NARFE: Required withdrawals this year are forcing senior to "sell low." Image: patpitchaya/Shutterstock.com
By: FEDweek StaffThe National Active and Retired Federal Employees Association is asking Congress to suspend the requirement that retirees age 72 and older take certain distributions from retirement savings accounts including the TSP.
The group noted that this year’s required distributions – which are a percentage of the account value that varies with age – “are based on the retirement account balance as of December 31, 2021, when markets like the S&P 500 were close to all-time highs.
Unfortunately, with the S&P 500 stock market index down by more than 20 percent since then, seniors will be forced to withdraw a far greater percentage of their retirement accounts than expected” or else face tax penalties in addition to normally required taxes.
“These required withdrawals will force seniors to sell assets at stock values that have been depressed by the Federal Reserve’s tightening monetary policy in response to surging inflation,” it said.
It noted that in 2020, Congress suspended the requirement following a steep drop in stock markets early in that year after the pandemic broke out. “We are now experiencing a similar, severe decline in the stock market. Coupled with high inflation and the timing of the crash, the situation is similarly concerning today,” it said.
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See also,
House Republicans Revive Retirement Benefit-Cutting Proposals
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The Process of Retiring – Making Late Changes
Retiring from a Federal Job – Getting Started
Retiring from a Federal Job: Make Sure Your Agency Gets it Right
