By Hannah Lang

(Reuters) – PayPal is launching new artificial intelligence-driven products as well as a one-click checkout feature, the company said on Thursday as its chief executive tries to inject new life into the payments giant.

It is the first major announcement under Alex Chriss, who joined PayPal in September, and the new products are another example of how companies are trying to tap investor enthusiasm for AI, which helped drive U.S. stock markets to record highs this month.

Investors hope Chriss, who was previously a senior executive at software company Intuit, will revive PayPal’s stock which is down more than 22% from January last year due to margins which have underwhelmed investors. Chriss has called 2024 a “transition year” for PayPal, and has promised to grow revenues beyond transaction-related volume.

“The data that we have and our ability to actually see what people have bought and know what merchants are trying to target, that’s where I think AI is the huge opportunity for us,” Chriss told Reuters in an interview.

PayPal will this year roll out a platform that uses AI to enable merchants to reach new customers based on their prior shopping history, using data from the roughly half a trillion dollars’ worth of merchant transactions it has processed globally.

Merchants will also be able to use a separate AI-based tool called “smart receipts” to recommend personalized items to shoppers in their email receipts, along with a cashback reward.

PayPal is introducing a “one-click” checkout feature called Fastlane, which in early testing has accelerated checkout speeds nearly 40%, along with new features for Venmo business profiles, the company said.

The S&P 500 index climbed to its fourth straight record high close on Wednesday, fueled in part by a rally in technology stocks on AI optimism. PayPal reports fourth quarter earnings on Feb. 7.

(Reporting by Hannah Lang in Washington; editing by Michelle Price and Emelia Sithole-Matarise)

By Stephen Nellis

(Reuters) – Apple on Thursday outlined its plans to allow software developers to distribute their apps to users in the European Union outside of Apple’s own App Store.

The move is in response to a new EU law called the Digital Markets Act, which requires companies with more than 45 million monthly active users and a 75 billion-euros ($82 billion) market capitalization to, among other things, make their apps compatible with those of rivals and let users decide which apps to pre-install on their devices.

Starting in March, developers will be able to offer alternative app stores on iPhones and opt out of using Apple’s in-app payment system, which charges commissions of up to 30%. However, developers will still have to submit apps to Apple for review for cybersecurity risks and obvious fraud, and Apple will charge a “core technology fee” to major app developers even if they do not use any of Apple’s payment services.

Apple released tools on Thursday for developers to begin making changes to their business arrangements, and consumers will see the changes with an update to the iOS operating system in March.

Firms such as Spotify Technology and “Fortnite” creator Epic Games have for years said that Apple’s commissions and restrictions impeded their businesses. But in recent years, Apple’s once-monolithic App Store approach has become a patchwork of rules as the tech company responds to legal and regulatory challenge.

For example, earlier this month, Apple said it would alter rules around linking out of apps to third-party websites for payment in the United States to comply with a ruling in an antitrust suit brought by Epic. But Apple also said it will charge a 27% commission on proceeds of those link-outs, which, when combined with a typical 3% payment processing fee, means developers will receive few economic benefits.

In the EU, by contrast, developers will be able to use a third-party payment processor inside an App Store app free of charge. Apple will also let EU iPhone users select a default web browser and contactless payments app, which means EU users can contactless payments without using the Apple Pay system.

But even if developers opt not use Apple’s App Store or payment system, they will still be required to pay a “core technology fee” of 50 euro cents per user account per year.

Apple said that only large developers will pay the fee, though it did not specify how many users will trigger the fee. The company said the first 1 million user accounts will be exempt and that it will not charge the fee to nonprofits, schools or governments.

(Reporting by Stephen Nellis in San Francisco and Foo Yun Chee in Brussels; Editing by Matthew Lewis)

MOSCOW/KYIV (Reuters) -A senior Russian lawmaker said Ukrainian military intelligence had been given a 15-minute warning before a Russian military transport plane carrying Ukrainian prisoners of war entered an area where it was shot down on Wednesday, killing all on board.

Moscow accuses Kyiv of downing the Ilyushin Il-76 plane in Russia’s Belgorod region, killing 74 people on board, including 65 captured Ukrainian soldiers en route to be swapped for Russian PoWs.

Russia’s Investigative Committee said on Thursday the plane was struck by a Ukrainian-made surface-to-air missile.

Ukraine denied that it was given a warning. It has neither confirmed nor denied that its forces downed the plane but has challenged details of Moscow’s account and called for an international investigation.

“The Ukrainian side was officially warned, and 15 minutes before the plane entered the zone they were given complete information,” Andrei Kartopolov, a former general with close ties to Russia’s defence ministry, told lawmakers, according to the ruling United Russia party. He said Ukraine’s military command confirmed receipt of the warning.

His assertion contradicted statements by Ukrainian military intelligence that Russia had not informed it about the flight arrangements.

Ukrainian military intelligence spokesperson Andriy Yusov, said that contrary to practice before previous PoW swaps, Kyiv had received no requests from Russia to refrain from attacks in the airspace where the plane was downed. He challenged Moscow’s version of events.

“No evidence has been provided for the charges … Nothing has been shown to prove the wreckage and the presence of people on board,” he said on national television on Thursday.

Conflicting narratives from both sides are a daily feature of a war now nearing the end of its second year. In this case the stakes are especially high, as it is the deadliest incident of its kind on internationally recognised Russian territory since Russia’s February 2022 invasion.

‘PROVOCATION’

At 11:33 a.m. on Wednesday, the Russian defence ministry published a report of a Ukrainian drone being shot down by air defences in the region. Reports of a plane crashing emerged on social media minutes later.

Yusov said Ukraine had been using reconnaissance drones in the area, and that Russia had launched attack drones. There was “no confirmed information” that Ukraine had hit any targets, he said.

“Unfortunately, we can assume various scenarios, including provocation, as well as the use of Ukrainian prisoners as a human shield for transporting ammunition and weapons for S-300 systems (being used in the war),” he told Radio Svoboda.

Fragments of what appeared to be a missile have been found at the site where the plane crashed in Russia’s southwestern Belgorod region near the border with Ukraine, the TASS state news agency cited emergency services as saying on Thursday.

In a statement posted on the Telegram messenger app, Russian investigators said their “preliminary” conclusion was that the plane had been hit by an anti-aircraft missile from the Zenit rocket family, and a criminal investigation had been opened.

Ukraine said it had opened its own investigation into a potential violation of the rules of war. President Volodymyr Zelenskiy said on Wednesday that greater clarity was needed, particularly when it came to who was on board, and he accused Russia of “playing with the lives of Ukrainian prisoners”.

Russia has sole access to the site of the crash, where TV pictures showed debris scattered over snowy fields. TASS said the plane’s flight recorders had been recovered and would be flown to Moscow for examination.

Ukraine’s human rights commissioner Dmytro Lubinets told Reuters he believed the incident was a planned Russian misinformation campaign. He said a list of Ukrainian PoW casualties, which was shared after the crash by Russian media, included soldiers already returned in a previous swap.

“The Russians will make loud statements but will not allow anyone in. They will not hand over any materials for analysis and will simply blame Ukraine,” he told national television.

The United Nations Security Council was due to convene at 2200 GMT on Thursday in response to a Russian call for a meeting to establish “the reasons behind the Ukrainian criminal act”.

France, a permanent member of the Security Council, said it was in no position to tell whether Russia’s assertions about the incident were true.

However, deputy foreign ministry spokesperson Christophe Lemoine told a weekly briefing that the international community was used to Russia “lying on these matters”.

(Reporting by Moscow and Kyiv bureaux, writing by Mark Trevelyan and Gareth Jones, Editing by Andrew Cawthorne and Ros Russell)

By Daniel Wiessner

(Reuters) – Walmart has been accused by a U.S. labor agency of using a series of illegal tactics to deter unionizing at a California store.

The National Labor Relations Board (NLRB) said it had issued a complaint late Wednesday alleging Walmart interrogated workers at the Eureka, California, store about their union activities, removed pro-union flyers from a break room and threatened employees who distributed union literature in violation of U.S. labor law.

Bentonville, Arkansas-based Walmart did not immediately respond to a request for comment. Reuters could not immediately obtain a copy of the complaint.

Unless Walmart settles the claims, an administrative judge will hold a hearing in the case in May. The judge’s decision can be appealed to agency’s five-member board and then to a federal appeals court.

None of Walmart’s roughly 4,700 U.S. stores have unionized despite decades of attempts by labor unions. The retail giant is currently facing at least 21 other NLRB complaints from workers or unions alleging labor law violations, such as threatening and interrogating workers and unevenly enforcing workplace rules against union supporters.

The NLRB has found merit to the claims and started proceedings in four of the cases thus far. Walmart has denied wrongdoing.

(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and Aurora Ellis)

By Giulia Paravicini

NAIROBI (Reuters) – Ethiopia’s deal to lease a port in Somalia’s breakaway region of Somaliland has infuriated the government in Mogadishu and prompted concern it will further destabilise the Horn of Africa region.

Under a memorandum of understanding signed on Jan. 1, landlocked Ethiopia would lease 20 km (12 miles) around Somaliland’s port of Berbera for 50 years, in exchange for stakes in Ethiopian state-run companies and possible recognition as an independent nation.

Somalia has responded by calling the deal an act of agression and says it will block it. Ethiopia says it is merely striking a commercial arrangement to address a need for access to the sea.

WHY DOES ETHIOPIA WANT A PORT?

Ethiopia, Africa’s second most-populous country with 120 million people, depends for more than 90% of its trade on ports in neighbouring Djibouti, costing it more than $1.5 billion a year in fees.

In a speech in October, as Abiy publicly made the case for Ethiopia to gain sea access, he cited an 19th-century Ethiopian general, who had called the Red Sea the country’s “natural boundary.”

Ethiopia lost sea access in the early 1990s when its then-province Eritrea seceded following a three-decade war. Abiy’s drive to reclaim it is seen as enjoying wide political support.

The prime minister also wants a sea base for Ethiopia’s navy, which has been rebuilt in recent years but is currently limited to conducting training exercises on an inland lake.

WHY IS SOMALIA SO ANGRY?

The Mogadishu government considers Somaliland an integral part of Somalia even though it enjoys effective autonomy.

While Somaliland declared its independence in 1991, it has not been recognised by any country. If Ethiopia does so, it could set a precedent that other countries would follow.

Somalia’s President Hassan Sheikh Mohamud signed a law that claimed to nullify the deal, and his government rejected an African Union proposal for dialogue with Ethiopia, saying it would not negotiate over its sovereignty.

WHAT ARE REGIONAL COUNTRIES SAYING?

Given chronic instability in Somalia, Ethiopia and Sudan as well as the Horn of Africa’s strategic location across the Red Sea from the Gulf, some analysts fear the dispute could draw in outside actors if it escalates.

Middle Eastern powers, including Saudi Arabia, the United Arab Emirates (UAE), Turkey and Qatar, have been vying for influence in the region by making economic investments, opening military bases and selling weapons.

So far, no country has publicly backed the port deal. The Arab League, of which Somalia is a member, reaffirmed its support for Somalia’s sovereignty over Somaliland, as did the African Union, European Union and United States.

President Abdel Fattah al-Sisi of Egypt, which has a frosty relationship with Ethiopia related to a dispute about a dam Ethiopia has built on a tributary of the Nile River, said on Sunday he would not allow anyone to threaten Somalia.

Eritrea has not commented on the deal but its President Isaias Afwerki invited Somalia’s Mohamud to Asmara shortly after it was was announced.

The UAE, which is a strong ally of Ethiopia and Somaliland and manages the Berbera port through state-run DP World, has not commented on the deal beyond the Arab League statement.

(Reporting by Giulia Paravicini; Editing by Aaron Ross and Angus MacSwan)

By Rajesh Kumar Singh, Abhijith Ganapavaram and David Shepardson

(Reuters) -Boeing’s troubles with its best-selling 737 MAX jets are upending the aerospace industry’s 2024 plans, changing airlines’ fleet and expansion goals as U.S. regulators ramp up scrutiny of the planes.

Analysts warn more pain for carriers after the FAA late Wednesday froze increases in production of the single-aisle 737 MAX.

The FAA said the order meant Boeing could continue producing MAX jets at the current monthly rate, but it could not increase that rate. It offered no estimate of how long the limitation would last and did not specify the number of planes Boeing can produce each month.

Customers’ frustration is mounting.

“Boeing needs to get their act together,” said American Airlines CEO Robert Isom, calling the issues “unacceptable.”

“It is hard enough running an airline. We need quality product, and that’s what we demand.”

The FAA’s unprecedented intervention in production schedules could further delay some deliveries of new planes to airlines and hurt suppliers already reeling from an earlier MAX crisis and the pandemic.

Boeing CEO Dave Calhoun told Reuters on Thursday he supported the FAA decision. “We all want safe airplanes. This is a safe airplane,” he said.

Texas-based American has 20 MAX planes on order for deliveries this year. Chief Financial Officer Devon May told Reuters that the FAA’s order may have a “modest” impact on those deliveries.

American is looking to place a new order for planes for deliveries in 2027 and beyond. May said the company is talking to Boeing, Airbus and Embraer for the new order, but is mindful of Boeing’s ongoing issues.

“We absolutely take current events into consideration as we’re going through our analysis of this order,” May said in an interview.

Alaska Air Group, the operator of the single-aisle 737 MAX 9 that suffered a mid-air incident this month, on Thursday forecast a $150-million profit hit in 2024 from the more-than-two-week grounding of the aircraft.

The carrier also cast doubts on its capacity growth plans for the year, citing “the grounding, and the potential for future delivery delays.”

Alaska’s CEO Ben Minicucci on Thursday said Alaska remains “fully committed” to its relationship with Boeing, adding: “We’re going to hold Boeing’s feet to the fire to make sure that we get good airplanes out of that factory.”

Southwest Airlines altered its fleet plans for 2024 due to Boeing’s continued supply-chain challenges and uncertainty over certification of the smaller MAX 7. Before the Jan. 5 accident when a cabin panel fell off during Alaska’s flight, Southwest was expecting the MAX 7 plane to get certification by this April.

Southwest expects non-fuel operating costs to be up as much as 7% in 2024, in part due to maintenance expenses. The delivery delays have forced airlines to fly older planes longer than expected, driving up maintenance and repair costs.

MORE PAIN FOR AIRLINES

Some airlines could be significantly impacted by any freeze on higher production, a senior industry source said, though many in the industry have already factored in some delays as aerospace firms continue to recover from the pandemic.

United Airlines, for example, has 100 MAX deliveries scheduled for this year, according to a regulatory filing in October. This week it warned of a wider-than-expected first-quarter loss due to the grounding of MAX 9 airplanes.

United’s CEO Scott Kirby said the company would also build a new fleet plan because of Boeing’s regulatory and delivery delays.

Boeing shares were down 6% Thursday. Supplier Spirit Aerosystems fell 7%. Shares of Alaska were up 4%, Southwest’s fell 0.6%, United’s shares were trading up 3%, while American rose 9%.

The FAA did allow grounded MAX 9 planes to return to service once inspections were done, a relief to U.S. MAX 9 operators Alaska and United, which had been forced to cancel thousands of flights and aim to begin returning the planes to service on Friday and Sunday, respectively.

PRODUCTION LINE PLANS

Boeing is seeking to increase production of 737 MAX family to keep pace with demand and close a gap in the market with Airbus.

Analysts have expressed concerns that extra scrutiny of Boeing factories would temper production increases for the smaller and more widely sold MAX 8, a key source of cash for Boeing and many suppliers.

Boeing’s latest 737 master schedule, which sets the production pace for suppliers, calls for production to rise to between now and late 2025, Reuters reported in December. However, Boeing’s own production pace can lag the supplier master schedule.

The FAA’s decision could impact plans to stand up a new 737 MAX line in Everett, Washington, by mid-2024.

The line, set to be the fourth 737 line overall and the first outside its Renton plant in suburban Seattle, is needed to meet strong demand.

Boeing declined to comment on any potential impact on the Everett line.

(Reporting by Rajesh Kumar Singh in Chicago, Abhijith Ganapavaram in Bengaluru, Valerie Insinna and David Shephardson in Washington, Lisa Barrington in Seoul and Tim Hepher in Paris; Additional reporting by Sophie Yu in Beijing and Mehr Bedi in Bengaluru; Editing by Jamie Freed, Raju Gopalakrishnan and Nick Zieminski)

By Noah Browning

LONDON (Reuters) – Oil prices rose on Thursday after data showed U.S. crude stockpiles fell more than expected last week and a fresh attack by Houthi forces on ships off Yemen’s coast underscored the peril facing trade in a key global transit route.

Brent crude futures were up $1.29, or 1.6%, to $81.33 a barrel at 1521 GMT , while U.S. West Texas Intermediate crude was up $1.37, or 1.8%, to $76.46 a barrel.

U.S. crude stockpiles tumbled by 9.2 million barrels last week, the Energy Information Administration said, while analysts in a Reuters poll had expected a 2.2 million-barrel draw.

The draw was driven by a stark drop in U.S. crude imports as winter weather shut in refineries and kept motorists off the road.

Geopolitical tensions in the Middle East remained in focus.

In the latest blow to shipping around the key Red Sea corridor, Maersk said explosions nearby forced two ships operated by its U.S. subsidiary and carrying U.S. military supplies to turn around when they were transiting the Bab al-Mandab Strait off Yemen, accompanied by the U.S. Navy.

On Thursday, Yemen’s Houthi leader vowed to continue targeting ships linked to Israel until aid reaches the Palestinian people in Gaza.

“We are finally seeing energy markets wake up to the distinct possibility that these supply chain disruptions will rumble on for months yet,” said Joshua Mahony, chief market analyst at Scope Markets.

“The prospect of a military solution to ensure safe passage looks unlikely.”

Oil prices also drew support from hopes for China’s economic recovery.

China’s central bank announced a deep cut in bank reserves on Wednesday, in a move that will inject about $140 billion of cash into the banking system and send a strong signal of support for a fragile economy and plunging stock markets.

However, elsewhere, the spectre of sustained high interest rates loomed large.

Data on Thursday showed the U.S. economy grew at a faster pace than expected in the fourth quarter, suggesting the Federal Reserve would be in no rush to cut interest rates.

Meanwhile, the European Central Bank retained its record-high benchmark rate of 4%, giving no hint that policymakers are even contemplating policy easing.

(Additional reporting by Natalie Grover in London, Yuka Obayashi in Tokyo and Jeslyn Lerh in Singapore; editing by Mark Potter , Jason Neely and Emelia Sithole-Matarise)

(Reuters) -Self-driving technology firm Mobileye Global more than doubled its profit in the fourth quarter on the back of higher margins, offering some respite to investors worried about the supply glut in the market for driver-assistance chips.

The shares were 1% higher in premarket on Thursday. They have lost more than a third of their value this month after Mobileye on Jan. 4 warned a pullback in orders from customers clearing inventory would batter its results this year.

“Our fourth quarter performance was very strong across the board, but is understandably overshadowed by the inventory build-up at our customers which will impact our growth in 2024,” Chief Executive Officer Amnon Shashua said.

Demand for auto chips has been weakening in recent months as customers work through the inventories they had rapidly built up to avoid the pandemic-driven supply crunch in 2021 and 2022.

Chipmakers Texas Instruments and STMicroelectronics also gave gloomy forecasts this week, fanning fears of weakening demand in the automotive sector.

Mobileye on Thursday stood by its preliminary 2024 revenue forecast of between $1.83 billion and $1.96 billion.

The Israel-based firm also beat estimates for quarterly adjusted profit by one cent, but its revenue of $637 million came in below analysts’ expectations of $639.8 million, according to LSEG data.

Its operating margin grew to 11.5% in the fourth quarter, compared to 4.2% in the same period in 2022.

The company, which counts Volkswagen and Porsche among its customers, also reported operating income of $73 million in the fourth quarter, up from $24 million a year earlier.

(Reporting by Zaheer Kachwala in Bengaluru; editing by Milla Nissi)

By Noah Browning

LONDON (Reuters) -Oil prices rose on Thursday after data showed U.S. crude stockpiles fell more than expected last week and a fresh attack by Houthi forces on ships off Yemen’s coast underscored the peril facing trade in a key global transit route.

Brent crude futures were up 86 cents, or 1.1%, to $80.90 a barrel at 1325 GMT, while U.S. West Texas Intermediate crude was up 92 cents, or 1.2%, to $76.01 a barrel.

U.S. crude stockpiles tumbled by 9.2 million barrels last week, the Energy Information Administration said, while analysts in a Reuters poll had expected a 2.2 million-barrel draw.

The draw was driven by a stark drop in U.S. crude imports as winter weather shut in refineries and kept motorists off the road.

U.S. crude output fell from a record-tying 13.3 million barrels per day (bpd) two weeks ago to a five-month low of 12.3 bpd last week after oil wells froze.

Geopolitical tensions in the Middle East remained in focus.

In the latest blow to shipping around the key Red Sea corridor, Maersk said nearby explosions forced two ships operated by its U.S. subsidiary and carrying U.S. military supplies to turn around when they were transiting the Bab al-Mandab Strait off Yemen.

A spokesman for Yemen’s Houthi military said they fired ballistic missiles at U.S. warships protecting the two U.S. commercial vessels.

“We are finally seeing energy markets wake up to the distinct possibility that these supply chain disruptions will rumble on for months yet,” said Joshua Mahony, chief market analyst at Scope Markets.

“The prospect of a military solution to ensure safe passage looks unlikely.”

Oil prices also drew support from hopes for China’s economic recovery.

China’s central bank announced a deep cut in bank reserves on Wednesday, in a move that will inject about $140 billion of cash into the banking system and send a strong signal of support for a fragile economy and plunging stock markets.

(Additional reporting by Yuka Obayashi in Tokyo and Jeslyn Lerh in Singapore; editing by Mark Potter and Jason Neely)

By Mark Miller

(Reuters) – The new year has brought some new math for anyone running their retirement planning numbers.

Social Security checks are a bit higher this month, thanks to the annual cost-of-living adjustment (COLA) – but higher Medicare Part B premiums will take a bite out of the increase. Meanwhile, new protections from high prescription drug out-of-pocket costs are in place, along with some new rules governing required minimum distributions from retirement accounts. And we have reached a milestone on the age when you can claim your full Social Security benefit.

Let’s take a look at five important retirement changes that take effect this month.

THE COLA KICKS IN

The annual Social Security COLA is landing in bank accounts this month. The inflation adjustment is pegged to changes in consumer prices in the broad economy. With inflation cooling off, the 2024 COLA is 3.2%, much lower than the historic 8.7% 2023 adjustment, but still ahead of the historical average of 2.6%.

Inflation is an ever-present concern for retirees – not so much because of year-to-year fluctuations like we have just experienced, but due to the way higher prices compound and erode spending power over the course of retirement. 

The Social Security COLA provides critical protection, although it is most meaningful for middle- and lower-income retirees. The program replaces a higher share of their pre-retirement income than it does for more affluent retirees. That means a greater share of their retirement income will be protected by the COLA. 

MEDICARE PREMIUMS JUMP

The standard monthly premium for Medicare Part B (which covers outpatient services) has been volatile over the past few years, reflecting the impact of the pandemic and the growing cost of expensive drugs administered by healthcare providers.

This year, the Part B premium jumped by a hefty 5.9%, to $174.70. If you receive both Medicare and Social Security benefits, the Part B premium is deducted from your check, so the dollar amount of the increase impacts your net COLA. This year’s premium increase amounts to $9.80 per month, and the impact is felt most sharply by people who have modest or low benefits. For example, for someone with a monthly benefit of $1,000, the net COLA this year is just 2.2%. But if your benefit is $3,500, you will hardly notice the reduction – your net increase is 2.9%

NEW PRESCRIPTION DRUG COST PROTECTIONS

For the first time, seniors with Medicare Part D prescription drug coverage will be protected by a cap on total out-of-pocket costs. Provisions of the Inflation Reduction Act (IRA), signed into law in 2022 by President Joe Biden, will effectively act as an out-of-pocket cap of $3,300 this year. In 2025, an across-the-board $2,000 annual cap on out-of-pocket costs for drugs under Medicare Part D will take effect.

These protections will immediately help patients taking expensive drugs for conditions such as cancer. Last year, patients taking drugs such as Lynparza, Ibrance and Xtandi faced annual out-of-pocket costs around $12,000, according to KFF, a nonprofit organization focused on health policy. 

NEW RULES FOR REQUIRED MINIMUM DISTRIBUTIONS

Have you reached the age yet when you must start drawing down funds from your tax-deferred savings? Required Minimum Distributions (RMDs) have been a moving target lately. The U.S. Congress bumped up the starting age for RMDs in 2020 to 72 from 70, and raised it again last year, to 73. And the minimum age will continue to rise, gradually, to 75 by 2033. The requirement dates vary according to your age, so consult this IRS page to understand your personal RMD deadlines.

Most financial services firms can calculate RMDs for you, but the penalty for failing to take them is ultimately yours. The penalty for failing to take an RMD on time is 25% of the amount by which your withdrawal fell short of the required minimum. 

The exceptions for RMDs include 401(k) accounts at a firm where you still work, and Roth IRAs. New for this year: Roth(k) accounts held within a workplace plan also are exempted from RMDs.

THE HIGHER RETIREMENT AGE: WE’RE ALMOST THERE

The Full Retirement Age (FRA) is the point when you can claim Social Security and receive 100% of the benefit you have earned. It is a critical feature of the program, since you can claim a retirement benefit as early as 62, or wait as late as age 70; your monthly benefit amount will be higher – or lower – depending on your timing. 

Reforms signed into law back in 1983 have been gradually increasing the FRA from 65 to 67. The idea was to lift the FRA over time in order to avoid any sudden impact on people close to retirement. But the change is now nearly complete; the FRA is 67 for workers born during or after 1960. For them, the higher FRA is equivalent to an across-the-board benefit cut of roughly 13%.

Are you turning 65 this year? Happy birthday – your FRA is 66 and 10 months. 

The opinions expressed here are those of the author, a columnist for Reuters.

(Writing by Mark Miller; Editing by Matthew Lewis)