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Secure Act - good news if you're super rich


splunch
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If you're not, and you inherit a 401k from your Baby Boomer parents sometime soon, you'll have to cash it all out and pay the taxes on that within 10 years.  Yes, yes, we know, you used to be able to leave it in there for later, when you might actually need it for retirement, and thus the family nest egg might grow and be passed down through the generations.  But now, we're not doing that.

 

Now, thanks to the SECURE ACT, we're going to do our best to get more people to put more of their money into the stock market via 401k's, and then strip away the tax benefits of those plans when you die. 

 

Hey, somebody has to pay for us raising the inheritance tax from $11 to $22 million, right?  How about THE MIDDLE CLASS.  Sure, the Greatest Generation and their kids, the Baby Boomers, built their wealth, paid for their houses, saved in 401k's when they were told that pensions were evil...but now when they try to take that savings and pass it on to their kids...unlike extremely wealthy people who can afford to tax shelter their wealth, their life savings will be taxed at a very high rate to cover...you know, everything.

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On 12/30/2019 at 12:17 PM, splunch said:

If you're not, and you inherit a 401k from your Baby Boomer parents sometime soon, you'll have to cash it all out and pay the taxes on that within 10 years.  Yes, yes, we know, you used to be able to leave it in there for later, when you might actually need it for retirement, and thus the family nest egg might grow and be passed down through the generations.  But now, we're not doing that.

 

Now, thanks to the SECURE ACT, we're going to do our best to get more people to put more of their money into the stock market via 401k's, and then strip away the tax benefits of those plans when you die. 

 

Hey, somebody has to pay for us raising the inheritance tax from $11 to $22 million, right?  How about THE MIDDLE CLASS.  Sure, the Greatest Generation and their kids, the Baby Boomers, built their wealth, paid for their houses, saved in 401k's when they were told that pensions were evil...but now when they try to take that savings and pass it on to their kids...unlike extremely wealthy people who can afford to tax shelter their wealth, their life savings will be taxed at a very high rate to cover...you know, everything.

 

I don't really see the basis of your complaint or argument.  The taxpayers most negatively affected by this RMD rule are heirs who want to keep the IRA open, invested and tax-sheltered for as long as possible, i.e., heirs who don't need the money they're inheriting.  If you're someone who is inheriting a big retirement account and your problem that creates for you is that it is making it hard to keep your tax burden minimized, you are one of the lucky ones.  Like very privileged.

 

Some people will be able to do a shuffle with this because they're currently not maxing out their retirement contributions, so they can pull the RMD from their inherited account and correspondingly increase the amount of their incomes going straight into their own 401(k)/403(b)/457.  If you're already maxing out your retirement contributions such that you can't do this, then again, you are really one of the lucky ones as it is.  So maybe you take the tax hit from your higher income and pay off your student loans, house, cars, etc.  If you don't have any debt to pay off, well, all the more evidence you are one of the really lucky ones.  In that case maybe you take the tax hit and use the influx as capital for a new income-producing endeavor like a new business venture or something.  In any case, the people this is the worst news for are a very privileged bunch overall.

 

 

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On 12/30/2019 at 2:17 PM, splunch said:

If you're not, and you inherit a 401k from your Baby Boomer parents sometime soon, you'll have to cash it all out and pay the taxes on that within 10 years.  Yes, yes, we know, you used to be able to leave it in there for later, when you might actually need it for retirement, and thus the family nest egg might grow and be passed down through the generations.  But now, we're not doing that.

 

Now, thanks to the SECURE ACT, we're going to do our best to get more people to put more of their money into the stock market via 401k's, and then strip away the tax benefits of those plans when you die. 

 

Hey, somebody has to pay for us raising the inheritance tax from $11 to $22 million, right?  How about THE MIDDLE CLASS.  Sure, the Greatest Generation and their kids, the Baby Boomers, built their wealth, paid for their houses, saved in 401k's when they were told that pensions were evil...but now when they try to take that savings and pass it on to their kids...unlike extremely wealthy people who can afford to tax shelter their wealth, their life savings will be taxed at a very high rate to cover...you know, everything.

 

But you love BIG GOVERNMENT...….let's see how the House voted.

 

 

Quote

 

Congress just agreed to a bipartisan appropriations bill that will help avert another government shutdown. However, attached to the spending bill is a piece of legislation called the Setting Every Community Up for Retirement Enhancement Act (SECURE Act), which passed the House with a 417-3 vote earlier this summer. 

Honestly, the passage of the SECURE Act came as a bit of a surprise as it appeared to be derailed during the fall. Now, just a few weeks before the end of the year, Congress is changing major tax laws implicating 2019 and especially 2020 going forward. 

 

So probably the most bipartisan vote in decades. Can't be mad at the R's, can't be mad at the D's - so are you just mad at government? Ya know, the government you also want to control your healthcare?

Can't have it both ways....

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The fact that splunch has been commenting in other threads but not his own here might indicate he is second-guessing his rant about this particular bill.  Given his apparent positions on inter-generational wealth and privilege that I believe he has expressed in other threads, this Secure Act bill is probably somewhat of a victory, i.e. something he should be a bit pleased to see.  I think he swung hard and missed on this one, attacking something that is overall not too bad of a thing.

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The fact that the union hater's only criticism is, "So what?  If this hurts you it's because you have the money anyway, so you can spare it.  What's the problem?" might indicate that this is some absurd sh!t.

 

Elizabeth Warren proposed a 2% wealth tax.  "Hey!  Why should the rich pay for everything!  THAT'S NOT FAIR!!"

 

Oh, but now that we're attacking the middle class' vehicle for building wealth, it's, "Meh.  What're ya complaining about?  Yer lucky we don't take it all."

 

Transparent propaganda, as always.

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