Major Retirement Savings Change Is Coming – Now Every American Can Let Their Investments Grow Longer
What’s Happening:
If you’re like most Americans, your retirement savings have suffered since President Biden took office. Thankfully, relief may be coming.
Most people expected a huge rebound after the pandemic. And after Trump reopened the economy, the markets did rebound. But when Biden took office and signaled more spending and taxes, the market stalled out.
So did America’s retirement investments. But a new rule may help Americans catch up. From Fox Business:
Americans contributing toward individual retirement accounts (IRAs) may see their investments grow for a longer time before they need to start making government-mandated withdrawals.
That’s because the Secure 2.0 Act raised the required minimum distribution (RMD) age for IRAs to 73, up from 72. That change went into effect on January 1, 2023. In addition, the RMD age will increase once again to 75 beginning January 1, 2033.
This is good news for those who have gotten behind in their retirement planning. But at the same time, it’s just a reminder of how bad things have gotten.
Many people have lost 30% in their retirement accounts because of the struggling market. To some, it may not be an encouragement that they will not be forced to withdraw from their IRAs until they are 73.
Who wants to keep working until that age? Not me! At that point, my plan is to start withdrawing, but that will depend on how the market is doing.
Hopefully, we will start to see historically average returns rather than the major swings in the market. But that will probably take a more even, steady hand at the wheel of the country.
Key Takeaways:
- The RMD was recently raised to the age of 73, and will raise again to 75 in 2033.
- The retirement savings of many Americans has been adversely affected by a struggling economy under President Biden.
Source: Fox Business