'The Ultimate Retirement and Estate Plan for Your Million Dollar IRA' is Released
By: Christina Mancuso Dec. 20, 2016
PITTSBURGH, Dec. 20, 2016 /PRNewswire-iReach/ Visit www.paytaxeslater.com/mediakit for contact details, review copies, photos, and an author bio.
Retirement and estate plans may soon be taking a huge hit from the IRS. While the strategies in my book The Ultimate Retirement and Estate Plan for Your Million Dollar IRA (www.paytaxeslater.com/freeirabook) will reduce the impact of this miserable law, it will still be major blow for any family that has more than $450,000 in their IRA or retirement plan.
Since January 1987, the IRS has permitted beneficiaries including children and grandchildren to stretch distributions from inherited IRAs over their lifetime. That way, they pay the income taxes on relatively modest annual distributions for many years while continuing to benefit from the tax-deferred growth. This is referred to as the "stretch IRA." In September, the Senate Finance Committee voted 26-0 to eliminate the stretch IRA for non-spouse beneficiaries. This proposal will be included as part of a bill called the Retirement Enhancement and Savings Act (RESA). The proposed law does not apply to surviving spouses, but only to all other heirs, subject to a few exceptions.
Though Congress has yet to sign the bill, it is likely to apply to all IRA owners dying after December 31, 2016. When (likely "when," not "if") this law passes, non-spouse heirs could lose one third of their inherited IRA to taxes. Under RESA, non-spouse beneficiaries would have to pay taxes on an inherited IRA or retirement account within five years of the owner's death, with an exclusion of $450,000 per IRA owner, and they could be taxed at the highest rates currently 39.6%.
Here are some things IRA owners can do.
1. Pay taxes later, except for the Roth. We have been advocating this for years, but Roth IRA conversions need a closer examination under the pending death of the stretch IRA.
2. Make your estate plan flexible by learning to use disclaimers. If you have a substantial IRA or retirement plan and don't have the kind of flexibility in your plan that we recommend, you should consider having your estate plan updated.
4. Consider a charitable remainder trust (CRUT) to protect your children's inheritance. Generally, we will not recommend charitable trusts unless the client has true charitable intent, but for some people a CRUT could be a great solution.
5. Take advantage of gifting and/or life insurance. One of the best defenses against the proposed law is a series of gifts and/or life insurance. Many clients figured they would wait until the "death of the stretch IRA" was more imminent and then look more closely to gifts or life insurance. Well, that day has come.
6. Combine multiple strategies. This, of course, has been our advice all along.
A full explanation of these strategies and more are included in my free book:
The Ultimate Retirement and Estate Plan for Your Million Dollar IRA
Your readers can download a copy at www.paytaxeslater.com/freeirabook.
A final note: When I wrote the book, I was anticipating the death of the stretch IRA, but I was not anticipating the $450,000 exclusion. After the proposal was approved with the exclusion, I wrote an addendum which presents new planning strategies not covered in the book for taking advantage of the $450,000 per IRA owner exclusion. Your readers can download and read this addendum at www.paytaxeslater.com/addendum.
Investment advisory services offered by Lange Financial Group, LLC. All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful.
Note: The above is provided for informational purposes only and is not a recommendation. Investments and strategies discussed may not be suitable for all investors. All investing involves risks, including the potential for loss of principal. There is no guarantee that any strategy will be successful. Learn more at www.paytaxeslater.com
-END-
Please contact: James Lange * 412-521-2732 * jim@paytaxeslater.com * 2200 Murray Avenue, Pittsburgh
Media Contact: Dan Weinberg, Lange Financial Group, 4125212732, ultimatedww@aol.com
News distributed by PR Newswire iReach: https://ireach.prnewswire.com
SOURCE Lange Financial Group, LLC
Comments
Videos