News | 02.04.20
Advisors Want Age to Continue to Climb for Mandatory Retirement Savings Withdrawals
Thanks to the SECURE Act, the age for required minimum distributions has been raised to 72. Investment advisors would like to see the age for RMDs go even higher – or be eliminated altogether. “If it was up to me, I’d get rid of [the RMD requirement] and let people take out as much as they need according to their financial plan,” said Tess Zigo, a financial advisor at Waddell & Reed. Zigo said she realizes a balance must be maintained between the government’s need to collect tax revenue on retirement savings that were put into a 401(k) or IRA on a tax-deferred basis and allowing clients to accumulate as much money as possible in those accounts before making taxable withdrawals. Another provision of the SECURE Act requires that almost anyone other than a spouse inheriting an IRA liquidate it within 10 years rather than holding on to it for their lifetimes. The end of the so-called stretch IRA has caused much consternation among financial advisors and is one reason some of them want to end to required distributions. “Since Congress has effectively capped the tax-deferral period for IRAs, it is only reasonable that they abolish RMDs entirely since their purpose is no longer required,” said Leibel Sternbach, founder of Yields4U.com.
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