November 23, 2007, Newsletter Issue #73: IRA Distributions To Your Spouse

Tip of the Week

If you have an Individual Retirement Account (IRA), are married, and your spouse is the sole beneficiary, at your death he or she can transfer the full amount of the funds in your IRA account to his or her IRA. This will enhance the IRA funds available for his or her retirement years. Also, depending on the age of your spouse at your death, they can remain in your account and continue to earn interest until your spouse is ready or required to use them. Under federal law, your spouse has the option of waiting until he or she is 70-and-a-half years old before making use of these funds. Another option is to have the total amount of funds distributed over his or her life expectancy, as determined by current government tables. This avoids the snare of a lump sum payout which could unnecessarily create a tax burden for your beneficiary.

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