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House Passes Bill Making Big Changes to U.S. Retirement System

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House Passes Bill Making Big Changes to U.S. Retirement System Empty House Passes Bill Making Big Changes to U.S. Retirement System

Post by espíritu del lago on Mon May 27, 2019 6:41 am

"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"

https://www.wsj.com/articles/house-on-track-to-pass-bill-making-big-changes-to-u-s-retirement-system-11558625474?mod=trending_now_1

Personally I  prefer the Senate bill.
The thing I would really like to see is the ability for age 65+ to be able to contribute to Health Savings Accounts, deduct the amount contributed from taxes to help pay for medical bills.
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Post by espíritu del lago on Mon May 27, 2019 7:27 am

I am interested in feedback from U.S expats that have grandkids or great gran kids who this will effect their futures.

Thank you, espiritu..
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Post by RVGRINGO on Mon May 27, 2019 9:07 am

Lets see: If I had an annuity 20 years ago, which paid $100 per month, I would have been able to buy 100 gallons of gasoline per month. I am still alive now, 20 years later, and would be able to buy about 33 gallons of gasoline every month, which would curtail my retirement travel a lot.
Annuities are not a good idea! Never have been! You are simply stashing your own money, out of reach, and paying someone else to dish it out to you later. Discipline yourself! Invest in growing assets, not paper money.

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Post by RoyD on Mon May 27, 2019 9:20 am

Yeah, I agree RV. It's the biggest scam perpetrated on the elderly since reverse mortgages. Buyer beware.

The bill is an improvement for sure. They want to extend the mandatory age for withdrawal from IRA's to 72 from 70 1/2. That is a winner in my book.

I would like to see more done to insure the Social Security system remains financially sound through the next century. The Congress keeps kicking that can down the road instead of fixing the problem. There is a reasonable proposal already on the table, they just need to act on it.

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Post by RVGRINGO on Mon May 27, 2019 9:35 am

Dare we suggest that all such programs be protected against inflation, in order to truly protect the retiree? I am so old, and my retirement and SS are based on such ancient income, that I am now rather strapped; unable to even consider a short 'vacation'. Yes, I remember $0.27/gallon gasoline, and nickle cokes and candy bars, which were bigger than today's candy bars. Pension & Social Security payments do not come close to keeping up with price inflation/dollar devaluation. Having retired 21 years ago, I am forced to live where the VA and Medicare can pay my medical bills, which far exceed my total income, and would have, otherwise, totally depleted all savings and assets. Otherwise, we would be at some pleasant place in Mexico.

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Post by RickS on Mon May 27, 2019 11:01 am

I'm with RoyD about addressing Social Security NOW! while it is still fixable. It is a crime that our elected officials won't do this. Extending RMD to 72 is another long overdue 'teak'.

I'm not against Annuities and/or Reverse Mortages or ? as an option but what happens is that people don't take the time to REALLY understand them and act accordingly... one size definitely does not fit all. Rather they watch TV and let someone else, who doesn't have their best interest as #1 priority, do their due diligence. It's called lack of personal responsibility.

Bob, the problem with 'inflation protection' is that it has to come with a cost that 'someone' has to pay... get less now compounded forever. Yes, it would be nice but one can 'inflation protect themselves'..... it's just harder to do.... takes some restraint on current spending....and most won't/can't wrap their consumerism habits around that fact.

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Post by Carry Bean on Mon May 27, 2019 11:48 am

If the “elected officials” aka the greedy crooks in Washington had SS as their pension plan you can bet your last dollar it would be fixed pronto.


Last edited by Carry Bean on Mon May 27, 2019 11:53 am; edited 1 time in total

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Post by Carry Bean on Mon May 27, 2019 11:53 am

As for annuities, it all depends on individual circumstances. I transferred some of my investments into one late in life. I can guarantee what my income will be even if I outlive what’s in it plus I can remove it if I so choose. No way will I live another 20 years. Sweeping statements generally aren’t usually correct.

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Post by espíritu del lago on Tue May 28, 2019 9:38 am

Thanks for the replies. Anyone have anything else to add?
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