When it comes to retirement accounts, you have many choices, including a traditional IRA, a Roth IRA, a 401(k) and, now, a Roth 401(k). You can use these retirement savings vehicles for estate planning purposes as well.
Weigh the choices
The main difference between traditional and Roth accounts lies in the tax treatment of the contributions and distributions. Even though contributions to traditional accounts generally reduce your taxable income, distributions are subject to tax. Roth contributions, on the other hand, don’t provide a tax benefit, but distributions generally are tax free.
From within the Hennepin County, our law firm represents estate planning and elder law clients from Minneapolis, Edina, Bloomington, St. Louis Park, Minnetonka, Plymouth, Wayzata, Maple Grove, Orono, Delano, Brooklyn Park and Brooklyn Center. The Minnesota Law Firm of Lennington Law Firm, PLLC focuses on Minnesota estate planning, wills, trusts, estates, probate administration, asset protection, Medical Assistance planning, Medicaid planning & eligibility, elder law, business succession planning, family limited partnerships, real estate and transactional law. With over fifteen years practicing law, Attorney Peter Lennington is an experienced estate planning attorney, trust attorney, probate attorney, asset protection attorney, Medicaid attorney, elder law attorney, corporate attorney, and real estate attorney.