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ROTH PROPOSAL
OBAMA's PROPOSED 2015 BUDGET:
Mandatory ROTH Required Minimum Distributions (RMD)
The rule to impose RMDs would bring Roth IRAs into line with traditional IRAs, which already require mandatory distributions at age 70 1/2. All qualified distributions would, however, remain tax-free.
Mandatory minimum withdrawals would alter planning for individuals who plan to use Roth IRA's to pass their assets on to the next generation. The planning in use allows current owners to continue to grow their Roth without any mandatory distributions which allows for more compounding of interest to grow the assets for ultimate use by the beneficiary. To further reduce the viability of Roth IRA's the budget would also change the distribution requirement to nonspousal beneficiaries by forcing liquidation within five years. This is all bad new for the Roth IRA and the individuals who have relied on the current rules to further estate planning for their families.