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: This legislation could help you save more for retirement, balance your student loans, find lost 401(k) plans — and more


Retirement savers might find themselves with more incentives and benefits to bolster their nest egg soon, as the Senate continues to work on legislation to enhance retirement security. 

The Senate Finance Committee unanimously approved the Enhancing American Retirement Now Act, or EARN Act, during a hearing on Wednesday. The meeting came weeks after the Senate Health, Education, Labor and Pensions Committee released draft legislation and advanced the RISE & SHINE Act, another retirement-focused piece of legislation. These proposals all, for the most part, align with the House’s proposal, the Secure Act 2.0, passed in March. 

Many Americans are underprepared for retirement. Some may not have saved much, if anything, for their old age, while others might misunderstand how their account balances—however lofty—translate into monthly or annual income they’ll rely on when they’re older. The trust funds behind Social Security are expected to run out of money by 2035, at which point beneficiaries would receive a 20% cut to what they’re owed if nothing is done to fix it. And many savers either do not have access to retirement accounts, or do not feel confident or comfortable in choosing the proper investments for their retirement nest egg. 

In essence: more can be done to improve the country’s retirement security, experts say. 

There is bipartisan support behind both the House and the Senate’s retirement proposals—a good sign that Americans may see something pass in the near future. “The EARN Act works hand-in-hand with the RISE & SHINE Act and it is similar to the House-passed Secure Act 2.0,” said Andy Banducci, senior vice president of retirement and compensation policy at the ERISA Industry Committee, an advocacy group for employers and their benefit programs. “We are optimistic that the House and Senate will be able to reconcile these two bills and get them to the president’s desk by the end of the year.” 

Once the two arms of Congress have come together to finalize the package, they’ll find a “vehicle” to attach it to, which may likely be during the lame duck session before the end of the year, said Paul Richman, chief government and political affairs officer at the Insured Retirement Institute, a group that represents annuity and insurance providers. 

Congress also had bipartisan support when it passed the initial Secure Act—the first major retirement legislation in decades — in December 2019. 

The EARN Act includes 70 provisions that focus on encouraging workers, their employers and retirees to boost Americans’ financial well-being in their later years, including treating student loan payments as elective deferrals for retirement accounts, indexing IRA catch-up limits (which are currently stagnant at $1,000 every year), penalty-free withdrawals from retirement accounts for victims of domestic abuse, creating a lost and found database for old workplace retirement plans and credits for small employers who want to offer retirement benefits. 

The proposal also calls for greater efficiency in rolling over workplace retirement plans. “Today that process is often a massive headache,” Sen. Ron Wyden, a Democrat from Oregon and chairman of the Senate Committee on Finance, said in a statement. “There’s loads of paperwork, forms haven’t been standardized, the process is slow and confusing. The EARN Act is going to help change that because portability ought to be a whole lot simpler.” 

This legislation is a step in the right direction, and will be a boon to retirement savings for Americans near retirement, or years away, said Jared Porter, co-founder of small business 401(k) provider 401GO. “Technology is moving in a way where people are learning more about what it means to save and what it means to put money away for retirement,” he said. “The first interaction like that would be working for a business that has a retirement plan, so you have to have legislation that’s there allowing more freedom.” 

The House and Senate have a number of provisions that overlap, or address issues with slightly different approaches but the same objectives, Richman said. “Not everything may make it in where there is a disagreement but most of the barriers where there are some differences are workable,” he said. “It just takes time for the staff committee for both sides of the Capitol to work out.”

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