Federal Government Looking for Ways to Get to Retirement Funds

Wooden,Figurine,And,Many,Piggy,Banks.,Concept,Of,Choosing,Savings

Just when you thought your retirement account was safe from the federal government, think again. That’s’ because according to the Government Accountability Office, there are around 9,000 U.S. taxpayers who have a minimum of $5 million in an individual retirement account.

Now some lawmakers are taking a closer look at these accounts because as Senate Finance Committee Chairman Ron Wyden of Oregon puts it: “The IRA was never intended to be a tax shelter for millionaires.” According to the GAO report, these accounts are only possible for someone who has access to investments that are not available to most people or who has an aggressive investment strategy.

Meantime, there were an estimated 1,100 taxpayers that had more than $10 million in their IRAs as of 2001, according to the GAO report. Of those, 314 people had more than $25 million. On the other hand, that means that close to 99 percent of all people who have IRAs have less than $1 million in their accounts.

So what, if anything, is the government trying to do about these types of accounts? For starters, last year, President Obama introduced a proposal that would put limits on these kinds of accounts. Under his proposal no one would be able to add tax-favored contributions after their total account balances accumulated about 3.2 million. However, so far, the president’s proposal has not moved forward in Congress. It remains to be seen if other lawmakers will push harder for changes.

/GROCO
Posted in ,

The Roth Way to Riches

The Roth Way to Riches By Roy Lewis With all the recent tax-code changes, it seems a number of taxpayers have forgotten the Roth IRA. That’s a shame, because it’s far more than an ordinary retirement savings account. Roth IRAs are tax-favored accounts to which qualified taxpayers can make non-deductible, after-tax contributions. Those contributions can…

executor and trustee

Choosing Your Executor and Trustee

Choosing Your Executor and Trustee You know that it’s vital to make a proper will and keep it up to date. No less critical is the need to select your executor or personal representative with care. You may believe that any friend or relative whom you might select could do the job. Perhaps so. But…

Estate Planning is not One size fits all

Estate Planning is Not “One Size Fits All”

Estate Planning is Not “One Size Fits All” Married, never married, widowed, divorced—each of us has unique needs when it comes to how and to whom we make our bequests. Here, in a brief discussion, are a few checkpoints for developing an estate planning strategy for people who are on their own. Review your will…