Happy Friday, readers! It’s always a bit of a challenge each week picking a theme for the Friday afternoon mailing, especially during these times of fast-paced regulatory and market evolution. This week the job was made a little easier by the impressive reaction to a story about a new, simple approach to retirement spending proposed by a fellow of the Society of Actuaries. One reader suggested participant spending in retirement is “quickly becoming the next big plan design concern.” What do you think?
Evan Inglis says his “simple but effective” new rule recognizes the lower level of returns we are likely to experience in coming years due to low interest rates and other factors such as demographic trends.
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Until 401(k) plan sponsors are more comfortable offering in-plan retirement income products, the industry must find solutions to deliver nuanced advice around retirement income to low-balance investors.
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Low and middle-income Americans struggling to save for retirement are depending on the U.S. Senate to pass the SECURE Act, advocates say. At present, one roadblock seems to the law’s treatment of “stretch IRAs.”
Washington insiders say Senator Ted Cruz is probably the biggest roadblock to the SECURE Act being passed in the near-term under unanimous consent; among other issues, he wants the bill to allow people to use tax-advantaged 529 college savings accounts to pay for home school expenses.
A new IRS private letter ruling essentially conforms the tax treatment of properly structured advisory fees from non-qualified annuity contracts to those paid out of qualified accounts, which typically are not treated as taxable distributions.
There is precious little time remaining for the proposal and adoption of any new advisory industry conflict of interest rules that the DOL hopes to make effective during this presidential administration.