SECURE Act - your thoughts

[meierlde]

Assuming other income qualifies one for a roth, one could take the rmds up to the limit, and the pay the tax and put the money right into a roth, so you take the one time haircut but get the long term benefit of tax free growth.
Note the weeping and wailing about rates but in reality if single and the your total income is under 160k or Married and under 321k you pay a max tax rate of 24% up to 200/400 the rate is 32% and above 500/612k 37% (The idea is that the money flows thru a taxable account, and the IRS can't tell where the money comes from) While this is a small account, there is then an element of soak the rich involved with incomes above the limit. Note the income limit is 124k single/196 marriedin 2019. IMHO descendants with income above this should in most parts of the country be able to live. Of course also IMHO they could have just done that you must take the RMD of the original account owner which would be less income coming in to the government, than the new model but more than under the old stretch model.

 

[gerntz]

Hopefully, when retires become aware of the elimination of the "stretch", for dependents.
There will be a backlash, and Congress will do the right thing?

Both parties agreed to it. Who ya gonna take your "blame" out on?

 

[Exit 2024]

I just read article "Secure Act Requires Your 401(k) Statement to Show Monthly Retirement Income", would be interesting to see what type of approach they will take to show that number, from the article it sounds like it will be estimates base on single or joint life annuity, although it also states that "Labor Department is expected to issue guidelines this year for how plan sponsors should calculate projected monthly income"

https://www.barrons.com/articles/th...me-you-could-be-in-for-a-surprise-51581940801

 

[Souschef]

I just ran the numbers. assuming a non spouse inherited IRA. I assumed $100K, using the IRS table, starting at age 55.
The RMD for 10 years is $34K, using the SECURE Act, all 100K is taxable income.
The bottom line is an acceleration of taxable income greater than 3 times what is was.

Another effect may be to prevent the IRA from being inherited by the person's heirs.

 

[Sandy & Shirley]

Sorry for coming in late on this thread, but I wanted to throw in out two cents!

We are domestic partners with a 9 year age difference. We are in the process of slowly moving as much as we can into our Roth Accounts to avoid inheritance taxes for each other and our combined children.

As we read the new law, since our age difference is less than 10 years, we can inherit the Roth accounts from each other as non-spouses without the 10 year distribution taking effect.

When either/both of us wills the combined Roth accounts to our combined 6 children, they will all be more than 10 years younger, so they will all receive the accounts tax free and will then have to empty each of the account within 10 year, but again, totally tax free.

 

[pb4uski]

Yup, what you descrbe is consistent with my understanding.