How much you will pay in taxes on an individual retirement account (IRA) withdrawal, depends on the type of IRA, your age and the purpose of the withdrawal. Sometimes the answer is zero—you owe no taxes. In other cases, you owe income tax on the money you withdraw and sometimes an additional penalty if you withdraw funds before age 59½. On the other hand, after a certain age, you may be required to withdraw money and pay taxes on it.
During the estate planning process, these beneficiary designations are reviewed to ensure that the beneficiaries are correct, and that the distribution of these assets conforms with the client’s intended estate plan.
Social Security provides a guaranteed source of income in retirement, but what many don’t realize is that you’re not guaranteed to keep it all.
I’m in my 80s and have a substantial sum in retirement accounts that I plan to leave to my children. Will they have to pay estate taxes on it?