Michael Kitces reports on the Treasury Greenbook proposals re retirement plans.  His post begins as follows:

Every year, the proposed changes to the tax laws encapsulated in the President’s budget request for the Federal government are recorded in the Treasury Greenbook, which is then taken under advisement by Congress to create its own budget resolution. And while the President’s budget request does not necessarily dictate what Congress will decide to do, it does provide valuable insight into potential legislation that may be considered in the coming months and years.

While some tax proposals in the Greenbook are relatively minor, or pertain to issues not directly relevant to our work as financial planners, this year’s FY2016 budget request had several proposals that would represent major changes in the world of planning for retirement accounts, both during clients’ lives and after they pass away.

Accordingly, following on last week’s review of the “good” and the “bad” of the proposed tax law changes for retirement accounts, we look at some of the “ugly” provisions that could have a more dramatic impact in the coming years, from the possible elimination of stretch IRAs (requiring the 5-year rule for most non-spouse beneficiaries), to a $3.4M “cap” on retirement accounts (though it is actually just a cap on new contributions to retirement accounts), and the proposed repeal of the Net Unrealized Appreciations (NUA) rules for those who were born after 1965!

Read the full Kitces Report at Proposals For Eliminating Stretch IRAs, Repealing NUA, And The $3.4M Retirement Account Cap In The FY2016 Treasury Greenbook | Kitces.com.


Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.