I started reading a book “beating the new death tax” by James Lange,cpa/attorney. I’m interested in looking for possible new ways to structure my distributions in retirement to possibly be more tax efficient. I’m in the part of the book where he mentions that if I die first my traditional Ira monies will pass to my wife first. After she dies whatever is left will go to our children (as per the beneficiary setup). What bothers me is that once the money is passed down to the children they must pull out distributions within a 10 year window. This may be a time in their lives where they might be making good money and this additional required distribution might throw them in a higher tax bracket. The CARES ACT deleted the “stretch Ira” feature. I feel that I have been saving for over 40 years so my kids might be able to prolong these distributions per their longevity numbers. Now all of a sudden the govt is looking for money to pay for all their programs, etc and deleting the stretch Ira features. This seems like a broken promise - to change the rules of the game. I understand the govt needs money to pay for programs but why not grandfather this up to 2020 so that those that saved for the intended purpose of utilizing the stretch Ira don’t get screwed? If people still want to contribute, fine but don’t keep changing the rules when convenient for one side. I feel the govt broke its initial promise to us.
Rant over.. what are your thoughts?
Rant over.. what are your thoughts?