The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing

URL:  https://boards.fool.com/has-the-gao-scored-either-bill-likely-decrease-34217427.aspx

Subject:  Re: RMDs to change to 72 Date:  5/27/2019  9:38 PM
Author:  aj485 Number:  93743 of 94963

Has the GAO scored either bill? Likely decrease in tax revenue and increase in deficit, IMO.

I don't know if the GAO has scored either one, but the offset for raising the age to 72 in the House (SECURE) bill is that after Dec 31, 2019, all IRAs inherited by non-spouses will now need to be fully distributed within 10 years of the owner's death (with a few exceptions, like for minor children). Thus, Traditional IRAs will get taxed in a shorter timeframe and with higher distributions than likely would have been required, and Roth IRAs will be removed from their tax-free status sooner. Not sure if this additional revenue will totally offset the loss of the first 1 or 2 years of RMD tax revenue for those who wait until required to remove anything from their accounts, but it should help. (Whether it's 1 or 2 years of delay in RMDs depends on when you turn 70 1/2 - my RMDs will only be delayed by 1 year, for example, since I turn 70 1/2 in March.)

The RESA act actually requires the inherited IRA distributions to be even faster - it's requiring a 5 year distribution timeframe, like IRAs left to estates and trusts, instead of 10. I suspect that's why the RESA act is able to target an RMD age of 75, rather than 72.

AJ
Copyright 1996-2019 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us