If current income restrictions on Roth IRA's are preventing you from using one for your planning purposes, you should also be thinking about not just investment management but estate planning as well. Fortunately, one of the best Roth IRA benefits is that it can be utilized as an inter-generational wealth transfer tool. Time plus modest regular savings can equal significant wealth accumulation for the next generation.

That's why setting up a Roth IRA when your children or grandchildren are still young can be one of your best long-term planning strategies. Over a 50 year time horizon, even a relatively modest savings rate can produce substantial wealth. There are no minimum distributions required for a Roth IRA holder, and unlike traditional IRAs minimum distributions are not required once the owner reaches age 70 ½. Therefore, theoretically, a child could have held a Roth IRA his or her entire life, never having tapped into it, and then pass it on to his or her beneficiaries upon death.

This entry was posted on Wednesday, May 11th, 2011 at 8:46 pm and is filed under IRA. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.