What’s an MGIRA

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)

More Updates

IMPORTANT TRUST DEADLINE APPROACHING

For trusts that inherited an IRA in 2019, an important deadline is approaching. The due date to provide required trust documentation to the IRA custodian to ensure that the longest payout period possible is available for the inherited IRA is October 31, 2020. Generally, only individuals who are named on an IRA beneficiary form can

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CRDS AND ROTH CONVERSIONS – ABUSE OF THE RULES?

The coronavirus-related distribution (CRD) rules for Roth conversions have a gaping hole. An “affected person” (as we have defined in previous blogs), is entitled under the CARES Act to withdraw up to $100,000 from their IRA or workplace retirement plan. A CRD avoids the 10% early distribution penalty for those under 59 1/2, can be

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Rolling Over an RMD

Like most people’s lives, the retirement world is upside down. This is made evident by a single statement: “Required minimum distributions (RMDs) can be rolled over.” Yes, that is the new normal—at least for this year. RMDs are considered the first money out of an IRA and workplace plan. Typically, these dollars are ineligible to

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