The assumptions you make about how much money you will need in retirement are probably the most difficult exercise in the whole of retirement planning. The unknowns are so numerous that simply thinking too much about it gives many people the incentive to simply ignore the question. Taxes and inflation play a role in how much money we will need along with the condition of our health, our portfolios and our living arrangements. Who could possibly guess with any accuracy what those costs will be?
Yet, some of us can with certain investments. If you can wait until you are 70 1/2 years-old to begin taking your distributions from an IRA, and you take only the minimum amount needed, you may be in a position to make that IRA last much longer, across generations. Called a Stretch IRA, the sort of planning can create untold wealth for a child or grandchild.
More on the Stretch IRA from Paul Petillo, managing editor of Target 2025.com and a fellow Boomer.
1 comment:
We certainly fall into the basket of not having really planned at all until the last 10 years of our working life. That baby boomer attitude of 'life will work out' was our unconscious mantra. the advice offered in the article is great and we will take it however belatedly.
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