Wednesday, September 19, 2018

Warning to 401K Account Holders

By Robert Wenzel

President Trump recently signed an executive order to make it easier for small employers to offer 401(k)s through multiple-employer plans.

But here's the thing.

The EO also called for the review of the rules on required minimum distributions (RMDs).

No one knows what will result from this.

Under current law, holders of 401(k) and traditional Individual Retirement Accounts (IRAs) are required to withdraw a percentage of their account balances each year once they reach 70½.  Presumably, the review will make changes to this rule.

Some reports indicate that the president would like to see the age moved from 70½ to, say, 72.  That's a plus in the direction of pension planning freedom.

But with massive deficits looming and the review seemingly wide open on  RMD changes, don't be surprised if the government tries to take a few small steps in the direction of a money grab from that big pool of retirement savings.

I don't know what is coming but a lot of it probably won't be good, especially if you have a tidy sum saved up.

Consider yourself warned.

Robert Wenzel is Editor & Publisher of


  1. What do you recommend for us with IRAs, 401ks, or pensions Robert?

    1. There's not much that you can do with your existing retirement accounts, except withdraw early and pay the (significant) penalties.

      You can stop contributing any more, if you're still doing that.

  2. Its obvious, the market can move in any way, the government can do anything about
    "promises" made. Just spread you assets among as many things as possible.

    Have a gold ETF, have some physical gold in a safe deposit box, have some stock, have some bonds, have some real estate, have a little cash hidden, buy a collectable Ferrari (just kidding).

    Even if you have few assets, you can spread them around well, and you should work to reduce spending so that you have more assets. The whole of financial planning education could be reduced to spend less than you earn.

    1. "Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
      -- Wilkins Micawber, in David Copperfield, novel by Charles Dickens, Chapter 12.

    2. "in a safe deposit box"

      Which government will confiscate if things get bad enough or they decide criminals use the same facility.

      "buy a collectable Ferrari (just kidding)."

      Don't sell that one short. Although present timing for putting assets into collector cars is probably poor.