Americans are living and working longer.
That means that the retirement age will rise too.
RMD age may increase
Required minimum distribution(RMD) age may go up under the new retirement bill. The bill is known as Securing a Strong Retirement Act, or Secure 2.0. Read more about it here.
RMD would increase to age 75. The increase would be gradual. It would increase to 73 in 2023, 74 in 2030, and 75 in 2033.
The current RMD age is 72. RMDs are required for certain types of accounts including:
- traditional IRAs
- SEP IRAs
- SIMPLE IRAs
- 401k plans
- 403(b) plans
- 457(b) plans
- profit sharing plans
- any other defined contribution plans
The SSA will be out of funds by 2034
The Social Security age is expected to go up because of funding. By 2034 the Social Security Administration(SSA) is expected to be out of funds. In order to fund the SSA there are three options:
- increase taxes on benefits
- raise payroll taxes
- increase retirement age
Almost 6 million new people sign up for Social Security each year. If retirees wait to claim benefits, less funds would be pulled and therefore last longer.
You can start collecting Social Security at 62, but can’t get full benefits until you reach full retirement age (FRA).