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https://www.wsj.com/articles/house-o...trending_now_1
"The House bill, passed by an overwhelming House majority and expected to be taken up by the Senate before it heads to President Trump’s desk, would encourage 401(k)-type plans to offer annuities, a type of insurance contract that guarantees a monthly income stream as long as a retiree lives. It also would repeal the age cap for contributing to traditional individual retirement accounts, currently 70½, and would increase the age at which savers must start taking withdrawals from 401(k)s and IRAs to 72 from 70½. Additional features benefit part-time workers, parents, home-care workers and employees at small businesses."
"The House bill, known as the Setting Every Community Up for Retirement Enhancement, or Secure Act, passed with a vote of 417-3. Senators have signaled they are keen to quickly take up the legislation, and Mr. Trump isn’t expected to oppose it.
If passed, the changes would be the most significant to retirement plans since 2006, when Congress made it easier for employers to enroll workers automatically in 401(k)-type plans and invest their money in funds that shift from stocks to bonds as people age.
Under current law, people who save money in 401(k)s or similar tax-deferred plans must begin withdrawing money—and paying tax on it—at age 70½, with annual amounts set by actuarial tables. These required distributions and associated income taxes can be a source of frustration for taxpayers who are still working or are trying to make their savings last for 30 years of retirement."
I hope this passes. Moving the RMA age to 72 would help.
I saw a pre-vote article somewhere a week or so ago discussing this same bill. I am relieved that the Legislature is doing something to counter the fact pension plans are becoming very scarce, and people need additional options , or improved access to existing options, so they can better save for their retirement.
Increasing the age for RMD's looks like it may be compressing the time windows between Full Retirement Age, RMD age, and eventual death. Are they increasing the mortality age to ease into RMD payments or maintain the current duration of RMD payments? But then "Pay until Death" is pretty much the same regardless of when you start paying.
This is kind of an odd thing. I don't think raising the RMD age 18 months does much. It only postpones making you take your money from your savings. The other thing about allowing plans to have an annuity option isn't anything special either. I thought that they were allowed to since the federal government had that in their 401k (TSP) as an option. I was given this option upon retirement from the federal government. TSP has this written foremost on the withdrawal election form, which we declined. It is even mandatory that you decline or accept it with spousal approval as well. They make a big deal out of it lately at some post office retirement briefings.
Increasing of the RMD age is a positive, so is the inclusion of annuities. That said, the latter is not without problem - in that the bill provides safe harbor to the employers and insurance companies. See https://theintercept.com/2019/05/22/...ment-accounts/
This bill now goes to the Senate for reconciliation. The Senate has a similar bill but the age for RMDs is advanced to 75yo. Both of these would be great for those of us converting IRA funds to Roth IRAs. It nice that there is still a residue of bipartisanship left in the sad mess in DC.
If only they would now start to work on Social Security & Medicare solutions instead of just posturing & finger-pointing.
The change in the age of RMD's is concerning to me. I had planned to start taking them in January 2020, the year I turn 70.5 as required. I wanted to do a monthly "paycheck" withdrawal. I don't really need the money, and would leave it alone if they raise the Age. I don't know if this Congress can move the Bill quickly through reconciliation and get the Prez to sign it (he's On Strike, you know).
I suppose I could do the Calculation on Dec 31st and hold off the start of withdrawals.....too many unknowns.
This bill now goes to the Senate for reconciliation. The Senate has a similar bill but the age for RMDs is advanced to 75yo. Both of these would be great for those of us converting IRA funds to Roth IRAs. It nice that there is still a residue of bipartisanship left in the sad mess in DC.
If only they would now start to work on Social Security & Medicare solutions instead of just posturing & finger-pointing.
I think this is the first step, they are preparing to deal with SS next. It will affect the younger than 40 crowd like my kids.
The change in the age of RMD's is concerning to me. I had planned to start taking them in January 2020, the year I turn 70.5 as required. I wanted to do a monthly "paycheck" withdrawal. I don't really need the money, and would leave it alone if they raise the Age. I don't know if this Congress can move the Bill quickly through reconciliation and get the Prez to sign it (he's On Strike, you know).
I suppose I could do the Calculation on Dec 31st and hold off the start of withdrawals.....too many unknowns.
He wants to do this. He’s on strike on the bills the Dems want to pass.
It certainly sounds like a positive step. Waiting to see how it gets altered as it progresses through the process, though.
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