Posted on 06/14/2019 6:28:50 AM PDT by Diana in Wisconsin
The House of Representatives recently passed a bill that may complicate retirement planning options for Americans.
The House passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 on May 23. If enacted into law, it could be tricky for Americans who are not financially savvy investors.
Some of the changes could benefit consumers: The law encourages more small employers to offer 401(k) plans and raises the age for required minimum distributions (RMDs) from retirement accounts to 72 from 70.5, a nod to longer life expectancies and later retirements.
However, there are some changes that consumers should be wary of, experts say.
For example, one change in the law would shorten the amount of time that someone who inherits an Individual Retirement Account (IRA) can hold onto the funds, potentially causing them to lose money.
"If you inherited my IRA — before I'd be able to stretch the distribution over your lifetime, which is more time for dollars to grow tax deferred. Now you have to drain that inherited IRA over 10 years, which gives you less time to grow the money on a tax-deferred basis," Dave O’Brien, chair elect of the National Association of Personal Financial Advisors (NAPFA), told ABC News.
Another change that American workers should be wary of, according to consumer advocates, is adding annuities — complex financial tools offered by insurance companies — to 401(k) plans.
*SNIP*
(Excerpt) Read more at msn.com ...
“to 72 from 70.5” is indeed an awkward construction (I used to get “awk” on my papers all the time), but the math is correct. They are proposing to raise the RMD age from 70.5 to 72. Right?
Teresa Ghilarducci rears her ugly head yet again.
https://en.m.wikipedia.org/wiki/Teresa_Ghilarducci
You didn’t really think they were going to let all that money just sit there, did you?
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New retirement plan. Work until you die. Simple plan.
They can change the capital gains tax which will affect you or your heirs taxes on real estate. Just last week the bastards in the house voted to eliminate the basis step up on assets when you die. That would royally screw your heirs if you have gains when you croak.
Agreed.
Yes, I screwed up. Just woke up and read it backwards..............
No. It’s “Work until you die. Give all your money to the government.”
You got that right. Yet I don’t recall anybody in my lifetime pointing that out.
Understandable given that weird inverted sentence construction.
My parents and my wife's parents had annuities. They were NOT a very good investment. The up-front costs (commissions for the sellers) were very high. The interest paid by the annuities once they were paid up (no more commissions) were marginally OK, but certainly not great. Once they were inherited, the interest paid became negligible. This necessitated them to be cashed out. Since the parents all lived to a ripe old age :>) , the payout counted significantly as income, thus subject to our income tax rate, not theirs.
Save carefully. When that government gun is in your face, you will need a nice big bribe to preserve your life.
It was phrased a bit oddly … sorta but not quite backwards. I had to read it twice.
My kids are all richer than me. My goal is to have little left when I die.
You can only mitigate risk. You can’t eliminate it.
Annuities are legalized theft.
NEVER get annuity.
If Pelosi’s house is fer it, I’m agin it.
Beware of ANY Dim bill, particularly those with a cute and clever acronym.
.....and lack of coffee..............
The republicans pushed thru the IRA in 1985-86 over the Democrat objections. There is a lot of historical data on the hearings, committee meetings and the press reporting. Basically, the democrats wanted to keep people from investing in themselves and in America stocks/any stocks. By keeping people from experiencing stocks they could continue to demonize big business and the markets because no one would understand how companies investing, nor would people be invested and a stake in the markets. Once people start to invest, they become independent and no longer only look to social security and medicaid/medicare to live on in their older retirement years.
Anything that destroys stock ownership or serves to make people stockholders and acquire an understanding of the markets keeps them serfs.
People who own stocks and have IRAs usually do not obsess like the “Occupy Wall Street” types who have an irrational basis to argue against companies and the markets.
Even Hillary’s “pork bellys” $2 turned into 170K or whatever the absurd amount really only served to undermine the truthful basis of the markets.
I will. Don't have to, but I will. I have retired friends looking for jobs, any jobs. They don't need the money. They got bored. There's only so much 'recreation' you can do before it gets old. Fishing, golf, travel, hobbies, they all get old after a while. You gotta have a reason to wake up every morning......................
I looked at them in past years and found them to be really good....for the company selling them.
For a guarantee of payments for as long as you live they offer a terrible return (i.e. small monthly pmt) and once you give them the lump sum to fund annuity you cannot get it back. Also most are not transferrable so if you hand them a million to buy an annuity on Monday and drop dead on Friday the pmts stop and the money is gone.
Things may have changed in the past few yrs but one thing has not. Annuities are complex investments and need to be studied very carefully.
My experience as a forty plus yr investor is I have never seen an annuity plan I could not beat by a simple investment plan.
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