Hoss Financial

401(k) 403(b) IOU to the IRS

Is Your IRA an IOU to the IRS?

Certain tax advantages can allow people with a 401(k) or 403(b) retirement savings account to create tax-deferred wealth for themselves and their families. Without proper planning, these retirement accounts may be partially diminished upon the death of the owner by a combination of estate and income taxes. Some Americans are at risk of falling into what we call the “accumulation trap.” Individuals need to work on distribution and income planning to take advantage of the IRA distribution rules that can allow you to parlay your IRA into a family legacy.


One key question in retirement planning is: “What is your exit strategy for your retirement program?” This boils down to a bigger question: Is a significant portion of your 401(k) or 403(b) account an IOU to the IRS? The answer is probably yes.


Depending on the size of your 401(k) or 403(b) and your taxable estate, your combined income and death taxes could boost what your children pay on the remainder of your retirement plans to more than 70%. Do you wish to leave a legacy — or an enormous tax bill?


Most Americans are unaware that retirement plan assets may be subject to both an immediate income tax and estate tax upon your death. That’s the bad news. The good news is that it’s now possible to at least defer the income tax and help leave a more lasting financial legacy to your family. How? By using a multi-generational IRA that is allowed by Congress.


Who do you want standing first in line when it’s time to distribute your lifetime of work to the next generation? Should it be your children and grandchildren — or should it be Uncle Sam? At Hoss Financial, our experienced financial advisors can help you correctly set up your IRA. This can help defer income taxes resulting from a lump-sum distribution if your retirement accounts are transferred to your children. Without a multi-generational retirement plan in place, the IRS could be your primary beneficiary.


Don’t go another day without understanding more about taxes and how they could impact your estate plan. Call us today to get started. We’ll help you evaluate your current situation and review your beneficiary documents and custodial agreements. Let us assist you with passing on your hard-earned assets to the people you care about most.


Are you interested in creating an estate plan that leaves the most money possible to your heirs? Schedule your 15-minute complimentary review today!

Or give us a call at 747.220.6750

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Insurance and Tax services offered through Hoss Retirement & Insurance Services, Inc., which is not affiliated with Madison Avenue Securities, LLC Securities and Advisory services offered through Madison Avenue Securities, LLC. Member FINRASIPC, a registered investment advisor. Any information contained in this communication is intended for the use of the named individual or entity.


This is intended for informational purposes only and should not be construed as tax or legal advice. Consult your tax or legal advisor regarding your situation.