Apr 13, 2019
Proverbs 13:12 says “Hope deferred makes the heart sick, but a longing fulfilled is a tree of life.” With IRA’s, or individual retirement accounts, hope, or money, deferred allows your longings to be fulfilled when you retire. These hopes include a comfortable retirement, with travel and fun, and providing for your family. Robby talks about how his dad wanted to go to Hawaii with his wife, but after she passed, he instead got to go with his children. This was his hope deferred.
One thing most people where not hoping for is paying taxes on the
money in their IRA, but someone is going to be paying these taxes.
That is why RMDs, or Required Minimum Distributions, now exist, so
that people do not just hold this money in their account until they
pass. If your children or spouse inherit this money, it is likely
they are going to take the money in a lump sum, and pay a much
larger tax bill than if this money was taken out over time. There
are some strategies you can put into place now to make the tax bill
much more manageable.
The first is QCDs, or Qualified Charitable Distributions, which we
talk about a lot on this show. If your hope for this money was to
give back to the kingdom, and you are over 70 ½, you can start
implementing this today to not only give money to the church, but
also satisfy your RMDs and reduce your taxes!
Another strategy involves life insurance. Hans discusses policies
that, over the years, will drain your IRA to pay the premium on a
life insurance policy. You pay taxes on the amount coming out, and
the rest goes to pay the life insurance bill. Ultimately, when you
pass, your family is going to receive more money than they would
have if you just left the IRA, as life insurance benefits are tax
free. In this situation, you still have control over the money, as
the cash value of the policy is still available to you. There are
even policies that will allow you to access the death benefit early
to pay for long term care costs!
It is so important when you are doing this planning that you find
someone who is looking out for things that you are not even
thinking about and makes sure your family is taken care of.
Don’t forget to get your copy of “The Complete Cardinal Guide to
Planning for and Living in Retirement” on Amazon or on
CardinalGuide.com for free!
You can contact Hans and Cardinal by emailing
hans@cardinalguide.com or calling 919-535-8261. Learn more at
CardinalGuide.com.