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PlanoPrivateer
LSU Fan
Frisco, TX
Member since Jan 2004
2226 posts

re: Congress is considering big changes to the way you retire
Interesting. Thanks for posting and the link. I hadn’t read about this before.
quote:

The plan also would increase the amount of non-Social Security income one can earn before benefits begin to be taxed. The new limits would go to $50,000 for individuals and $100,000 for couples, up from today's $25,000 and $32,000 thresholds.
It irks me that my required minimum distribution will trigger that part of my and my wife’s social security will be taxed. So this part would be good news to me.
quote:

“Bailing out poorly managed and corrupt unions?”
Good question from TheChosenOne. I would need to learn more details. I would be worried that some companies, unions, etc. that are currently doing a good job of funding their pension programs may be tempted to relax a bit knowing they have a safety net.
quote:

“In order to pay for those changes, the bill calls for raising payroll taxes on wages over $400,000. Wages up to $132,900 are currently taxed. It also calls for increased payroll contributions from workers and employers. That rate would increase to 7.4% from 6.2% and would be gradually phased in from 2020 to 2043.”
Also need more details on this. While most employees making $400,000 wouldn’t be affected by a gradual raise in payroll taxes, some employers might. It looks like all employees (not just those making $400,000) will have the rate increased from 6.2% to 7.4%. Will the employer’s rate also match that? I’m am worried about the impact on a struggling small employer that will have to pay this increase on multiple employees.
This post was edited on 8/11 at 10:20 am


LSURussian
LSU Fan
Member since Feb 2005
115830 posts
 Online 

re: Congress is considering big changes to the way you retire
quote:

We have been using lifetime stretches on non-spousal IRA’s for as long as I can remember.
That can be done if the original IRA owner had not started his distributions from the IRA at the time of his death.

The article linked in the OP does not specify exactly who the 10 year IRA liquidation proposal will affect. But the current requirement is 5 years if the IRA owner dies before required distribution beginning date. And all other provisions in the proposed changes posted in the OP for IRA are beneficial to IRA owners despite OleWarSkule's obvious paranoia.

Here are the current IRS rules regarding distributions to beneficiaries:

LINK


LSURussian
LSU Fan
Member since Feb 2005
115830 posts
 Online 

re: Congress is considering big changes to the way you retire
quote:

Shhhhh. He likes to feel as if he’s important.
Feel important about what? That I can read IRS regulations?

Raising the RMD age to 72 rather than the current 70 1/2 would not make sense if the same proposal accelerates the RMD for non-spousal beneficiaries. Based on the limited information in the CNBC article you linked, it's safe to believe the intent of the proposal is to lengthen the required liquidation time from the current 5 years up to 10 years.

Your paranoia is obvious.


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LSURussian
LSU Fan
Member since Feb 2005
115830 posts
 Online 

re: Congress is considering big changes to the way you retire
You may be right but the statement below from your Forbes link sums up my opinion regarding the new IRA proposal:
quote:

Nonetheless, for most people it's unlikely the Stretch IRA limitations will have a major impact.


Janky
LSU Fan
Team Primo
Member since Jun 2011
26597 posts

re: Congress is considering big changes to the way you retire
I don't really understand what you are trying to say. However, the stretch can be used at any point in time.

Easy chart to understand inside article
This post was edited on 8/11 at 10:59 am


LSURoss
Chicago Cubs Fan
Shreveport, LA
Member since Dec 2007
13574 posts

re: Congress is considering big changes to the way you retire
I up voted just for the gif, which I have rightfully right click/saved


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baldona
Auburn Fan
Florida
Member since Feb 2016
10037 posts
 Online 

re: Congress is considering big changes to the way you retire
quote:

don't really understand what you are trying to say. However, the stretch can be used at any point in time.



He is saying this doesn’t take away the stretch. The current rule was 5 years they changed it to 10, that’s the only thing that changed. The ability to stretch or not to stretch was not affected.


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31
cave canem
Mississippi St. Fan
pullarius dominus
Member since Oct 2012
9574 posts

re: Congress is considering big changes to the way you retire
quote:

That can be done if the original IRA owner had not started his distributions from the IRA at the time of his death.

The article linked in the OP does not specify exactly who the 10 year IRA liquidation proposal will affect. But the current requirement is 5 years if the IRA owner dies before required distribution beginning date.



Not going to join in y'alls little pissing contest but you are still incorrect.


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21
hottub
Florida State Fan
Member since Dec 2012
885 posts

re: Congress is considering big changes to the way you retire
Just want to be on the record that social security is a scam.



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BestBanker
New Orleans Saints Fan
Around here.
Member since Nov 2011
10754 posts

re: Congress is considering big changes to the way you retire
But it sounds so secure???


I read this last month and sent to my clients. Its not just democrats coming for the tax money.

Amazing, the stupidity of the 90% who think the government is their solution.





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21
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lsu13lsu
Member since Jan 2008
6770 posts

re: Congress is considering big changes to the way you retire
quote:

It was a tax benefit used in estate planning to pass along inherited wealth.


It is called an Individual Retirement Account. It shouldn't be an Estate Planning Account. I don't understand all the fuss over this. These are the kind of loop holes and BS that give progressives teeth to do things like a Wealth Tax.


Janky
LSU Fan
Team Primo
Member since Jun 2011
26597 posts

re: Congress is considering big changes to the way you retire
So, you think a child should be forced to give up 30% of the inherited amount just because? What does that do the beneficiary's retirement plans?

As for estate planning. It is included in the owner's estate for tax purposes. Other then the ease of transferring the funds it really isn't much of an estate planning tool.


baldona
Auburn Fan
Florida
Member since Feb 2016
10037 posts
 Online 

re: Congress is considering big changes to the way you retire
quote:

So, you think a child should be forced to give up 30% of the inherited amount just because? What does that do the beneficiary's retirement plans?


You are simply talking about in IRA's where the taxes have already been paid right so like a ROTH?

I'm pretty conservative but I don't see the big fuss over being able to pass on a retirement account to an heir. If the money is simply given to an heir in a taxable account I have no issue with that. The heir can always place the money over time into a Roth of their own.

Just because its been done a certain way for awhile doesn't mean it should continue.


Janky
LSU Fan
Team Primo
Member since Jun 2011
26597 posts

re: Congress is considering big changes to the way you retire
quote:

You are simply talking about in IRA's where the taxes have already been paid right so like a ROTH?


No, I am talking about forcing a beneficiary to liquidate an account in 5 or 10 years. Thus having to take bigger chunks and paying more in taxes.

quote:

I'm pretty conservative but I don't see the big fuss over being able to pass on a retirement account to an heir.


I don't either nor do I believe they should make the heir liquidate it in a short amount of time just to solely collect tax revenue.

quote:

Just because its been done a certain way for awhile doesn't mean it should continue.



Doesn't mean it shouldn't either. If there is an argument to be made I would love to hear it.


baldona
Auburn Fan
Florida
Member since Feb 2016
10037 posts
 Online 

re: Congress is considering big changes to the way you retire
quote:

I don't either nor do I believe they should make the heir liquidate it in a short amount of time just to solely collect tax revenue.


How is 5-10 years a short amount of time? They are "forcing" you to liquidate because it is the Heir's money and not the departed's retirement account anymore. The heir is getting the benefit of tax free growth, so they have 0 reason to liquidate until they are forced to liquidate. Its not about the tax revenue, its about preventing someone from using a loophole to get tax free growth.

ETA: Its called an IRA or individual retirement account. They were never supposed to be an ERA or Estate Retirement Account. As the account holder of an IRA, it should be expected that at your death the money is not meant to stay in the IRA but moved to your heir's accounts. If they can move the money into their own IRA's great, if not...so be it.
This post was edited on 8/12 at 11:46 am


lsu13lsu
Member since Jan 2008
6770 posts

re: Congress is considering big changes to the way you retire
quote:

So, you think a child should be forced to give up 30% of the inherited amount just because?


Just because? If a Traditional then the parents never paid any taxes on it. So, someone should be paying taxes.

Under the changes they will get to stretch it over 10 years. so let's just say it is an average IRA account $200,000 in 50s or 60s. That is $20,000 per year. No one is paying 30% on that.

If people are stacking far more than that and an amount that will trigger 30% taxes over ten year stretch then it isn't a Retirement Account it is an Estate Planning Account.


Janky
LSU Fan
Team Primo
Member since Jun 2011
26597 posts

re: Congress is considering big changes to the way you retire
quote:

How is 5-10 years a short amount of time?


Because compared to lifetime 5-10 years is short.

quote:

The heir is getting the benefit of tax free growth, so they have 0 reason to liquidate until they are forced to liquidate


Yes, they are forced to liquidate under a lifetime stretch as well, just not in such big chunks.

quote:

Its not about the tax revenue


It 100% is.

quote:

its about preventing someone from using a loophole to get tax free growth.


So, it is about tax revenue.

quote:

As the account holder of an IRA, it should be expected that at your death the money is not meant to stay in the IRA but moved to your heir's accounts.


So, you think the heir should take possession of the funds and pay taxes on all of it on day one essentially turning it into NQ funds?


Janky
LSU Fan
Team Primo
Member since Jun 2011
26597 posts

re: Congress is considering big changes to the way you retire
quote:

Just because? If a Traditional then the parents never paid any taxes on it. So, someone should be paying taxes.


As I said above, they will be forced to pay taxes every year over their lifetime on the RMD amount.

quote:

Under the changes they will get to stretch it over 10 years. so let's just say it is an average IRA account $200,000 in 50s or 60s. That is $20,000 per year. No one is paying 30% on that.



Well, since it is considered income you don't know that.


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lsu13lsu
Member since Jan 2008
6770 posts

re: Congress is considering big changes to the way you retire
quote:

So, you think the heir should take possession of the funds and pay taxes on all of it on day one essentially turning it into NQ funds?



Sounds like 10 years not day 1.


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30
lsu13lsu
Member since Jan 2008
6770 posts

re: Congress is considering big changes to the way you retire
quote:

The Health Savings for Seniors Act, a bipartisan bill, introduced by Reps. Ami Bera, D-Calif., and Jason Smith, R-Mo., in July. This bill would allow individuals who are on Medicare to continue to contribute to health savings accounts. Currently, they are prohibited from doing so.


This also will no longer allow Medicare payments from the HSA. That is a terrible move.

quote:

Another proposal by Rep. Kevin Brady, R-Texas, the Equal Treatment of Public Servants Act, would enable public workers to get larger Social Security benefits. A current rule, the Windfall Elimination Provision, reduces their benefits based on how much pension income they receive.


This is long overdue. It is terrible that people have paid in and not get to take out.


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