Do you have money saved in an employee retirement plan, IRA or tax-sheltered annuity? Retirement plan benefits include assets held in individual retirement accounts (IRAs) and in accounts under 401(k) plans, profit-sharing plans, Keogh plans, and 403(b) plans.
Income taxes on retirement-plan benefits are deferred, but not avoided. This means that, as these assets are withdrawn during retirement by the account owner or the account owner’s spouse, they are subject to income tax.
When passed on to heirs, retirement plans can incur a tax-hit of 60 percent or more of the retirement-plan benefits — because these asset may face double taxation. Not only can the amount of the plan be reduced by estate taxes, but an must also pay income taxes on the plan.
Naming a charitable organization as a beneficiary for all or for a percentage of your retirement plan proceeds may allow your heirs to avoid costly taxes. It is easy to do and does not require a lawyer. Simply request a change in beneficiary form from your plan administrator and allocate a percentage to WTIU. To learn more >>
