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2ND NAME 1
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Professor’s Name
Business & Finance
Date
Choosing a Beneficiary for the Retirement Plan
Johnson has a plan for distributing his assets with an aim to minimize tax liability on
each and every beneficiary who receives the assets. In addition to that, he considers the type
of asset that should be allocated to the beneficiaries. The beneficiaries whom he has in mind
are his children, his spouse and to charity. The assets are in different investment plans which
include the Roth plan, the traditional retirement plan, and the outside investments.
Distribution of the assets should ensure minimum income taxes to the beneficiaries. The next
part, therefore, explains the different investments plans and their potential beneficiaries for
minimal tax liability.
1.
The Roth Plan
A Roth plan is a retirement plan which allows an individual to save money in their
Roth savings accounts and to name the beneficiaries of the savings after a retirement age
which is approximated at seventy and a half years of age. The Roth accounts are controlled
by the employers of the individuals who allocate a specific amount of money after tax to the
Roth savings accounts of their employees. The employee is incapable of tampering with the
account until he/she is of a retirement age and is allowed to transfer it to their Roth accounts.
In addition to that, the Roth plans are divided into two major components which include the
traditional plan and the Roth individual retirement account (IRA) plan. In general, the Roth
2ND NAME 2
plan is an improvement of the traditional plan. It is carried out on the willingness of an
individual and not forced on them.
The tax method of the Roth plan allows the taxes to be deducted at an initial stage and
the money is saved at a little...