You undoubtedly understand the importance of retirement planning, but do you know how important it is to ensure that your retirement plans work in harmony with your estate plans? If you have an IRA, a 401(k), or another type of retirement account, it is essential that those accounts are factored into your overall estate plan. To reap the maximum benefits from your retirement planning efforts you need to incorporate your retirement plans into your estate plan. Doing so, however, can be tricky given all of the I.R.S. rules and regulations. Working with an experienced IRA and Retirement Planning attorney is the key to successfully integrating your retirement plans into your estate plan.
IRAs, 401(k)s and Other Retirement Accounts
In the 21st Century, most workers must take charge of their own retirement planning because the days of employer sponsored pension and retirement benefits are all but gone. Consequently, retirement planning tools such as Individual Retirement Accounts (IRAs), 401(k)s, and other tax deferred retirement accounts have become extremely popular ways to save for retirement. As the retirement tools continue to diversify, the rules and regulations that apply to each new option multiply as well. The tax consequences of your retirement accounts alone can be confusing. Moreover, the tax laws can vary significantly and change frequently. Although you may have a tax-deferred retirement account, the tax consequences of the funds you save in that account will have to be addressed when you start taking the funds out during your retirement. If you don’t plan for the impact your retirement plans will have on your overall estate plan you could find yourself in trouble during your retirement years.
Retirement Planning and Estate Planning
Because your retirement plan will have a direct and significant impact on your estate plan, and vice versa, it is imperative that you consider the two together. Withdrawals from your retirement plans come with rules and tax consequences as do the transfer of wealth. It is crucial that you incorporate your retirement plans into your overall estate plan to ensure that your retirement savings account is protected and any tax consequences of the withdrawal or transfer of the funds held in the account is minimized. After working hard all your life and investing wisely it would certainly be a shame to lose a significant portion of your savings to taxes. Without incorporating your retirement plans into your estate plan, however, that is precisely what can happen.
The Hawaii IRA and Retirement Planning attorneys at Sterling & Tucker, LLP are committed to protecting you and guarding your retirement nest egg. Because our attorneys understand the I.R.S. rules and regulations we can help you develop an estate plan that minimizes the tax burden on your estate and ensures that your retirement nest egg is protected. Contact the team today by calling (808) 531-5391 or by filling out our online contact form.