June 12, 2014

There’s a flurry of activity in D.C. lately that might have an influence on your retirement plans. The proposed Obama budget has some important considerations inside for IRAs and Social Security. To start with, the plan suggests “harmonizing” required minimum distribution rules making mandatory RMDs for Roth IRAs after the individual passes age 70 ½. As of now, Roth IRAs still offer unique benefits since they are not in line with other rules on RMDs in retirement accounts.

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A second proposal inside the budget suggests a cap on IRAs that would limit what an individual can put into the vehicle once they have surpassed a “secure retirement” stage. This would influence wealthy individuals and could reduce opportunities for roll-over from an employer sponsored plan.

Finally, the government aims to explore ways in which to maximize Social Security benefits. Currently, some retirees are able to get the most out of Social Security with claiming strategies, but the government wants to reduce any windfalls and use those savings to help make the Social Security program more solvent.

As always, tax, retirement, and estate planning are subject to change often- and they do. These proposed changes could influence your own plans. Staying on top of the game by working with a qualified planner “in the know” can ensure that you’re getting the most out of your plans. To learn more, email info@lawesq.net or contact us via phone at 732-521-9455 to get started.