Header Section

Smart money/Coming Soon

Slott Report Mailbag: Will Congress Renege on the Roth IRA's Tax-Free Deal?

We understand the public's apprehension with those in Washington, D.C., and this week we received many questions on recent Congressional action and what may be in store for the future. This week's Slott Report Mailbag examines two issues Congress has not taken a stand on (and in our opinion won't for fear of public outcry and backlash) - the Roth IRA's tax-free distribution power and the Stretch IRA.  As always, we stress the importance of working with a competent, educated financial advisor to keep your retirement nest egg safe and secure. Find one in your area at this link.


Roth IRA congress tax-free distributions
Send questions to [email protected]

I have read your books and watched a couple of your seminars. It made sense for me to convert our IRAs to Roth IRAs, which we did in 2010, and paid the taxes in 2011 and 2012. Unfortunately, I am reading and hearing on an almost daily basis that the government is going to start going after private retirement accounts.

In your opinion, how safe are our Roth IRAs from some type of government interference? It would certainly seem unfair to tax Roth IRAs again since the contributions have already been taxed.



One of the reasons that some people won’t convert their IRA money to a Roth IRA is that they don’t trust the government to keep the tax-free deal. While Congress has the right to change the rules, if they ever did, they would likely grandfather or exempt existing accounts from the new rules. In addition, the only funds in a Roth IRA that could be taxed would be the earnings in the account.


We are considering the "Stretch" process for the future of our IRAs. Does it look to you that this may be eliminated by Congress? Also, who will enforce and carry out our stretch wishes when we're gone?

The stretch process for taking death distributions from retirement plans using the beneficiary’s single life expectancy is in the tax law. While we cannot predict the future, it seems highly unlikely that Congress would eliminate it. It is up the beneficiary of the account to follow all the IRA rules once they inherit the account.

- By Joe Cicchinelli and Jared Trexler


Post a Comment


Thursday's Slott Report Mailbag

Consumers: Send in Your Questions to [email protected]

Can I transfer money from my IRA to my husband's Roth IRA? I am 35, and he is 36.

Thank you!

Gail Clements

No. The only way your IRA funds can be transferred to your husband’s IRA is in a divorce or after your death. Even then, it would have to be transferred to a similar IRA, for example an IRA to IRA or a Roth IRA to another Roth IRA. In this case, you cannot transfer your IRA into your husband’s Roth IRA.