Is it Possible Men Fear Retirement More Than Death?
According to a 2019 survey, 42% of men over the age of 21 are somewhat or very afraid of death. While this number is not small, it becomes more interesting when compared to the results of another 2019 survey:
- 87% of men over 50 fear lack of income in retirement
- 77% fear losing employment-based health insurance
- 71% fear not keeping mentally active
- 64% fear not keeping physically active
- and 50% fear losing their social network
Clearly, this is not a groundbreaking scientific discovery, but it points to an interesting conclusion. The imminence of retirement can often feel intimidating; perhaps, for some, even more intimidating than the less immediate prospect of death.
The Bright Side
2022 is setting up to be a good year for IRA owners as another loosening of IRA regulations is slated to go before Congress.
The Securing a Strong Retirement Act, or SECURE Act 2.0, has come out of Committee with unanimous support. Yes, every Democrat and every Republican voted to support a list of amendments to the IRA rules. The bipartisan proposal includes the following:
- Increasing Roth IRA accessibility. The proposal adds a Roth IRA portion to both SIMPLE and SEP IRAs. SEPs and SIMPLE IRAs are designed for small businesses. This change makes sense as 401(k)s have long contained a Roth component.
- Raising the required start date for the Required Minimum Distribution (RMD) from age 72 to age 75. Remember, Roth IRAs will still have no RMDs.
- Starting a steady increase in the dollar amount of “catch-up” contributions an individual may make to their IRA when they reach age 50. The amount set for catch-up contributions has remained at $1,000 per year for quite some time, but will soon start to grow.
- Reducing the penalty if you forget to take your RMD. The current penalty is 50% of the amount that should have been taken; the proposal reduces this penalty to 25%.
- Eliminates the possibility of forfeiting your entire IRA for making a prohibited transaction (even by accident). The proposal changes the penalty to forfeiture of only that prohibited investment. The remainder of the IRA remains in place and can continue to grow.
These provisions and others will make IRAs even more user-friendly and easy to understand. As a result, it looks like blue skies ahead.
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