Millions of Americans received good news today as a new retirement bailout was announced, changing the lives of millions in the United States.
The United States Department of Labor’s Employee Benefits Security Administration announced the release of a report demonstrating how the American Rescue Plan has ensured that over 1.2 million American workers, retirees, and their families receive their earned retirement benefits by protecting financially distressed pension plans.
According to the department’s report on the effects of the Butch Lewis Emergency Pension Relief Act, more than $69 billion in special financial assistance has been approved through October 2024 for 98 multiemployer pension plans whose members experienced retirement benefit reductions of an average of 41%.
The retirement bailout that will change American lives
According to the report, the American Rescue Plan has paid out more than $1.6 billion in restorative and continuing benefits to over 121,000 retirees. This equates to an average payout of nearly $13,600 per retiree.
Approximately half of the $1.6 billion was used to restore previous retiree benefit cuts. A pension is more than just a number on paper; it represents the freedom to retire after years of earning a respectable, honest income, to rest your aching back and knees, and to sleep without setting an alarm. There is no pension. It is earned, according to Acting Secretary Julie Su.
More than 1.2 million workers and retirees have already received a secure and dignified retirement through the Biden-Harris Administration’s American Rescue Plan, with more on the way.
Finally, we expect pension systems that serve over two million workers and retirees to be sustainable and capable of providing full benefits for decades to come.
Furthermore, in a variety of industries, including nearly 620,000 Teamsters, over 152,000 United Food and Commercial Workers International, over 103,000 Bakery and Confectionery workers, over 89,000 United Steelworkers, over 50,000 Communications Workers of America, 49,000 union musicians, and 29,000 carpenters, Special Financial Assistance has protected plan benefits for union workers and retirees.
The American Rescue Plan’s pension protection legislation is named after the late Butch Lewis, a former Teamster who fought to protect union retirees’ pensions from severe benefit cuts caused by no fault of their own.
Finally, the measure is expected to ensure that the pension systems of approximately two million employees and retirees remain sustainable and capable of providing them with full benefits until at least 2051.
Middle-class Americans are approaching retirement without enough retirement savings
America is currently facing a serious problem: the middle class is approaching retirement age without enough money to support themselves. According to recent Transamerica Institute data, 33% of middle-class Americans withdraw money from their retirement accounts before retiring.
This is a concerning trend because it puts far too many of them at risk of living in poverty as they get older. As a result, future retirees must plan their retirement and consider other ways to increase their savings in order to avoid future financial difficulties.
As a result, financial experts advise current employees to keep a reserve of conservative investments, such as cash equivalents and laddered government bonds, to prevent their nest egg from being depleted during a downturn.
This year, consider phased retirement, which allows people to change their retirement lifestyle while still receiving a paycheck.
Beginning in 2025, Secure 2.0 allows older workers ages 60, 61, 62, or 63 to contribute more to workplace retirement plans such as 401(k)s, with a maximum contribution of $11,250 versus $7,500 for all other workers age 50 and older. This could be useful for people who are concerned about their finances.
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