How to Turn Your IRA Into a Retirement Plan For Your Kids | #RichLifeLawyer Show 75
Many people don’t realize that their IRA, if they don’t spend it all down in their lifetime, can be used to create a “pension” for their kids if they take a few simple steps to secure that set up.
That’s what we talk about in today’s show.
It’s called “stretching” an IRA, and it’s the process of taking your IRA funds and created a new IRA for your beneficiaries.
When the IRA is turned over to them they then become the life that the IRA distribution schedule is determined from.
So, for example, if you have a kid that is 30 and he inherits your IRA and chooses to stretch it out over his lifetime (let’s say 85 years) then in year one he is going to take a distribution of 1/55 of the IRA funds (85-30 = 55 years of distributions).
This is a small fraction of the IRA, allowing it to continue to grow and accrue interests and value over time.
By the time they turn 85 there should be a sizable amount of money in your children’s new “pension” fund.
There are some dangers to look out for when doing this, and I think I’m going to talk about them in the next episode.
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Christopher Small knows how to help people live a rich life and leave a rich legacy. He is more than just an estate planning lawyer. He wants to help you create legacy.
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Christopher is a Kirkland estate planning lawyer with CMS Law Firm LLC. He is a speaker, a blogger, a husband, a father, a golfer, and really good at helping people create the life of their dreams.
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