Estate Planning with IRAs: Traditional v. Roth

Most folks know that an IRA can provide you with a financial underpinning during your retirement years. However, did you know that you can also use an individual retirement account as part of your estate plan. Let s start by looking at the two types of IRAs traditional and Roth. A traditional individual retirement account is funded with pretax earnings. One can begin taking penalty-free distributions from the account when you are 59.5 years of age. Because you didn’t pay taxes on the funds that you placed into the account, the distributions will be taxable. This type of account has some, but limited value from an estate planning perspective, because you are required to take distributions annually when you reach the age of 70.5. There is another type of individual retirement account called a Roth IRA. With a Roth IRA, the tax situation is reversed. You contribute assets into a Roth individual retirement account with funds that have already been taxed.  As a result, you do not hav


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