One of the aspects of the Roth IRA that everyone loves is no RMD at age 70.5 like all other qualified retirement accounts require. One proposal in President Obama’s 2015 is the implementation of this game-changer. RMD for Roth accounts. Why require a withdrawal from an account that accumulates earnings tax deferred and anything withdrawn after 5 years comes out tax free? The tax free part is exactly the reason why.

Many years ago when the Roth IRA was developed, you could convert your IRA to a Roth and take 4 years to pay the tax on the amount converted. Many, many people took advantage of this option knowing that their withdrawals, after 5 years, would come out when they wanted to take them with no tax. If you are forced to pull funds from an account that has these provisions, your only choice is to reinvest the funds into something taxable. You may only pay capital gains on the reinvestment, depending on where you deposit those funds, but you will now annually pay tax.

This is what it is all about. Getting more tax dollars into the system.

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