82 • RU BY, WILD ING & SWANSBURG years from now. From year six on, we’ll now assume Marty is paying the IRS at a 32.5 percent effective tax rate. Here’s what it looks like for his $700,000 IRA in a rising tax environment: IRA Value: $700,000 | Assumed Tax Liability: 25% Years 1- 6 , 32.5% 7 + Pre-Tax Growth Rate: 5% Receive RMDs from Age 7 5 to Age 90, Per IRS Rules
$ 341,110
Total Taxes Paid on RMDs
Taxes Paid on Growth of Reinvested RMDs
$ 101,085
Taxes Paid by Heirs on Remaining IRA Value at Death (Age 90)
$ 304,270
$ 746,465
TOTAL TAXES PAID
Example shown for illustrative purposes only and are not guaranteed. That’s a total of $ 746,000 —on his $700,000 IRA! Rising Taxes . . . In Dollars and Cents Tt ahxiensg ss twa yeer de nt’ ht el o soakmi neg. gArse ayto fuo rmMa ya rrt ye m’ s eamc cboeurn, tt he ev emn oi fd he liss showed he could pay $ 584 ,000 in taxes on his $700,000 IRA. But things are much worse if—like us—you believe taxes aMraertygowinoguludpenidn utphepafyuitnugre$. Because, in this scenario, 746,000 in taxes—$1 62 ,000 more than if his taxes stayed the same.
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