Starting in 2010, the maximum income level to own a Roth IRA has increased, allowing many individuals who had traditionally not been able to qualify for this useful retirement plan to take advantage of its many benefits.
Unlike most IRAs that are accumulated pre-tax, Roth IRAs are created with post-tax assets, which allows individuals to set aside funds to tap into tax free at a later date, and these assets can be passed on to heirs without their incurring a tax liability.
Anyone shifting funds from a more traditional IRA to a Roth IRA must pay taxes on the funds coming from the dissolved account. Individuals are allowed to spread these taxes between 2011 and 2012.
Individuals can avoid some of the tax liability by funding a Charitable Gift Annuity with some of the funds from the traditional IRA. This plan not only decreases the tax liability the individual's heirs would incur, but allows the individual to make a substantial gift to a charity of his or her choice and enjoy an income stream during their lives.
To find out if this is a good plan for you, please call 212.415.5678 / email.