Obama’s Plans for Your Retirement
Emily Brandon writes in U.S. News & World Report: The leading edge of the baby boomers will hit age 65 during Barack Obama’s administration. Legislation enacted over the next four years will be key to boomers’ economic security in retirement, especially as investors frantically try to recover from massive stock market losses before they retire. Here’s a look at the president-elect’s major retirement proposals:
Income tax for seniors. Obama plans to eliminate all income tax for seniors making less than $50,000 annually. Obama’s advisers estimate this will save 7 million seniors an average of $1,400 apiece annually.
Hardship withdrawals. Early withdrawals from IRAs and 401(k)’s are currently subject to a 10 percent early withdrawal penalty for those younger than 59½. Obama proposes penalty-free hardship withdrawals of 15 percent of the IRA or 401(k) account balance, up to $10,000, in 2008 (including retroactively) and 2009. These withdrawals would still be subject to normal income taxes.
Filed Under: Baby Boomers • Retirement
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