Continuing his rapid-fire attack on people who are not wealthy, President Donald Trump is expected to mark the approaching Labor Day weekend by signing an executive order on retirement account rules that one advocacy group says appears to be "nothing more than a cruel joke on American workers" that will further enrich deep-pocketed donors and Wall Street.
Under the expected order, the Wall Street Journal reported, "the Treasury Department would review the rules on required minimum distributions from retirement plans to see if investors can keep more money for a longer time in 401(k)s, individual retirement accounts, and other tax-sheltered savings plans." Under current law, investors are required to start withdrawing from those accounts at age 70.5. The change would also reportedly instruct the Treasury and Labor Departments to look into regulations to allow small businesses to band together to offer multiple employer plans (MEPs).
Trump teased the order in a tweet on Thursday, saying, "For all of you that have made a fortune in the markets, or seen your 401k's rise beyond your wildest expectations, more good news is coming!"
It would be good news for those who have enough wealth to not need to withdraw from such accounts and have a cushion for their potential gains or losses. Further, not all employers offer 401(k)s, and the shift away from traditional pension plans to 401(k)s, say economists, has contributed to growing the inequality crisis and "frightening retirement reality" many are facing.
"Americans are facing a looming retirement income crisis," said Nancy Altman, president of Social Security Works. "Using that very real crisis as a pretext, Donald Trump reportedly plans to allow the wealthiest among us to shelter their retirement savings from taxes for a longer period. He will also reportedly seek to make it easier for small businesses to offer 401(k) plans."
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"Currently," she added, "nearly two-thirds of Americans have less than $1,000 in savings of any kind. Lack of access to tax-favored savings accounts is not the reason. "
Rather, Altman asserted that "decades of stagnating wages, rising healthcare costs, and skyrocketing inequality have left workers struggling just to keep their heads above water. Families approaching retirement have a median amount of $17,000 in their retirement accounts, and nearly half have $0."
Though the program remains on the Republicans' chopping block, real stability for retirement should be found in Social Security, she added, "which is the most universal, efficient, fair, and secure form of retirement income."
Altman argued that the GOP "will inevitably use this executive order as an additional excuse to cut Social Security because, they will claim, people should take responsibility and save for themselves now that Trump has given them the option."