Brutal May and RMDs at age 72?

A&I Financial Services > Periscope Newsletter > Brutal May and RMDs at age 72?

I thought I’d quote at length a particularly smart economist, working for a major mutual fund company, who recently wrote passionately about the market behavior of May, 2019. Her conclusion summarizes our opinion nicely, I think:
“Markets continue to be nervous and are suggesting a high level of fear…Having said that, investors with diversified portfolios and longer-term time horizons should not be panicked by the current situation.”

“At this juncture, I still believe a recession is unlikely, given the ability of the Federal Reserve to respond to the current situation – as well as China’s commitment to continue to stimulate its economy fiscally and monetarily. I expect stocks will be volatile but will still outperform in this low-rate, benign inflation environment. In this environment, sell-offs can represent attractive buying opportunities for disciplined investors.” – Kristina Hooper, Chief Global Market Strategist at Invesco. (1)

In more hopeful news, Congress is considering raising the age of required distributions from age 70 ½ to age 72. (2)

Right now, the law states in the year you turn 70 ½, you must make a distribution from any tax-qualified account, like an IRA or 401k. You must pay taxes on that withdrawal and you may not put that money back into a tax-qualified account.

The proposed law would give you 18 more months of freedom. The House Panel Retirement Bill HR1994 postpones required distributions until age 72. The details of the new plan are not yet known. In particular, what does this mean for folks who are 70 ½ or 71? Do they get a free pass?

Once again, this new law has not yet passed. If it does not pass, you’ll still have RMDs at age 70 ½. We promise to keep you informed as soon as we know!

In the mean time, if you or someone you know is in between the age 70 ½ and age 71, you may want to talk with your financial advisor about postponing your “RMD” until after we know if this law is going to pass! and nbsp;

Resources:

(1) https://www.blog.invesco.us.com/the-month-of-may-was-a-game-changer-for-markets/utm_source=wysija and amp;utm_medium=email and amp;utm_campaign=DailyBlogEmail

(2) https://www.thinkadvisor.com/2019/04/02/house-panel-passes-retirement-bill-to-raise-rmd-age-boost-annuities/?slreturn=20190503190053

About the author

Karl Frank, Certified Financial Planner ®, MSF, MBA, MA, is the President of A&I Financial Services LLC, a local business that specializes in wealth management, insurance planning, and retirement planning. Karl cares for business owners and the businesses that care for them. Learn More about Karl.

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