Stretch IRAs no longer targeted in Senate highway-funding bill

Distributions from inherited Individual retirement accounts can continue over a lifetime

Jul 11, 2014 @ 10:53 am

By Mark Schoeff Jr.

+ Zoom

People who inherit individual retirement accounts can continue to hold onto them indefinitely, with the congressional threat of curbing the ability to take distributions over a lifetime abating for now.

The Senate Finance Committee dropped the so-called stretch-IRA provision from the nearly $11-billion highway-funding bill it approved on Thursday. The move came hours after the House Ways & Means Committee passed its own measure of just about the same size without the stretch-IRA provision.

In the original draft of the Senate measure, Senate Finance Committee Chairman Ron Wyden, D-Ore., included a provision that would require the distribution of IRAs within five years of the death of the account holder, with some exceptions. A committee summary of the bill said that accelerating the taxes paid would raise $3.7 billion over 10 years. Under current law, distributions can be stretched over the life of the beneficiary, which can be many years, if he or she is young.

Both versions of the bill now instead rely on other measures to raise the money required to replenish the Highway Trust Fund, which could start running out of funds in August and threaten hundreds of road projects and thousands of jobs. The House and Senate bills raise money through an extension of custom user fees, adjusting the amount of money companies have to contribute to pension plans and transferring gas-tax money from an underground storage account to the highway fund.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Albridge's Butler: Making advisers of tomorrow more effective and efficient

Gadget Girl checks out the latest tech from Albridge and how they're helping advisers stay one step ahead of the curve.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

Vanguard rides robo-advice wave to $65B in assets

Personal Advisor Services, four times the size of its closest competitor, combines digital and human touch.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print