IRA and Retirement Accounts and Your Estate Plan
Individual Retirement Accounts, or IRAs, 401(k)s, and other retirement accounts are a popular way to save for your golden years. At first glance, a retirement account appears to be a simple, structured, tax deferred method of growing your nest egg; however, once you factor in the complex and ever-changing IRS rules that apply to retirement accounts, your simple method of saving for your golden years becomes much more complicated. Moreover, a wrong step along the way can lead to financial disaster.
At Law Offices of Richard B. Schneider we understand how important your retirement accounts are to you. We are committed to ensuring that your retirement savings are protected. Contact us today by calling 503-241-1215 or through our online contact form to discuss strategies for guarding your nest egg and your future.
Understanding IRAs, 401(k)s, and Other Retirement Accounts
The concept behind IRAs, 401(k))s, and other retirement accounts is simple enough – tax deferred savings that can be used after retirement. The simplicity, however, stops there. There are at least five separate and distinct types of IRAs, as many versions of a 401(k) as there are employers, and a multitude of additional retirement account options. Each one of these accounts has its own rules, advantages, and disadvantages for a participant. Furthermore, the IRS has rules and procedures that apply to each of these accounts that must also be taken into consideration. Many of the IRS rules relate directly to the tax deferred advantage that attracts investors to these accounts. Failing to understand the labyrinth like rules that apply to a retirement account can result in losing the intended benefits of the account.
Contributions, Distributions, Vesting, and Taxes
Although each retirement plan is unique, there four basic questions that you should be able to answer about your retirement plan:
- How much can I (and my employer if applicable) contribute each year?
- When do I have to start taking distributions and how much am I required to take?
- What is the vesting schedule for employer sponsored plans?
- What are the tax rules relating to the principle and distributions?
Each of these questions is important to your overall retirement plan. Moreover, the answer to one question will impact the answer to another question. To gain the maximum benefits from your retirement plan you must understand how the plan works and how the IRS taxes the contributions and/or distributions to the plan.
The estate planning attorneys at Law Offices of Richard B. Schneider, LLC can help answer these questions and many more because we make it our business to understand both financial planning and tax law. Contact us today by calling 503-241-1215 or through our online contact form so that we can sit down and go over your retirement accounts to ensure that you are receiving the maximum benefits possible from your hard earned money.