ira stretch planning with life insurance not for consumer use. 0187631-00004-00 ed. 07/2015 exp....
DESCRIPTION
The Problem: Taxation Not for Consumer Use.3TRANSCRIPT
IRA Stretch Planning withLife Insurance
Not for Consumer Use.
0187631-00004-00 Ed. 07/2015 Exp. 01/02/2017
The Prudential Insurance Company of America, Newark, NJ.
PRESENTED BY:[Joe Sample,][Designations per field stationery guidelines][Company Approved Title][Agency Name] [The Prudential Insurance Company of America][1234 Main Street, Suite 1, Floor 10][Anywhere], [ST] [12345][in required states] [<ST> Insurance License Number <1234567890>][Phone] [123-123-1234] Fax [123-123-1245] [[email protected]]
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Important Notice
Not for Consumer Use.
This material has been prepared by The Prudential Insurance Company of America to assist our producers. It is designed to provide general information in regard to the subject matter covered. It is published with the understanding that Prudential is not providing legal, accounting or tax advice. Such services should be provided by the client’s own advisors. Accordingly, any information in this document cannot be used by any taxpayer for purposes of avoiding penalties under the Internal Revenue Code.
Life insurance is issued by The Prudential Insurance Company of America, Newark, NJ, and its affiliates. Like most insurance policies, our policies contain exclusions, limitations, reductions of benefits and terms for keeping them in force.
Securities and Insurance Products:Not Insured by FDIC or Any Federal Government Agency. May Lose Value.
Not a Deposit of or Guaranteed by Any Bank or Bank Affiliate.
Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities.
© 2014 Prudential Financial, Inc. and related entities.
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The Problem: Taxation
Not for Consumer Use.
Clients with significant sums in their qualified plans or Individual Retirement Accounts (IRAs)
Double taxation on IRA assets can reduce the estate value passing to their heirs by as much as 60% or more …
At death, IRA balance is included in a client’s estate. Distributions to beneficiaries are subject to income tax.
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The Solution: IRA Stretch Planning
What is a Stretch IRA?
A strategy that allows IRA holders to extend the period of tax-deferred growth on the assets in an IRA or qualified plan by passing assets to a younger beneficiary
Paired with life insurance planning, it is a tax-efficient wealth transfer tool
Not for Consumer Use.
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How Does IRA Stretch Planning Work?
Not for Consumer Use.
Step 1 IRA holder names spouse as primary beneficiary
Step 2 IRA holder takes RMD at age 70½
Step 3 Life insurance is purchased on the IRAholder’s life
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How Does IRA Stretch Planning Work?
Not for Consumer Use.
Step 4At the IRA holder’s death, the surviving spouse executes a spousal rollover and names a younger individual(s) as beneficiary
Step 5At the spouse’s death, the younger beneficiary receives the RMD distributions based on his/her remaining life expectancy
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Why Life Insurance?
Not for Consumer Use.
The Goal of IRA Stretch Planning
Maximizing the sum left to the heirs
The Problem: Dollars Lost to Taxes on DeferralsIRA Stretch Planning is income tax efficient but at the death of an IRA holder, a large IRA balance can result in estate and generation-skipping transfer taxes
The Solution: Life Insurance
Provides income tax-free death benefits
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Prospects for IRA Stretch Planning
Not for Consumer Use.
Individuals who have substantial assets in IRAs
Individuals who may be single, married, or widowed
Individuals who don’t envision needing incomefrom their IRA, either now or in the future
Individuals interested in legacy planning foryounger generations
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Benefits of IRA Stretch Planning
Not for Consumer Use.
Flexibility SpousalProtection
TaxEfficiency
EstatePlanning
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Not for Consumer Use.
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[Any Questions?]
Not for Consumer Use.
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