I was having dinner with a few of my high school friends the other night, when one of them mentioned that she was thinking of retiring from her job as an elementary school teacher. It was an important decision, with various pros and cons attached. I couldn’t help flashing back to another important discussion we had about a decision back in high school: Who would have first dibs on picking a date for our respective Sweet Sixteen parties, as we share a birthday (both date and year)?
Fortunately for my friend, she has the financial ability to retire at such a young age. And, (hopefully) fortunately for readers of Trusts & Estates, I plan to continue working for the foreseeable future.
But, eventually, most clients will have moved from planning Sweet Sixteen parties to planning their retirements. And in doing so, they’ll face a variety of decisions and issues. For example, if individual retirement account benefits are payable to a trust that has unwanted beneficiaries (that is, those with a short life expectancy), consider decanting the trust to keep assets in the IRA for as long as possible. “Decanting Trusts to Remove Unwanted Beneficiaries,” p. 45, by Bruce D. Steiner, discusses that issue. And, for clients who are considering a Roth IRA conversion, timing may be everything, especially for certain married taxpayers filing jointly. In “Roth IRA Conversion Sweet Spot,” p. 30, Christopher R. Hoyt details five situations when conversion makes sense. Other topics in our Committee Report include: the need for a new regulation on whether trust beneficiaries who are unlikely to receive any trust-held retirement benefits should be considered when calculating required minimum distributions; the effect of the qualified business income deduction on retirement planning; tips on designating beneficiaries for retirement accounts; and post-mortem planning opportunities available to taxpayers seeking the spousal or non-spousal rollover of plan proceeds received from a decedent.
