Pushing back the age at which people must start to take required minimum distributions from retirement accounts would have little impact on their financial behavior during their working years, a mixed impact on retirees and little effect on government tax revenues, according to research conducted for the TIAA Institute.
The study, by researchers at Goethe University in Germany and the University of Pennsylvania, found that some effects of changing the RMD age would be seen during the years in retirement, depending on whether or not the retiree has a bequest motive.
“For households having a bequest motive, the former age-70.5 RMD rule was quite restrictive, since such a household would prefer to make fewer withdrawals than required and use the 401(k) plans as a tool to transfer financial wealth to the next generation. Raising the RMD age to 72 postpones account withdrawals, and defers taxes for a time,” the research report stated.
But it noted that households having a bequest motive pay more income taxes in old age than those without that motive. For households without a bequest motive, researchers said little likely would change.
Even if the RMD rule were eliminated, tax revenues would change little on average, the researchers found, despite leading to lower tax payments for the highest 1% of taxpayers.
The SECURE Act, passed in late 2019, boosted the age at which individuals must start to take distributions from retirement accounts to 72 from 70½. Legislation has been proposed in Congress that would raise the age again, to 75.
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
