How would you like to leave tax-sheltered assets to your kids and grandkids that can actually increase in value over time? It’s not a pipe dream.
Strategy: Take advantage of the “stretch IRA” concept. As the name implies, this technique enables a family to stretch out the benefits of retirement savings over a longer period than usual. In the interim, the funds continue to grow tax-deferred.
Keeping it going requires coordination between the IRA holder and his or her heirs.
Here’s the whole story: With a traditional IRA, you can accumulate savings for retirement without any current tax erosion. The IRA may be funded by annual contributions, subject to tax law limits, or a rollover from a qualified retirement plan like a 401(k), or both.
You must begin taking annual “required minimum distributions” (RMDs) after reaching age 70½. RMDs are taxable at ordinary income rates. Thus, the tax rate on these mandatory IRA payouts may...(register to read more)