David W. Donahue ʜDavid W. Donahue, Jr., CFA

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "David W. Donahue ʜDavid W. Donahue, Jr., CFA"

Transcription

1 David W. Donahue ʜDavid W. Donahue, Jr., CFA Much is being heard these days about the stretch IRA strategy. This idea is being suggested as the answer to the IRA and estate concerns of many investors. At our firm, we feel it is important to understand what the stretch IRA strategy means for your situation. The stretch IRA is a strategy not a special type of IRA. Instead, it reflects an approach to estate planning that attempts to maximize the tax-deferred or tax-free growth potential of IRA assets by leaving them in the IRA for as long as the law permits. The stretch IRA approach avoids large, lump-sum distributions to the IRA owner and his or her beneficiaries. By only taking Required Minimum Distributions (RMDs), the distribution of assets can be spread out over one or possibly two generations. Wealth can generally be enhanced through the tax-deferred or tax-free compounding of earnings. The rules governing distributions from IRAs enhance the advantages of stretching an IRA. The key advantages of the stretch IRA strategy include: Payments may be spread over a longer period of time. IRA owners over 70.5 use the Uniform Table to take RMDs. Upon death, designated beneficiaries will use the Single Life Table when taking RMDs from their Inherited IRAs, thus stretching the IRA assets. IRA assets are tax-deferred or tax-free even while payments are being made to beneficiaries. While RMDs are being taken from the IRA using the Single Life Table (term-certain), the bulk of the assets may continue to grow compounded on a tax-deferred or tax-free basis. Those who have inherited IRAs are able to name their own beneficiaries. The individual who initially inherited the IRA can stretch out the life of the account by taking RMDs. If the original beneficiary dies before depleting the IRA, their named successor beneficiaries will complete the original beneficiary s single life expectancy (term certain) distribution. You may want to learn more about the stretch IRA strategy if you answer true to any of the following statements: I do not need the income from my IRA during my lifetime I want to distribute as little as possible from my IRA once I reach my Required Beginning Date (RBD). RBD is April 1 of the year after the year the IRA owner reaches age 70.5 My spouse will not need to use all of my IRA assets during his or her lifetime I want to minimize taxes on my IRA distributions as much as possible I want to leave a legacy to my family

2 Spouse Beneficiaries: To provide for the spouse s financial needs after the IRA owner s death, an IRA owner names his or her spouse as the sole IRA beneficiary. This approach generally avoids probate and may qualify for the unlimited marital deduction, eliminating estate tax. An inherited IRA may be set-up for the benefit of a spouse under age 59.5 who may need to take distributions from the IRA. Here, the surviving spouse will avoid the 10% premature distribution penalty; however he or she will pay all income taxes owed on any distribution. If the deceased spouse was not yet 70.5, the surviving spouse who is the sole primary beneficiary may defer RMDs until the year when the decreased IRA owner would have reached age Until that time, the surviving spouse may take distributions from the Inherited IRA in any amount and at any time. After reaching age 59.5, the surviving spouse may want to roll over the IRA to their own name. If the deceased spouse had reached age 70.5, the surviving spouse would be required to take RMDs by December 31 of the year following the IRA owner s year of death. Here the surviving spouse would use the Single Life Table with Recalculation based on the surviving spouse s age each year. Surviving spouses inheriting their deceased spouse s employer-sponsored retirement plan can do a Roth conversion. If the employer-sponsored retirement plan holds after-tax funds, those funds can be directly transferred to a Roth IRA or an Inherited Roth IRA. Such a transaction would result in a taxfree conversion under IRS rules. The surviving spouse also has the option to convert all or a portion of the pre-tax dollars into a Roth or Inherited Roth IRA. Any resulting taxes will be generally due in the year of the conversion. Beginning in 2010, the MAGI and tax filing status requirements have been eliminated, and taxpayers are able to convert to a Roth IRA regardless of their MAGI or tax filing status. Additionally, for 2010 only the taxpayer can elect to pay 50 percent of the income resulting from the conversion in the 2011 tax filing and 50 percent in the 2012 tax filing. You may pay all taxes due on the 2010 tax filing. Taxes will be paid at whatever federal income tax rate is applicable for those tax years. Please Note: Taxes due in regard to a Roth conversion may be accelerated if a distribution is taken before Please consult your tax advisor for more information. Options available to a surviving spouse, whatever the age of the IRA owner at death: If the surviving spouse is the sole IRA beneficiary they can claim the IRA as his or her own and roll it over to a new or existing IRA in their name. RMDs would begin based on their RBD. The surviving spouse may take a lump-sum distribution from the deceased spouse s IRA. Taxes are due on the taxable portion of the distribution in the year it is received. A portion of any distribution would be exempt from taxation subject to the Pro-Rata Rule if the IRA owner had made non-deductible contributions or had rolled after-tax money into the IRA. There are times when the surviving spouse does not need or want the IRA assets; if so he or she can exercise a qualified disclaimer within nine (9) months after the IRA owner s death. The

3 disclaimed assets would then be paid to the contingent beneficiaries named by the deceased spouse. In cases where no contingent beneficiary is named, the disclaimer assets would go to the individual specified under the default rules in the IRA custodial agreement. The defaults on an IRA at our firm are: -First a surviving spouse -Second surviving children under state law -Third the estate Qualified disclaimers can offer you enhanced planning opportunities when considering use of the stretch IRA strategy. As always, you should consult your tax and legal advisors for advice about disclaimers. Surviving spouses should take care to name beneficiaries for the IRAs in cases where they elect to continue the IRA through an Inherited IRA, or rollover the inherited assets into their own IRA. Keep in mind that to maximize planning flexibility, both primary and contingent beneficiaries should be named. Non-spouse beneficiaries: If an investor is single, divorced, or feels that his or her spouse does not need the IRA, then they will be naming a non-spouse beneficiary to inherit the IRA. The benefits to inheriting an IRA for the nonspouse include the following. Since many beneficiaries may be significantly younger than the IRA owner, the RMDs after the IRA owner s death will be minimized, potentially stretching out the life of the IRA. However, a non-spouse beneficiary cannot rollover IRA assets or retirement plan titled in their own name at the death of the IRA owner. The non-spouse IRA beneficiary must continue to maintain the IRA in the name of the deceased owner as an Inherited IRA. Any other process is viewed as a distribution by the IRS and can result in the IRA being fully taxable, ending any stretch IRA strategy. Non-spouse beneficiaries who inherit employer-sponsored retirement plans (401(k), 403(b), 457 plans, etc.) have the ability to request that a direct transfer of these inherited plan assets be made to an Inherited IRA. The beneficiary will need to contact their financial professional to establish an Inherited IRA and contact the employer plan sponsor for help in executing the transfer of the assets into the Inherited IRA. Remember, only a direct rollover is allowed. This is a non-taxable distribution from the employer-sponsored plan that is sent directly to the new custodian and will be reported to the IRS as a rollover. Failure to employ the direct transfer process could make this transaction fully taxable to the beneficiary and end the tax-deferral or tax-free status available under the Inherited IRA. By executing the direct rollover the beneficiary can enjoy continued tax-free or tax-deferred compounding, only RMDs need to be taken, successor beneficiaries can be named to the Inherited IRA, and he or she should enjoy a broader investment selection for the Inherited IRA assets. A non-spouse beneficiary who inherits a qualified retirement plan has the ability to request a direct trustee-to-trustee transfer to an Inherited Roth IRA

4 - If the employer-sponsored retirement plan holds after tax funds, those funds can be directly rolled to an Inherited Roth IRA. Such a transaction should result in a tax-free conversion under the IRS rules. - The non-spouse beneficiaries also have the option to convert all or a portion of the pre-tax dollars into an Inherited Roth IRA as a direct rollover. Any resulting taxes will generally be due in the year of the conversion. - Keep in mind, RMDs will need to be taken each year from an Inherited Roth IRA. If a beneficiary has an Inherited Traditional and Inherited Roth IRA, RMDs will need to be taken from both accounts to take advantage of the stretch IRA strategy. It is important to remember that non-spouse beneficiaries who inherit Traditional IRAs cannot convert them to Inherited Roth IRAs Investigate all options for handling an inheritance of retirement assets with tax and legal advisors before executing a strategy. Remember that stretch IRA strategies are designed for investors who will not need the money in the account for their own retirement. There is no guarantee that there will be assets remaining in the account at the time of the IRA owner s death Non-spouse IRA beneficiary options: The non-spouse IRA beneficiary may take a lump-sum distribution from the IRA. The distribution would be fully taxable in the year it is received. A portion of any distribution would be exempt from taxation subject to the Pro-Rata Rule if the IRA owner made non-deductible contributions or rolled after-tax money from an employer-sponsored retirement plan into the IRA. RMDs to a non-spouse beneficiary may be made over the beneficiary s single life expectancy (term-certain), if an IRA owner dies before or after his or her RBD. Term certain means that the beneficiary s life expectancy will be reduced by one for each later year of distribution. This is also referred to as the stretch IRA strategy. If the beneficiary does not take a distribution in the year following the IRA owner s death and the IRA holder dies before their RBD, it is possible that distributions would be made under the Five Year Rule. Under this rule, the entire IRA must be distributed by the end of the fifth year following the year of death of the IRA owner s death. The use of a qualified disclaimer is also available to a non-spouse beneficiary if he or she wishes to relinquish any or all rights to the inherited IRA assets. The disclaimer must be exercised within nine (9) months of the death of the IRA owner. Multiple beneficiaries: Some thought should be given to the following matters for those with multiple primary beneficiaries During the gap period (the time between the IRA owner s death and September 30 of the year after that death), designated beneficiaries are determined. Each beneficiary will be able to use his or her own life expectancy as long as separate Inherited IRAs are established by December 31 the year following the IRA owner s year of death. Each beneficiary will then have his or her own Inherited IRA maintained in the name of the deceased IRA owner. RMDs will be calculated separately for each beneficiary using that beneficiary s single life expectancy (term certain). Term certain means that the beneficiary s life expectancy will be reduced by one for each later year of distribution. The advantages of this approach are that each beneficiary can make his or her own investment decisions and they can

5 take advantage of the stretch IRA strategy. This technique also allows the individual to name their own successor beneficiaries to the Inherited IRA. RMDs must be calculated using the single life expectancy (term certain) of the oldest beneficiary if the IRA is not divided into separate accounts for each beneficiary by December 31 the year following the year of the IRA owner s death. This approach increases the amount of the distribution and reduces one s ability to take advantage of the stretch IRA strategy. The chart below will help you understand the potential importance IRA planning can have for your family. A beneficiary who chooses wisely may avoid paying income taxes on an Inherited IRA all at once, and stretch distributions over his or her lifetime. The Stretch IRA Concept Total IRA distributions over beneficiary s lifetime Age Life Expectancy Value of IRA when inherited by beneficiary $100,000 $500,000 $1,000,000 Total Projected Distributions years 53.3 years 43.6 years 34.2 years 1,740,307 1,045, , ,695 8,701,264 5,226,414 3,201,872 2,038,414 17,402,515 10,452,821 6,403,739 4,076,824 Assumptions: RMDs only taken, 7 percent annual return. This chart is hypothetical and is provided for informational purposes only. It is not intended to represent any specific investment. When deciding whether to initiate a stretch IRA strategy, an investor should consider such factors as possible changes to tax laws, the impact of inflation, and other risks. Please note that designating a beneficiary two or more generations below the IRA owner may result in additional taxes when the distribution is made (exemptions may apply). Please consult with your tax advisor for more information. Trust, charity, or estate as beneficiary: When a trust is named as the IRA beneficiary and the trust meets certain IRS requirement, RMDs will be based on the age of the oldest trust beneficiary s single life expectancy (term certain). A lump-sum distribution is also available when a trust is named as IRA beneficiary If the IRA owner dies before his or her RBD, distribution may be taken under the 5-Year Rule explained previously. Again, proper planning of the trust beneficiaries can help to take advantage of the stretch IRA strategy. In some instances a trust or estate may be able to disclaim (refuse) IRA assets within nine (9) months after the plan IRA owner s death.

6 When a trust that does not meet IRS requirements of a lookthough trust, or a charity, or estate is named as the IRA beneficiary, the options for extending the life of the IRA are limited to the remainder of the IRA owner s single life (term certain) expectancy, if the IRA owner died after his or her RBD. Otherwise, distribution must be made under the Five-Year rule discussed previously At EagleClaw Capital Management we understand your desire to maximize the benefit your family receives from your IRA. Please contact us for further information on your stretch IRS strategy. We look forward to helping you and your family build your financial future. Please Note: This material has been prepared for informational purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. The accuracy and completeness of this information is not guaranteed and is subject to change. It is based on tax information and legislation as of April Since each investor s situation is unique, you need to review your specific investment objectives, risk tolerance, and liquidity needs with your financial professional(s) before a suitable investment strategy can be selected. Also, since EagleClaw Capital Management does not provide tax or legal advice, investors need to consult with their own tax and legal advisors before taking any action that may have tax or legal consequences. Accounts carried by First Clearing, LLC, Member NYSE/SIPC First Clearing, LLC. ECG Products and Services offered through Moors and Cabot Investments, Member FINRA, NYSE, SIPC.

The Advantages of a Stretch IRA

The Advantages of a Stretch IRA Lifetime Retirement Planning with Wachovia Securities. The Advantages of a Stretch IRA Much is being heard these days about a concept called the Stretch IRA. This phrase is bandied about as being the answer

More information

Inheriting retirement assets as a nonspouse beneficiary

Inheriting retirement assets as a nonspouse beneficiary Inheriting retirement assets as a nonspouse beneficiary When you inherit IRAs or other retirement plan assets, you will have many planning and distribution considerations. Some of your decisions will be

More information

Facts to Know When You Inherit a Non-Spousal IRA

Facts to Know When You Inherit a Non-Spousal IRA Facts to Know When You Inherit a Non-Spousal IRA There are many planning and distribution considerations for individuals inheriting a non-spouse s IRA (Traditional, Roth, SEP or SIMPLE). It is imperative

More information

A guide for managing your IRA inheritance. Maximize your inherited IRA and enhance your financial security.

A guide for managing your IRA inheritance. Maximize your inherited IRA and enhance your financial security. A guide for managing your IRA inheritance Maximize your inherited IRA and enhance your financial security. Make the most of your inheritance by taking advantage of continued tax-deferred growth potential.

More information

Taking Your Required Minimum Distributions

Taking Your Required Minimum Distributions RETIREMENT Taking Your Required Minimum Distributions A Guide for Retirement Account Owners and Beneficiaries Taking Distributions During Your Lifetime Most people are required to start withdrawing from

More information

Beneficiary Planning Investor Guide. Design a plan for you and your beneficiaries

Beneficiary Planning Investor Guide. Design a plan for you and your beneficiaries Beneficiary Planning Investor Guide Design a plan for you and your beneficiaries Today is an important day. It is the day you will develop a comprehensive beneficiary plan that will let you relax, knowing

More information

Lifetime retirement planning. Extending your legacy with beneficiary planning

Lifetime retirement planning. Extending your legacy with beneficiary planning Lifetime retirement planning Extending your legacy with beneficiary planning Beneficiary planning within retirement accounts The money you save for retirement makes up a large portion of the wealth you

More information

Beneficiary Payment Options for Traditional IRAs (Death Before Required Beginning Date)

Beneficiary Payment Options for Traditional IRAs (Death Before Required Beginning Date) Beneficiary Payment Options Beneficiary Payment Options for Traditional IRAs (Death Before Required Beginning Date) Frequently Asked Questions Payment Options Payment Flexibility Withholding Elections

More information

chart retirement plans 8 Retirement plans available to self-employed individuals include:

chart retirement plans 8 Retirement plans available to self-employed individuals include: retirement plans Contributing to retirement plans can provide you with financial security as well as reducing and/or deferring your taxes. However, there are complex rules that govern the type of plans

More information

Required Minimum Distributions: What Every Advisor Needs to Know FOR FINANCIAL PROFESSIONAL USE ONLY / NOT FOR PUBLIC VIEWING OR DISTRIBUTION.

Required Minimum Distributions: What Every Advisor Needs to Know FOR FINANCIAL PROFESSIONAL USE ONLY / NOT FOR PUBLIC VIEWING OR DISTRIBUTION. Required Minimum Distributions: What Every Advisor Needs to Know 1 Required Minimum Distributions Upon reaching age 70½, clients must begin taking annual distributions from their IRA in accordance with

More information

Originally Published: June 2012 Updated: August 2015!!

Originally Published: June 2012 Updated: August 2015!! Updated: August 2015 This educational publication is designed to provide a background for understanding the use of Individual Retirement Accounts (IRAs). It is not a substitute for professional tax advice.

More information

the t. rowe price Guide for IRA and 403(b) Account Beneficiaries

the t. rowe price Guide for IRA and 403(b) Account Beneficiaries the t. rowe price Guide for IRA and 403(b) Account Beneficiaries who should use this guide T. Rowe Price retirement specialists have designed this guide for: 1 : Individuals who are beneficiaries of the

More information

Extending Retirement Assets: A Stretch IRA Review

Extending Retirement Assets: A Stretch IRA Review Extending Retirement Assets: A Stretch IRA Review Are you interested in the possibility of using the funds in your traditional IRA to provide income to one or more generations of family members? Table

More information

10 common IRA mistakes

10 common IRA mistakes 10 common mistakes Help protect your valuable retirement assets Not FDIC Insured May Lose Value No Bank Guarantee Not Insured by Any Government Agency You ve worked hard to build your retirement assets......

More information

What are my options if I inherit an IRA or benefit from an employer-sponsored plan?

What are my options if I inherit an IRA or benefit from an employer-sponsored plan? Ebert Associates What are my options if I inherit an IRA or benefit from an employer-sponsored plan? Answer: If you don't want the money, you can always disclaim (refuse to accept) the inherited IRA or

More information

Distributions and Rollovers from

Distributions and Rollovers from Page 1 of 6 Frequently Asked Questions about Distributions and Rollovers from Retirement Accounts Choosing what to do with your retirement savings is an important decision. Tax implications are just one

More information

Inherited IRA Information Sheet

Inherited IRA Information Sheet Inherited IRA Information Sheet Inheriting an IRA, whether it s a Traditional or Roth, raises a lot of questions. If you are reading this information sheet, the likelihood is that you are either the beneficiary

More information

Frequently asked questions

Frequently asked questions Page 1 of 6 Frequently asked questions Distributions and rollovers from retirement accounts Choosing what to do with your retirement savings is an important decision. Tax implications are just one of several

More information

Tax Strategies From a Financial Planning Perspective

Tax Strategies From a Financial Planning Perspective Tax Strategies From a Financial Planning Perspective Spectrum Advisors Don Goerner offers securities through Purshe Kaplan Sterling Investments Member FINRA/ SIPC Headquartered at 18 Corporate Woods Blvd.,

More information

Retirement Plan Distributions

Retirement Plan Distributions Retirement Plan Distributions What Every Participant Should Know IRS Employee Plans 2 Employee Plans Landing Page 3 Employee Plans Newsletters Distribution Topics 2015 IRA one-rollover rule Pre and post-tax

More information

Retirement. A Guide to Roth IRAs

Retirement. A Guide to Roth IRAs Retirement A Guide to Roth IRAs A Roth IRA is an individual retirement account named for the late Senate Finance Committee Chairman, William Roth, Jr. who championed the creation of this new type of IRA.

More information

What you need to know about an Inherited IRA

What you need to know about an Inherited IRA What you need to know about an Understanding your choices and taking action. In this guide: Understand the basics Review your choices Take action Understand the Basics When the owner of an Individual

More information

Thursday, March 26 2015 WRM# 15-11

Thursday, March 26 2015 WRM# 15-11 Thursday, March 26 2015 WRM# 15-11 The WRMarketplace is created exclusively for AALU Members by the AALU staff and Greenberg Traurig, one of the nation s leading tax and wealth management law firms. The

More information

This article focuses on rollovers by a

This article focuses on rollovers by a Rollovers From Retirement Plans and IRAs By Marcia Chadwick Holt This article focuses on rollovers by a surviving spouse and by a nonspouse to retirement plans and individual retirement accounts (IRAs).

More information

IRAs. AKD Consultants Adam Dworkin CPA 188 Whiting Street Suite 10 Hingham, MA 02043 781-556-5554 Adam@AKDConsultants.com

IRAs. AKD Consultants Adam Dworkin CPA 188 Whiting Street Suite 10 Hingham, MA 02043 781-556-5554 Adam@AKDConsultants.com AKD Consultants Adam Dworkin CPA 188 Whiting Street Suite 10 Hingham, MA 02043 781-556-5554 Adam@AKDConsultants.com IRAs October 01, 2013 Page 1 of 8, see disclaimer on final page Both traditional and

More information

Traditional and Roth IRAs. Invest for retirement with tax-advantaged accounts

Traditional and Roth IRAs. Invest for retirement with tax-advantaged accounts Traditional and s Invest for retirement with tax-advantaged accounts Your Retirement It is your ultimate reward for a lifetime of hard work and dedication. It is a time when you should have the financial

More information

Raymond James Financial Services September 06, 2011

Raymond James Financial Services September 06, 2011 Raymond James Financial Services Bob Alft Wealth Advisor 220 E. Nine Mile Road Pensacola, FL 32534 850-479-7190 bob.alft@raymondjames.com www.raymondjames.com/bobalft Understanding IRAs Understanding IRAs

More information

Beneficiar y Payment Options for Roth IRAs

Beneficiar y Payment Options for Roth IRAs Beneficiary Payment Options Beneficiar y Payment Options for Roth IRAs Frequently Asked Questions Payment Options Payment Flexibility Withholding Elections TABLE OF CONTENTS INTRODUCTION.......................

More information

Updated Custodial Agreement and Disclosure Statement for UBS IRAs

Updated Custodial Agreement and Disclosure Statement for UBS IRAs Updated Custodial Agreement and Disclosure Statement for UBS IRAs We have updated the custodial agreement and disclosure statement for UBS Individual Retirement Accounts (IRAs). The changes made to these

More information

To Roth or Not Revised September 2013

To Roth or Not Revised September 2013 Introduction To Roth or Not Revised September 2013 Tax law allows all taxpayers (without income limitation) to convert all or part of their traditional IRAs to Roth IRAs. Even though conversion to Roth

More information

premiere select Rollover IRA Invest in your retirement today.

premiere select Rollover IRA Invest in your retirement today. premiere select Rollover IRA Invest in your retirement today. Leaving your current job can be challenging in any environment. For many of us, it can also be a bit overwhelming. That s why it s comforting

More information

ira individual retirement accounts Traditional IRA

ira individual retirement accounts Traditional IRA ira individual retirement accounts Traditional IRA Grow dollars for tomorrow, save on taxes today. A traditional IRA may provide you significant immediate tax savings, and due to the deferral of all taxes

More information

You ve just inherited a retirement account. Now what?

You ve just inherited a retirement account. Now what? You ve just inherited a retirement account. Now what? A step-by-step decision guide for retirement account beneficiaries. You ll need to make a decision about your inheritance. We ll help you make it with

More information

Mark Scholl, First Vice-President AWMA 600 Grant Street Suite 3100 Pittsburgh, PA 15219 412-562-7892 mscholl@janney.com www.jmsonline.

Mark Scholl, First Vice-President AWMA 600 Grant Street Suite 3100 Pittsburgh, PA 15219 412-562-7892 mscholl@janney.com www.jmsonline. Mark Scholl, First Vice-President AWMA 600 Grant Street Suite 3100 Pittsburgh, PA 15219 412-562-7892 mscholl@janney.com www.jmsonline.com "Stretch" IRAs Page 1 of 6, see disclaimer on final page "Stretch"

More information

The IRA Rollover. Making Sense Out of Your Retirement Plan Distribution

The IRA Rollover. Making Sense Out of Your Retirement Plan Distribution The IRA Rollover Making Sense Out of Your Retirement Plan Distribution Expecting a Distribution? You have been a participant in your employer s retirement plan for a number of years, and you have earned

More information

IRAs & Roth IRAs. Beneficiary or Inherited IRAs. Questions & Answers

IRAs & Roth IRAs. Beneficiary or Inherited IRAs. Questions & Answers IRAs & Roth IRAs Beneficiary or Inherited IRAs Questions & Answers Purpose The purpose of this brochure is to provide a person who is a beneficiary of a traditional IRA (including SEPs and SIMPLEs) or

More information

Vertex Wealth Management LLC 12/26/2012

Vertex Wealth Management LLC 12/26/2012 Vertex Wealth Management LLC Michael J. Aluotto, CRPC President Private Wealth Manager 1325 Franklin Ave., Ste. 335 Garden City, NY 11530 516-294-8200 mjaluotto@1stallied.com Roth IRA Conversions 12/26/2012

More information

MFS Retirement Strategies Stretch IRA and distribution options READY, SET, RETIRE. Taking income distributions during retirement

MFS Retirement Strategies Stretch IRA and distribution options READY, SET, RETIRE. Taking income distributions during retirement MFS Retirement Strategies Stretch IRA and distribution options READY, SET, RETIRE Taking income distributions during retirement ASSESS YOUR NEEDS INCOME WHEN YOU NEED IT Choosing the right income distribution

More information

3/15 23203-15A. Annuity Distribution Options for Your Beneficiaries

3/15 23203-15A. Annuity Distribution Options for Your Beneficiaries 3/15 23203-15A Annuity Distribution Options for Your Beneficiaries Getting Started Beneficiary distribution options tied to annuity assets may differ depending on the types of retirement assets as well

More information

IDEAS December 2013. Life Insurance and Roth IRAs: The Dynamic Duo

IDEAS December 2013. Life Insurance and Roth IRAs: The Dynamic Duo IDEAS December 2013 Life Insurance and Roth IRAs: The Dynamic Duo Summary Clients who face income from minimum distributions on qualified plans and IRAs but do not need that income can benefit from a conversion

More information

KEY FACTORS WHEN CONSIDERING A ROTH IRA CONVERSION

KEY FACTORS WHEN CONSIDERING A ROTH IRA CONVERSION KEY FACTORS WHEN CONSIDERING A ROTH IRA CONVERSION PERTINENT INFORMATION Mr. Kugler has accumulated $1,000,000 in a traditional IRA. Mrs. Kugler is the designated beneficiary (DB) and their daughter is

More information

Rules for Taking Distributions from Tax-Deferred Retirement Savings Plans

Rules for Taking Distributions from Tax-Deferred Retirement Savings Plans Rules for Taking Distributions from Tax-Deferred Retirement Savings Plans Putting money into an employer s retirement plan or IRA is just the first step toward financial security in retirement. How you

More information

Minimum Distributions & Beneficiary Designations: Planning Opportunities

Minimum Distributions & Beneficiary Designations: Planning Opportunities 28 $ $ $ RETIREMENT PLANS The rules regarding distributions and designated beneficiaries are complex, but there are strategies that will help minimize income and estate taxes. Minimum Distributions & Beneficiary

More information

10Common IRA mistakes

10Common IRA mistakes 10Common IRA mistakes Help protect your valuable retirement assets You ve worked hard to build your retirement assets. And you want them to continue to work hard for you throughout your working career

More information

Table of Contents. Page 1

Table of Contents. Page 1 Table of Contents Frequently Asked Questions... 2 Individual Retirement Arrangements (IRAs)... 2 IRA Basics... 2 Why should I name beneficiaries for my IRA?... 2 Traditional IRAs... 9 Roth IRAs... 13 SEP

More information

Retirement Plan Distributions Choices & Opportunities

Retirement Plan Distributions Choices & Opportunities Retirement Plan Distributions Choices & Opportunities Leaving Your Job: Things to Think About» What you want to do next Work full time? Part time? Retire? How much will your lifestyle cost?» Continuing

More information

Roth IRAs. Why Should I Convert My Traditional IRA into a Roth IRA? Questions & Answers

Roth IRAs. Why Should I Convert My Traditional IRA into a Roth IRA? Questions & Answers Roth IRAs Why Should I Convert My Traditional IRA into a Roth IRA? Questions & Answers Purpose of a Roth IRA Conversion Contribution If a person has a traditional IRA, federal income tax laws allow you

More information

Rollover IRAs. Consider the advantages of consolidating your retirement savings

Rollover IRAs. Consider the advantages of consolidating your retirement savings Rollover IRAs Consider the advantages of consolidating your retirement savings Consider the Advantages of Consolidating Your Retirement Savings If you have changed jobs, left the workforce or plan to

More information

Traditional and Roth IRAs. Invest for retirement with tax-advantaged accounts

Traditional and Roth IRAs. Invest for retirement with tax-advantaged accounts Traditional and Roth IRAs Invest for retirement with tax-advantaged accounts Your Retirement It is your ultimate reward for a lifetime of hard work and dedication. It is a time when you should have the

More information

Leaving your employer? Options for your retirement plan

Leaving your employer? Options for your retirement plan Leaving your employer? Options for your retirement plan Contents Evaluating your options 1 The benefits of tax-deferred investing 4 Flexibility offered by an IRA rollover 6 How to get started 9 Evaluating

More information

RETIREMENT PLANNING FOR THE SMALL BUSINESS

RETIREMENT PLANNING FOR THE SMALL BUSINESS RETIREMENT PLANNING FOR THE SMALL BUSINESS PI-1157595 v1 0950000-0102 II. INCOME AND TRANSFER TAX CONSIDERATIONS A. During Participant s Lifetime 1. Prior to Distribution Income tax on earnings on plan

More information

From Mark Andres. Blommer Peterman, S.C.

From Mark Andres. Blommer Peterman, S.C. Using Trusts to Protect Inherited IRAs Volume 8, Issue 3 Many clients have large IRAs and retirement plan accounts and need special estate planning for these assets. A 2009 study by the Investment Company

More information

The IRA Distribution Manual

The IRA Distribution Manual SEPTEMBER 2010 The IRA Distribution Manual A Guide to Receiving Benefi ts From Your IRA Contents 1. Retirement Income...2 2. Early Retirement...3 3. Required Minimum Distributions...6 4. Your Beneficiary

More information

Roth IRAs. Why Should I Convert Traditional IRA Funds into a Roth IRA? Questions & Answers

Roth IRAs. Why Should I Convert Traditional IRA Funds into a Roth IRA? Questions & Answers Roth IRAs Why Should I Convert Traditional IRA Funds into a Roth IRA? Questions & Answers Purpose of a Roth IRA Conversion Contribution If a person has a traditional IRA, federal income tax laws allow

More information

General Taxability (Contributions)

General Taxability (Contributions) Tax Aspects of Individual Retirement Accounts & Valuation of Retirement Accounts in Divorces Presented by: Erin Spiwak, CPA, John VanDuzer, CPA, Kim Hardy, CPA/ABV/CFF, CVA, Mike Carignan May 28, 2015

More information

WHICH TYPE OF IRA MAKES THE MOST SENSE FOR YOU?

WHICH TYPE OF IRA MAKES THE MOST SENSE FOR YOU? WHICH TYPE OF IRA MAKES THE MOST SENSE FOR YOU? In 1974, when IRAs were first created, they were rather simple and straightforward. Now, 35 years later, it s challenging to know the best way to save more

More information

Roth IRA. Explore the Opportunity. 2 RBC Wealth Management

Roth IRA. Explore the Opportunity. 2 RBC Wealth Management Roth IRA Explore the Opportunity 2 RBC Wealth Management N o w Y o u H a v e E v e n M o r e F l e x i b i l i t y i n H o w Y o u I n v e s t f o r Y o u r F u t u r e Retirement a time that you work

More information

Common IRA Mistakes. Help protect your valuable retirement assets

Common IRA Mistakes. Help protect your valuable retirement assets 10 Common IRA Mistakes Help protect your valuable retirement assets 0208:1304514 ML2007-1677A Issued by John Hancock Life Insurance Company (U.S.A.) New York: John Hancock Life Insurance Company of New

More information

Traditional IRA/Roth IRA

Traditional IRA/Roth IRA premiere select Traditional IRA/Roth IRA Invest in your retirement today. Saving for your retirement. 01 Important Section in head any lorem market. ipsum dolore sit amet If you re planning for your future,

More information

IRAs & Roth IRAs. A Surviving Spouse s Options with Respect to Their Spouse s IRA(s) Questions & Answers

IRAs & Roth IRAs. A Surviving Spouse s Options with Respect to Their Spouse s IRA(s) Questions & Answers IRAs & Roth IRAs A Surviving Spouse s Options with Respect to Their Spouse s IRA(s) Questions & Answers Purpose Your deceased spouse designated you as his or her traditional IRA and/or Roth IRA beneficiary.

More information

Passing on the Good Stuff! Implementing a Roth IRA Conversion Using Life Insurance

Passing on the Good Stuff! Implementing a Roth IRA Conversion Using Life Insurance Passing on the Good Stuff! Implementing a Roth IRA Conversion Using Life Insurance Passing On The Good Stuff! All inheritances aren t equal. Even two different assets that are worth similar amounts may

More information

Roth Conversion Frequently Asked Questions

Roth Conversion Frequently Asked Questions Roth Conversion Frequently Asked Questions Brian Dobbis QPA, QKA, QPFC Retirement Analyst, Private Wealth Group 888-522-2388 A Roth individual retirement account (IRA) is a tax-deferred and potentially

More information

Understanding IRA distributions

Understanding IRA distributions Understanding IRA distributions A retirement distribution guide Allianz Life Insurance Company of New York Allianz Life Insurance Company of North America AMK-019-N Page 1 of 12 It s important to know

More information

Your retirement income. Managing your retirement plan assets

Your retirement income. Managing your retirement plan assets Your retirement income Managing your retirement plan assets Taking control of your retirement assets If you are changing jobs, displaced, or retiring, you may find yourself facing one of the most important

More information

How to Avoid the Top Ten IRA Rollover Errors

How to Avoid the Top Ten IRA Rollover Errors IRA Rollover How to Avoid the Top Ten IRA Rollover Errors To err is human, but when it comes to your money, little mistakes can cost a lot. That s especially true with Individual Retirement Accounts (IRAs).

More information

Know The Rules and. Avoid Costly Mistakes!

Know The Rules and. Avoid Costly Mistakes! Know The Rules and Avoid Costly Mistakes! Securities and Advisory Services offered through The Strategic Financial Alliance, Inc. ( SFA) Member FINRA, SIPC. Mark Keen is a Registered Principal and investment

More information

Roth IRA. Answers. To Your. Questions

Roth IRA. Answers. To Your. Questions Roth IRA Answers To Your Questions A wealth of information to plan your future The Roth IRA offers unique and exciting savings opportunities. Not only can it help with retirement needs, but also a first-time

More information

Governmental 457(b) Application For Distribution

Governmental 457(b) Application For Distribution #1303-PS (5/14/2008) Governmental 457(b) Application For Distribution GENERAL INFORMATION Name of Plan Name of Employer Address City State Zip Name of Participant Date of Birth Complete the following section

More information

Roth IRAs and Conversions

Roth IRAs and Conversions Roth IRAs and Conversions When the law that created Roth IRAs was originally enacted there were two eligibility limits placed on them. The first affected an individual s ability to contribute to the Roth-

More information

Traditional and Roth IRAs

Traditional and Roth IRAs october 2012 Understanding Traditional and Roth IRAs summary An Individual Retirement Account (IRA) is a powerful savings vehicle that can help you meet your financial goals. As shown in the chart on page

More information

IRAs and Required Minimum Distributions Traps for the Unwary

IRAs and Required Minimum Distributions Traps for the Unwary IRAs and Required Minimum Distributions Traps for the Unwary 19 th Annual Maine Tax Forum November 5, 2015 Richard A. Carriuolo, J.D., CFP Vice President & Director of Wealth Management Services R.M. Davis,

More information

Strength of Many. Convenience of One. Voya Select Advantage IRA. Mutual Fund Custodial Account

Strength of Many. Convenience of One. Voya Select Advantage IRA. Mutual Fund Custodial Account Strength of Many. Convenience of One. Voya Select Advantage IRA Mutual Fund Custodial Account Life brings change. C hange often comes from life events such as switching jobs or retiring. What impact will

More information

Understanding IRAs. Thad Johnson, AIF, MBA 222 2nd Ave SE Hutchinson, MN 55350 320-587-3444 thad.johnson@flagship-advisors.com

Understanding IRAs. Thad Johnson, AIF, MBA 222 2nd Ave SE Hutchinson, MN 55350 320-587-3444 thad.johnson@flagship-advisors.com Thad Johnson, AIF, MBA 222 2nd Ave SE Hutchinson, MN 55350 320-587-3444 thad.johnson@flagship-advisors.com Understanding IRAs Page 1 of 5, see disclaimer on final page Understanding IRAs An individual

More information

Traditional Individual Retirement Account Disclosure Statement

Traditional Individual Retirement Account Disclosure Statement Traditional Individual Retirement Account Disclosure Statement This Disclosure Statement contains important information about traditional Individual Retirement Accounts ( traditional IRA ) described in

More information

Inherited Retirement Plans

Inherited Retirement Plans FPA-NCA Inherited Retirement Plans Presented by: Helen Modly, CFP, CPWA Focus Wealth Management, Ltd. These Rules Apply For: 401(k), 403(b), 457(b) IRA, SEP-IRA, SIMPLE IRA ROTH 401(k) ROTH IRA (after

More information

While numerous benefits derive from saving for retirement using IRAs and

While numerous benefits derive from saving for retirement using IRAs and Chapter 67 Required Minimum Distributions and Stretching Pat Casey (Bonita Springs, Florida) While numerous benefits derive from saving for retirement using IRAs and Qualified Plans, one of the more significant

More information

BENEFICIARY PAYMENT OPTIONS

BENEFICIARY PAYMENT OPTIONS BENEFICIARY PAYMENT OPTIONS FOR ROTH IRAS TABLE OF CONTENTS INTRODUCTION................... Page 2 QUESTIONS AND ANSWERS........ Page 3 PAYMENT OPTIONS............... Page 6 Lump Sum........................

More information

Caution: Special rules apply to certain distributions to reservists and national guardsmen called to active duty after September 11, 2001.

Caution: Special rules apply to certain distributions to reservists and national guardsmen called to active duty after September 11, 2001. Thorsen Clark Tracey Wealth Management 301 East Pine Street Suite 1100 Orlando, FL 32801 407-246-8888 407-897-4427 thorsenclarktraceywealthmanagement@raymondjames.com tctwealthmanagement.com Roth IRAs

More information

Roth IRAs The Roth IRA

Roth IRAs The Roth IRA Roth IRAs The Roth IRA 2015 and 2016 Questions & Answers What is a Roth Individual Retirement Account (Roth IRA)? A Roth IRA is a type of tax-preferred savings and investment account authorized by Internal

More information

Roth IRA Conversions Estate and Tax Planning Information

Roth IRA Conversions Estate and Tax Planning Information Roth IRA Conversions Estate and Tax Planning Information BY DAVID J. GORDON Executive Summary: Roth conversions involve current taxation of retirement plan assets in exchange for the elimination of future

More information

Traditional IRAs. Understanding Required Distributions at 70 1 / 2. Questions & Answers

Traditional IRAs. Understanding Required Distributions at 70 1 / 2. Questions & Answers Traditional IRAs Understanding Required Distributions at 70 1 / 2 Questions & Answers Why are there federal tax rules mandating required minimum distributions from a traditional IRA? The primary purpose

More information

IRAs & Roth IRAs. IRA Opportunities. Contribution Limits For 2014 and 2015. Questions & Answers

IRAs & Roth IRAs. IRA Opportunities. Contribution Limits For 2014 and 2015. Questions & Answers IRAs & Roth IRAs IRA Opportunities Contribution Limits For 2014 and 2015 Questions & Answers What is the purpose of this brochure? It explains the basic tax rules for traditional IRAs and Roth IRAs. TRADITIONAL

More information

Estate planning opportunities with Roth IRA conversions

Estate planning opportunities with Roth IRA conversions Estate planning opportunities with Roth IRA conversions Vanguard research March 2010 Executive summary. Beginning January 1, 2010, as part of the Tax Increase Prevention and Reconciliation Act of 2005,

More information

Preserving Retirement Assets: An IRA Rollover Review

Preserving Retirement Assets: An IRA Rollover Review Preserving Retirement Assets: An IRA Rollover Review How will you replace your income when you retire? What will happen to your standard of living when your income ceases at retirement? Table of Contents

More information

Guide to Individual Retirement Accounts. Make a secure retirement yours

Guide to Individual Retirement Accounts. Make a secure retirement yours Guide to Individual Retirement Accounts Make a secure retirement yours Retirement means something different to everyone. Some dream of stopping employment completely and some want to continue working.

More information

The Ultimate IRA Strategy

The Ultimate IRA Strategy The Ultimate IRA Strategy Do you want your IRA account to live beyond YOU, Your Spouse and even live beyond your Children? If you answered NO, then read no further. Is the answer YES? Then continue to

More information

IRA Opportunities. Traditional IRA vs. Roth IRA: Which is right for you? What kind of retirement funding vehicle is right for you?

IRA Opportunities. Traditional IRA vs. Roth IRA: Which is right for you? What kind of retirement funding vehicle is right for you? IRA Opportunities. Traditional IRA vs. Roth IRA: Which is right for you? What kind of retirement funding vehicle is right for you? Now more than ever, an Individual Retirement Account (IRA) may help provide

More information

Variable Annuities 101

Variable Annuities 101 WealthMark Advisory Services Philip Scholler President/CEO 5001 Horizons Drive Suite 201 Columbus, OH 43220 614-824-4352 phil@wealthmarkas.com www.wealthmarkas.com Inside Workbook: What Is a Variable Annuity?

More information

Guide to Titling Annuitant-Driven Contracts

Guide to Titling Annuitant-Driven Contracts Guide to Titling Annuitant-Driven Contracts ADVANCED MARKETS Guide to Titling Annuitant-Driven Contracts Annuities can provide beneficial and creative wealth-accumulation and wealth-transfer solutions

More information

Traditional IRA and Roth IRA

Traditional IRA and Roth IRA Traditional IRA and Roth IRA Plan Today for a Secure Tomorrow lord abbett retirement services Bring an Unwavering Commitment to Your Retirement Plan Founded in 1929, Lord Abbett is an independent, privately

More information

Converting to a Roth IRA - 2010 and Beyond (Slides)

Converting to a Roth IRA - 2010 and Beyond (Slides) College of William & Mary Law School William & Mary Law School Scholarship Repository William & Mary Annual Tax Conference Conferences, Events, and Lectures 2010 Converting to a Roth IRA - 2010 and Beyond

More information

Key Concepts for Required Minimum Distributions from IRAs and Qualified Retirement Plans

Key Concepts for Required Minimum Distributions from IRAs and Qualified Retirement Plans Key Concepts for Required Minimum Distributions from IRAs and Qualified Retirement Plans WSU Accounting & Auditing Conference Tuesday, May 20, 2014 Presented By: Steven P. Smith Hinkle Law Firm LLC 301

More information

IRA UPDATE: SEPTEMBER 2012

IRA UPDATE: SEPTEMBER 2012 IRA UPDATE: SEPTEMBER 2012 Beneficiary Determination Date September 30 th is the beneficiary determination date for those who inherited an IRA from a person who deceased in 2011. This is the date which

More information

The Truth About Taxes & Retirement

The Truth About Taxes & Retirement The Truth About Taxes & Retirement WILL THE GOVERNMENT INHERIT YOUR IRA? What You Should Know About Inherited IRAs Brought to you by: WHO WILL INHERIT YOUR IRA? Nancy saved for her retirement with hopes

More information

Disclosure Statement and Custodial Agreement for Traditional or Roth Individual Retirement Accounts

Disclosure Statement and Custodial Agreement for Traditional or Roth Individual Retirement Accounts ab Disclosure Statement and Custodial Agreement for Traditional or Roth Individual Retirement Accounts This booklet contains disclosures required by federal law. a Please keep this information for future

More information

Roth IRAs. Why Should I Convert Traditional IRA Funds into a Roth IRA? Questions & Answers

Roth IRAs. Why Should I Convert Traditional IRA Funds into a Roth IRA? Questions & Answers Roth IRAs Why Should I Convert Traditional IRA Funds into a Roth IRA? Questions & Answers Why is now the right time? Marginal income tax rates are relatively low on a historical basis. The sooner you do

More information

EXPLORING YOUR IRA OPTIONS. Whichever you choose traditional or Roth investing in an IRA is a good step toward saving for retirement.

EXPLORING YOUR IRA OPTIONS. Whichever you choose traditional or Roth investing in an IRA is a good step toward saving for retirement. EXPLORING YOUR IRA OPTIONS Whichever you choose traditional or Roth investing in an IRA is a good step toward saving for retirement. 2 EXPLORING YOUR IRA OPTIONS Planning for retirement can be a challenging

More information

Roth IRAs The Roth IRA

Roth IRAs The Roth IRA Roth IRAs The Roth IRA 2014 and 2015 Questions & Answers What is a Roth Individual Retirement Account (Roth IRA)? A Roth IRA is a type of tax-preferred savings and investment account authorized by Internal

More information

NORTHERN FUNDS TRADITIONAL IRA. investor guide

NORTHERN FUNDS TRADITIONAL IRA. investor guide NORTHERN FUNDS TRADITIONAL IRA investor guide TRUST NORTHERN for a lifetime of investing LOOK FORWARD Retirement isn t about age. It s about possibilities, and dreams for your future. At Northern Funds,

More information

AN ANALYSIS OF ROTH CONVERSIONS 1

AN ANALYSIS OF ROTH CONVERSIONS 1 AN ANALYSIS OF ROTH CONVERSIONS In 1997, Congress introduced the Roth IRA, giving investors a new product for retirement savings. The Roth IRA is essentially a mirror image of the Traditional IRA, but

More information