Hello there,On my quest to become Foolish, I've been thinkingabout the Fed's 'Success Taxes' ...Has this been discussed here with possibleapproaches to Foolish 401K/IRA planningwith regards to minimizing/eliminating thesuccess tax?For those of you not familiar with the tax,it affects people in two ways:1. It penalizes people who through the use of tax favorable plans (such as a 401K) accumulate wealth beyond what the government thinks is reasonably required for a comfortable retirement. Under current legislation, withdrawls and payments from all pension and retirement accounts that exceed $160,000 per year (this is the 1997 level indexed for inflation) suffer a 15% excess-distribution tax.2. The second way the law affects retirees is the excess-accumulation tax where it becomes effective when a retiree dies with an account the government deems 'too much money'. Currently, it's approximately $1.2 million for a 65-year old and $1 million for a 75-year old. Amounts over this will result in a 15% tax hit. This only affects sigle people as excess-accumulation tax can be deferred if assets are transferred to a surviving spouse.Any email@example.com
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