Is Your IRA Or Retirement Plan MULTI-GENERATIONAL?

What is a Multi-Generational IRA?

QUESTION: Can you name one of the greatest tax breaks in the U.S. Tax Code?

Thanks to the salutary effects of tax-free growth, the miracle of compound interest and tax breaks aimed
at saving spendthrift Baby Boomers from themselves, many people are going to accumulate more
money in IRAs, pensions, profit sharing plans, 401(k)s, and similar plans than ever before. Why?


Some retirees may be able to sustain their lifestyles, meet obligations and still leave some percentage of their IRAs to their heirs. These individuals
may want to pass on the unused portion of an IRA to a spouse, children or even grandchildren. Creating a Multi-Generational (MGIRA) or “stretch” IRA can result in substantial distributions being made over the life expectancies of the owner, the owner’s spouse and their children. Consider, for example, a 72-year-old married man with three children who has accumulated $2,550,000 for retirement. By making the most of Multi-Generational IRA planning, total distributions from a $2.5 million retirement nest egg could exceed $11 million!

Unfortunately, putting together a successful Multi-Generational IRA takes careful planning, as there are plenty of issues to consider. As Forbes® Magazine explained, “The rules covering inherited IRAs are the most complex that ordinary taxpayers ever encounter; even the IRS hasn’t filled in all the gaps.” The biggest obstacle to an IRA legacy strategy, believe it or not, is the Federal Government. Congress created IRAs to encourage Americans to plan for their retirement. However, it never intended for them to accumulate funds and defer taxes indefinitely. Unless an IRA owner takes specific steps to continue to defer tax liability, the IRS stands to take 35% to 80% of those hard-earned IRA funds upon the death of the owner.


Your retirement distribution professional will gladly describe for you in greater detail how an MGIRA
works, provide a detailed diagnostic review of your current accounts, and help you decide whether or
not this powerful legacy option is suitable for you.

Talk to Lance!