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Old 10-04-2016, 05:46 PM   #41
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So, where should it go? Surely not to the government!
This one is easy. If Gumby were king, it would very likely all just go to Gumby!
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Old 10-04-2016, 05:48 PM   #42
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Capital piled up in one place (or one family) is not economically useful. It needs to go back into the economic system that permitted its accumulation in the first place. If it requires the government to facilitate that, so be it.
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Old 10-04-2016, 05:58 PM   #43
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Thanks (others, see page 42 and on). This does provide additional details, but it is not entirely clear how Roth IRAs may or may not be affected. In the earlier paragraph, there is a statement referring to Roth IRAs not having the RMD requirement during the owner's life. That *may* suggest that Roth stretches are not impacted. We can only hope.....
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Old 10-04-2016, 05:59 PM   #44
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I agree. Tax was avoided and must be paid. Now and expedited.
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Old 10-04-2016, 06:07 PM   #45
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I agree. Tax was avoided and must be paid. Now and expedited.
Tax was avoided at a low tax rate and the assets were accumulated over many years. The tax rate in the proposed plan is punitive. Why not let the assets be taxed through the decumulation (distribution) process, at a rate more in keeping with the rate during accumulation?
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Old 10-04-2016, 06:08 PM   #46
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Capital piled up in one place (or one family) is not economically useful. It needs to go back into the economic system that permitted its accumulation in the first place. If it requires the government to facilitate that, so be it.
Is the money likely buried in their yard? Or more likely already "at work" through loans to companies (bonds), deposited with banks (and re-loaned to people and businesses and thereby put to work), etc. There's zero reason to believe the government will put it to more productive use than individuals do, and boxes full of $500 hammers that say it won't.

But, there's direction to stay focused on this particular bill. . . .
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Old 10-04-2016, 06:12 PM   #47
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It's an "individual retirement account", it was designed to help an "individual" retire. Since the government looks with favor on spouses, they benefit also.

Children? Let the children be be happy with whatever is left. They will be richer than before. Let 'em make their own dough.
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Old 10-04-2016, 06:27 PM   #48
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But, there's direction to stay focused on this particular bill. . . .
Yes there was, so my exposition on the velocity of money will have to wait. Please carry on with the bill and its effects.
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Old 10-04-2016, 07:36 PM   #49
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Help me out here: this is a fantasy, passed by a committee, in a presidential election year. What is the likelihood this even gets voted on before this congress adjourns? Pretty slim, I would guess. Then the new congress comes in doing its usual pull-the-rope-in-500-different-directions with either an establishment president everyone despises or an outsider president that everyone despises. Pardon me if I fail to see a reason to start heating up the pitch and getting the feathers ready.
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Old 10-04-2016, 08:45 PM   #50
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I received an inherited IRA from my parents. It was small but still caused problems on my own retirement efforts.

If I had suddenly had an accelerated RMD thrown in at $1M, it would have set me own retirement plans back for those accelerated five years. I would have had my income suddenly thrown too high, and had the double whammy of accelerated RMD income too.

I delayed retirement to be able to leave an estate to my wife and family. My daughter and son in law will have 6 digit yearly medical bills and frankly will have a tough time in getting a decent retirement without help.

Political critters changing the rules in the middle of the game is a pure money grab. Without changing the rules, taxes would still be paid, but at more realistic rates.
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Old 10-04-2016, 09:48 PM   #51
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Help me out here: this is a fantasy, passed by a committee, in a presidential election year. What is the likelihood this even gets voted on before this congress adjourns? Pretty slim, I would guess. Then the new congress comes in doing its usual pull-the-rope-in-500-different-directions with either an establishment president everyone despises or an outsider president that everyone despises. Pardon me if I fail to see a reason to start heating up the pitch and getting the feathers ready.
All good points. That said, this is a revenue raising bill passed by a republican led committee. The only thing the democrats would resist more than a republican initiative is not voting to raise revenue. I really hope you are right, but I'm still a bit nervous.
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Old 10-04-2016, 09:50 PM   #52
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Help me out here: this is a fantasy, passed by a committee, in a presidential election year. What is the likelihood this even gets voted on before this congress adjourns? Pretty slim, I would guess. Then the new congress comes in doing its usual pull-the-rope-in-500-different-directions with either an establishment president everyone despises or an outsider president that everyone despises. Pardon me if I fail to see a reason to start heating up the pitch and getting the feathers ready.
With gov't or kings like Gumby, there's always reason to have the tar and feathers handy. There were reasons for the Magna Carta and the American and French revolutions.

Back to our regularly scheduled argument, wouldn't an inherited Roth still pass tax free? I can see it needing to be emptied within 5 years so whatever it gets invested in can be taxed, but the Roth itself would still pass through sans taxes. At least that's the way I read it. Obviously not the eternal family fortune Ed Slott has been selling for years, but still far better than a tIRA that would get taxed (after the first $450K) at a higher rate than it probably would have with the original owner's RMDs. Is this right?
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Old 10-04-2016, 09:59 PM   #53
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With gov't or kings like Gumby, there's always reason to have the tar and feathers handy. There were reasons for the Magna Carta and the American and French revolutions.

Absolutely. That said, good luck with all that unless you are planning on joining your local militia.

I have no doubt that we will all be held by the ankles and shaken, repeatedly. It is to easy for the gubmint to stick this stuff into bills and stick it to us. Doesn't seem like there is much we can do about it under the present set of circumstances. I think it is unlikely that this is going anywhere until (possibly) next year, but we all know that this sort of thing will increasingly come down the pike as it is just too easy for the powers that be to spend other people's money (mine and yours).
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Old 10-04-2016, 10:30 PM   #54
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Would this effect existing beneficiary IRAs?
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Old 10-04-2016, 11:27 PM   #55
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Would this effect existing beneficiary IRAs?
According to the links I've read, the answer would be no. As an earlier poster suggested, that gives folks with large tIRAs less than three months to die if they want to benefit from the old rules. We're still not sure about the impact on Roth IRAs.
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Old 10-05-2016, 03:13 AM   #56
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Before I also get scared, the list of exceptions is significant. Spouse and children retain the ability to do a stretch IRA. It sounds like this bill might target generation skipping inheritance, like an IRA left to a grandchild. Although scary, the net effect for many people leaving IRAs to their spouse or children might be minimal.
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