Stretch IRAs no longer targeted in Senate highway-funding bill

Individual retirement account beneficiaries can continue to stretch distributions over a lifetime, as the Senate dropped a provision in its highway funding bill that would have required those distributions within five years of the death of the original account holder.
AUG 07, 2014
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.

Latest News

Independent contractor formerly associated with MML Investors Services charged with running Ponzi
Independent contractor formerly associated with MML Investors Services charged with running Ponzi

Trevor Uhls was charged with wire fraud and money laundering in a criminal complaint filed in U.S. District Court for the Western District of Missouri.

Osaic adds $367M multigenerational team from Ameriprise in Iowa
Osaic adds $367M multigenerational team from Ameriprise in Iowa

The multigenerational Cedar Rapids firm is joining through a key OSJ as recruiting competition heats up across the wealth space.

IRS floats eligible investment rules for Trump Accounts
IRS floats eligible investment rules for Trump Accounts

New Treasury guidance sets fee caps, defines index-tracking rules, and bars ESG-linked funds from the tax-deferred accounts for minors

Carson Group adds $405M Northwestern Mutual team in Atlanta
Carson Group adds $405M Northwestern Mutual team in Atlanta

Yari Capital's move to Carson continues a run of additions for the $62 billion firm, days after it hired a veteran recruiter from Osaic.

Wealth Enhancement inks 'coming home' deal with Oklahoma RIA
Wealth Enhancement inks 'coming home' deal with Oklahoma RIA

Servo Wealth Management's $210 million book brings the Minneapolis consolidator's total client assets further past $160 billion.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income