In congress: 529-to-Roth IRA rollover

[FrancisBayes]

Call your legislator…because why would anyone not want this?

“The bill, S. 4440, allows rollovers from a 529 plan into a Roth IRA without being penalized.”

You can 2x backdoor roth.

https://twitter.com/CPAPlanner/status/1541907180584050688?s=20&t=sWf5p7phOE5WcgRpCb4X1g

[JBME]

Senator Burr is retiring in November so we’ll see if it gets picked up. So if your kids doesn’t use the 529 you can roll that money into your own Roth IRA (not your child’s Roth). Interesting idea. Doesn’t address how someone could plow $200k into a 529 right before the child might go to school but then doesn’t so you can roll $200k over to Roth. That really means Roth limits don’t exist. Also what about the fact that most get state tax deductions on 529 contributions? That is not addressed

[Hank]

Seems a bit too good to be true. It also looks like poor public policy.

But on the other hand, we would benefit if this goes through.

[G]

Seems a bit too good to be true. It also looks like poor public policy.

But on the other hand, we would benefit if this goes through.

Unless a majority of legislators on Capitol Hill have huge 529s they need to roll into their Roths, there is zero chance that this passes.

[Lordosis]

It's a trap!

We will all over fund 529s and the carpet will be yanked before we can use it!

[Hank]

It's a trap!

We will all over fund 529s and the carpet will be yanked before we can use it!

Charlie Brown, Lucy, and the football? Surely not this time!

[spiritrider]

Call your legislator…because why would anyone not want this?

Because it makes absolutely no public policy sense and the budget deficits are unsustainable.

Why don't we just spend money we don't have in a fiscally irresponsible manner. Wait! we already did that with the $2 trillion American Rescue Plan.

[Hank]

Because it makes absolutely no public policy sense and the budget deficits are unsustainable.

Why don't we just spend money we don't have in a fiscally irresponsible manner. Wait! we already did that with the $2 trillion American Rescue Plan.

I can recognize something that would benefit me personally and yet makes utterly no sense as a matter of sound government financial policy. I would hope that others on this for could do so as well.

[FrancisBayes]

Because it makes absolutely no public policy sense and the budget deficits are unsustainable.

Why don't we just spend money we don't have in a fiscally irresponsible manner. Wait! we already did that with the $2 trillion American Rescue Plan.

So y’all also opposed the Tax Cuts and Jobs Act of 2017?

On a more serious note, I figured providing flexibility for two major financial concerns of most middle-class Americans (ie, retirement and college savings) may be worth adding to the deficit. I think anything that can incentivize saving should be tried because Americans love to spend. It’s just a bill, so I hope it passes after some tweaks that address some concerns raised here.

[Turf Doc]

So y’all also opposed the Tax Cuts and Jobs Act of 2017?

On a more serious note, I figured providing flexibility for two major financial concerns of most middle-class Americans (ie, retirement and college savings) may be worth adding to the deficit. I think anything that can incentivize saving should be tried because Americans love to spend. It’s just a bill, so I hope it passes after some tweaks that address some concerns raised here.

Depends on how you define middle class but it would be pretty easy to argue this is just a giveaway to "the rich" who can invest for college

Feel like getting rid of the penalty and rolling it into taxable would make more sense, not roth

[spiritrider]

As a matter of fact, I was against many components of the TCJA as unnecessary and fiscally irresponsible.

529 account use is already skewed to higher income taxpayers. Tax advantaged accounts have always come with tax and penalties when not used as intended.

A taxpayer knows going in what could be the consequences of overfunding a 529 are. The last thing we need are tax-advantaged bailouts for higher income taxpayers.

[Brains428]

Because it makes absolutely no public policy sense and the budget deficits are unsustainable.

So, you're telling me there is a chance....

[Tim]

So y’all also opposed the Tax Cuts and Jobs Act of 2017?

On a more serious note, I figured providing flexibility for two major financial concerns of most middle-class Americans (ie, retirement and college savings) may be worth adding to the deficit. I think anything that can incentivize saving should be tried because Americans love to spend. It’s just a bill, so I hope it passes after some tweaks that address some concerns raised here.

The only problem is you will pay higher taxes. Probably higher than the penalty.
Tax policy influences behaviors. This will not result in more savings or education.

[JBME]

So y’all also opposed the Tax Cuts and Jobs Act of 2017?

On a more serious note, I figured providing flexibility for two major financial concerns of most middle-class Americans (ie, retirement and college savings) may be worth adding to the deficit. I think anything that can incentivize saving should be tried because Americans love to spend. It’s just a bill, so I hope it passes after some tweaks that address some concerns raised here.

most people here are very fiscally conservative, which generally is a good thing. I think most here opposed those tax cuts. However, if the law exists, that gives us permission to use them to our advantage. The idea that you will pay higher taxes doesn't hold merit though. Taxes really haven't been raised since 1993. What's happened since then? Two recessions (probably in a third one right now), large increases in government spending especially in the Departments of Education and Health and Human Services and Defense, and the creation of a totally new department, Homeland Security. National deficit has blown up under 2 Democratic presidents and 2 Republican presidents. Ross Perot complained back in 1992. We all say and truly believe it is an issue, but likely no one here is being elected to Congress to fix any of this and so the budget will continue to balloon and no one truly knows when it will pop. No one knows when or if taxes will go up. Those who say taxes must go up have been saying that since the 2000s and here we are 20 years later. Note I do believe taxes will go up at some point. But then they could go down again. who knows. crystal ball is cloudy

[Tim]

JBME
Government spending could go down couldn’t it?
Is you crystal ball that cloudy?
There is an economic tax that has occurred!
Government spending has resulted in substantial harm to 50% of the population. Every metric shows this. Income disparities, wealth disparities, and cash disparities and taxes paid. The bottom 50% have been greatly taxed due to policies. So much of social spending actually produces a counterintuitive result, the bottom 50% are paying the price. Less buying power and a lower standard of living. Oh where can the lower 50% buy a decent free public education?
Oh, send a cash check for high gas prices is not a tax but it doesn’t work. Slight of hand.
Ben’s chart on cash reserves is very clear.