Proposed wiki page on Stretch IRA

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fyre4ce
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Proposed wiki page on Stretch IRA

Post by fyre4ce » Tue Mar 24, 2020 3:35 pm

The wiki has an article on the Stretch IRA but it's very short, just once sentence, so I'm proposing an update. In the course of recent edits on IRA and RMD pages, I realized the wiki could benefit from more content related to Stretch/Inherited IRAs, particularly with the new SECURE Act ten-year rule. Kitces has a great article on post-SECURE Act strategies; the content I write is largely consistent with that page, although I have more or less detail in certain places. I'd like to solicit feedback from the forums on this proposed expansion of the content:

https://www.bogleheads.org/wiki/User:Fy ... tretch_IRA

Thanks!

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Peculiar_Investor
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Re: Proposed wiki page on Stretch IRA

Post by Peculiar_Investor » Tue Mar 24, 2020 4:39 pm

As a Canadian I know nothing on the topic, but I do know that one of the key mantra's of Wikipedia is Be bold so why not just Go for It.
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams

Alan S.
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Re: Proposed wiki page on Stretch IRA

Post by Alan S. » Tue Mar 24, 2020 5:37 pm

There are some major issues left unresolved by the Secure Act legislation involving things such as multiple beneficiaries, some of which are just DBs and some are EDBs. Another is the situation where a non DB ends up better off than a DB. The definition of what course of education a minor EDB must pursue in order to stave off the start of the 10 year rule is not known.

The IRS is going to have to produce a major update of the IRS RMD Regulations. This is somewhat urgent since most trusts drafted to secure the stretch have now been rendered useless. While these Regs would normally be on fast track, it is not clear whether the current pandemic is going to delay the Regs.

In short, any update to the wiki will have to be redone after the Regs are released. It is not so much a question of old law vs new law as it is a matter of the new law being subject to interpretation by the IRS.

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fyre4ce
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Re: Proposed wiki page on Stretch IRA

Post by fyre4ce » Tue Mar 24, 2020 6:31 pm

Alan S. wrote:
Tue Mar 24, 2020 5:37 pm
There are some major issues left unresolved by the Secure Act legislation involving things such as multiple beneficiaries, some of which are just DBs and some are EDBs. Another is the situation where a non DB ends up better off than a DB. The definition of what course of education a minor EDB must pursue in order to stave off the start of the 10 year rule is not known.

The IRS is going to have to produce a major update of the IRS RMD Regulations. This is somewhat urgent since most trusts drafted to secure the stretch have now been rendered useless. While these Regs would normally be on fast track, it is not clear whether the current pandemic is going to delay the Regs.

In short, any update to the wiki will have to be redone after the Regs are released. It is not so much a question of old law vs new law as it is a matter of the new law being subject to interpretation by the IRS.
Are you proposing that we wait until we get more guidance before making a wiki update?

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Re: Proposed wiki page on Stretch IRA

Post by Alan S. » Tue Mar 24, 2020 11:18 pm

Perhaps. Just know there are several gray areas. An update now would itself have to be updated again once the IRS Regs are issued. Another option is to update now what is known and mention the gray areas.

Natalie Choate refers to some of those in the attach January review of Secure, although the emphasis is on trusts as beneficiaries. Bruce Steiner, who posts here is the expert on trusts.

https://www.ataxplan.com/wp-content/upl ... 0-2020.pdf

is50xenough
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Re: Proposed wiki page on Stretch IRA

Post by is50xenough » Wed Mar 25, 2020 6:52 am

I would be very interested in more info, if there are additional strategies not covered. Thanks

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neurosphere
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Re: Proposed wiki page on Stretch IRA

Post by neurosphere » Wed Mar 25, 2020 7:42 am

Alan S. wrote:
Tue Mar 24, 2020 11:18 pm
Perhaps. Just know there are several gray areas. An update now would itself have to be updated again once the IRS Regs are issued. Another option is to update now what is known and mention the gray areas.
It's easy to update a wiki page when new information is available. Incremental changes are fine. The wiki can even include links to a discussion/thread of the grey areas, for example.
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes".

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fyre4ce
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Re: Proposed wiki page on Stretch IRA

Post by fyre4ce » Wed Mar 25, 2020 10:49 am

neurosphere wrote:
Wed Mar 25, 2020 7:42 am
Alan S. wrote:
Tue Mar 24, 2020 11:18 pm
Perhaps. Just know there are several gray areas. An update now would itself have to be updated again once the IRS Regs are issued. Another option is to update now what is known and mention the gray areas.
It's easy to update a wiki page when new information is available. Incremental changes are fine. The wiki can even include links to a discussion/thread of the grey areas, for example.
After further reflection I would propose we consider updating the content I wrote now, pending review and revision. The basics of the SECURE Act (ten-year rule vs. life expectancy by Table I) are pretty clearly set and I think these strategies for dealing with the shorter distribution window should be helpful immediately. When I wrote the draft I linked, I intentionally avoided some of the more nuanced topics (eg. age of majority being different in different states, exact definitions for disability, etc.) because they will apply to only a small minority of readers, and would take up a lot of space to explain fully. Future IRS guidance may fall into that category, but in any case, dealing with the new ten-year rule is an issue facing both owners and beneficiaries right now, and I hope this new content will help with that.

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fyre4ce
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Re: Proposed wiki page on Stretch IRA

Post by fyre4ce » Fri Mar 27, 2020 12:47 am

*bump*

Looking for more feedback on this topic before I publish.

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