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And there goes the Stretch IRA??

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  • And there goes the Stretch IRA??

    Today's news:

    Pending Retirement Rule could make IRS your biggest IRA beneficiary

    Let's see if it passes... it has certainly been attempted before

  • #2
    SECURE Act

     

    Here's a link to a thread here that discusses this a bit more.

     

    Comment


    • #3




      SECURE Act

       

      Here’s a link to a thread here that discusses this a bit more.

       
      Click to expand...


      Discusses quite a bit more ... Thanks, CordMcNally

      Comment


      • #4
        People are running around like their hair is on fire, yet most of them don't even know anyone actually stretching an IRA.
        Helping those who wear the white coat get a fair shake on Wall Street since 2011

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        • #5




          People are running around like their hair is on fire, yet most of them don’t even know anyone actually stretching an IRA.
          Click to expand...


          And it will likely affect only a very small number of physicians

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          • #6




            People are running around like their hair is on fire, yet most of them don’t even know anyone actually stretching an IRA.
            Click to expand...


            When my 87 year old father passes on, I will most likely be stretching one.

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            • #7




              People are running around like their hair is on fire, yet most of them don’t even know anyone actually stretching an IRA.
              Click to expand...


              I seriously doubt that is true. Myself, my daughter, my sister and her daughter and all of my close friends who have lost parents and/or siblings have Inherited IRAs with lifetime distributions.

              Even if what you say is true. Almost all forum members have retirement accounts and would probably want some day for their children (even if they don't have any yet) to be able to take lifetime distributions from their retirement accounts.

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              • #8
                Luckily, it's been stalled in the Senate because of Ted Cruz (though not because of this provision, something much dumber). Hopefully, it dies quietly without a vote since recess and budget fights are coming.

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                • #9
                  I am stretching two. My children will most likely stretch ours. I showed in the earlier thread how easy it is to die with very large retirement accounts for a household earning $120k per year. This is not limited to the rich and twenty years from now will stop pretending to be. If you believe otherwise I've got a story to tell you about how the federal income tax was originally only 1% on income in today's dollars over at least $50k per year and only 7% on income in today's dollars over at least ten million. See how that worked out for you.

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                  • #10
                    I cannot say I know anyone who is stretching an IRA.  I do not see it happening in our future either.  It would be nice for my kids but hopefully I have 50 years left and a lot can happen in that time.  Especially if it is starting now.

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                    • #11
                      If you don't die, do you still have to take it out in 10 years or does this only apply after you die?

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                      • #12
                        Applies to nonspousal heirs.

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                        • #13
                          Not gonna affect me, but definitely going to affect my kids, but they're spoiled. Not in the "silver spoons" kind of way but probably similarly to the kids in the same small cohort. It's not money they earned, and I'm dead so I won't care.

                          Question, if you win the lottery, don't most take the lump sum/and the tax hit vs annuitizing it over 20 years. Certainly if there was an option to defer the prize winnings for a lifetime(and the taxes), how many would opt to treat that windfall in that manner?

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                          • #14







                            People are running around like their hair is on fire, yet most of them don’t even know anyone actually stretching an IRA.
                            Click to expand…


                            I seriously doubt that is true. Myself, my daughter, my sister and her daughter and all of my close friends who have lost parents and/or siblings have Inherited IRAs with lifetime distributions.

                            Even if what you say is true. Almost all forum members have retirement accounts and would probably want some day for their children (even if they don’t have any yet) to be able to take lifetime distributions from their retirement accounts.
                            Click to expand...


                            Don't get me wrong, I'm a big fan. But this is a pretty minor technique used primarily by the financially literate AND wealthy who also had wealthy parents.

                            Most people don't leave behind much money.

                            Of those who do, most of the heirs pull it all out in year one.

                            Of those who don't pull it all out in year one, most have pulled it all out over 10 years.

                            Even if they haven't pulled it out in ten years, most people aren't maxing out retirement accounts. So you can live off the inherited IRA while maxing out your 401(k), thus providing even more benefit than a stretch IRA.

                            The percentage of people who inherit a bunch of money, don't pull it out immediately, don't pull it out over 10 years, and are already maxing out their tax-deferred options has got to be less than 1%, even if it is a higher percentage (10%?) of those reading these words.
                            Helping those who wear the white coat get a fair shake on Wall Street since 2011

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                            • #15
                              “People are running around like their hair is on fire, yet most of them don’t even know anyone actually stretching an IRA.”

                              That would make a lot of sense. IRA’ in 1974, 401k’s in 1978, companies switching over with employer math in the 80’s that would put most IRA holders about 50-65.
                              With most that had a wife and kids, probably one of em is still alive. I mean 80’s are the life expectancy.
                              Of course I don’t know ANYONE that inherited a 401k either. I do know people that ran calculations about lump sum pensions though. And pensions don’t usually get inherited do they.

                              So we seem to be right in the baby boomer sweet spot. They are retiring. A few have rolled over 401k’s and built IRA’s.

                              News flash, let’s wait and see how much baby boomers have stocked away. Not too much from the surveys I see.
                              I doubt many gen x and y are looking for a lot.
                              Inherited 401k’s and IRA’s will probably be small.

                              Might as well screw the ones that actually listened and planned. Small casualties.
                              The pertinent question is do you know anyone that inherited a 401k or IRA?
                              There have been a few threads. Most were “not worth it, too small.”

                              So it’s 100% safe about the “hair on fire”. 40 years seems to be no big deal for a stretch. Do you know anyone that hit the $11.4 estate tax either? Oh well, since that can move up to $22.8 for a couple that’s ok. Estate planning is a different topic. IRA’s and 401k’s are that type of money.

                              Might as well blow it off. Seems like the right thing to do.

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