U.S. Markets open in 3 hrs 10 mins

Republicans are looking to overhaul retirement plans in tax cut bill

Chairman of the House Ways and Means Kevin Brady (R-TX) speaks at the start of the House-Senate Conferees conference meeting on the “Tax Cuts and Jobs Act” on Capitol Hill in Washington, U.S., December 13, 2017. REUTERS/Joshua Roberts

As part of a package to make the tax cuts passed last year permanent, Republican Rep. Kevin Brady, chair of the House Ways and Means Committee, will include a proposal that would drastically change the way Americans save for retirement.

Brady’s proposal is expected to include a revamped version of the Retirement Enhancement and Savings Act of 2018 that was proposed in March. The bill could make it easier for small businesses to offer 401(k) retirement accounts to workers and provide some with annuity-like vehicles, which provide guaranteed income during retirement.

In many ways, this provision helps recreate traditional pension plans that used to promise workers that no matter how long they lived, they’d get a monthly check thanks to their former employer,” Dirk Kempthorne, CEO of the American Council of Life Insurers wrote in an op-ed.

The changes would be the most significant to retirement savings since 2006. That could be especially important as nearly half of working-age families have nothing saved in retirement accounts. Analysis from the Federal Reserve found that the median working-age family had only $5,000 saved in 2013.

A major culprit for the lack of retirement savings is the disappearance of pensions for most workers. Just 13% of workers now covered by pensions or “defined benefit” retirement programs. U.S. pension funds also are underfunded to the tune of trillions of dollars and a recent Yahoo Finance analysis found that pension fund managers have cost taxpayers at least $600 billion and possibly up to $1 trillion through poor performance and high fees. The cost falls to taxpayers in the form of higher taxes or reduced public services because pensions are guaranteed.

The proposals in the Retirement Enhancement and Savings Act expected to be included in Brady’s tax reform proposal may also provide employees of small businesses with access to multiple-employer plans, or MEPs. MEPs allow small companies to join together with others, spreading plan administrative costs over more participants, lowering fees.

MEPs are a major part of the not-for-profit healthcare conglomerate being worked on by Amazon, Berkshire Hathaway and JPMorgan Chase.

“The need for this legislation is clear,” Kempthorne wrote. “Every day 10,000 Americans will reach age 65, and half will live to age 85 or older. Without help, many people throughout the country and across the economic and political spectrum will be unprepared for retirements that could last 20, 30 years or more.”

Unfortunately, analysts say the bill is likely a non-starter for Congress, despite the inclusion of the bi-partisan retirement reform package. The bill also could contain additional corporate tax rate cuts and a lower capital gains rate.

“Republicans think they have a political winner in pushing for more tax cuts just before the election, but we don’t see evidence of public support – either in the polls or anecdotally; many voters say corporations and the wealthy have gotten too much already. And estimates of the budget deficit continue to surge; red ink could exceed $1 trillion in fiscal 2019,” Greg Valliere, chief global strategist at Horizon Investments, wrote in a note to clients.

Valliere said he’s expecting Republicans to lose control of the House of Representatives in November and that the proposal is largely an attempt to get a proposal for more tax cuts on the record.

If there’s a recession between now and 2025 — a pretty safe bet — Brady can claim that his bill, expanding the tax cuts and making them permanent, would be the perfect medicine,” he said.

See also:

Wall Street managers have cost Americans more than $600 billion over the past decade

It’s the end of the world as we know it, and investors feel bullish

Global debt jumped by $8 trillion in Q1, rising to record $247 trillion

Dion Rabouin is a global markets reporter for Yahoo Finance. Follow him on Twitter: @DionRabouin.

Follow Yahoo Finance on FacebookTwitterInstagram, and LinkedIn.

  • Why These 3 Top Marijuana Stocks Slumped Today
    Business
    Motley Fool

    Why These 3 Top Marijuana Stocks Slumped Today

    With earnings season hitting a crescendo this week, investors are looking closely at the specific prospects for certain corners of the market, and that's contributing to disparities among the various major benchmarks followed most often by investors. Amid the crosscurrents, marijuana stocks took particularly hard hits, and New Age Beverages (NASDAQ: NBEV), Tilray (NASDAQ: TLRY), and Canopy Growth (NYSE: CGC) were among the worst performers on the day. All three of these stocks have given back some of their gains following the long-awaited legalization of recreational cannabis in the Canadian market last week. In the month leading up to the Oct. 17 start date for legal cannabis sales, New Age Beverages tripled in value, while Tilray had more than doubled since the end of August, and Canopy Growth had seen more modest gains of between 10% and 20%.

  • News
    CNBC

    Here's how much money you should have saved by 50

    Fidelity, the nation's largest retirement-plan provider, recommends having the equivalent of six times your annual salary saved. To get to that number, Fidelity recommends saving 15 percent of your annual income. Make sure to invest these funds instead of leaving them in a traditional low-interest savings account.

  • Watch out for ‘dead cat bounce’ in stocks because there’s more pain ahead: Morgan Stanley’s Wilson
    News
    MarketWatch

    Watch out for ‘dead cat bounce’ in stocks because there’s more pain ahead: Morgan Stanley’s Wilson

    October is living up to its infamous reputation as a volatile month for stocks with major indexes down sharply and there is likely more pain ahead for investors, according to one prominent Wall Street analyst. The recent rebound “was a dead cat bounce,” said Michael Wilson, an equity strategist at Morgan Stanley, in a report. After eking out gains last week, the S&P 500 (SPX) is trading below the 200 DMA of 2,768 Monday as stocks struggle for direction with third-quarter earnings cycle picking up pace.

  • These stocks may be sacrificed in a cold war with China
    COL
    CNBC Videos

    These stocks may be sacrificed in a cold war with China

    Jim Cramer says the escalation in the United States' trade war with China could end in an outright cold war that debilitates parts of the stock market.

  • 4 Things Aurora Cannabis Did Right Before Its NYSE Debut
    Business
    Motley Fool

    4 Things Aurora Cannabis Did Right Before Its NYSE Debut

    Aurora Cannabis (NASDAQOTH: ACBFF) (TSX: ACB) has sought to make it even easier for U.S. investors to buy its shares by arranging to have its shares listed on the New York Stock Exchange. Beginning tomorrow, Oct. 23, Aurora will join the elite group of cannabis companies whose shares trade on major U.S. exchanges. Getting ready for the increased exposure that a NYSE listing brings takes time and effort, and Aurora Cannabis hasn't wasted any time.

  • China Will Open the World's Longest Sea Bridge This Week. A Lot of People Are Unhappy About It
    World
    Fortune

    China Will Open the World's Longest Sea Bridge This Week. A Lot of People Are Unhappy About It

    Later this week, the long-awaited 34-mile sea bridge connecting mainland China to Hong Kong and Macau will finally open. In a ceremony on Tuesday that Chinese president Xi Jinping will reportedly attend, the bridge will officially open. Some critics see the Hong Kong-Zhuhai-Macau Bridge as an attempt by mainland China to tighten its grip on Hong Kong, which is an autonomous region.

  • Finance
    CNBC

    Here's the tax bite on $1.6 billion Mega Millions and $620 million Powerball jackpots

    Strategies can be employed to reduce the amount of your win that is taxed, although they are best explored with the help of an experienced tax advisor. While it's anyone's guess who will end up winning the Mega Millions and Powerball jackpots, there's at least one guaranteed recipient of a chunk of the loot — the IRS. With the Mega Millions jackpot at $1.6 billion and Powerball's top prize at $620 million, that tax bill will be hefty even if the winner employs strategies to reduce their taxable income.

  • Why Nektar Therapeutics Crashed 17.2% Today
    Business
    Motley Fool

    Why Nektar Therapeutics Crashed 17.2% Today

    After delivering a disappointing update on NKTR-214 in cancer patients this summer, Nektar Therapeutics' (NASDAQ: NKTR) shares have been struggling. The company didn't report any news today, so a negative report issued by Plainview LLC this month may be to blamed for its 17.2% tumble today. In February, Bristol-Myers Squibb (NYSE: BMY) inked a blockbuster deal to license rights to NKTR-214 following positive data last year for NKTR-214's use alongside Bristol-Myers' Opdivo.

  • AMD's Q3 Earnings to Benefit from Strong Demand for GPUs
    Business
    Zacks

    AMD's Q3 Earnings to Benefit from Strong Demand for GPUs

    Advanced Micro Devices AMD is set to report third-quarter 2018 results on Oct 24.The company is expected to gain from robust demand of graphic processor units (GPUs), which are now profusely used in industries like gaming, automotive and blockchain.Increasing

  • Saudi Arabia conference site hacked with disturbing image of murdered journalist Jamal Khashoggi
    World
    The Independent

    Saudi Arabia conference site hacked with disturbing image of murdered journalist Jamal Khashoggi

    Hackers have hijacked the website of a major conference in Saudi Arabia and placed an image of the murdered journalist Jamal Khashoggi on its homepage. The conference, dubbed “Davos in the Desert”, is due to take place this week in Riyadh but has been overshadowed by the withdrawal of several high-profile attendees over the murder of the Saudi dissident. The second annual Future Investment Initiative conference has billed itself as “a blueprint for the 22nd century” that is bringing together “the world’s most visionary and influential leaders in business, government and civil society”.

  • Finance
    American City Business Journals

    Microsoft's typical worker makes $168K a year — how that compares with Facebook, Google, PayPal, Box, Salesforce, Intel and other big Bay Area tech employers

    Microsoft Corp. is the latest major Silicon Valley tech employer to reveal just how much its typical employee earns — and how that compares with its top executive. The software giant's median employee pay — almost $168,000 — is high, even by Silicon

  • 2 Things to Watch When Ford Motor Company Reports Earnings
    Business
    Motley Fool

    2 Things to Watch When Ford Motor Company Reports Earnings

    Wall Street analysts expect Ford's earnings to fall from the third quarter of 2017. Ford has refreshed the Explorer twice since its 2011 debut, but its age is hurting Ford's pricing power. 1. How soon will Ford's new products arrive?

  • Why Pot Stocks Canopy Growth, Cronos Group, and Tilray Are Cratering Today
    Business
    Motley Fool

    Why Pot Stocks Canopy Growth, Cronos Group, and Tilray Are Cratering Today

    Canadian pot stocks are getting hit hard across the board today. As of 1:21 p.m. EDT, for example, shares of Canopy Growth Corporation (NYSE: CGC) and Cronos Group (NASDAQ: CRON) were both down by 11.2%, whereas Tilray's(NASDAQ: TLRY) stock had fallen by 14.4%. Canopy, Cronos, and Tilray all seem to be succumbing to a so-called "sell the news" event.

  • Business
    Benzinga

    Caterpillar Q3 Earnings Preview

    Caterpillar, Inc. (NYSE: CAT) unveils its next round of earnings this Tuesday. Here is Benzinga's everything-that-matters guide for the Q3 earnings announcement Earnings and Revenue Sell-side analysts expect Caterpillar's EPS to be near $2.83 on sales

  • Why AMD Stock Fell 11% on October 19
    Finance
    Market Realist

    Why AMD Stock Fell 11% on October 19

    Semiconductor (SMH) stock Advanced Micro Devices (AMD) fell 11.1% on October 19 to close trading at $23.66. New Street Research analyst Pierre Ferragu has a 12-month price target of $18 for AMD. Ferragu stated, “AMD’s stock price reflects a scenario we don’t believe possible.

  • Former General Electric vice chair on the company's futur...
    Business
    CNBC Videos

    Former General Electric vice chair on the company's futur...

    Beth Comstock, Nike board member and former vice chair of General Electric, weighs in on the future of General Electric under new CEO Larry Culp.

  • 5 Popular Marijuana Stocks I Wouldn't Buy With Free Money
    Business
    Motley Fool

    5 Popular Marijuana Stocks I Wouldn't Buy With Free Money

    Last week on Oct. 17, Canada lifted the curtain on nine decades of prohibition and legalized recreational marijuana for adults. Given the notable surge in pot stocks since the beginning of 2016, it's pretty evident that Wall Street and investors expect the industry to be a resounding success. With that being said, there are a handful of marijuana stocks -- some quite popular -- that I simply wouldn't buy, even if I were given free money to do so.

  • Meet What Could Be Advanced Micro Devices' Next Billion-Dollar Business
    Business
    Motley Fool

    Meet What Could Be Advanced Micro Devices' Next Billion-Dollar Business

    Advanced Micro Devices (NASDAQ: AMD) CEO Lisa Su said earlier this year that the company plans to achieve "mid-single-digit server unit share" by the end of 2018. The chipmaker's server chip market share crossed 1% at the end of the second quarter. Mercury Research estimates that AMD now commands 1.3% of the server market as compared to just 0.5% earlier.

  • Aurora Cannabis prepares for NYSE debut on Oct. 23
    Finance
    Yahoo Finance Canada

    Aurora Cannabis prepares for NYSE debut on Oct. 23

    One of Canada’s largest marijuana producers is gearing up for its big debut on the New York Stock Exchange on Tuesday, Oct. 23. Edmonton-based Aurora Cannabis will be the third major Canadian cannabis company to go public in the U.S., where marijuana is still an illegal substance in most states. Aurora will be following in the steps of Tilray, which became the first U.S. marijuana IPO in July, and Canopy Growth, which debuted in the U.S. markets in May.

  • 3 Dividend Stocks to Fund Your Retirement Nest Egg
    Business
    Motley Fool

    3 Dividend Stocks to Fund Your Retirement Nest Egg

    Dividend stocks play a key role in a good retirement portfolio, but investing indiscriminately in companies just because they offer a big yield or have a recent history of payout growth will likely cause your portfolio's performance to fall short of its

  • Why Did AMD Stock Fall 25% in the First 20 Days of October?
    Finance
    Market Realist

    Why Did AMD Stock Fall 25% in the First 20 Days of October?

    October Has Been Weak for AMD Stock: What's Ahead? (Continued from Prior Part) AMD stock reacts to the market sell-off This year has been slow for semiconductor stocks due to growing trade tensions between the United States and China. The stock

  • Investors Dumped Cannabis Stocks after Legalization Last Week
    Finance
    Market Realist

    Investors Dumped Cannabis Stocks after Legalization Last Week

    Cannabis Stocks Getting Dumped after Legalization? Cannabis sector Last week, the overall cannabis sector ended in negative territory. The Horizons Marijuana Life Sciences ETF (HMMJ) lost almost 5.4% of its value, while the Emerging Marijuana Growers

  • Which Canadian Marijuana Stock Will Enjoy a Bigger Bump From Its NYSE Listing -- Aphria or Aurora?
    Business
    Motley Fool

    Which Canadian Marijuana Stock Will Enjoy a Bigger Bump From Its NYSE Listing -- Aphria or Aurora?

    Maybe Wall Street should be called "Weed Street." Big Canadian marijuana grower Canopy Growth listed its stock on the New York Stock Exchange (NYSE) earlier this year. Aurora Cannabis (NASDAQOTH: ACBFF) begins trading on the NYSE on Tuesday, Oct. 23. Aphria (NASDAQOTH: APHQF) filed last week to list its stock on the NYSE.

  • Business
    CNBC

    Two tech stocks to buy and one to avoid heading into busiest week of earnings

    "Amazon AMZN , Google GOOGL , Microsoft MSFT — we like and own all of these, and one of the things that all three have in common is that they're huge players in cloud computing and that space is going to continue to see accelerating growth over the next several years," Tepper told CNBC's " Trading Nation " on Friday.

  • Suze Orman has a killer question for your retirement
    Business
    MarketWatch

    Suze Orman has a killer question for your retirement

    Suze Orman is one of those singular personalities in the financial business who seems to be right on the pulse of everyone she meets. She’s written books, starred in her own television show and made innumerable appearances in person. Like Oprah