Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Proposed Changes to IRA rules
Old 02-24-2011, 01:23 AM   #1
Thinks s/he gets paid by the post
kyounge1956's Avatar
 
Join Date: Sep 2008
Posts: 2,171
Proposed Changes to IRA rules

Here's an article from Forbes about proposed changes to the RMD rules. If adopted the new rules would
  • allow 60-day rollovers of non-spousal inherited IRAs
  • eliminate RMD's if balance of all tax-favored accounts is under $50K
__________________

__________________
kyounge1956 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 02-24-2011, 08:10 AM   #2
Thinks s/he gets paid by the post
GregLee's Avatar
 
Join Date: Oct 2010
Location: Waimanalo, HI
Posts: 1,881
Nice! And just in time for me to avoid my first RMD in 2013, hopefully, provided the $50K limit applies separately for each spouse (since my wife's IRA is too big).
__________________

__________________
Greg (retired in 2010 at age 68, state pension)
GregLee is offline   Reply With Quote
Old 02-24-2011, 10:13 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 2,712
Actually when tax reform hits I see going back to the old RMD rules where the savers life expectancy was used to calculate the RMD even for inherited IRAs/401k its an easy low hanging fruit to get more revenue. Note that at 50k value the first years RMD is really about 3k which should not bump anyone up much in tax brackets. At 80 if the balance were still 50k its 5k.
But since IRA's and 401ks were designed for retirement, why allow eternal tax postponement, which the current rules do. About the only other thing that is lost if you take an RMD and pay the taxes is the shield in Bk.
__________________
meierlde is online now   Reply With Quote
Old 02-24-2011, 11:26 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Quote:
Originally Posted by meierlde View Post
Actually when tax reform hits I see going back to the old RMD rules where the savers life expectancy was used to calculate the RMD even for inherited IRAs/401k its an easy low hanging fruit to get more revenue. Note that at 50k value the first years RMD is really about 3k which should not bump anyone up much in tax brackets. At 80 if the balance were still 50k its 5k.
But since IRA's and 401ks were designed for retirement, why allow eternal tax postponement, which the current rules do. About the only other thing that is lost if you take an RMD and pay the taxes is the shield in Bk.
This is a good commonsense change to the law. We're talking about some fairly small accounts here, and if Granny only has $50K in the account and wants to save it for a few more years, I can't see much of a problem at this balance level. Folks in this situation need all the flexibility they can get. It might be the difference between needing to file a tax return and not, which saves everybody some hassle.
As pointed out in the article, I think kids will be important beneficiaries. If they don't have to take the RMDs from inherited accounts the money can grow untouched until they are 18. That could make more money available for college or other expenses, they can start the RMDs then.

So, any exploitable angles? It seems that if you can delay RMDs by some means, you'll show lower income for longer and maybe qualify for more fruit from the government money tree (medical insurance supplements, lower tax rates, low-income tax credits, etc). The $50K limit is fairly low, so probably no practical way to exploit this.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   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
converting IRA to Roth IRA based on new Roth Rules vs. 72t mbmmccoy FIRE and Money 27 09-28-2009 07:27 AM
Can I max out my Roth IRA, Trad. IRA, and SIMPLE IRA? thefed FIRE and Money 9 09-24-2007 05:52 PM
Tax Rules on Annuitizing IRA? WayneH FIRE and Money 5 06-03-2007 02:32 PM
Re: Proposed changes in 403b plan newellcr FIRE and Money 4 03-15-2005 10:48 AM
new proposed savings accounts wabmester FIRE and Money 2 02-03-2004 02:16 PM

 

 
All times are GMT -6. The time now is 09:08 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.