Our goal for Tax and Business Planning clients is to accumulate at least $1,000,000 in their Roth IRA by age 73—when taxable Required Minimum Distributions (RMDs) must begin from their retirement plan and regular IRA accounts—in order to take maximum advantage of the tax-free growth. Reaching that goal is impossible if you’re relying solely on IRA contributions, since they’re limited to $6,500 per spouse annually ($7,500 if age 50 or older).
To achieve this goal, you’ll need to convert larger amounts from your regular (taxable) IRA and/or retirement plan into your Roth IRA. You can convert an unlimited amount, but all amounts converted must be included in your income in the year of the conversion. When is the best time to make these larger conversions? Once you’ve sold your practice and your income is lower, and more easily offset by other deductions, resulting in the lowest possible tax bite.
Solving The Estate Planning Dilemma
Successful doctors often have difficulty finalizing their estate plans. They face a dilemma: If they leave all their generational wealth to their children, it’ll likely do them more harm than good, and could potentially ruin them! So, many doctors decide to leave a set amount to each child, with the balance going to one or more charities following the second spouse’s death. That’s a good approach and will usually eliminate federal and state
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The McGill Advisory content Is provided For informational purposes only And does Not constitute legal, accounting, Or other professional advice.
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