From the March-20, 2002 issue of Credit Union Times Magazine • Subscribe!
NAFCU writes Maryland Rep. on increasing mandatory IRA withdrawal age
<p>WASHINGTON-Noting that personal savings is at its lowest level in more than 40 years, NAFCU President and CEO Fred Becker wrote Maryland Representative Benjamin Cardin (D) encouraging him to work to increase the age for mandatory withdrawals from Individual Retirement Accounts (IRAs). NAFCU supports increasing the age for mandatory withdrawal from 70 to 75. "People are working later and later and may want to continue to save while they're working," NAFCU Director of Legislative and Political Affairs Brad Thaler explained. Becker's letter went more in detail. He wrote that NAFCU member credit unions notified the organization after hearing "from their members about reaching the mandatory withdrawal age for their retirement accounts and being forced to take these withdrawals in slower economic times and in a down market-effectively `selling low'-when it otherwise wasn't necessary." Lifting the ceiling could help senior citizens wait out an economic downturn, NAFCU Communications Manager John Zimmerman explained. "Raising the age for mandatory retirement account withdrawals is an important step to giving people more freedom and opportunity as they may need," the letter read. Buying time for senior citizens and their retirement accounts could be a potential economic boon for credit unions as well. According to NAFCU data, at year-end 2001, federally insured credit unions held $39.6 billion in IRAs and Keogh accounts, which makes up 9.1% of total savings in credit unions. Banks IRA deposits only amount to 5% of their savings. Congressman Cardin has been a long-time supporter of increasing personal savings. Just last congressional session, he, along with Rep. Rob Portman (R-Ohio), introduced a bill to expand retirement plan allowable contributions. The measure was included in the President's economic stimulus package signed into law last year.</p>