For example, if a beneficiary of her father's IRA elects to take distributions over her fife expectancy (commonly called a stretch IRA
payout), what portion of the annual minimum required distribution (MRD) is IRD?
The Obama budget would eliminate the stretch IRA
that allows beneficiaries to stretch the proceeds from an inherited retirement account over their lifetime.
Make sure to speak with a Gilman Ciocia tax advisor regarding Roth IRA conversion opportunities and whether a Roth or Stretch IRA
is right for you.
In Michigan, effective for 2005, a new Income and Principal Act goes in affect allowing post death payments of a stretch IRA
to be taxable to the beneficiary of the stretch trust.
Unless your clients are not going to be worth more than the exemption amount at the time of death and their heirs will be in the same or lower tax bracket from the time of the client's retirement until death, carefully consider whether a Stretch IRA
is the best solution to maximize wealth transfer.
Calculator - Analyzes the estate and income tax impact of a client's IRA at death.
Some financial institutions still restrict beneficiary options in their IRA custodial agreements or annuity contracts and might not allow the stretch IRA
, so it's wise to check those details.
Calculator--analyzes the estate and income tax impact of a client's IRA at death.
Caution: When implementing the stretch IRA
strategy, clients should keep in mind that amounts not deposited into an IRA by the applicable 60-day deadline generally are taxable as a distribution and are potentially subject to the 10% penalty applicable to distributions received by taxpayers who have not attained age 591/2 at the time of the distribution.
The new version makes it easier for planners to illustrate how life insurance improves the continuation of stretch IRA
strategies, which promotes the sale of IRA rollovers and new life insurance.
Of the sixteen firms we follow, six fail to provide anything regarding estate planning, beneficiaries, Stretch IRA
products or other legacy-related issues," said Alan Maginn, Senior Analyst at Corporate Insight and author of the Mutual Fund Monitor-Advisor report.
For example, the Alert points out a number of assumptions used to project stretch IRA
returns that may not be realistic for an IRA purchaser over a period of many years, such as: