The SECURE Act's Big Money Grab

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MomTo2Boys
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The SECURE Act's Big Money Grab

Post by MomTo2Boys » Sat Jul 13, 2019 12:26 pm

Hey, all,

I'm trying not to panic about the following:

https://www.forbes.com/sites/jlange/201 ... 8be7e3bbd7

...but it's difficult for me not to. My husband and I have a nice amount in our TSPs (we're federal government employees, but just change that to IRAs or 401(k)s if you'd like), and reading this scares me.

As a potential inheritor of retirement accounts, and as a mother who does all the money in the family and wants to be able to pass money on to her children after death, this act scares me.

Thoughts? Mitigation techniques? Message board offers of Xanax? I'm seriously unimpressed with this.
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Re: The SECURE Act's Big Money Grab

Post by pugchief » Sat Jul 13, 2019 12:48 pm

One way to look at it is that money put into a 401k/IRA/TSP is theoretically to be used for YOUR retirement. The government is kind enough to let you defer the taxes on that $ until withdrawn. They don't have to do that. Tax laws change all the time. Why should your heirs continue to enjoy that tax deferral? It's certainly nice that they do now, but so what? The money was for YOUR retirement, not theirs. Tax and estate planning is always complicated because the government giveth and the government taketh away. Flexibility is always useful.
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Re: The SECURE Act's Big Money Grab

Post by ochotona » Sat Jul 13, 2019 2:57 pm

Roth conversion of Traditional IRAs...
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Re: The SECURE Act's Big Money Grab

Post by dualstow » Sat Jul 13, 2019 4:22 pm

Mom.2.Boys. Blast from the past. I miss your China posts
Even Obama called out cancel culture last week and he was derided for it.
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MomTo2Boys
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Re: The SECURE Act's Big Money Grab

Post by MomTo2Boys » Sat Jul 13, 2019 6:32 pm

dualstow wrote:
Sat Jul 13, 2019 4:22 pm
Mom.2.Boys. Blast from the past. I miss your China posts
Awwwwwww!! That's very kind of you to say, but trust me, I do NOT miss China, lol!

Now Japan, on the other hand... ;)
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Re: The SECURE Act's Big Money Grab

Post by dualstow » Sat Jul 13, 2019 6:54 pm

O0
Even Obama called out cancel culture last week and he was derided for it.
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Re: The SECURE Act's Big Money Grab

Post by jacksonM » Sat Jul 13, 2019 7:33 pm

MomTo2Boys wrote:
Sat Jul 13, 2019 12:26 pm
Hey, all,

I'm trying not to panic about the following:

https://www.forbes.com/sites/jlange/201 ... 8be7e3bbd7

...but it's difficult for me not to. My husband and I have a nice amount in our TSPs (we're federal government employees, but just change that to IRAs or 401(k)s if you'd like), and reading this scares me.

As a potential inheritor of retirement accounts, and as a mother who does all the money in the family and wants to be able to pass money on to her children after death, this act scares me.

Thoughts? Mitigation techniques? Message board offers of Xanax? I'm seriously unimpressed with this.
What is it exactly that scares you?

In my own case the only thing I can see that will affect me as a 70-year-old retiree is that it will delay the required minimum distribution from my IRA for another year and a half to age 72 instead of 70 1/2 which I'm now officially past. That's assuming when/if it passes it will go into effect immediately. Even if it doesn't go in effect this year then at least I'll have another year before I'm required to make RMD's.
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Re: The SECURE Act's Big Money Grab

Post by MomTo2Boys » Sat Jul 13, 2019 8:38 pm

jacksonM wrote:
Sat Jul 13, 2019 7:33 pm
MomTo2Boys wrote:
Sat Jul 13, 2019 12:26 pm
Hey, all,

I'm trying not to panic about the following:

https://www.forbes.com/sites/jlange/201 ... 8be7e3bbd7

...but it's difficult for me not to. My husband and I have a nice amount in our TSPs (we're federal government employees, but just change that to IRAs or 401(k)s if you'd like), and reading this scares me.

As a potential inheritor of retirement accounts, and as a mother who does all the money in the family and wants to be able to pass money on to her children after death, this act scares me.

Thoughts? Mitigation techniques? Message board offers of Xanax? I'm seriously unimpressed with this.
What is it exactly that scares you?

In my own case the only thing I can see that will affect me as a 70-year-old retiree is that it will delay the required minimum distribution from my IRA for another year and a half to age 72 instead of 70 1/2 which I'm now officially past. That's assuming when/if it passes it will go into effect immediately. Even if it doesn't go in effect this year then at least I'll have another year before I'm required to make RMD's.
When I am thinking about my husband's and my retirement, I see our TSPs (sub in 401(k) or what have you) as one of the biggest bedrocks of our retirement planning. My husband and I may live for quite a while longer (we are in our 40s), or we may not. I always have a view toward our sons and our estate, if you will, when I think about our finances.

Estate taxes aren't triggered until you're talking about very large balances outside of what my husband and I would have. But to treat 401(k)s and retirement account like TSP accounts far, FAR less favorably than even how estate taxes are set up gives me pause and makes me rethink the game, if you will, going forward.

I have never had a desire to start messing with financial planners or to try to work extremely hard to think about mitigating death or estate taxes (or the like) because I knew that my children could, for lack of a better word, inherit any leftover TSP balance we have when we both die. But if we accrue a large amount of money in a 401(k)-like vehicle and then perhaps have a large portion of it erased by the taxes brought by this new law makes me wonder if I need to start totally rethinking how my husband and I are planning our finances. And it also makes me wonder if I need to start messing with estate planning or the like, which makes me less than happy, to say the least, because accruing retirement funds via the TSP is stupid simple for us and requires no outside professional intervention/costs/fees.

I feel like the rules are changing drastically for those who are investing/have invested heavily in these sorts of vehicles and who want to have a sharp eye out on how to best pass leftover funds to their heirs/children upon their death.
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Re: The SECURE Act's Big Money Grab

Post by MomTo2Boys » Sat Jul 13, 2019 9:41 pm

Actually, I started this thread because everything I read made it sound like the Secure Act was certain to pass the Senate and be signed into law imminently, but I just saw this:

https://www.planadviser.com/exclusives/ ... ing-house/

and also, I saw that Bogleheads has closed a ton of discussions about it because Bogleheads doesn't allow discussions about proposed law, just final law, so...

Sorry if I shouldn't have posted this here because this is proposed law and not final law as of yet.
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Re: The SECURE Act's Big Money Grab

Post by technovelist » Fri Jul 19, 2019 1:33 pm

MomTo2Boys wrote:
Sat Jul 13, 2019 9:41 pm
Actually, I started this thread because everything I read made it sound like the Secure Act was certain to pass the Senate and be signed into law imminently, but I just saw this:

https://www.planadviser.com/exclusives/ ... ing-house/

and also, I saw that Bogleheads has closed a ton of discussions about it because Bogleheads doesn't allow discussions about proposed law, just final law, so...

Sorry if I shouldn't have posted this here because this is proposed law and not final law as of yet.
Don't worry about that. One of the advantages of this board over bogleheads is that we can discuss pretty much whatever we want to.
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Re: The SECURE Act's Big Money Grab

Post by dualstow » Fri Jul 19, 2019 1:41 pm

{This thread has run its course
And is now locked}


Whoops, sorry, I must have dozed off and sleep-typed that.
Carry on.
BH has very strict rules about discussing government policies and speculating on those policies. The good part is that nothing goes off topic for very long. The drawback is that it is quite easy to run afoul of those rules, until you can’t do much beyond sitting on folded hands.

I bet that more than half the threads here have lockable posts, as innocuous (inoffensive) as they are.
Even Obama called out cancel culture last week and he was derided for it.
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Re: The SECURE Act's Big Money Grab

Post by Mountaineer » Sat Jul 20, 2019 7:00 am

technovelist wrote:
Fri Jul 19, 2019 1:33 pm
MomTo2Boys wrote:
Sat Jul 13, 2019 9:41 pm
Actually, I started this thread because everything I read made it sound like the Secure Act was certain to pass the Senate and be signed into law imminently, but I just saw this:

https://www.planadviser.com/exclusives/ ... ing-house/

and also, I saw that Bogleheads has closed a ton of discussions about it because Bogleheads doesn't allow discussions about proposed law, just final law, so...

Sorry if I shouldn't have posted this here because this is proposed law and not final law as of yet.
Don't worry about that. One of the advantages of this board over bogleheads is that we can discuss pretty much whatever we want to.
Except for bringing up religion in a thread other than the religion thread! ;) But, I agree, this forum is mostly tolerant of other things that do not ultimately matter.
Romans 1:16-32
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