{"id":540875,"date":"2023-01-19T14:03:00","date_gmt":"2023-01-19T11:03:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/encore-how-big-is-the-secure-2-0-act-and-who-gets-the-money\/"},"modified":"2023-01-19T14:03:00","modified_gmt":"2023-01-19T11:03:00","slug":"encore-how-big-is-the-secure-2-0-act-and-who-gets-the-money","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/encore-how-big-is-the-secure-2-0-act-and-who-gets-the-money\/","title":{"rendered":"#Encore: How big is the Secure 2.0 Act? And who gets the money?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3df4d4c7252\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3df4d4c7252\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/encore-how-big-is-the-secure-2-0-act-and-who-gets-the-money\/#%E2%80%9CEncore_How_big_is_the_Secure_20_Act_And_who_gets_the_money%E2%80%9D\" >&#8220;Encore: How big is the Secure 2.0 Act? And who gets the money?&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/encore-how-big-is-the-secure-2-0-act-and-who-gets-the-money\/#Most_benefits_still_go_to_top_third_but_expansion_of_Savers_Credit_improves_the_optics\" >Most benefits still go to top third, but expansion of Saver\u2019s Credit improves the optics<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/encore-how-big-is-the-secure-2-0-act-and-who-gets-the-money\/#Alicia_H_Munnell\" >Alicia H. Munnell<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CEncore_How_big_is_the_Secure_20_Act_And_who_gets_the_money%E2%80%9D\"><\/span>&#8220;Encore: How big is the Secure 2.0 Act? And who gets the money?&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Most_benefits_still_go_to_top_third_but_expansion_of_Savers_Credit_improves_the_optics\"><\/span>\n  Most benefits still go to top third, but expansion of Saver\u2019s Credit improves the optics<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap crawler\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0001574172\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0001574172\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       A reporter asked how big the new retirement law (Secure 2.0) was. Despite having <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.jct.gov\/publications\/2022\/jcx-21-22\/\" class=\"icon none\">the estimates<\/a> from the Joint Committee on Taxation in front of me, I had to give a convoluted response. If we ignore the proposal to enable employers to establish emergency savings accounts, the answer is straightforward. The provisions cost about $51 billion.\u00a0<\/p>\n<p> This total is \u201cpaid for\u201d primarily by three \u201crevenue raisers.\u201d\u00a0 <\/p>\n<div class=\"paywall\">\n       1) Catch-up contributions going forward must be made on a Roth rather a traditional basis ($17 billion).\u00a0 <\/p>\n<p>2) Employer matching or nonelective contributions can be designated as Roth rather than traditional contributions ($14 billion).\u00a0 <\/p>\n<p>3) Employers can offer emergency accounts within defined-contribution plans funded with posttax Roth contributions rather than traditional pretax contributions ($12 billion).\u00a0<\/p>\n<p>What outrageous budget gimmickry! The shift from traditional to Roth contributions increases revenues over the next 10 years \u2014 the budget window for evaluating the impact of Secure 2.0\u2014but it reduces revenues by a comparable amount thereafter. The increase occurs in the short term because money going to Roths is taxed up front, while taxation of money contributed to traditional plans does not occur until retirement. In other words, in the long run, Secure 2.0 is not really paid for. It will add $51 billion to the deficit.<\/p>\n<p>[By the way, even though I don\u2019t like counting the introduction of emergency savings accounts as a revenue raiser, I like the idea of these accounts. They give individuals easy access to funds when things go wrong; they may encourage participation in retirement plans; and by distinguishing saving for emergencies from retirement saving, may end up protecting retirement saving. Under the legislation, employers that opt for emergency savings accounts must automatically enroll participants at a rate of 3% and contributions are c<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ed at $2,500 (indexed for inflation). Participants can take at least one withdrawal per month.<\/p>\n<p><strong>Read:<\/strong> Which comes first\u2014emergency savings or your retirement goals?<\/p>\n<p>The fact that Secure 2.0 adds $51 billion to the deficit means that people will receive real benefits from this legislation either by paying less in lifetime taxes or receiving money in the form of a government match. Where will these benefits go? I read through the 82 provisions and allocated them to separate bins for low, middle, and high earners. According to my estimates, $21 billion goes to high earners, $14 billion to middle earners, and $16 billion to low earners (see Figure 1).<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:68.71428571428572%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-705555?width=540&amp;size=1.4545454545454546 540w, https:\/\/images.mktw.net\/im-705555?width=620&amp;size=1.4545454545454546 620w, https:\/\/images.mktw.net\/im-705555?width=639&amp;size=1.4545454545454546 639w, https:\/\/images.mktw.net\/im-705555?width=700&amp;size=1.4545454545454546 700w, https:\/\/images.mktw.net\/im-705555?width=700&amp;size=1.4545454545454546&amp;pixel_ratio=1.5 1050w, https:\/\/images.mktw.net\/im-705555?width=700&amp;size=1.4545454545454546&amp;pixel_ratio=2 1400w, https:\/\/images.mktw.net\/im-705555?width=700&amp;size=1.4545454545454546&amp;pixel_ratio=3 2100w\" sizes=\"(max-width: 639px) 100vw, (max-width: 979px) 620px, (max-width: 1299px) 540px, 700px\" src=\"https:\/\/images.mktw.net\/im-705555?width=700&amp;height=481\" alt=\"\" title=\"\"><\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\"><\/figcaption><\/figure>\n<\/div>\n<p>       It\u2019s important to point out how key to making this deal even remotely palatable is the expansion of the Savers Credit, which accounts for $9 billion of the $16 billion going to the bottom third of earners. The legislation provides a uniform credit rate of 50% and makes the credit refundable in the form of a government match on contributions to a retirement plan for eligible participants. Without the expansion of the Saver\u2019s Credit, the legislation would have been shameful.\u00a0<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Alicia H. Munnell\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/author\/alicia-h-munnell\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:contributors@marketwatch.com\",\"text\":\"contributors@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Alicia_H_Munnell\"><\/span>Alicia H. Munnell<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><ufc-follow-author-widget product=\"marketwatch\" author-id=\"5_MW\" author-name=\"Alicia H. Munnell\" signin-url=\"https:\/\/accounts.marketwatch.com\/login?target=https%3A%2F%2Fwww.marketwatch.com%2Fstory%2Fhow-big-is-the-secure-2-0-act-and-who-gets-the-money-11674063441%3Frss%3D1%26siteid%3Drss\" panda-api=\"https:\/\/follow-api.marketwatch.com\"><\/ufc-follow-author-widget><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C06575-04D4-B545-7180-51C0BC83C109%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Encore: How big is the Secure 2.0 Act? And who gets the money?&#8221; Most benefits still go to top third, but expansion of Saver\u2019s Credit improves the optics A reporter asked how big the new retirement law (Secure 2.0) was. Despite having the estimates from the Joint Committee on Taxation in front of me, I&#8230;<\/p>\n","protected":false},"author":1,"featured_media":540876,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-705578\/horizontal","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-540875","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/540875","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=540875"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/540875\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/540876"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=540875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=540875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=540875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}