nhboy
Ubi bene ibi patria
Roth IRA: Time to retire Roth IRAs - latimes.com
"The day after Congress passed the new healthcare law, an opponent called it "a fiscal Frankenstein." In fact, those are fitting words for Roth individual retirement accounts, or IRAs. Roths drive up the federal deficit and cause other pain. They're great for holders but grim for America. It's time to retire them.
Retirement accounts were designed by Congress to spur saving by Americans for their golden years. Let's compare a Roth IRA to other accounts, such as traditional IRAs, 401(k)s or 403(b)s.
In the other accounts, contributions are tax deductible and nest-eggs grow tax-free until money is withdrawn. Payouts can begin at age 59 1/2; they must begin after age 70 1/2 and be taken annually thereafter, and they're fully taxable. The accounts strike a two-way bargain: years of tax deferral and deductions, followed by years of taxpaying withdrawals.
Then, in 1997, Congress created the Roth IRA.
In a Roth, taxes are treated the other way around. There's no tax break on contributions. But from that point on, taxes simply vanish. As long as the account is at least 5 years old, there is no tax on any withdrawals made after age 59 1/2. There's no requirement that you make a minimum withdrawal — after age 70 1/2, or ever.
All of which makes Roths a perfect "fiscal Frankenstein." In return for little more than ordinary upfront taxes, Congress waived untold billions in future Treasury receipts. Then, too, Roths could be a drag on the U.S. economy. Since no withdrawals are required, assets can lie idle indefinitely."
"Gleckman is the editor of TaxVox, a blog published by the nonpartisan Tax Policy Center in Washington. Here's Gleckman on Roths for the rich: "In the long run, turning billions of dollars from tax-deferred to tax-free savings will be a huge loser for Treasury. My colleagues at Tax Policy Center figure that, through mid-century, allowing unlimited Roth conversions will reduce federal revenues by $100 billion."
Whatever the answer for individuals, there's little doubt that Roths are wrong for America. They're Frankensteins, fated to wreak havoc. It's time to retire Roth IRAs."
"The day after Congress passed the new healthcare law, an opponent called it "a fiscal Frankenstein." In fact, those are fitting words for Roth individual retirement accounts, or IRAs. Roths drive up the federal deficit and cause other pain. They're great for holders but grim for America. It's time to retire them.
Retirement accounts were designed by Congress to spur saving by Americans for their golden years. Let's compare a Roth IRA to other accounts, such as traditional IRAs, 401(k)s or 403(b)s.
In the other accounts, contributions are tax deductible and nest-eggs grow tax-free until money is withdrawn. Payouts can begin at age 59 1/2; they must begin after age 70 1/2 and be taken annually thereafter, and they're fully taxable. The accounts strike a two-way bargain: years of tax deferral and deductions, followed by years of taxpaying withdrawals.
Then, in 1997, Congress created the Roth IRA.
In a Roth, taxes are treated the other way around. There's no tax break on contributions. But from that point on, taxes simply vanish. As long as the account is at least 5 years old, there is no tax on any withdrawals made after age 59 1/2. There's no requirement that you make a minimum withdrawal — after age 70 1/2, or ever.
All of which makes Roths a perfect "fiscal Frankenstein." In return for little more than ordinary upfront taxes, Congress waived untold billions in future Treasury receipts. Then, too, Roths could be a drag on the U.S. economy. Since no withdrawals are required, assets can lie idle indefinitely."
"Gleckman is the editor of TaxVox, a blog published by the nonpartisan Tax Policy Center in Washington. Here's Gleckman on Roths for the rich: "In the long run, turning billions of dollars from tax-deferred to tax-free savings will be a huge loser for Treasury. My colleagues at Tax Policy Center figure that, through mid-century, allowing unlimited Roth conversions will reduce federal revenues by $100 billion."
Whatever the answer for individuals, there's little doubt that Roths are wrong for America. They're Frankensteins, fated to wreak havoc. It's time to retire Roth IRAs."
