The First Shall Be Last and the Last Shall Be First: IRAs

It is “Finishing Well”s” first LIVE show. This week, Hans and Robby visited Peace Church in Durham, NC to discuss IRAs, and go more into depth about Qualified Charitable Distributions.

Robby discusses Matthew: 20, the parable of the day laborer. The story is basically that a landowner whent to hire workers in the morning for his vineyard and offered them to pay thema  denarius for the day. 2 hours later, he got another group to come to work, and then he got another group, with one hour left, hre brought another group. At the end of the day, everyone got a denarius, as that is what he promised them. The workers who worked longer were upset that they got the same payment as the people who only worked an hour.

Almost everyone gets angry when they have to take out money out of their IRA when they turn 70 ½, especially when they have to pay taxes on this money. A lot of people view this as their savings account, and it is for many people because it is the account with the largest amount of money at their disposal. Natuall, with a savings account, you are going to want to save not spend. But that is not what IRA’s were designed for. They were basically designed to replace pensions that were going away at the time and to give people and income to live off of in retirement.

Some people also like to use IRAs as a vehicle to pass money onto their children or spouse once they pass. While this is a great cause, this might not be the best way to do this as, no matter what, someone is going to have to pay the taxes on money when it comes out of an IRA. More often than not, as Hans discusses, the children who get this money take the lump sum and lose a lot of money to taxes. Hans and Robby discuss strategies to leave this money in a more tax-effective way.

Lastly, Hans and Robby disuccss QCDs, or Qualified Charitable Distributions. These are one way to take out money from your IRA, possibly to meet your required minimum distributions, and not pay taxes on the money. With QCDs, you can give up to $100,000 per year per person to a Church, or other charity, tax-free. This strategy works great for many people, but you definitely need to consult with a professional before implementing it.

Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on CardinalGuide.com for free!

If you would like Hans and Robby to come to your church, you can contact Hans and Cardinal by emailing hans@cardinalguide.com or calling 919-535-8261. Learn more at CardinalGuide.com.