wonderer
10-09-2002, 10:26 AM
Andy, here's a reform idea worth fighting for.
Section 72 was recently changed to allow a re-amortization of Accounts and avoid a too fast asset depletion.
To me, this does not address another set of individuals in our society, those who lose their jobs at advanced ages.
Many DB plans have severe early retirement reductions, especially if retirement age conditions are not satisfied at the age of termination.
In addition, a late employment shock can raise true havoc with financial planning. The most realistic long term effect will be that the standard of living throughout remaining life will be reduced. However, the more immediate impact shows up in current cash flow, such as paying off the mortgage, paying health bills, etc. This opens many people to a distressed asset sale risk of their home.
If Section 72 allowed a Social Security Leveling option in withdrawing funds from a retirement account, individuals could take a portion of their IRA and accelerate receipt until age 62 or age 65. This would bypass the 10% penalty restriction on early withdrawal and allow individuals to delay defined benefit plan receipt.
Section 72 was recently changed to allow a re-amortization of Accounts and avoid a too fast asset depletion.
To me, this does not address another set of individuals in our society, those who lose their jobs at advanced ages.
Many DB plans have severe early retirement reductions, especially if retirement age conditions are not satisfied at the age of termination.
In addition, a late employment shock can raise true havoc with financial planning. The most realistic long term effect will be that the standard of living throughout remaining life will be reduced. However, the more immediate impact shows up in current cash flow, such as paying off the mortgage, paying health bills, etc. This opens many people to a distressed asset sale risk of their home.
If Section 72 allowed a Social Security Leveling option in withdrawing funds from a retirement account, individuals could take a portion of their IRA and accelerate receipt until age 62 or age 65. This would bypass the 10% penalty restriction on early withdrawal and allow individuals to delay defined benefit plan receipt.