US Retirement: 401(k), Social Security and Roth — 2026-09-10
Recent legislative efforts in Congress aim to repeal the Social Security earnings test, potentially boosting benefits for working retirees, while new tax rules favor high-income seniors. Simultaneously, private equity firms are pushing to include private assets in target-date funds, raising fee concerns among plan sponsors.
US Retirement: 401(k), Social Security and Roth — 2026-09-10
Top developments
Congress Considers Repealing Social Security Earnings Test
Legislators are actively looking to repeal the Social Security rule that reduces benefits for retirees who continue to earn income above certain thresholds. If passed, this law could significantly boost monthly checks for millions of working seniors, though analysts warn it may accelerate the depletion of the trust fund. The move addresses long-standing complaints from beneficiaries who feel penalized for remaining in the workforce.
New Tax Rules Favor High-Income Seniors
Recent changes to the tax code under the Trump administration lean heavily toward higher-income Americans over age 65. These adjustments impact how seniors can maximize savings and interact with Social Security taxation, requiring careful planning for those near or above income thresholds. The rules affect the calculation of taxable benefits and available deductions for older filers.
Private Equity Targets Target-Date Funds
Asset managers are racing to introduce private market products into 401(k) plans, specifically targeting target-date funds with allocations ranging from 5% to 20%. While proponents argue for diversification, fees remain a significant hurdle, and liquidity concerns persist for retail investors. BlackRock and other major firms are leading this shift, which could alter the traditional structure of default retirement investments.
September Social Security Updates Announced
The Social Security Administration (SSA) has announced major updates effective September 2026, impacting millions of retirees, disabled workers, and Supplemental Security Income recipients. These changes involve administrative adjustments and benefit processing updates that beneficiaries should monitor closely. Specific details on how these updates affect individual check amounts are being communicated via mail and official channels.
Local view
Spanish-language media outlets are actively preparing Hispanic workers for upcoming Social Security changes, particularly focusing on the 2027 Cost of Living Adjustment (COLA) speculation and current September 2026 administrative updates. Outlets like Infobae and La Opinión are advising readers on when the official COLA announcement will occur and who is eligible for benefits, noting that early projections suggest a potential increase of around 3.6% for 2027. Cronista highlights the government's order for the system to function differently starting this month, affecting all beneficiaries.
Context & numbers
- Social Security Earnings Test: Currently, retirees under full retirement age lose $1 in benefits for every $2 earned above the annual limit; repeal proposals aim to eliminate this reduction.
- Target-Date Fund Allocations: Proposed private asset allocations in target-date funds range from 5% to 20%, a significant shift from traditional public-market-only portfolios.
- Auto-Enrollment Growth: The percentage of employer plans with auto-enrollment climbed to 46.7% in Q2 2026, reflecting continued adoption of SECURE Act provisions.
On the radar
- 2027 COLA Announcement: Speculation continues regarding the 2027 Cost of Living Adjustment, with early estimates suggesting a 3.6% increase, though official figures are pending.
- ERISA Litigation Trends: Plan sponsors are advised to review forfeiture reallocation and collective investment trust (CIT) decisions, as excessive fee suits increasingly challenge these specific administrative choices.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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