Let me prove it to you.  Who designed 401k’s, 403(b)’s, SEP’s, Simple IRA Accounts, IRA’s?  Congress.  And who enforces those provisions?  The IRS.  They set the rules and upon you contributing to these types of retirement plans, you’ve made a deal with the (some might say the devil) government.  Still not convinced, give me a call and I’d be happy to discuss this in detail. 

Just to be clear, I’m not saying you shouldn’t utilize these types of retirement planning strategies; however, when you do, you need to be clear about the rules and how to make the most of these strategies.  So you’ve spent years saving for your retirement, which is outstanding, but at some point, two things are going to happen:  You live a long time, distributing funds from your retirement accounts prior to your death (best option) or you die prematurely with funds still inside your retirement accounts. 

Ok, so what, you might say.  Well, remember a few key items:  These are pre-taxed accounts that in retirement will be taxed as you distribute funds (70 ½ being the magical age at which you have to start taking required mandatory distributions) and Uncle Sam’s going to tax those distributions at ordinary income tax rates.  But, let’s say you die. At that point, IRA’s 401k’s 403b’s, SEP’s, Simple IRA accounts will be taxed as ordinary income for your beneficiaries, plus they may be subject to an estate tax on top of this.  For 2012, the Federal Estate Tax Exemption is $5million, but come January 2013, it’s scheduled to return to a $1million exemption. 

When you factor state and federal tax rates plus potential estate taxes we may be subject to, it’s easy to see how our beneficiaries may not receive that which we have set aside for them.  See How to Help Protect Your IRA Accounts from Uncle Sam.

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If you have questions about your Traditional or Roth IRA, 401k, Rollover IRA, investments, retirement accounts, SEP, or Simple IRA you've come to the right place. Our comprehensive IRA Resource Center is here to help you navigate the difficult waters of your retirement investments.

No matter your goals, St. Croix Advisors is your one stop solution to managing your business and your life, so you may enjoy both to the fullest. 

Contact Brett Anderson today to learn more at 651-337-1919.