Today, however, if someone says, ‘I have a pension,’ that usually means they work in the public sector. Public employees make up 14% of the total workforce. Fifty-two percent of them have college degrees, which is higher than in the private sector, where only 35% do.
The most significant change, though, is how it treats non-spouse beneficiaries. Previously, non-spouse beneficiaries could “stretch” their required withdrawals over their lifetime. For example, a 40-year-old successful doctor who received a substantial sum from their mother’s IRA could take their required amount over their lifetime.
When someone inherits an IRA, the particular relationship between the individual who passed away and the beneficiary dictates the available choices. When the spouse is the sole beneficiary, that person can either remain a beneficiary or become the owner of the IRA.
For the 4th year in a row, Five Star Professional is pleased to announce that Financial Advisor Tim Hayes is one of Boston’s Five Star Wealth Managers. for 2017. About Tim Tim provides wealth management, financial planning, and retirement planning solutions to individuals and employers in MA, NH, and RI.
What does the new rule mean for you? If you have a 401(k), the advisor fees might come down. If you roll over the 401(k) to an IRA, the fees in the IRA should be identical to what they were in the 401(k). If they are not, then the advisor must pledge to do what is in your best interest.
The Department of Labor is the point agency because they oversee the Employee Retirement Income Security Act (ERISA). Most IRAs, however, are not regulated by ERISA; instead, they fall under the jurisdiction of the Internal Revenue Service. But the IRS uses the Department of Labor’s definition of “investment advice,” so IRAs most likely get covered if the government prevails.