thing, small businesses are allowed to join together in groups to offer these plans. This makes it easier for the business to deal with their own costs and hassles.

3. Requires Certain Benefits for PT Workers

Of course, like many bills, this one has a carrot and a stick. Hopefully, small businesses will be inspired by the tax incentives to offer 401(k) plans to employees. However, in case they aren’t, some specific new rules are in place. The big one is that any small business that has part-time workers who are long-time employees much allow them to participate in the 401(k) plans that they set up. This is a protection for part-time workers who need retirement income as much as, if not more than, full-time employees.

Will the Secure Act Help You in Your Retirement?

Ultimately, you are responsible for your own retirement savings. If you don’t have a private retirement savings plan, then you should remedy that as quickly as possible. For some people, that’s just a matter of ease of access. Those are the people who will benefit most from the Secure Act. People who are already saving for retirement through 401(k) plans or other means will not likely see any change as a result of this bill. However, those people on the margins, particularly long-term part-time employees, can definitely benefit from what this bill has to offer.

That said, some of the provisions in the bill could benefit anyone interested in saving for retirement through 401(k) plans. Such details include:

Currently, employers can auto-escalate their employees’ 401(k) contributions to 10% of their pay. The new bill increases that amount to 15% which can mean significantly more retirement savings for those people.
Graduate students and post-doctoral students will both be able to include their stipends and fellowships as a means for saving for retirement, something that was not previously available.
Home healthcare workers will also see benefits that allow them to save more than previously allowed.
Loans based on credit cards will be prohibited, which is important because they tend to ultimately result in less money in the accounts.
Even though you’ve set that money into a retirement account, you will be able to withdraw some penalty-free if you need money to cover the cost of the birth or adoption of a child. This is an incentive to encourage more young people to start contributing to their own retirement. The earlier you start, the better off you will be.

2 Other Things the Secure Act Does

The thrust of this new bill is all about what it does to help small business employees save for retirement through 401(k) plans. However, there are a couple of extra things in the bill as well. After all, the 401(k) might be the most popular retirement savings plan, but it’s not the only one. Here are two more things that the new bill does:

1. Changes IRA Age Rules

The IRA is another popular retirement plan. The bill has two components that affect it:

Takes away the maximum age for IRA contributions. You can keep contributing to your IRA for longer. That’s important because people who are working later into retirement can set aside more money. Then when they need their retirement income, there’s more to access.
Increases the age for required mandatory distributions. It used to be that you had to start taking money out of your IRA by age 70.5. The new bill increases that to age 72. Again, this allows people who are working later into retirement age to benefit more from their IRA.

In addition to working longer, people are living longer. They need that retirement money into their 80s, 90s, and even past age 100. Therefore, these small changes can actually make a big impact for some retirees.

2. Expands 529 Savings Plans

The 529 savings plan isn’t for retirement per se. Instead, it’s tax-friendly savings account for future education costs. If you have children, you should set one up. Oftentimes, parents are looking towards retirement as their kids reach college age, so it does help ease the mind around retirement in that way. In any case, the new expansions from this bill will help some people reap more benefit from 529 savings plans.

Previously, the money in those savings accounts had to be used for college costs. However, the new bill changes that. For one thing, it allows the money to be used for homeschooling and apprenticeships. Perhaps even more powerfully, it allows the money to go towards paying off student loans. With student loan debt so incredibly high these days, that can mean a big change. Therefore, the Secure Act gives parents more reason to start setting aside money in those savings plans.

What’s Next for the Secure Act?

This act passed a critical committee in the House. It goes to the full House floor in May. The bill has a good chance of full Congress approval.