American Thinker du jour - Roth Edition
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Requiem for the Roth Ira
One of the great senators of the modern era was William Roth, by whose vision and persistence the Roth IRA was established in 1997, giving average Americans, especially those without a pension, the opportunity to build their financial independence without fear of rising tax rates.
The Roth could be funded either with after-tax dollars or by converting money from a conventional IRA. The original law said that: (1) the taxpayer could invest in a wider range of investments than with other tax-advantaged plans, (2) both the growth of and
withdrawal from the account would be tax-free and (3) upon death, the account could pass to non-spousal beneficiaries who could let the funds grow tax-free during their lifetime. The Roth was a superb financial planning vehicle for people with some assets, but
who could not afford the elaborate trusts of the super-rich.I quickly saw the advantages of the Roth, and gradually started converting my pre-tax IRA accounts in 2004. For every dollar converted, I had to report it as income on my tax return and pay tax at my highest marginal rate. Eventually, I converted all of my pre-tax IRAs to Roths, having paid huge amounts in taxes in order to fulfill my part of the deal that the government offered with the 1997 law.
Then in 2019, Congress changed the law by enacting the deceptively titled SECURE Act, which actually stands for “Screw Every Citizen Using Roth Equity.” It reduces the lifetime growth of inherited Roths for non-spouse beneficiaries to only ten years, shortcircuiting the compounding that was the intent of the original law. This was the first step in devaluing the Roth. The SECURE Act passed without any objections by people who should have known better.
But SECURE was just a prelude to what is now being proposed as part of the duplicitously named “Build Back Better” Act. There are at least seven major changes that seriously affect Roth (as well as pre-tax IRA) savers, but for brevity, we will discuss three
which are likely to affect more people:- Prohibits the use of Roth funds for investments that require accredited investor status;
- Prohibits the use of Roth funds for investments where the Roth owner has more than a 10% interest (vs. 50%) in the investment or
3 .where the Roth owner is an officer;
Both of these types of investments that exist in Roth’s at the time of enactment would be required to be divested from the Roth
https://www.americanthinker.com/articles/2021/10/requiem_for_the_roth_ira.html
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But but but but
That is not possible. It was Republic Congress and President Trump was the President. They only do good things for people.
I think you are spreading fake news @Jolly
LOL
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Doesn't both congress have to pass it and then the president has to sign it??
