Benefits & Executive Compensation News

Retirement Payout Rules Tweaked to Reflect Longer Lifespans

Nov. 7, 2019, 5:05 PM

Retirement savers in no hurry to crack open their nest eggs will be able to hold onto those tax-favored funds for a few more years under a nearly completed White House project.

The proposed rule, issued Nov. 7 by the Internal Revenue Service, affects tax-free savings options such as employer-sponsored 401(k)s and individual retirement accounts (IRAs) by raising the life expectancy, for example, of a 70-year-old retiree from 27.4 years to 29.1 years (up 1.7). Similarly, benefits for a 75-year-old surviving spouse are extended from 13.4 years to 14.8 years (up 1.4).

Under current law, account holders are forced...

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