Finance Minister Shochat said Mr. Klein's selection "will defer growth".
But the trade-off for tax-deferred growth and tax-free distribution is that funds must be used for college expenses for the beneficiary.
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These proposals are bound to further devastate annuity sales because one of the main advantages annuities have to offer is the tax-deferred growth of assets.
The main no-no is "self-dealing," meaning you can't benefit from the IRA investment beyond its tax-deferred growth, which you will tap in retirement.
Gifting money towards your children's retirement accounts yields them an immediate tax deduction, tax-deferred growth and maybe a matching contribution from their employer.
(To learn more, read "Tax Treatment Of Roth IRA Distributions" and "Taking Penalty-Free Withdrawals From Your IRA").. Tax-Favored Education-Savings Alternatives: Plans like the 529 offer tax-deferred growth and tax-free distribution for qualified educational expenses.
Robertson chose the inherited IRA option, which allows an heir to stretch out withdrawals and tax-deferred growth (or in the case of a Roth IRA, tax-free growth) over his own life expectancy.
They will also enjoy the benefits of tax-deferred growth on their retirement savings and receive a nonrefundable tax credit for the amounts they add to their IRAs, or salary deferral contributions they make to their employer-sponsored plans.
If people other than a spouse are named as heirs, they must begin taking distributions from the account by Dec. 31 of the year after inheriting, but they can draw these out over their own expected life spans, enjoying decades of income-tax-deferred growth in a traditional IRA or tax-free growth in a Roth IRA.
Leaving it will keep your money to continue its tax-deferred growth.
