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Advisors Take Note - Legislation that Could Impact IRAs!

Posted by Russell E. Towers on 28 Oct 2016
Russell E. Towers

Currently, the US Senate is considering legislation that would eliminate a life expectancy payout for inherited IRAs. 

Legislation that would eliminate a life expectancy limited payout of 5 years..png

On September 21st, Senate Finance Committee Chairman Orrin Hatch (R-Utah) released a modified proposal to the so-called Chairman's Mark. This prospective legislation proposed a number of retirement provisions - one of which included changes to inherited IRAs. The proposal passed the Senate Finance Committee on a unanimous 26-0 vote. 

This inherited IRA proposal would force IRA beneficiaries to distribute those assets over no more than 5 years. It would eliminate the life expectancy "stretch" option available under current law. This 5 year post-death distribution rule would only apply to IRA amounts above $450,000.

Stay tuned to keep informed! The proposal may or may not be considered for a vote in the December "lame-duck session" of Congress after the election. The House Ways and Means Committee has not proposed any changes to the current "inherited IRA" rules. 

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Topics: IRAs, Retirement Planning Strategies