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<<<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?>>>

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

I thought that we were already on 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?"

I think that it becomes a question of sample size and the potential application of the law of large numbers.

"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."

I understand that the indidual decisions are each made for their own reason, but do not some other families also have terminal disease, underemployment and debt, kid's college tuition, or pending retirement?

"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."

IRAs becaome available per ERISA in 1974 and much more widely available in 1981 under ERTA.
401-k plans date from 1980-81 and generally became more avialble after the Tax Reform Act of 1984.

Thirty plus years is not the longest time period, I agree, but I am not sure that it is still "relatively new".

"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 not sure that using the general rule of all funds out within five years after the year of death (and eliminating the "stretch" provisions) pulls a tool from the tool belt. All of the tax advantages for the initial account owner remain the same.

"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."

Why? I am curious as to your reasoning? Step-Up in Basis (assuming it does not get changed, again, or limited like in 2010)?

Regards, JAFO
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