Changes could be coming to the way you save — and plan — for retirement.
President Donald Trump on Friday signed an executive order to expand access to retirement plans to make it easier for small businesses to offer retirement plans through pooled plans. The directive also asks for a review of current required minimum distribution (RMD) rules. Trump signed the executive order at an event in Charlotte, North Carolina.
“Small businesses will no longer be at a competitive disadvantage, and small-business workers will now be treated more fairly and have many more choices,” Trump said at the event.
In the executive order, Trump directed the Departments of Labor and the Treasury to consider issuing regulations that would help businesses offer their employees retirement plans.
“Since Americans tell us that their failure to save for retirement ranks among their top financial regrets, any well-considered program which would potentially help individuals meet their long-term savings needs could be beneficial,” says Mark Hamrick, senior economic analyst and Washington bureau chief at Bankrate.
RMD rules may be relaxed
The executive order will direct the Treasury and Labor Department to review the rules on required minimum distributions. The proposed changes might help Americans keep their retirement money in a tax-deferred status for a longer period of time. This would give retirees more flexibility in planning when and how much of their retirement money to withdraw.
Currently, RMDs must be taken each year beginning with the year that you turn age 70 1/2. Generally, you have to take withdrawals from your IRA, SIMPLE IRA, SEP IRA or retirement plan at that age under current rules.