Retirement & Financial Planning Report

Do you have multiple beneficiaries for your IRA? If so, you’re probably better off establishing separate accounts. Suppose you have a $300,000 IRA and you have named your three children, Mary, Mona and Jack, as beneficiaries. Instead, divide your IRA into three $100,000 IRAs, each with a single child as beneficiary. With this strategy, each individual beneficiary will maintain and manage his or her inherited account, after your death. (The accounts must be kept in your name, as deceased owner.) Thus, each child will have more control over the pace of IRA distributions. The minimum payout will be unique for each account, to the benefit of younger children.