What Is the Government Doing to Your Retirement Funds?


Retirement savings plans have sailed into some new waters lately, undergoing two major overhauls in nearly as many months. With the government poised to consider still more ways to stimulate this pandemic-rattled economy, who knows whether further changes are afoot.

First came the SECURE Act, signed into law last December. Its big changes included incentives for employers to allow part-time workers to participate in them. It allowed annuities to be offered as investment options (cheer up, all you Des Moines annuities companies), and lifted the age cap on contributing to a 401(k). And it pushed to 72 the age at which you have to start taking mandatory distributions from your IRA.

In short order the CARES Act popped up. It put a halt to required minimum distributions (RMDs) for this year. RMD amounts are calculated based upon the value of your assets as of Dec. 31 of the prior year, and at that time the market benchmark Dow Jones industrial average was 16% higher than today. Your assets inside that IRA have likely declined.

With the RMD hiatus, you have a chance to recover some of those assets. And the tax man won’t be breathing down your neck to take the money out – or pay an ugly penalty. At least this year.

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