06/27/2024
🗣️ “I’ll pass down the money I don’t use in my IRA/401(k) to my kids.”
I hear this often in my meetings with clients when we talk about legacy planning.
Many people want to leave money behind to their heirs, but most don’t know how to do this tax efficiently.
Did you know, if your non-spouse beneficiaries inherit your IRA/401(k), they will have to withdraw the entire balance over a 10 year window and still pay 100% taxes on the distributions (under The Secure Act 2.0)?
They will also have to pay this at THEIR OWN ordinary income tax rate, which we often see beneficiaries receive an inheritance at their highest income years (ages 50-60 years old).
This can be thousands of dollars in tax liability for your children, grandchildren, or whoever you want to pass your money down to, which can take a toll on them financially.
So how do we mitigate this? We help clients pass down assets that will NOT include a detrimental tax liability to their heirs, instead assets that will be passed down with tax advantages.
Disclosures: thrivent.com/social
