Tax Advantages of an IRA
IRAs and Roth IRAs are both accumulation and distribution vehicles.
Traditional IRAs continue to grow tax-deferred and Roth IRAs grow tax-free.
If IRAs are properly set up and administrated, an IRA can become a Multi-Generational legacy that allow “stretching” of the assets and required distributions beyond the life of the original owner.
This legacy plan is accomplished through a Multi-Generational IRA (MGIRA) strategy – individual beneficiaries can stretch inherited IRA distributions over their individual life expectancies.
When you inherit a traditional IRA, you only pay taxes on the actual annual distributions you receive while the remaining assets grow tax-deferred.
For those who inherit a Roth IRA, the assets grow tax-free and qualified distributions are tax-free!
Other potential IRA advantages include:
- More estate planning options
- Wider array of investment choices within the account
- Simplified conversions to a Roth IRA
- Plan portability
- Account consolidation options