Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Proposal to require Roth Distrib at 70.5
Old 09-08-2014, 12:39 AM   #1
Full time employment: Posting here.
 
Join Date: Mar 2008
Posts: 637
Proposal to require Roth Distrib at 70.5

Just read that the 2015 budget proposal includes requiring Roth distributions at age 70.5 and some changes in taxing inherited Roth's...

Should I Leave a Roth to My Heirs? - WSJ
__________________

__________________
bizlady is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-08-2014, 06:04 AM   #2
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Worrying about what might happen to the tax code in the future doesn't have much benefit. When something gets close to being passed it's worth thinking about what you might be able to do to minimize the impact.

As the article says it will come close to eliminating any benefit for IRA to Roth conversions. Not being stupid, most people with significant IRAs won't convert and simply take their Roth RMD along with their IRA RMD. Excess over spending would go into a taxable investment account. It would reduce the tax revenue over the next decade or so as conversions stop to get a small increase after that via larger RMDs. In the short term thinking of DC, that's not what I would expect them to be trying to accomplish.
__________________

__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 09-08-2014, 07:58 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Apr 2011
Posts: 1,558
Worrying about anything doesn't do much good. Trying to impact a choice/decision does.
__________________
gerntz is online now   Reply With Quote
Old 09-08-2014, 09:58 AM   #4
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
At most "proposed" legislation might be worth thinking about potential ways to hedge your bets in the future, but they are almost never a valid reason to shift away from your current strategy. And usually when laws *are* passed like this, they are applied to future tax years so you may often still have time to make moves even after the bill is signed into law.

And in the general case, the whims of Washington are a good reason to remain diversified in your investment vehicles anyway, both in terms of minimizing the tax bite and in terms of managing taxable income in the future.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 09-08-2014, 10:47 AM   #5
Recycles dryer sheets
Greencheese's Avatar
 
Join Date: Oct 2013
Posts: 261
That's it, the world is coming to an end. Pack your bags and flee the country now!
__________________
Greencheese is offline   Reply With Quote
Old 09-08-2014, 11:36 AM   #6
Thinks s/he gets paid by the post
Telly's Avatar
 
Join Date: Feb 2003
Posts: 1,448
Thanks, bizlady, for the heads-up. This never made it into the popular press back in March, nor since.

Here are more links on it:

The (Ed) Slott Report (def. worth reading): President Obama's 2015 Budget Includes A Possible Retirement Planning Game-Changer ~ Ed Slott and Company – IRA, Tax, Retirement Planning Articles, Insight

And a Credit Union common website:
Obama budget proposes significant changes to Roth IRAs « CU Insight
__________________
-- Telly, the D-I-Y guy --
Two fools dancing on the hands of time
Telly is offline   Reply With Quote
Old 09-08-2014, 12:06 PM   #7
Thinks s/he gets paid by the post
Cobra9777's Avatar
 
Join Date: Jul 2012
Location: Texas
Posts: 1,132
Very interesting. For us, the potential benefit of Roth conversions was already tenuous at best, and likely negative in my lifetime. Subtract the estate-planning benefits, and I'm no longer on the fence. I'm out.

Of course, I'll wait and see what actually happens. But given that this is clearly on someone's chopping block, not to mention the countless other inherently fragile assumptions, I'll happily sit on the sidelines and watch my would-be tax prepayments continue to grow.
__________________
Retired at 52 in July 2013. On to better things...
AA: 55% stock, 15% real estate, 27% bonds, 3% cash
WR: 2.0% SI: 2 pensions, some rental income, SS later
Cobra9777 is online now   Reply With Quote
Old 09-08-2014, 12:16 PM   #8
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Quote:
Originally Posted by ziggy29 View Post

And in the general case, the whims of Washington are a good reason to remain diversified in your investment vehicles anyway, both in terms of minimizing the tax bite and in terms of managing taxable income in the future.
+1. It's just too difficult to figure out what they are going to come up with next.
__________________
FIREd is online now   Reply With Quote
Old 09-08-2014, 12:23 PM   #9
Full time employment: Posting here.
gcgang's Avatar
 
Join Date: Sep 2012
Posts: 927
http://www.forbes.com/sites/jamiehop...tirement-plan/

This "proposal" has been out there for a while.

Above article from April, 2014, talks about this as well as mentioning changes to Social Security claiming strategies. Again, these are just proposals at this time.


Sent from my iPad using Early Retirement Forum
__________________
In theory, there's no difference between theory and practice. In practice, there is. YB
gcgang is offline   Reply With Quote
Old 09-09-2014, 02:42 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
We'll be pulling from Roth accounts to fill in for expenses beyond the tIRA income we'll have, both within the low tax bracket or RMD's. The Roth conversions are still an important strategy for us. Unless the RMD for Roths is unreasonably high, this would probably not be an issue for us.
__________________

__________________
Animorph is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Require advice: unsolicited all cash offer to buy my condo caninelover FIRE and Money 32 04-07-2013 06:26 AM
Can health care provider require SS #?? Koolau Health and Early Retirement 15 11-25-2010 12:55 PM
Investment Property Loans that Require Less than 20%-25% LeBlanc Young Dreamers 6 09-06-2009 10:35 AM

 

 
All times are GMT -6. The time now is 10:22 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.