Trump seeks to update retirement rules, help Americans save more

By Personal FinanceFOXBusiness

What Trump's executive order on retirement security means for you

'Everyday Millionaires' author Chris Hogan on President Trump's executive order to boost retirement savings, efforts to get young people to start their retirement plan early and tackling credit card debt.

President Trump signed an executive order on Friday that will affect how you save for retirement.

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The White House said the measure – which directs the Treasury and Labor Department to consider issuing regulations or guidelines – will look at updating the rules on required minimum distributions for retirement plans, in an effort to allow retirees to stash away more money in their accounts for a longer period of time.

Under current law, retirees are required to begin withdrawing funds from their retirement accounts when they turn 70.5.

Trump is also asking the administration to look into ways to make work-based retirement programs more affordable for small businesses, in order to increase the number of those businesses that offer options.

One potential measure, for example, would be to allow small businesses to band together to offer joint plans.

According to the administration, only 53 percent of businesses with fewer than 100 employees offer workplace retirement plans, compared with nearly 90 percent of businesses with more than 100 workers that do so.

In addition to reducing costs as a pathway for more small businesses to offer plans, the order directs the agencies to look at ways to reduce bureaucratic barriers.

The president is expected to sign the order in Charlotte, North Carolina, Friday afternoon.

Retirement has been a focal point for Trump this week: On Thursday, the president took to Twitter to comment on the stock market, and how continued over performance could lead to a bump in retirement account balances.

The administration has said it wants to help more Americans save: As of May, more than 20 percent of Americans had no cash stashed away for retirement. The administration hopes it can help change that with its second round of tax legislation, which Republican leaders have said they have begun working on.

It remains unclear exactly what Republicans plan to do with that bill to help more Americans stash away a larger percentage of their income, but Rep. Kenny Marchant, R-Texas, told The Wall Street Journal that a universal savings account could be included. Contributions to a universal savings account would be taxed, but earnings would grow tax-free and would be easier to withdraw than a traditional 401(k) or other retirement account.

Further, the bill could aim to make it easier to use health savings accounts, an account where an individual contributes pretax dollars for the explicit purpose of spending those funds on future medical expenses.