A Roth IRA Is a Gift That Keeps On Giving

November 3rd, 2009 by David Leave a reply »

With a Roth IRA, you are not obligated to receive the required minimum distributions (RMD) and because of that, you could pass your Roth IRA savings to your children or even your grandchildren!

Kelley Greene posted a great article that will help you understand how this could be done.

Here’s an excerpt from her article:

“If the surviving spouse then names his or her children as equal beneficiaries of the same Roth IRA, they can indeed split it in half, and it is to their advantage to do so. Any heir other than a spouse who treats the account as his or her own had to take required distributions from a Roth IRA, starting by Dec. 31 of the year after the year of the previous owner’s death. If the children keep the account intact, and they want to stretch withdrawals across their life expectancies, they are limited to using the older child’s age. But by splitting the account, each sibling can stretch those distributions across his or her own life expectancy, Mr. Jones says. That means the younger sibling can spread those withdrawals across more years, leaving more assets in the account for a longer time and possibly reaping more tax-free earnings.”

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