Lobbying by more than 2,000 FSI members to get a provision removed from the Highway Bill that proposed stretch IRAs be taxed over five years instead of a lifetime for certain beneficiaries has succeeded, according to a statement from the advocacy organization. Senate Majority Leader Harry Reid amended the bill to reflect this change.
“With our economy in the shape it’s in, and saving for retirement more difficult than ever, it was critical that this troubling provision be stripped from the bill,” according to a statement from FSI President and CEO Dale Brown. “The provision would no longer have permitted tax deferred stretches of IRAs for beneficiaries other than a spouse, minor children or the disabled. Others, such as adult children, would only be permitted a five-year window to defer.”
This five-year time frame in which to pay the taxes “would have greatly deterred saving,” according to Brown. “We applaud Leader Reid for taking this initiative and protecting savings in America.”
Danielle Reed writes for Financial Planning.