Potentially forgiving student loans is a controversial topic these days. I’ve weighed in before on the current administration’s proposals and ideas. There are additional financial consequences to this proposal for the borrowers, too.
401k or IRA funds are what we call “tax-deferred”, not “tax-free”. IRS tax laws require funds invested in tax-deferred plans must start to be distributed by age 72, and taxable at your current tax rate when taken.
We’re seeing some alarming trends regarding retiree spending these days and this has the potential to derail your ability to sustain your retirement lifestyle.
There are specific rules that you need to follow depending on what IRA type you inherit and what type of beneficiary you are. Your distribution options will vary as well.
This week I dig into some of the key points of the Biden tax proposal to help you better understand if – or how – you might be affected.