Case Study #4:  Untapped Retirement Accounts & RMDs

 

Far too many American families avoid discussing important issues regarding their parents; especially when the discussion has financial implications.   However, proactive planning, across generations, can often lead to wise long-term decisions.

 

In this case study, we make the following planning assumptions:

 

  • The couple, both age 72, are quite active and healthy. 
  • Concerned about becoming a burden on the children or grandchildren
  • Both receive a pension and Social Security that meets their income needs
  • Would “pay for care” with untapped $1,000,000 in IRA Accounts
  • Couple unaware of Required Minimum Distributions.
  • Consider just $250,000 of the qualified funds.

 

Once the RMD situation is understood, which scenario would better address their planning needs?

 

Age 72 may not be the optimum age to set up a Long-Term Care Plan, but funding the plan with qualified funds can provide substantial benefits and minimize the impact of age affecting the plan.

 

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