Edelman Financial Engines Founder asks for policy shift to help retirees struggling with market volatility related to COVID-19

SANTA CLARA, Calif. — March 24, 2020 — Congress must pass legislation immediately to waive the requirement that Americans 72 and older make Required Minimum Distributions from their retirement accounts, due to sharp declines in account values caused by COVID-19, demands acclaimed financial advisor Ric Edelman, founder of Edelman Financial Engines, the largest independent financial planning and investment advisor[1].

“Millions of retirees are being forced to sell shares of their mutual funds and other investments while stock prices are down 30 percent or more,” Edelman notes. “In a great many cases, these retirees don’t need the money or can get the income they need from other sources. Forcing them to sell during this market downturn merely to satisfy an IRS requirement is punitive and unnecessary during these difficult times.”

Edelman, whose firm is ranked the #1 independent financial advisory in the nation by Barron’s, and who was personally ranked by Barron’s three times as the nation’s #1 independent financial advisor, says the situation is made worse by the fact that the calculation for making this year’s RMD must be based on account values as of December 31, 2019. Current account values, he notes, are far lower now than they were just a few months ago.

“Consider a 72-year-old whose IRA was worth $500,000 at the end of the year. If that account is now worth only $350,000, a retiree is required to withdraw 5.6 percent of the account’s value – far more than the 3.9 percent shown in IRS tables,” Edelman says. “The market’s sharp decline is forcing retirees across the country to withdraw excessively large amounts from their accounts, trigging massive tax liabilities needlessly.”

Edelman, recognized as one of the most influential thought leaders in the financial planning field by InvestmentNewsRIABiz and Wealth Management magazines, adds that the problem will get even worse if the financial markets continue to decline.

“Congress must fix the distribution rules for retirement accounts immediately, for the benefit and well-being of millions of American retirees during this economic crisis,” Edelman says.

About Ric Edelman

Ric is a financial advisor and has been recognized as one of the most influential people in the financial planning and investment management profession by three leading trade publications: Investment Advisor[2], RIABiz[3] and InvestmentNews[4]. Three times he has been ranked as the nation’s #1 Independent Financial Advisor by Barron’s[5] In 2004, he was inducted into Research magazine’s Financial Advisor Hall of Fame[6] and in 2019, the Barron’s Hall of Fame[7]. In 2017, he received the IARFC’s Lifetime Achievement Award[8]. Ric is also a Distinguished Lecturer at Rowan University, an award-winning host of one of the longest-running radio show on personal finance in the country, a producer of award-winning specials for Public Television, and a #1 New York Times bestselling author who has written 10 books on personal finance.

About Edelman Financial Engines

Since 1986, Edelman Financial Engines has been committed to always acting in the best interest of our clients. We were founded on the belief that all American investors – not just the wealthy – deserve access to personalized, comprehensive financial planning and investment advice. Today, we are America’s top independent financial planning and investment advisor, recognized by both InvestmentNews and Barron’s with 170 planner offices across the country and entrusted by more than 1.2 million clients to manage more than $213 billion in assets. Our unique approach to serving clients combines our advanced methodology and proprietary technology with the attention of a dedicated personal financial planner. Every client’s situation and goals are unique, and the powerful fusion of high-tech and high-touch allows Edelman Financial Engines to deliver the personal plan and financial confidence that everyone deserves.

[1] Ranking and status for 2018. For independence methodology and ranking, see InvestmentNews Center (http://data.investmentnews.com/ria/).

[1] The Investment Advisor magazine listing of the Investment Advisor 25 is based on readers’ opinions and highlights those who are ahead of the pack with their insights, innovation and disruption. Advisors and other industry participants cast about 12,000 total votes for leaders in the following six categories: RIA/Advisory; Independent Broker-Dealers; Custody & Clearing; Portfolio, Investing & the Markets; Politics/Regulation/Compliance; and Fintech/IA/AI. Investor experience/returns were not considered as part of this ranking.

[2] The RIABiz listing of the 10 most influential figures in the Registered Investment Advisor industry is in recognition of notable, driven and influential executives who are advancing their firms and are considered influential in the RIA business. Investor experience/returns were not considered as part of this ranking.

[3] Based on the opinions of the editors of InvestmentNews using the following definition as a guidepost: Those who have conceived new ideas and tools that have propelled the industry forward. Investor experience/returns were not considered.

[4] According to Barron’s, “The formula [used] to rank advisors has three major components: assets managed, revenue produced and quality of the advisor’s practice. Investment returns are not a component of the rankings because an advisor’s returns are dictated largely by each client’s risk tolerance. The quality-of-practice component includes an evaluation of each advisor’s regulatory record.” The rankings are based on the universe of applications submitted to Barron’s. The selection process begins with a nomination and application provided to Barron’s. Principals of Edelman Financial Services, LLC self-nominated the firm and submitted quantitative and qualitative information to Barron’s as requested. Barron’s reviewed and considered this information, which resulted in the rankings on Aug. 27, 2012/Aug. 28, 2010/Aug. 31, 2009.

[6] Research magazine cover story “Advisor Hall of Fame,” December 2004 (based on serving a minimum of 15 years in the industry, having acquired substantial assets under management, demonstrating superior client service and having earned recognition from peers and the broader community for how they reflect on their profession). Investor experience/returns were not considered as part of this ranking.

[7] Barron’s Hall of Fame advisers have been ranked for 10 or more years on the Barron’s Top 100 Financial Advisors list. Barron’s listings are based on data compiled by many of the nation’s most productive advisers, which has been submitted to and judged by Barron‘s. Key factors and criteria for each award include assets under management, revenue produce for the firm, regulatory and compliance record, and years of professional experience. This award is not indicative of this advisor‘s future performance.

[8] Presented by the International Association of Registered Financial Consultants (IARFC). Candidates must hold a professional designation and must have disseminated their comments on financial topics by having them widely published in articles, journals, books, etc. They must have provided outstanding personal service or leadership in the financial services industry. Nominees must have participated in some aspect of financial education to the public or to other members of the profession. Investor experience/returns were not considered.

Media Contact

Amy Conley
Edelman Financial Engines