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IRA Maximization

An Individual Retirement Account (IRA) has been the staple of retirement savings for many Americans. For those fortunate enough to not need all of their IRA for retirement income, an IRA can be one of the least efficient assets to leave a beneficiary. Without proper planning, an IRA can be subject to 70% taxes between state estate tax, federal estate tax and income tax. IRA Maximization can help make your IRA an effective instrument in leaving a meaningful legacy to one’s family or a charity.


Who Can Benefit from IRA Maximization?

People who meet the following criteria would be ideal for IRA Maximization:

  • Recently or already retired
  • Large IRA account balance
  • Do not need all or part of their IRA assets for retirement income
  • Want to provide a legacy for their families or charity


How to Utilize IRA Maximization:

One can substitute the IRA, which is an inefficient legacy asset, for a more tax efficient asset for beneficiaries. Using the portion of the IRA that is not needed for retirement income, distributions can be gifted outside of the estate into an insurance trust, also referred to as an ILIT. If properly structured, the insurance death benefit will pass to beneficiaries income tax free and outside of the estate. With this tax-efficient approach, your beneficiaries receive more of the money that you worked a lifetime to accumulate.


View the attachment below for more details.

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