[Proposed changes to 401(k) and IRAs]

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RJC
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Re: "Help Is Almost Here for Retirement Savers"

Post by RJC » Wed Jun 12, 2019 7:57 am

Rus In Urbe wrote:
Wed Jun 12, 2019 7:56 am
I tried to remove my comment but RJC had already copied it into the thread. What to do? Lady Geek, forgive me!
I edited! Sorry.

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PrettyCoolWorkshop
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Re: "Help Is Almost Here for Retirement Savers"

Post by PrettyCoolWorkshop » Wed Jun 12, 2019 7:57 am

Compare that with the current system, under which Americans with individual accounts must currently decide how to invest their retirement savings as they are accumulating them.

That was an insane idea. Why did we turn ordinary Americans into money managers, burdened with the task of figuring out which funds to invest in or, even crazier, which individual stocks to buy? How many of us would fix our own plumbing or take out our own appendixes?
I find this quote to be very frustrating. We here know the failure modes of trusting your money with an advisor. Obviously managing your own investments is a task that no individual is fit to do :annoyed
Be greedy and fearful. All the time.

livesoft
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Re: "Help Is Almost Here for Retirement Savers"

Post by livesoft » Wed Jun 12, 2019 7:58 am

I'm surprised TIAA Traditional Annuity was not mentioned in the article because it sure looks like it already exists and hundreds of thousands of workers use it.
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RJC
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Re: "Help Is Almost Here for Retirement Savers"

Post by RJC » Wed Jun 12, 2019 8:00 am

livesoft wrote:
Wed Jun 12, 2019 7:58 am
I'm surprised TIAA Traditional Annuity was not mentioned in the article because it sure looks like it already exists and hundreds of thousands of workers use it.
Is that one of the good annuities? I only have a limited understanding of them.

gmc4h232
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Re: "Help Is Almost Here for Retirement Savers"

Post by gmc4h232 » Wed Jun 12, 2019 8:01 am

I always viewed annuities as giving a chunk of money to someone and paying them a fee to give it right back to you in smaller chunks with mediocre rates of return. I dont understand the appeal.

Wouldnt you be better off to setup automatic withdrawals from a savings acct to accomplish the same thing?

If longevity risk was a real problem, then annuities wouldn't exist.

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Sandtrap
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Re: "Help Is Almost Here for Retirement Savers"

Post by Sandtrap » Wed Jun 12, 2019 8:09 am

Quotes from article for convenience:
Opinion
Help Is Almost Here for Retirement Savers
Only a few Republican senators stand in the way of the most consequential reform legislation in more than a decade.
The legislation’s provisions regarding annuities would relieve employers of the obligation to assess the financial health of the insurance companies that would provide the annuities while, importantly, leaving with the employer the responsibility for evaluating and negotiating the cost and other terms of the specific annuities being offered.
We should go further, toward requiring workers to open accounts and maintain them, with early withdrawals limited to extreme circumstances.
Unfortunately, the prospects for national enactment of even modest improvements like the Oregon approach are remote, because of Republican opposition to greater government mandates.
That narrow thinking shortchanges the many millions of Americans who, as a consequence, will spend their golden years facing financial challenges.
Compare that with the current system, under which Americans with individual accounts must currently decide how to invest their retirement savings as they are accumulating them.
That was an insane idea. Why did we turn ordinary Americans into money managers, burdened with the task of figuring out which funds to invest in or, even crazier, which individual stocks to buy? How many of us would fix our own plumbing or take out our own appendixes?
Steven Rattner, a counselor to the Treasury secretary in the Obama administration, is a Wall Street executive and a contributing opinion writer.
OP:
This is an opinion piece on something that has not happened, and without actionable personal investement finance content.
Always consider the source and purpose of daily "noise".

Stay the course.

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CyclingDuo
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Re: "Help Is Almost Here for Retirement Savers"

Post by CyclingDuo » Wed Jun 12, 2019 8:13 am

PrettyCoolWorkshop wrote:
Wed Jun 12, 2019 7:57 am
Compare that with the current system, under which Americans with individual accounts must currently decide how to invest their retirement savings as they are accumulating them.

That was an insane idea. Why did we turn ordinary Americans into money managers, burdened with the task of figuring out which funds to invest in or, even crazier, which individual stocks to buy? How many of us would fix our own plumbing or take out our own appendixes?
I find this quote to be very frustrating. We here know the failure modes of trusting your money with an advisor. Obviously managing your own investments is a task that no individual is fit to do :annoyed
Frustrating indeed since many of us are very capable at doing our own plumbing, electrical work, sheet rock work, painting, landscaping, oil changing, light construction, wood chopping, gardening, etc... - all DIY handyman stuff that is not that difficult to do properly if one has the tools, time and willingness to actually learn how to accomplish each task in a successful manner.

Surgery on one's self, on the other hand, would not be a DIY skill any of us should engage in... :shock:
"Everywhere is within walking distance if you have the time." ~ Steven Wright

goblue100
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Re: "Help Is Almost Here for Retirement Savers"

Post by goblue100 » Wed Jun 12, 2019 8:16 am

gmc4h232 wrote:
Wed Jun 12, 2019 8:01 am

If longevity risk was a real problem, then annuities wouldn't exist.
Isn't this the same as saying if car crashes were a real problem, car insurance wouldn't exist?

Variable annuities are overly expensive, overly complex and frowned upon. Immediate annuities may have a place in prudent retirement planning, especially if you are healthy and a longer than normal life is a possibility. If you buy an annuity, you may "lose" (die younger than expected) or you may "win" (live longer than expected). It's insurance, in my mind.
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns

livesoft
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Re: "Help Is Almost Here for Retirement Savers"

Post by livesoft » Wed Jun 12, 2019 8:25 am

RJC wrote:
Wed Jun 12, 2019 8:00 am
livesoft wrote:
Wed Jun 12, 2019 7:58 am
I'm surprised TIAA Traditional Annuity was not mentioned in the article because it sure looks like it already exists and hundreds of thousands of workers use it.
Is that one of the good annuities? I only have a limited understanding of them.
Yes, it is traditionally (pun!) considered one of the good ones. What is sad is that the author of this article and perhaps the authors of the legislation don't seem to know about things like this used in many many 403(b) plans across the country.

OTOH, 403(b) plans have also had terrible annuities from other companies, so that fact tells one how things might turn out, so "The Vultures Are Almost Here for Retirement Savers" except the vultures have been here for decades already.
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Sandtrap
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Re: "Help Is Almost Here for Retirement Savers"

Post by Sandtrap » Wed Jun 12, 2019 8:30 am

CyclingDuo wrote:
Wed Jun 12, 2019 8:13 am
PrettyCoolWorkshop wrote:
Wed Jun 12, 2019 7:57 am
Compare that with the current system, under which Americans with individual accounts must currently decide how to invest their retirement savings as they are accumulating them.

That was an insane idea. Why did we turn ordinary Americans into money managers, burdened with the task of figuring out which funds to invest in or, even crazier, which individual stocks to buy? How many of us would fix our own plumbing or take out our own appendixes?This is anti-Boglehead.
I find this quote to be very frustrating. We here know the failure modes of trusting your money with an advisor. Obviously managing your own investments is a task that no individual is fit to do :annoyed
Frustrating indeed since many of us are very capable at doing our own plumbing, electrical work, sheet rock work, painting, landscaping, oil changing, light construction, wood chopping, gardening, etc... - all DIY handyman stuff that is not that difficult to do properly if one has the tools, time and willingness to actually learn how to accomplish each task in a successful manner.

Surgery on one's self, on the other hand, would not be a DIY skill any of us should engage in... :shock:
+1
Although there are some areas where I "draw the line" as I have a "brown thumb". :wink:
j :happy

dknightd
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Re: "Help Is Almost Here for Retirement Savers"

Post by dknightd » Wed Jun 12, 2019 8:38 am

It is good to have options. Choose the one that makes you happy.

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CyclingDuo
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Re: "Help Is Almost Here for Retirement Savers"

Post by CyclingDuo » Wed Jun 12, 2019 8:55 am

Sandtrap wrote:
Wed Jun 12, 2019 8:30 am
Although there are some areas where I "draw the line" as I have a "brown thumb". :wink:
j :happy
So at least you're good at some form of plumbing? :mrgreen:
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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UpsetRaptor
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Re: "Help Is Almost Here for Retirement Savers"

Post by UpsetRaptor » Wed Jun 12, 2019 9:12 am

I'm with LiveSoft. Sounds theoretically good on paper, but beware the vultures. Many teachers have been sold horrendous annuity-type products in their 403b plans.

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oldcomputerguy
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Re: "Help Is Almost Here for Retirement Savers"

Post by oldcomputerguy » Wed Jun 12, 2019 9:36 am

This topic is locked. See Unacceptable topics:
Note that discussions of proposed laws or regulations are prohibited.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

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LadyGeek
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Re: Proposed changes to 401k and IRAs

Post by LadyGeek » Wed Jun 12, 2019 3:36 pm

I merged RJC's thread into the on-going discussion. I'll repeat my previous post here:
LadyGeek wrote:
Fri May 24, 2019 2:51 pm
Here's a summary from: Political comments and proposed tax plan remain off-topic
LadyGeek wrote:
Sun Nov 20, 2016 12:01 pm
...Speculation about future legislation is prohibited by forum policy, see Unacceptable Topics:
Politics and Religion

In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited. The only exceptions to this rule are:
  • Common religious expressions such as sending your prayers to an ailing member.
  • Usage of factual and non-derogatory political labels when necessary to the discussion at hand.
  • Discussions about enacted laws or regulations that affect the individual investor. Note that discussions of proposed legislation are prohibited.
  • Proposed regulations that are directly related to investing may be discussed if and when they are published for public comments.
This forum is focused on investing that is directly actionable to personal investors. We don't hold debates on conjecture.

The whole point of the policy is to (1) eliminate contentious disagreements that result from these discussions and (2) keep investors from making bad decisions. Proposed legislation changes many times between the time it's introduced and signed into law.
Also, a summary of the legislative process, from: Re: Political comments and proposed tax plan remain off-topic
LadyGeek wrote:
Fri Nov 03, 2017 8:46 pm
Here is some background info:

Tax authority comes from Title 26 of US Code - which is US law and a legislative process. See the wiki: Hierarchy of tax authority

...The bill is the first step in changing the law. See any of these links:

- The Legislative Process · House.gov
- The Legislative Process: Overview (Video) | Congress.gov | Library of Congress
- U.S. Senate: Legislative Process

Quite a bit of negotiation will be on-going until the bill becomes signed into law.

The purpose of this forum is to educate investors and provide actionable, accurate advice. Consider the primary purpose of investors here is to save for retirement. This is your life's savings.

Making a decision based on information that will change from now until the tax legislation becomes law places your life's savings at risk. In some cases, an incorrect decision can result in an unrecoverable error.

To protect investors - and even more lurkers - from making a potentially bad life changing decision, we are not permitting discussion of "proposed legislation" in this forum. Aside from the political disagreements, we are simply trying to protect investors from making a bad decision. It's no more complicated than that.

(Political discussions are not permitted either, but for the purpose of keeping discussions civil and to avoid contentious disagreements.)
With the above in mind, here is the current status: H.R.1994 - Setting Every Community Up for Retirement Enhancement Act of 2019 (passed House 5/23/2019)

When the last step has completed (Became Law), we can reopen the thread to discuss.

(Thread remains locked.)
The latest action: Senate - 06/03/2019 Received in the Senate.

When the last step has completed (Became Law), we can reopen the thread to discuss.

(Thread remains locked.)
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Patrick584
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Are existing stretch IRAs safe?

Post by Patrick584 » Fri Jun 14, 2019 8:33 pm

Details on the Secure act are a little scarce. It looks like the elimination of the stretch IRA will only apply to future dead people and existing stretch IRAs can continue indefinitely. Is this correct.

retiringwhen
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Re: Are existing stretch IRAs safe?

Post by retiringwhen » Fri Jun 14, 2019 8:38 pm

The articles I read said it only applies to beneficiary iras created after 12/31/19....

In before the lock......

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LadyGeek
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Re: [Proposed changes to 401(k) and IRAs]

Post by LadyGeek » Fri Jun 14, 2019 8:42 pm

^^^ I moved Patrick584's post and one reply into the on-going discussion.

(Thread remains locked. Status is still at: Senate - 06/03/2019 Received in the Senate.)
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