Is Your IRA an IOU to the IRS?
Tax Traps and Other Problems Every IRA Owner Should Know!
By: Rex Hogue and Fred Haiman, equity Partners with the faith-based estate and elder law firm of Haiman Hogue, PLLC
We have something shocking to tell you. In fact, you may not believe what we’re about to tell you. That’s okay; most people don’t believe it until we show them the facts. Did you know that for most people, an IRA is their biggest problem asset? It doesn’t matter whether it is a traditional IRA or a Roth IRA. This is because there are significant tax traps to IRAs. Not understanding these issues could cost you a lot of money!
Practically everyone thinks having a “nest egg” for retirement is a good idea. If you are like most people, that eventually means a 401K, IRA 403B, or Keogh plan. And tax issues aren’t even the biggest problems with qualified retirement plans! Other issues could actually destroy your family.
Let me do something right here to make terminology a little easier. I’m going to use the term “IRA” even if I mean some other type of qualified retirement plan.
It makes sense to put money in one of these tax-deferred vehicles. Tax-free growth is normally a good thing, but, without proper planning, your IRA will be an IOU to the IRS! That’s because the IRS wins when your IRA becomes subject to two, three, or four different taxes at once. The tax problems are not the only problems either. For instance, did you know that distributing your IRA through a beneficiary designation to an individual is likely to create serious but avoidable problems for that beneficiary? Without proper planning, passing your retirement plans to your loved ones will create unnecessary headaches for your loved ones!
As for the tax problems, you have to remember that the IRS is only in it for the money. The job of the IRS is to raise money for the U. S. Treasury. That’s it, pure and simple. That is why the IRS exists; it is why they do what they do. Wouldn’t it be a tragedy if the IRS became the Biggest Beneficiary of Your IRA
So how can you avoid these problems? It’s called a Retirement Plan Trust.
If you would like to learn more about this amazing estate planning tool, just email us at firstname.lastname@example.org or plan on attending one of our FREE upcoming workshop on February 20 at the McKinney Senior Center. Simply visit our events page to RSVP or call 469-893-5337.