Goldman Sachs forecasts a 22% S&P 500 earnings surge driven by AI, inflating required minimum distributions and tax liabilities for retirees.
Goldman Sachs strategists project a 22% year-over-year jump in S&P 500 Q2 earnings, fueled by AI investments and energy-sector gains. The index has climbed 21% over the past year, boosting retirement account balances but also increasing future tax obligations for pretax accounts.
Required minimum distributions (RMDs), mandatory at age 73, are calculated from prior year-end balances. Current market gains directly enlarge these withdrawals, potentially pushing 85% of Social Security benefits into taxable income and raising Medicare Part B premiums to as much as $689.90 monthly.
Retirees with traditional 401(k) or IRA savings face a dilemma: while account values rise, so do future tax bills. The S&P 500’s 9% year-to-date gain compounds this effect, leaving some uncertain how to manage withdrawals before RMDs take effect.