Savings-plan legislation a big step forward for ordinary people

While saving money is good practice at any age, it’s essential for older adults getting close to retirement or living on a fixed income.

The new year will bring enhanced savings options for those looking ahead.

Democratic and Republican members of Congress get a lot of grief for not working together, an attitude reflected by their low public-approval ratings.

There is merit to the claim that partisanship too often prevents progress – or at least what passes for it. But that charge is not altogether true, as demonstrated by a financial Christmas gift for Joe and Jane Sixpack that is soon expected to become law.

The measure will encourage Americans to save more, allow their retirement savings to accumulate longer, give late-starters a chance to enhance their savings and allow more financial flexibility for Americans facing a costly emergency.

The concept behind the proposal is that too many people are not prepared for the financial challenges of their retirement years. Given the clear trend away from private-sector pension plans, people need to do more than rely on Social Security.

At best, that venerable program is not enough – and was never intended to be enough – to provide for retirement.

That’s why savings vehicles like 401(k) programs are in place. The new law expands provision for prudent savers to help themselves.

For starters, it recognizes this country’s aging population. That’s why it raises the age when people will be required to take annual minimum distributions from their 401(k)s.

Champaign News-Gazette