This Common 401(k) Rule Is Making Life Difficult for Retirees - TIME Business

This Common 401(k) Rule Is Making Life Difficult for Retirees Posted: 19 Apr 2017 03:00 AM PDT A big part of retirement planning is setting up monthly income for the years after you leave work. Yet many 401(k) plans make this difficult by placing restrictions on how you take distributions. In some plans, if you want to withdraw anything at all you must take out every dime. That is more than a mere inconvenience. You may have most of your retirement dollars in a 401(k) or similar plan. Restrictions on how you take out your money may prompt you to roll over all the funds into an IRA, where you are free to take out cash pretty much as you wish. That’s not necessarily a bad move. But it may push you into higher-fee investments and leave you without certain valuable investment options—such as a stable-value fund, which is a cash equivalent with a relatively high yield that is generally not available outside a 401(k) plan. In this way, inflexible distribution rules handcuff savers and may cost them dearly when it comes time to live off the money they have gathered. Even the government’s mighty Thrift Savings Plan (TSP), which will welcome the military with new incentives next year, leaves participants with painfully few options for taking their money out. Earlier this month, lawmakers called attention to inflexible distribution rules with a proposal to loosen restrictions on the widely used federal government plan, which has assets of $482 billion. Senators Rob Portman, R-Ohio, and Tom Carper, D-Del., introduced the TSP Modernization Act, which would change distribution rules for the first time since the TSP was established in 1986. Currently, federal employees can take only one partial distribution while they are employed and meet age requirements. Any follow-up distribution after they leave government employment must be for the full balance. Those who have left the federal payroll and meet age requirements and haven’t yet taken a distribution can take one partial distribution. After that, they must move to full distribution options. The proposal would allow for multiple partial distributions while workers are employed by the government and more again after retiring or leaving government service. The idea is to keep more government workers in the TSP, which has some of the lowest fees of any retirement plan. TSP participants move $9 billion a year into other plans that almost always have higher fees. More than a quarter of those moving the funds say they do it for greater flexibility. In the private sector, a shift toward more flexible withdrawal rules is one of the encouraging ways that 401(k)s are changing to help retirement savers. Making it easier for workers to keep the money in a 401(k) can benefit the employer as well as workers: Companies are concerned that if plan assets shrink, they may have less leverage to negotiate lower fees with investment managers, theWall Street Journal reported last year. Larger 401(k) plans tend to have lower fees and fewer restrictions on distributions. But that isn’t true across the board. Some charge higher fees than you would pay in an IRA stocked with low-cost index funds. And only 61% of large plans allow people to take monthly distributions, according to Aon Hewitt. Small-employer 401(k) plans tend to charge the highest fees and be the least flexible. So for those in such a plan, a full rollover to an IRA may make sense in any event. The good news for retirement savers is that the proposal to loosen distribution rules from the massive government TSP has momentum, and it may lead more private-industry plan sponsors to follow suit. For now, though, you will have to navigate on your own. A rollover to an IRA makes the most sense if you can get into lower fee investments, like index funds. If you cannot lower your costs, consider keeping your money in an employer-sponsored plan as long as possible—and hope for distribution reforms sooner rather than later.@

Trump Adding Former Lobbyists To Swamp, Giving Them Ethics Waivers - Huffington Post

Trump Adding Former Lobbyists To Swamp, Giving Them Ethics Waivers

Some new Trump officials are working on policies likely to benefit clients they recently served.

Far from fulfilling his campaign promise to “drain the swamp” in Washington, President Donald Trumpappears to be filling it with former lobbyists and consultants.

The president has relaxed ethics regulations, eliminating a requirementbarring lobbyists from joining agencies that they lobbied up to two years prior. Trump does require that former lobbyists not work on specific issues linked to a past client. But it appears that regulation is not always followed.

The New York Times and ProPublicahave highlighted some especially worrisome hires in the executive branch, including White House energy adviser Michael Catanzaro, a former oil and gas company lobbyist, and Geoff Burr, a former construction industry lobbyist now working at the Department of Labor.

A lobbyist may “de-register on Monday and enter the Trump Administration on Tuesday,” Craig Holman of the watchdog group Public Citizen told ProPublica — and could also quickly return to the private sector.

Far from fulfilling his campaign promise to “drain the swamp” in Washington, President Donald Trump appears to be filling it with former lobbyists and consultants.

The president has relaxed ethics regulations, eliminating a requirement barring lobbyists from joining agencies that they lobbied up to two years prior. Trump does require that former lobbyists not work on specific issues linked to a past client. But it appears that regulation is not always followed.

The New York Times and ProPublica have highlighted some especially worrisome hires in the executive branch, including White House energy adviser Michael Catanzaro, a former oil and gas company lobbyist, and Geoff Burr, a former construction industry lobbyist now working at the Department of Labor.

A lobbyist may “de-register on Monday and enter the Trump Administration on Tuesday,” Craig Holman of the watchdog group Public Citizen told ProPublica — and could also quickly return to the private sector.

Just last week, Bloomberg revealed that Marcus Peacock, a top Trump aide who worked briefly in the Office of Management and Budget, will join the lobbying group the Business Roundtable. Peacock has recused himself from lobbying the OMB for just six months — even though he agreed not to lobby his former agency for five years, according to Bloomberg. 

Trump may also be issuing other ethics waivers, but that’s difficult to determine because granted waivers are generally kept secret, the Times reports. The president is also keeping White House visitor logs secret, making it difficult to track corporate representatives’ meetings with federal officials as they create new policy. 

The White House told the Times that it “takes its ethics pledge and federal conflict of interest rules very seriously,” and is complying with the law.

Huffington Post

Theresa May has just handed Scottish independence to Nicola Sturgeon on a plate - Independent

Theresa May has just handed Scottish independence to Nicola Sturgeon on a plate

One career politician in Westminster is striking while the iron is hot, and so is another north of the border

• Rachael Revesz 
• @RachaelRevesz 
• Tuesday 18 April 2017 14:15 BST

Nicola Sturgeon must be rubbing her hands with glee at this moment.

In the aftermath of Theresa May’s announcement to hold a snap election, Sturgeon knows how most Scots will receive the news: badly.

Provided May is allowed to hold the election by Parliament, it will most likely lead to a Conservative victory and further degradation of the opposition – one poll predicts the Conservatives will end up with a 100-seat lead in Parliament. So long 2020: May could stay in power until 2022.

Sturgeon’s tweet after the news hit the nail on the head: “The Tories see a chance to move the UK to the right, force through a hard Brexit and impose deeper cuts. Let's stand up for Scotland. #GE17,” she said.

One career politician in Westminster is striking while the iron is hot, and so is another north of the border.

Sturgeon has already won the backing of Holyrood to hold another referendum between 2018 and 2019, but needed the people’s support for a second push. She might have it now, and could force May’s hand into the bargain.

No one has forgotten the £12 billion cuts to welfare. Austerity is a bitter pill to swallow when there is no light at the end of the tunnel. Yet the Scottish people might never have thought they would have to choose between debilitating cuts under May and breaking away from the UK altogether.

The Conservatives won the 2010 election off the back of false rhetoric which said Labour’s expenditures caused a global financial crisis. They then whipped up a frenzy of xenophobia and ignorance to take us out of the European Union, walked away without a stain, and then convinced us they were the best ones to clean up the mess.

Over the past few years, the sustained media attack against Jeremy Corbyn, who was elected in a landslide – twice – has fuelled the perception that there is not a credible opposition.

It has only been seven years and we have already forgotten why we take pride in allocating money (less than 1 per cent of gross national income) to foreign aid, why we need immigrants to power our economy, why we need to stop spreading myths of welfare “hand-outs” and watching shows like Benefits Street.

Nicola Sturgeon knows all of this; she knows the potential devastating impacts of a prolonged Tory government and the hard Brexit it’s likely to bring. She knows people are growing tired and impatient of cuts to welfare, without seeing an equal attack upon big companies and wealthy individuals.

She knows that the tide might be turning in her favour. Ironically, May thinks now is the time to cement her hold on power, under the guise of creating unity in Westminster. What the snap election will do is just the opposite – and she might be surprised by how Scotland responds.