The traditional benchmark age to draw retirement money is getting revamped, even as many Americans in their late 60s and 70s are continuing to work full-time or part-time.
On Friday, President Trump signed The Secure Act, a bill which aims to remove hurdles for Americans looking to save for retirement. It raises the age that savers must begin drawing on retirement funds to 72.
Its other features include helping small businesses band together to offer pooled retirement plans, and opening the door for long-term, part-time workers to become eligible for retirement benefits.
“It recognizes that people are working longer and living longer, and so it extends the required minimum distribution age” from 70.5 to 72, Skip Schweiss, managing director of retirement plan services & advisor advocacy at TD Ameritrade Institutional, told Yahoo Finance.
“So if people are still working when they're 70 or 71, they don't have to start taking money out of their retirement account,” he told YFi PM.
Schweiss also suggested there was a need for Americans to shift their thinking about the age at which it was appropriate to retire.
“I feel like we have to get away from this number 65 that we've all kind of dialed in on for decades -- that we're all going to retire at 65,” he added. “A lot of us are living much longer than that, working longer than that, to help fund a longer retirement.”
On average, seniors still in the workforce predict they won’t fully retire until 72 years old, with over 60% citing financial reasons, according to a recent study by Provision Living. The survey asked 1,032 people between the ages of 65 and 85 who currently work either full-time or part-time.
Schweiss also stressed the importance of saving early, as unexpected pitfalls can hinder building a future nest egg.
“They may be planning for retirement at say, 65 or 67, and then what happens is they get into their 60s and they get health problems that prevent them from working, or cause them to cut back on work,” he said.
McKenzie Stratigopoulos is a producer at Yahoo Finance. Follow her on Twitter: @mckenziestrat