So by now you know we are up to our a$$’s in debt right?
You know that Congress has been tasked with reducing spending… And don’t forget spending’s ugly stepsister raising revenue (i.e., taxes). I learned yesterday from a little bird that the Senate Finance Committee is seriously considering adding to the Highway Bill, of all things, a provision that will change the way inherited IRA accounts will be taxed.
How it works today
Let’s say you inherit an IRA account from that great, great Uncle you had forgotten about. Under today’s rules, you as the beneficiary of that account, are able to keep it as an IRA and not be forced to begin withdrawing the money from it until you are the ripe old age of 70½ (yep, that’s 70½). That means you could really benefit from some long-term tax deferred growth, making that account potentially very valuable to you.
What is being proposed?
In the interest of raising tax revenue today, this new law would require you to liquidate the account and withdraw it all within five years of receiving it. The thought is that it would raise $3.9 billion in tax revenue over the next 10 years!
This is just the tip of the proverbial tax revenue-raising iceberg. Watch for Congress to eye your other retirement savings programs in the interest of short-term gains… And at what long-term costs?
While the current retirement savings programs we have are far from perfect, they’re working and they’re all we have. Call or email your representatives and tell them to keep their hands off your retirement savings!