New Retirement Savings Time Bomb

A fairly popular book among libraries for the amount of technical information (mostly on IRAs) included with some notable excerpts.

60-day IRA-to-IRA….The rules have tightened in this area and a mistake here could end your IRA. The IRS has no authority to provide relief in this area. (page 10)

You can contribute to your own IRA, but you can never contribute to an inherited IRA. (page 11)

“I’m putting all my money into taxes – the only thing sure to go up.” Henny Youngman (1906-1987), comedian

A good scare is worth more to a [person] than good advice. – ED HOWE (`853-1937), AMERICAN EDITOR AND NOVELIST (page 33)

Conflicting with a long-standing IRS position in private letter rulings (PLRs) as well as earlier edition of IRS Publication 590,m the Tax Court in Bobrow v. Commissioner (TC Memo 2014-21) made a surprising decision. It declared that the once-per-year IRA rollover rule applies to all of an individual’s IRAs, not to each of his or her IRA accounts separately. (page 39)

SECURE is the word they use to describe the new ways they are finding to separate you from your retirement savings….Our tax system penalizes savers. The SECURE Act is just the latest scheme Congress has devised to punish you for saving for your retirement and wanting to provide a legacy for your children, grandchildren, or other beneficiaries. (page 149)

You can bet that any law Congress passes will almost always do exactly the opposite of whatever its name suggests. Remember years ago, when Congress came up with the Deficit Reduction Act? LOL hahahaha how did that work out? (pages 149-150)

The point to remember is that what the government gives it must first take away. JOHN STRIDER COLEMAN (1897-1958) AMERICAN BUSINESS EXECUTIVE (page 221)

Many people believe that they will be in a lower tax bracket in retirement so the tax on withdrawals from a traditional IRA will be less. But that’s a myth. Most people are in a higher tax bracket in retirement given the combination of their retirement income, including those increasing RMDs from IRAs not converted to Roth IRAs, Social Security, and investment income. (page 222)

We accountants are virtually taught to tell our clients never to pay a tax before they have to. But that’s wrongheaded, if paying tax now will lead to your prospering later, which is the case with a Roth IRA, where you’ll be paying zero percent tax on withdrawal! How much better can you do than that? Take my word. It’s true. I’m an accountant. Would I lie? (page 225)

Experience is a good school. But the fees are high. – HEINRICH HEINE (1797-1856), GERMAN POET (page 335)

www.irahelp.com

www.leimbergservices.com

4 responses to this post.

  1. Posted by nj2az on February 20, 2022 at 3:07 pm

    i would not bet my life that the tax-free status of Roth withdrawals is immortal.

    all it takes is one populist moron going “Look at those rich people, not paying their fair share in taxes!” and a bunch of morons in the electorate agreeing.

    Reply

    • My guess is some sort of RMD for Roths – not that they would be taxed but doing something where it would count towards bringing other taxable income into a higher bracket. Might be really complicated but IRS has never shied away from complicating matters if it means getting money out of people they trap.

      Reply

  2. Posted by geoxrge on February 21, 2022 at 1:36 pm

    Maybe relevant to NJ’s solar plans, and the promises of governments:

    Spain’s solar energy crisis: 62,000 people bankrupt after investing in solar panels •

    Reply

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