22 • MARTIN H. RUBY
James’ family grew up at the lower end of the middle class. When his dad passed away, there wasn’t much need for a will, be- cause there wasn’t much to pass on to his kids. His dad had sold his house to help cover his nursing home care and had gone through most of his savings in pursuit of the same. But James built a good career as an attorney in Louisville. While he never expected an inheritance from his dad, he wanted to leave one to his kids. The reality James faces — the same reality I face and one I bet you do, too — is that we have one pot of money. We’ve saved, and now it’s a question of how that money will be distributed. Do I use it while I’m living, as income? Or does it go to my kids once I’m no longer here, as an inheritance? This creates a big conflict in your IRA. My Conflicted IRA When I think about my IRA, I know I’m going to need it for four things: First, and most obviously, I’ll need to use it for income to cover everyday expenses. While my wife will tell you I’ll never retire (I’m not sure she wants me puttering around our house, anyway), at some point, I’m going to either work less or stop working altogether. So, when my income drops or disappears, I’m going to need money every month to buy groceries and pay our cable bill. This is why most of us started an IRA or 401(k) in the first place: for retirement income in the future. But there are three other ways I’ll likely use my IRA. One is for the medical costs associated with aging. After all, ex- pensive medical bills aren’t factored into our budgets, but they’re a reality for many of us in retirement.
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