Your retirement savings are an important asset in your estate plan. Many Illinois employees do not have a retirement plan at work and need to create enough savings and assets in their estate to fund their retirement. When you die, your retirement savings are a significant part of your estate plan that can help protect your loved ones in the future.
Do you have a retirement plan at work? In 2018, Illinois launched Illinois Secure Choice, a mandatory Illinois retirement savings program sponsored by the state for business owners with 25 or more employees who do not already offer a retirement plan. This program to save for retirement provides a Roth Individual Retirement Arrangement (IRA) to employees who do not have access to a retirement savings plan through work.
The plan requires employers to withhold 5% of employee pay, up to the annual max allowed for a ROTH IRA. Employees have the option to choose a different amount; down to as little as 1% or they may opt-out entirely. In addition, each individual owns their retirement account and can move it with them from job to job. Employers who do not comply face penalties of $250 per employee for the first year and $500 per employee for each subsequent year.
November 1, 2019 employers who meet the following criteria are required to register for Illinois Secure Choice or prove that they are not subject to the requirement:
1. 25 or more employees
2. Have been in operation for at least two years
3. Do not offer an employer-sponsored retirement plan
Employers are required to register by a certain date depending on the number of employees, as reported to the Illinois Department of Employment Security:
• November 1, 2018, for 500 or more employees
• July 1, 2019, for businesses with 100-499 employees
• November 1, 2019, for businesses with 25-99 employees
It’s important that your estate plan document all your assets such as retirement savings. Our 7-Point Estate Planning Checklist will help you document your assets and consider what you want to happen to your estate after you die.
Meeting with an estate planning attorney helps you prepare for the unknown and the unexpected. Though it may be tempting to put off, creating an estate plan can help prevent serious issues down the road. When you work with an attorney to decide what will happen to your assets after you die, they can create an estate plan that gives you peace of mind today. To talk to an estates and probate attorney contact the Estate & Probate Legal Group in Lombard Illinois at (630) 382-8069.