SECURE Act moving retirement readiness needle slowly

By Susan Rupe

The SECURE Act is moving the needle forward on retirement security, but slowly and mainly for younger workers.

That was one of the takeaways from the Employee Benefit Research Institute’s preliminary analysis of SECURE provisions using their Retirement Security Projection Model. The findings were presented during the Employee Benefit Research Institute-Milken Institute 2024 Retirement Symposium.

The nation’s youngest workers are the most impacted by SECURE’s provisions around retirement saving, said Craig Copeland, director of wealth benefits research with EBRI. Workers in the 36- 39-year-old age group showed the greatest improvement in their retirement readiness, as they have longer times remaining in the labor force to benefit from SECURE’s provisions.

One provision of SECURE will have a positive impact on workers’ retirement readiness is the saver’s match with automatic enrollment. This provides a matching contribution, up to $2,000, for any eligible individual who makes a qualified retirement savings contribution for a tax year, which the individual will claim as a tax credit. The saver’s match will have a large impact on improving the likelihood of individuals not running short of money in retirement, Copeland said.

SECURE provides some help in reducing the gaps in retirement readiness among those of different races and ethnicities, he said. The research showed Hispanic workers with a 2% increase in their retirement readiness score, compared with a 1.7% increase among Black workers and a 1.5% increase among white workers. But seeing a large-scale impact of SECURE on retirement readiness will take time, he said.

“We do see an improvement in retirement readiness but basically not a huge change in behavior,” he said. “We see incremental changes bringing more people into the market. But it won’t solve the problem of retirement readiness in the short term. Retirement is a long game.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on X @INNsusan.