CAI-NJ August 2021

RETIREMENT ROAD... from page 47.

efit from the tax-free growth inside the account

your designed intentions. They can be structured to provide you and/ or your spouse income while alive and stipulate distributions to ben- eficiaries upon your death. Other trusts such as Revocable Trusts, IDGTs (intentionally defective grant- or trusts), ILITs (irrevocable life insur- ance trust), etc. can be created to potentially own, control, remove assets from your estate, pay death taxes, etc. 2) Gifting: An individual can contrib- ute up to $15,000 ($30,000 for married couples)(2021) to anoth- er individual, each year, without triggering a gift tax filing. Also, grandparents can gift payments made for Educational Tuition for a student directly to the school and not trigger gift and potential tax or eating into your lifetime exemption, currently at $11,700,000 per per- son. 3) Creating a 529 plan for grandchil- dren: If it will be some time before a grandchild goes to college, grandparents can create a 529 plan to contribute money to a fund where earnings in the account can be tax-free when used for edu- cational purposes and again, if done properly not use any lifetime exemption. Retirement can be a long, winding road but understanding the resources available to you can help make that road a bit straighter. No matter where you are in your journey, just remember to enjoy the ride as you have earned it. Please consult your financial, legal and tax advisors before making any retirement strategic decisions. n

Your 70s At this point, all the planning should be set and you should be ready to enjoy your golden years within the retirement framework you have cre- ated. As you are taking distributions from your retirement accounts, receiv- ing your social security benefits and any other items of income you are generating, it becomes important to understand what the best way may be to protect and transfer your assets in the future. They say you can’t take it with you, so here are some items to consider when utilizing and eventually transferring your hard-earned wealth: 1) Creating Trusts: Trusts are a great way to assure that your wealth reaches your beneficiaries with

7) Rolling over your Tradition IRA to a Roth IRA: Beginning at age 72 (2020), you must start taking RMDs (required minimum distribu- tions) from your traditional IRAs. However, Roth IRAs do not have the same requirement. Roth IRAs allow for tax free growth by fund- ing the account with after tax dol- lars. If you are not relying heavily upon distributions from your IRA to fund your retirement, it may be best to roll over your traditional IRA into a Roth IRA before you reach the age of 72. Income tax will be due in the year this transfer occurs, but you (and eventually your chosen beneficiaries) will be able to ben-

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