Jesse reflects on a Senate bill -- now signed into law as the Setting Every Community Up for Retirement Enhancement (SECURE) Act -- which will require a greater amount of employers to offer 401(k) plans to employees. The new law also makes it easier for annuities to be included in 401(k) offerings by easing the fiduciary rules around fees and expense ratios.
401k) plans are excellent vehicles for saving for retirement because they allow employees to put away a lot of money every year -- up to $19,500 in 2020. Some employers offer matching on 401(k) contributions, further boosting savings rates.
However, the inclusion of more annuities in 401(k) plans has a darker motivation. Annuities typically charge higher fees than mutual funds and index funds -- sometimes a percentage point or more -- making them an inefficient and expensive way to save for retirement for most people. On the other hand, they are very profitable for insurance companies! Not surprisingly, insurance companies lobbied hard for the relaxation of fiduciary rules in the SECURE Act.
Just like Jesse discussed in last week's episode #411, wherever there are incentives, there are people making money. The wise investor follows the money!
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Budgeting for the Nomadic Life
Ask Jesse: What's the Deal with Whole Life Insurance?
Debt and Pay Later Plans: An Independence Day Rant
What If Your Coworkers Weren't Stressed About Money?
Ask Jesse: How Do You Move On... From Budgeting?
Mid-Year Check In: Are You Still Clear On Things?
Ask Jesse: What Do I Do With My Investments Now?
Revisiting a Hot Take on Index Investing
How to Budget When Everything Is Expensive
Ask Jesse: How Should You Track Vacation Spending?
A Financial Roadmap for Marriage and Financial Separation with Attorneys Kelly Frawley and Emily Pollock
Better Budgeting... and a Rant about Banks
Ask Jesse: First-Time Home Buyer in a Crazy Market
Savings With a Purpose
EP16 Money Stories: First Responders and Finance, $78k Debt Paid off in 28 Months
Meet Todd: The CEO Behind YNAB
EP15 Money Stories: Unconventional Job? No Problem. A Lifetime of Budgeting Wisdom from Nina Clark
Ask Jesse All About Taxes
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