No. of Recommendations: 0
Not with respect to the question about changing the rules to increase federal revenue. If a large percentage of non-spousal beneficiareis are not using the "stretch" then abolishing the "stretch" would not raise that much more federal revenue.

Said another way, if only a small percentgage of most non-spousal beneficiaries are stretching withdrawals past five years per the "stretch" rule, how much more revenue would abolishing the "atretch" rule acutually raise?

Regards, JAFO

Are you still talking about Roths, or have we switched the topic to TIRAs?

I totally get what you are saying, but if continuing on with the inherited IRA vs cashing it in really depends on the individual circumstances, unless you find a predictable trend then all you would get in a survey would be a snap shot in time, rather than a predictor of future behavior. Can you really extrapolate that data set forward, when there are so many variables involved with the individual choice? For example just in my family alone you had the following: N-stage cancer, underemployment and debt, kids' college tuition, under water home, impending retirement. These are a few reasons some of my siblings chose not to continue on with the IRA.

One requirement of a valid experiment design is to make sure that the data you collect actually addresses the hypothesis in question. I could be wrong, but I question that. Has there actually even been all that many IRAs that have been available to be inherited? It's still a relatively new product, one that required time to be built, and the passing on of the originator and their spouse. Add to that the general investor still trying to recover from the not so distant downdraft in the market that sent them scrambling out of their stocks at a low.

It would be a shame to see one of the few ways in which we have been encouraged to save be pulled from our tool belt, particularly amid the hue and cry about the "crisis" in retirement savings and the talk about a need to ween oneself off of the dependency on social security, particularly for the generation who recently started working.

I am looking very closely at where all this is headed to figure out how to advise our kids when they start having options for putting money away for retirement. One of the talking points has always been the IRA's use in inheritance. For us it made even the TIRA worthwhile, but without the stretch provision? Probably not.

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.