SECURE Bill applicable to Roth?
As currently written the SECURE Bill limits the stretch IRA to 10 years. Would that 10 year limitation apply to a Roth too?
Assuming this provision was written into the Bill for revenue generation – there would be no revenue generation for imposing such restriction on Roth inheritance (at least not in the near term following an inherited IRA).
Permalink Submitted by Alan - IRA critic on Sun, 2019-05-26 18:10
Bills in both houses restricting the stretch will apply to all retirement plans including Roth IRAs. Even with no taxes due for Roth distributions, the transfer of Roth money into taxable accounts will generate tax revenue when the taxable accounts spew out annual income, and tax free earnings in the Roth will cease. The RESA bill in the senate includes an approx 400k exemption per beneficiary, but if the inherited value per beneficiary on the DOD is over that, the 5 year rule would apply. Any resulting compromise bill will likely have either no exemption and a longer stretch or a dollar exemption and shorter stretch.