answer:1. The “stretch” IRA: beneficiaries will be required to withdraw the balance of inherited retirement accounts within 5 years of the owner’s death, which will increase taxes on distributions. 2. Back-door Roth IRA conversions: high-income earners can make a non-deductible contribution to a traditional IRA and then convert it to a Roth IRA without paying any income tax, which lawmakers believe results in an unintended tax-free windfall. 3. Aggressive Social Security benefit claiming strategies: likely to end is the “file and suspend” strategy, which allows married couples to claim benefits based on their own work record or on the work record of their spouse, resulting in an increase of monthly benefits over time.

answer:The proposed law changes would require beneficiaries of an inherited retirement account, such as an IRA, to withdraw the balance of the account within 5 years of the account owner's death. This would require beneficiaries to take their distributions sooner than if they were able to use the current "stretch" provision, which allows them to take distributions over their remaining life expectancy. This acceleration of distributions would also increase the income taxes that beneficiaries will pay on the distributions, particularly in the case of a traditional IRA, where the distributions are subject to ordinary income tax. By taking the distributions over a shorter period, beneficiaries may end up being pushed into a higher tax bracket, resulting in a larger tax bill. Additionally, the loss of the "stretch" provision may also impact individuals who are contemplating making Roth conversions for the benefit of their children or other heirs. If the beneficiaries will be required to withdraw the funds within 5 years, it may be less advantageous to make Roth conversions as a means of passing wealth to the next generation.

answer:The "file and suspend" Social Security benefit claiming strategy is a loophole that allows married couples to maximize their retirement benefits. In this strategy, one spouse reaches full retirement age and files for their own retirement benefit but then immediately suspends the application. This allows the benefit to continue to accrue delayed retirement credits, which increase the benefit amount by 8% each year until age 70. Meanwhile, the other spouse can file for a spousal benefit, which is equal to 50% of the first spouse's full retirement benefit. The couple can then switch to their own benefits at any time before age 70. This strategy has been used to maximize the total amount of benefits received by the couple over their lifetimes. However, lawmakers believe that it is unfair because it allows higher-earning couples to receive more in Social Security benefits than they may have been intended to receive. By suspending their own benefit, the higher-earning spouse can increase it later and, in turn, increase the spousal benefit that the lower-earning spouse receives. Additionally, lawmakers argue that this strategy is costly for the Social Security program and that it undermines the program's long-term solvency. As a result, lawmakers have proposed changes to Social Security claiming strategies, including the end of the "file and suspend" strategy. The changes would limit the ability of individuals to claim spousal benefits while their own benefit is suspended and would limit the ability of individuals to receive retroactive benefits for more than 6 months prior to the date of application. While the changes have not been finalized, individuals who are considering this strategy may need to act quickly if they want to take advantage of it before it is closed.

answer:The proposed changes to the "back-door" Roth IRA conversion loophole will affect high-income earners who use this strategy to make non-deductible contributions to a traditional IRA and then convert those funds to a Roth IRA without paying taxes on the conversion. Essentially, the loophole allowed high-income earners to bypass the contribution limits for Roth IRAs and then benefit from tax-free distributions. The proposed changes would make it harder for high-income earners to continue using this strategy by requiring them to include all traditional IRA funds in their pro-rata calculations. This means that if a high-income earner has both deductible and non-deductible IRA contributions, they would need to include the total balance of their traditional IRAs when calculating the tax implications of a Roth conversion. This could result in a greater tax bill upon conversion. However, there may still be a way for high-income earners to take advantage of the tax benefits of a Roth IRA without exploiting the loophole. For example, they could contribute to a Roth 401(k) plan if their employer offers one, or they could consider other tax-advantaged accounts, such as health savings accounts or 529 college savings plans. Additionally, they may be able to use Roth conversions strategically over a longer period of time, rather than making large, one-time conversions that trigger higher tax bills. It's important for high-income earners to consult a financial professional for guidance on the best way to maximize their retirement savings without taking unnecessary tax risks.