Can an IRA Be Used for Estate Planning Purposes?

On the surface, the value of an individual retirement account is self-explanatory. You contribute into an individual retirement account so that you have a nest egg to draw from during your golden years. However, when circumstances are right, an individual retirement account can also be useful from an estate planning perspective. Let s look at the details. Traditional Individual Retirement Accounts You would contribute into a traditional individual retirement account with pretax earnings. This provides an immediate advantage, because your taxable income is being reduced by the amount of the contributions into the account. That s the good news, but the bad news is that the withdrawals that you take would be subject to taxation. You can begin to take penalty free withdrawals when you are 59.5 years of age. With a traditional individual retirement account, you are required to take mandatory minimum distributions when you are 70.5 years old. This is because the taxman wants to get some mo


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s