If you already have a retirement plan started, make sure you incorporate that retirement plan into your estate plan to ensure that the two plans work in harmony with one another. Whether you have an IRA, a 401(k), or another type of retirement account, your retirement plans should become an integral component of your estate plan. Integrating your retirement plans you’re your estate plans can become complicated once you start to factor in all the relevant I.R.S. rules and regulations. The key to maximizing your retirement savings, and ensuring that you and your loved ones are financially secure, is to work with an experienced estate planning attorney.
At Levine, Furman & Rubin, LLC our IRA and Retirement Planning attorneys understand the complex tax and financial issues involved in combining your retirement and estate plans.
IRAs, 401(k)s and Other Retirement Accounts
There was a time in the United States when workers counted on lifetime employment and an employer sponsored pension as a reward at the end of that lifetime of dedicated service to an employer. Today, however, employer sponsored pensions are rare, and lifetime employment has all but gone by the wayside. Consequently, most workers are forced to structure their own retirement plans using Individual Retirement Accounts (IRAs), 401(k)s, and other tax deferred retirement accounts.
As the number of individual retirement account options grows, the rules and regulations that apply to each option grows as well. The tax consequences alone of your retirement accounts may be difficult to understand, much less incorporate into your estate plan. Keep in mind, for example, that although many retirement accounts are tax-deferred, that does not mean tax-free. Ultimately, the tax implications of your retirement accounts must be addressed. Failing to do so could wreak havoc on your overall estate plan.
Combining Retirement Planning and Estate Planning
The sheer volume of rules and regulations that apply to retirement accounts is one reason why it is essential that you not make the mistake of creating your retirement and estate plans independently of one another. Your retirement nest egg will have a direct impact on your estate plan as will the tax consequences of your retirement accounts. The rules for withdrawals from a tax-deferred retirement account are typically complex.
Moreover, the withdrawal rules are subject to change – and do change frequently. When you add in the rules that apply to wealth transfers, it should come as no surprise that people often lose a significant portion of their retirement nest egg to taxes either during their “Golden Years” or after death.
The New Brunswick IRA and Retirement Planning attorneys at Levine, Furman & Rubin, LLC are well versed in the tax implications of all the various retirement account options. We are committed to helping you blend your retirement plans with your estate plans to ensure that they work in harmony with each other. Contact the team today by calling 732-238-6000 or by filling out our online contact form.