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Old 07-11-2019, 09:24 AM
 
8,853 posts, read 5,132,953 times
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Quote:
Originally Posted by ohio_peasant View Post
Exactly. The main impact is on a high-earning near-retiree, say of age 55, whose 85-year-old parent dies. The parent had been taking RMDs for the past 15 years, but still has a hefty sum remaining untapped. Now the "child" ends up with the tax-burden. Formerly it was at the "child's" RMD rate, which was bad enough. In the proposed scheme, it would be 10%/year.
You can always refuse the inheritance, if the taxes are your primary concern.
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Old 07-11-2019, 09:27 AM
 
8,853 posts, read 5,132,953 times
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Quote:
Originally Posted by WRM20 View Post
So? Who cares? It's your retirement account, not your children's. Personally, I would make the whole balance subject to tax as of the date of death, assuming it's children and not the spouse who inherit. If the children want to invest, they can put the balance in a Roth account.
No, they can't. The can contribute up to the annual limit, but they certainly can't plunk the balance of an inherited IRA into their own IRA.
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Old 07-11-2019, 09:29 AM
 
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Quote:
Originally Posted by ansible90 View Post
That's harsh. Do you have parents? Do you have children?
It's not "harsh". IRAs are a vehicle for people to receive a tax advantage for planning for their own retirement years. They are not a vehicle for transferring wealth to future generations.
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Old 07-11-2019, 09:31 AM
 
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Quote:
Originally Posted by tijlover View Post
I've never invested in a 401k, let alone an IRA. When I sought advice from people in my Gambler's Anonymous Group about these programs, years ago, they said: Don't do it! Don't do it! Don't do it!

And I followed their advice!
What is your plan for income, then?
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Old 07-11-2019, 09:55 AM
 
Location: Kentucky
514 posts, read 306,573 times
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Well, if I had rmds from a beneficiary account that added to my income I would attempt to manipulate my taxable income, by increasing my tax deferred investments (IRA, 401k, HSA, 529, whatever) to counter the disbursement. Most people are not maxing out their accounts. If I was maxed out I'd take the tax hit, it's a good problem to have in my book.

Rg
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Old 07-11-2019, 10:31 AM
 
Location: Tucson/Nogales
17,401 posts, read 21,239,668 times
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Quote:
Originally Posted by Petunia 100 View Post
What is your plan for income, then?
$1245 a month Social Security, 55K left over from a house sale, and I own my own house, and will never need another car!
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Old 07-11-2019, 10:45 AM
 
1,651 posts, read 567,483 times
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Quote:
Originally Posted by tijlover View Post
$1245 a month Social Security, 55K left over from a house sale, and I own my own house, and will never need another car!
Well.....I hope you have all your medical expense possibilities completely covered by some kind of insurance. Because $55K in reserve is not much if you are going to have to rely only on Medicare which does not cover many things commonly encountered by seniors: hearing aids, orthotics, and dental (one single implant can easily cost $5000, as I found out last year), to name a few.

Or if your house needs a new roof ($10K easily), heating or central AC system, or other major repair that could cost thousands.

Last edited by BBCjunkie; 07-11-2019 at 11:10 AM..
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Old 07-11-2019, 10:51 AM
 
8,853 posts, read 5,132,953 times
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Quote:
Originally Posted by tijlover View Post
$1245 a month Social Security, 55K left over from a house sale, and I own my own house, and will never need another car!
I hope it works out well for you.
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Old 07-11-2019, 10:55 AM
 
Location: Omaha, Nebraska
7,316 posts, read 4,160,046 times
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Quote:
Originally Posted by tijlover View Post
I've never invested in a 401k, let alone an IRA. When I sought advice from people in my Gambler's Anonymous Group about these programs, years ago, they said: Don't do it! Don't do it! Don't do it!

And I followed their advice!
And that was foolish. You passed up many years of tax-free growth because you listened to a bunch of financial illiterates.
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Old 07-11-2019, 10:57 AM
 
Location: Omaha, Nebraska
7,316 posts, read 4,160,046 times
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Quote:
Originally Posted by RationalExpectations View Post
Part of the point? Part? That's the entire point.
Getting the tax money faster, yes. But I don't think the government cares whether it happens via Roth conversions before the owner of the IRA passes away, or by RMDs over 10 years the inheritors of the IRA are forced to make. Either will do.
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