Congress eyes retirement-plan tax benefits – MarketWatch
SAN FRANCISCO (MarketWatch) — You’d think a legislative bill to fund the nation’s highways and mass-transit systems would have no connection to your retirement savings. But that didn’t stop lawmakers from proposing an amendment to the bill that would have trimmed a valuable retirement-plan benefit.
The proposal would have raised about $4.7 billion over 10 years by changing the rules governing how people who inherit an individual retirement account, or IRA, cash out that account.
Current law lets heirs stretch those payments — and the income-tax hit — over their lifetime, while the proposed amendment would have required heirs to distribute the sum over five years (spouses and some other types of heirs were excluded from the change).