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Table: The Incredible Shrinking Ira


Personal Business: SMART MONEY

TABLE: The Incredible Shrinking IRA

Here's what can happen to a large individual retirement account inherited by

your children (or nonspousal heirs) if you don't plan properly:

IRA VALUE $2,312,831

LESS: ESTATE TAX (56.2%)* 1,299,811

INCOME TAX (27.8%)** 642,967

EXCISE TAX (6.3%)*** 145,708

NET TO HEIRS $224,345

TOTAL TAX HIT TO HEIRS 90.3%

* Varies from 55% to 60%, depending on state, for those in top tax brackets

** Ranges from 25% to 30% after deduction of federal estate taxes

*** Represents 15% of the excess accumulation in the IRA

DATA: LOCKWOOD PENSION SERVICES INC.


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