What Is A Multi-Generational IRA? – October 24, 2017

Who will get the money in your IRA if something happens to you?

Congress created IRAs to encourage Americans to plan for their retirement but it never intended for them to accumulate funds and defer taxes indefinitely. Unless an IRA owner takes specific steps to continue to defer tax liability, the government could end up with a large percentage of those hard-earned IRA funds upon the death of the owner.

A Multi-Generational IRA (MGIRA) is not a product. An MGIRA is a strategy that gives IRA beneficiaries the ability to stretch required minimum distributions (RMDs) over their individual life expectancies.

Why is an MGIRA strategy important? It allows your IRA beneficiaries to maximize the benefit of IRA assets they inherit from you by “stretching” RMDs over their individual life expectancies while the IRA assets continue to grow tax-deferred or perhaps tax-free in the case of a Roth IRA.

An MGIRA strategy is available only if the IRA plan document or custodial agreement allows it and specific steps are taken. Your local retirement distribution specialist or tax professional can help you set up an MGIRA strategy for your loved ones or conduct a FREE review of your current plan to ensure it is set up properly.

Source: I.R.C. § 401(a)(9)