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MONEY MATTERS
he 2021 tax deadline is upon us. passing for several more years adds to the Along with paying additional benefits of IRAs and Roths. In certain cases, taxes, something else often is these accounts may give you asset/creditor missed more than it should be, protection, too. For a QCD, beginning at and that is contributing to your IRA or age 70-1/2, you can donate up to $100,000 Roth. Being that I was a professional per year from your IRA to a qualified golfer, I like to compare a lot of things to charity, and it qualify as a QCD. Upon golf. Missing an IRA/Roth contribution your passing, your heirs would have 10 is like missing a 1-foot putt in golf. There years before the IRS forces all the money could be a valid reason for not making a from the IRA/Roth shell. A few years contribution, such as no earned income, ago, you could stretch these distributions but for most people, it’s an unforced error if out over the course of the beneficiary’s you don’t do it. lifetime, but in most cases today, that is no These vehicles by design are as tax efficient longer possible. The 10-year rule is still a as any investment vehicle. Some argue that good deal and offers a small edge on the Lee Williams you can’t get a better deal than the Roth, compounding upon passing. as it grows tax-free and you can pull the In this article, I’m just scratching the money out tax-free. The IRA isn’t quite as tax friendly, surface on IRAs/Roths. Utilizing a 401k, 457, 403(b), but the ability to invest money in a vehicle that allows etc., also could offer great tax advantages that parallel tax deferral for many years presents a compelling nod. the points I hit on earlier. As always, I encourage you I’ve written about compounding interest before to seek the advice of your trusted financial advisor and and will not get into the weeds with it in this article tax professional to determine what’s best for you and other than to say these vehicles give you an edge on your family’s long term goals. compounding. The reason why is due to the IRA/Roth “shell” that keeps you from having to pay incremental Lee Williams offers products and services using the taxes on dividends, capital gains, etc., until you following business names: Nowlin and Associates – withdraw the money (IRAs are taxed as ordinary insurance and financial services | Ameritas Investment income at withdrawal). This is a huge advantage given Company, LLC (AIC), Member FINRA/SIPC – securities to you by Uncle Sam, so for most people, it is a great and investments | The Ascent Group, LLC – investment place to tax efficiently compound wealth. advisory services. AIC is not affiliated with Nowlin and The ability to donate to charity in the form of a Associates or The Ascent Group, LLC. Qualified Charitable Distribution and defer gains at
34 Lake Martin Living
