Changes The Government Could Make To Simplify Retirement Planning

The rules and regulations concerning retirement are numerous and opaque and have been known to frustrate experts in the field. For an average retiree, making sense of it all is often impossible and, as a result, faces the potential of losing out on many benefits they might otherwise have available. A recent article outlined several changes that should be made in order to streamline current retirement laws:

• Moving back the mandatory withdrawal age for various types of retirement accounts could prevent bumps into a higher tax bracket for a retiree.
• Create uniform rules and regulations for withdrawals from all forms of retirement savings accounts rather than the current and confusing patchwork legislation.
• Whenever a withdrawal is made, give it preferential tax treatment such as being considered to first have been drawn from any tax free portion of the plan.
• A change to Roth IRA’s income limits would remove extra steps some tax payers have to make to create a “backdoor” Roth as well as simplify the system overall.

See Liz Weston, Four Changes That Would Simplify Retirement Savings, Reuters, June 16, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.