Jim was a retired corporate lawyer, married with two grown kids and one year from turning 70.5 — the age when he’d have to take his first IRA required minimum distribution. The thing is, Jim didn’t need the money from his RMD.
All in all, Jim and Susan were extremely satisfied. They could have done nothing and let the IRA stay in stocks and bonds, and maybe it would have doubled on its own over time. But we took the uncertainty out of his planning. The insurance created an immediate income tax-free estate for his kids, and the annuity provided the funding — the whole plan was now on autopilot. Jim and Susan were free from worrying about how to provide for their kids and could now spend more time enjoying their retirement.
If this type of plan sounds like it might be for you, here are a couple things you should consider:
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- Be sure to have enough other money to live on. The client mentioned here had ample other money and pensions so they did not need their IRA RMD.
- Also, this works for conservative investors who want to take the guesswork out of planning. This couple did not want to take stock market risk with their kids’ inheritance.
Disclaimer
Investment advisory and financial planning services are offered through Summit Financial LLC, an SEC Registered Investment Adviser, 4 Campus Drive, Parsippany, NJ 07054. Tel. 973-285-3600 Fax. 973-285-3666. This material is for your information and guidance and is not intended as legal or tax advice. Clients should make all decisions regarding the tax and legal implications of their investments and plans after consulting with their independent tax or legal advisers. Individual investor portfolios must be constructed based on the individual’s financial resources, investment goals, risk tolerance, investment time horizon, tax situation and other relevant factors. Past performance is not a guarantee of future results. The views and opinions expressed in this article are solely those of the author and should not be attributed to Summit Financial LLC. Links to third-party websites are provided for your convenience and informational purposes only. Summit is not responsible for the information contained on third-party websites. The Summit financial planning design team admitted attorneys and/or CPAs, who act exclusively in a non-representative capacity with respect to Summit’s clients. Neither they nor Summit provide tax or legal advice to clients. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state or local taxes.
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