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Uncle Sam's Opportunity For You
The Catch However, you can’t defer taxes forever. To ensure that Qualified Plans, 403(b)s, and IRAs are used primarily for retirement purposes, the Internal Revenue Service imposes regulations that force you to take withdrawals. Specifically, you must begin to take minimum withdrawals – called Required Minimum Distributions (RMDs) – by April 1 of the calendar year following the year when you turn age 70 ½ and then by December 31 each year thereafter. For employer-sponsored plans such as 403(b)s, it is the latter of severance from employment or age 70 ½.
John is a 66-year old retired firefighter. His wife, Mary, is 65. They have retired on John’s pension and income generated by their rental property. John owns a $189,000 Qualified Plan. They are the parents of Kim, age 37, Shannon, 35, and Matt 27.
Let’s assume that John lives to age 78 and Mary passes away four years later at age 81. John’s Qualified Plan is growing at a steady 4.5% The graph below illustrates how much each of them will receive from the qualified plan without the benefit of Multi-Generational Planning. If the children cash in the Qualified Plan after Mary’s death, they will share a lump sum of $215,093 before taxes.
Using the Multi-Generational approach increases the amount passed on to their beneficiaries . By dividing the funds into separate contracts (one for each child) and arranging for the children to take just minimum distributions based upon each individual life expectancy, the account generates $526,310 in distributions to their children throughout their children’s lives. *This is a hypothetical example used for illustrative purposes only. Actual values will vary. But what if you don’t need the money for retirement income?
What if you prefer that your beneficiaries benefit from your IRA, 403(b), or Qualified Plan? Is there a way to delay this tax obligation and prolong the tax-deferred growth? Yes, there is
The Multi-Generational Opportunity
Through the power of a Multi-Generational approach, you can create a legacy for your beneficiaries that grows over your lifetime and their lifetimes. Through proper selection of your settlement options, structuring your IRA, 403(b) or Qualified Plan properly, and by withdrawing no more than the Required Minimum Distribution during your lifetime, the Multi Generational approach can deliver excellent results.
Would you like to learn more about the Multi-Generational approach?
A Multi-Generational approach is not a product. Rather, it’s an approach that has the potential to increase the legacy that you can leave to your beneficiaries. For example, this legacy can last the entire lifetime of your beneficiaries.
Contact us for additional information or join us for our next Multi-Generational Webinar.
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Home | About Us | 10% Immediate Bonus | Guaranteed Income | Guaranteed 7.2% Return | Copyright 2008 -- Strategic Planning Insurance Group |
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The federal government provides you with a wonderful opportunity to save for retirement utilizing IRAs, 403(b)s, and employer-sponsored Qualified Plans. These plans allow you to accumulate assets on a tax-deferred basis to build a retirement nest egg. Eventually, you must pay taxes when the money is withdrawn – but until then, your tax dollars and your principal grow tax-deferred.
