IRA Beneficiary
11. Benefit of Young Beneficiary
For example, let's say your grandson is 20 when he inherits a $100,000 IRA from you or your spouse. Over the next 63 years, which is the life expectancy of a 20-year-old, this $100,000 IRA can provide your grandson with over $1.7 million in income!
Of course, this income is subject to income taxes. But with a Roth IRA, which we will discuss later on, the distributions would be tax-FREE!
As you can see, naming the right beneficiary is critical to getting the most tax-deferred growth on your money.
NOTE: The projections shown are based on a 7% annual rate of return, with only minimum required distributions taken each year.