Originally Posted by
iaflyer
Everything I read about "rabbi trusts" emphasize that
- A rabbi trust does many things but it doesn't keep creditors at bay.
- If a company goes under and declares bankruptcy, the funds in a rabbi trust can be used by creditors."
For those reasons, I'm out.
it’s optional for a reason. When you hit 60 and have 5 years to go, it may fit very well into your financial plan.
The other place where this can be amazing is in the known reality of the last parent or in-law passes and an IRA is inherited. Secure 2.0 killed the stretch and makes a 10 year drawdown. This can very effectively kick the tax bill down the line instead of a 35-39.6 federal (assuming TCJA isn’t renewed in a bill for 2026+), plus state, plus Medicare surcharge, and potentially IRMAA @ 63. You can take that inheritance with planning and defer the income over the go-go years while delaying retirement plan withdrawal and Social security.
it’s an added lever that you CAN pull.