Stretch IRA Concept

Have you worked a lifetime to accumulate your retirement nest egg?

Do you hope to have something left to pass on to your children or other loved ones? Are you concerned that loved ones will not have enough retirement income for their retirement?

Are you concerned they may quickly spend what you have spent a lifetime saving? If so,

The Stretch IRA Concept may be for you!

The Stretch IRA Concept can help preserve and protect the assets you worked so hard to accumulate The Stretch IRA Concept can help ensure children have something for retirement The Stretch IRA Concept can help protect assets from divorcing spouses, creditors and children themselves The Stretch IRA Concept allows you to set the terms for receipt of IRA assets while you are still alive! Stretch IRA Concept A Stretch IRA is an Individual Retirement Annuity (IRA) Concept set up in a way that extends the period of tax deferral beyond the lifetime of the original owner, typically over two generations The benefit of Stretching an IRA is that tax deferred growth is maximized by the owner taking minimum distributions allowing the IRA to build for the next generation IRA is Stretched by naming younger beneficiaries (Children or Grandchildren) where payments can be made over their individual life expectancy IMG8695 03/11 4 Stretch IRA Concept The Stretch IRA Concept is designed to prolong the period where IRA earnings can be tax deferred beyond the life of the original IRA owner When the IRA owner does not need all of the funds from the IRA and wants to create a legacy for future generations, STRETCH IT The IRA Owner must still take the Required Minimum Distribution

What, When and How to Distribute Individuals struggle to decide whether to spend personal non qualified money or whether to withdraw funds from IRAs to meet daily living expenses Factors to Consider Size of each IRA Amount required Asset mix in non-qualified and qualified accounts Expected Marginal Tax Bracket Time horizon for investing (Age of IRA owner) IMG8695 03/11 6 Stretch IRA Concept – What, When and How to Distribute If all living expenses came out of the IRA, the impact of tax deferred compounding lost If all living expenses came from non-qualified money, may eventually run out of non-qualified money and only have qualified money left requiring a tax payment every time money is needed from the IRA Tax Deferred money should outperform money where earnings are taxed each year if invested in the same assets

What, When and How to Distribute Let tax deferred money grow but take advantage of lower tax brackets and keep a safe cushion in nonqualified money

Where possible, let the IRA grow tax deferred with minimum withdrawals Tax deferred growth can build account more rapidly than non-qualified money if invested in the same assets IRA owner can be building a retirement plan for the next generation.

IRA Concept IRA owners are concerned with providing for children who: May not have been as successful as IRA owner in building retirement nest egg – more job hopping now Are spenders where IRA owner is concerned they will not have enough money in retirement May not have saved enough for grandchildren’s education or other needs Are irresponsible and IRA owner is worried they will blow all of the money in a year (or less)