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Learning, Sharing, and Teaching => Investor Alley => Topic started by: imustachemystash on January 04, 2014, 04:49:02 PM

Title: Do you think the tax law for SEPP will change in the next 10-15 years?
Post by: imustachemystash on January 04, 2014, 04:49:02 PM
We're planning on doing the Roth IRA conversion ladder from my 403 B and my husband's 401K and we want to be pretty sure the tax law doesn't change on us when we are ready to retire in our 40's.  What do you all think?
Title: Re: Do you think the tax law for SEPP will change in the next 10-15 years?
Post by: iamlindoro on January 04, 2014, 05:04:29 PM
As I understand it, SEPP (72t distributions) and Roth IRA pipelining are two different things.  It's not clear to me which you mean from your question/subject.

I don't think anyone can guess what laws will be in 15 years, but I don't think either program is currently under fire or in any danger.
Title: Re: Do you think the tax law for SEPP will change in the next 10-15 years?
Post by: imustachemystash on January 04, 2014, 05:25:51 PM
Oh.  Thanks for pointing that out.  Luckily I still have several years to figure out what I'm doing.  I was asking about this info I gathered from 403bwise.com

"Retire before age 55 and arrange a schedule of Substantially Equal Periodic Payments (SEPP). The payments are based on an IRS formula and must continue for 5 years or until the individual reaches age 59, whichever takes longer. " 
Title: Re: Do you think the tax law for SEPP will change in the next 10-15 years?
Post by: kyleaaa on January 04, 2014, 06:17:18 PM
SEPP accelerate tax receipts, so I wouldn't think they would be eliminated as a result of any revenue-raising or budget-cutting schemes.
Title: Re: Do you think the tax law for SEPP will change in the next 10-15 years?
Post by: Khan on January 04, 2014, 06:37:54 PM
Yeah, SEPP is different from the ROTH IRA pipeline.

You have to think about the bigger picture with these things. These are tools of the middle to upper middle class. Harming them would rile up those masses much more then raising long term capital gains rates or anything else that hits the rich, which is where all the power and wealth is.

It's like hitting a beehive with a bat to get honey. Will it work? Yeah. But there's much more efficient ways to go about collecting revenues.

I wouldn't worry about SEPP changing, the ROTH IRA pipeline I'd be a little more worried about, but that's .2% instead of .1% worry.
Title: Re: Do you think the tax law for SEPP will change in the next 10-15 years?
Post by: imustachemystash on January 04, 2014, 07:06:11 PM
Thanks for your responses.  Since they are different, could we do both the Roth conversion ladder and the SEPP?  It looks like the SEPP alone will not allow us to withdraw enough to cover all our expenses.