Many retirement savers spend much of their working life building their retirement nest egg through the use of Individual Retirement Accounts (IRAs). The savings can be a significant part of their security throughout the retirement years. When retirement time arrives, the plan is simple. Utilize these accounts for a steady and dependable source of income, which will help supplement other sources of income. For many individuals, this is exactly what they will do.



For others, IRAs are a source of potential income that may not be needed. Converting these accounts into income often means a tax burden that is not necessary. One would rather pass this power of income with tax deferral onto their heirs, essentially creating a legacy of growth and income for multiple generations.

For anyone who has an IRA, qualified distributions are required to begin by age 701/2

and must be taken over the owner's life expectancy. The owner may always choose to take out more if they need, but they have to take out a minimum based on their life expectancy. If you are fortunate enough to need only the Required Minimum Distribution (RMD), you may find yourself in the position to leave a significant amount to your heirs. Prior to recent tax law changes this would mean an additional tax burden on those you care about the most. Before these changes, a complex, and often costly plan was used to pass on the legacy you wanted to leave to your beneficiary(ies). Your beneficiary's only other option was taking the full distribution spread out over a maximum of five years. This may have caused unwanted tax liability and severely limited the future growth potential of the inheritance.

A New Opportunity

The internal Revenue Service (IRS) has made significant changes to the tax law, making it easier to set up and pass on an IRA to you heirs. They have also defined how the wealth may be distributed once you have pass on. Due to the structuring of the payout process, the beneficiary(ies) is allowed to “stretch” the distributions over their own life expectancy. This will allow them to spread out their tax liability as long as possible, which allows that legacy to continue to grow tax-deferred and provide income for a number of years.

This concept is called Multi-Generational Distribution Option, and specific information is available at http://www.HappyRetiree.com

Stretch IRA

Features

• Ensure an income stream to you and your heirs, while offering continued tax deferral on your IRA. This created a legacy for your retirement nest egg.

• You have the ability to name multiple primary and contingent beneficiaries. These can be changed at any time until death of the contract owner.

• Gives the beneficiary the ability to spread out the taxable liability over a number of years, as well as take additional amounts of income from the account if needed.