One of the most neglected issues in
estate and financial planning is the treatment of a
person's retirement accounts.
Retirement accounts include
company-provided plans, Section 401(k) plans, IRA accounts,
SEPs, SIMPLEs and Roth IRAs.
There are numerous choices as to
how to draw down on these accounts. Generally, a person
must begin to make withdrawals from a retirement account
by April 1 of the year following the year in which the
person attains the age of 70 1/2. This applies to all
accounts other than Roth IRA accounts.
It is usually most advantageous
for a person to delay taking withdrawals as long as
possible, so as to allow the assets to grow tax-free,
and to delay the time when income taxes are due.
Any balance remaining in the
account at the time of death will pass to the named
beneficiaries, who will be required to pay income taxes at
the time of withdrawal.
Copyright 2008 @ John L. Pritchard All
Rights Reserved.
