Carmel, CA New IRA Retirement Tool With No Early Withdrawal Penalties


With the COVID-19 pandemic forcing a number of Americans to be laid off, many people are taking a close look at 72(t) plans, which allows you to withdraw money without the usual 10% penalty, even if you are below the age of 59.5 years old.  Dubbed 72(t) plans, they give you a series of equal payments taken at least annually.  The duration of the plan must be at least five years or until the person reaches 59.5 years, whichever is longer.  Talk to your tax planner, Monterey County Bank or one of our other local banks about this option.  Another possibility which was made as part of the Cares Act is an exemption to coronavirus-related distributions as another exception.  If you are interested in this option, act quickly as it’s only available until year end.

https://www.wsj.com/articles/early-ira-withdrawals-can-be-penalty-free-11607004008

Monterey, CA Seniors Should Make The Most Out Of Their Home Equity


Historically, the big hope was to retire debt free.  However, experts who recently talked to Kiplinger’s Retirement Report say this may be a big mistake.  Homeowners age 62 and older have a record $6.5 trillion of “tappable†equity, according to Data analytics firm Black Knight.  Many financial planners believe that tapping wealth just before retirement makes sense if it is done for the right reasons.  Suggested uses include paying off credit card debt, doing a remodel to make your house more senior friendly, buying long-term care insurance and pay the tax bill on a Roth conversion.  In addition, you can use the funds to avoid taking early retirement from Social Security.

New Legislation Could Boost Retirement Savings

A jar of coins with the word retirement written on it.


A bill from Rep. Richard Neal (D, Mass.) and Rep. Kevin Brady (R. TX) would boost the age for required minimum distributions (RMDs) from IRAs and 401 (k) accounts to 75, from 72.  It applies to those born after June 30, 1949.  It would also waive RMDs entirely who have a cume total of less than $100K.