Will the Obama Budget Ruin Roth IRAs?

Roth IRAs are a useful way to save for retirement that millions of Americans use. But in President Obama's new budget proposal, changes to Roth IRAs could make them less valuable for investors.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the proposal to add required minimum distributions for Roth IRAs. Dan notes that currently, those who have traditional IRAs have to start taking minimum distributions when they reach age 70 1/2, but there's no requirement for Roth IRA holders. But the Obama budget would impose the same rules on Roth IRAs, forcing retirees to withdraw tax-free money from their accounts even if they don't need it. Dan points out that while the intent of IRAs was to use them for retirement, changing the rules after so many people counted on the current provisions in choosing to convert traditional IRAs to Roth IRAs isn't entirely fair. The real concern is that even bigger future changes to Roth IRAs could make them even less valuable for saving for retirement.

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The article Will the Obama Budget Ruin Roth IRAs? originally appeared on Fool.com.

Dan Caplinger doesn't own shares of any companies mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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