No matter the amount of your retirement assets, proactive planning is critical because of the sometimes confiscatory taxes these assets are subject to – up to 70% or more in certain circumstances. As you may know, traditional retirement assets are not subject to income tax until withdrawal – and because the withdrawals consitute income, the larger the withdrawal, the higher the tax rate. If you’re like many of our clients, you want these assets to grow to the maximum extent possible, since assets not taxed until withdrawal grow much faster than assets that are taxed every year.
There are several strategies that can help you defer and perhaps eliminate the tax liability of these hard-earned assets, while at the same time legally protecting them from the creditors of your loved ones. These strategies can also help you coordinate your retirement plans with your overall estate and financial planning objectives to ensure that those objectives are met.
Retirement Plan Trust Planning can hep ensure maximum stretchouts but must be done carefully to avoid a requirement of early distributions.
Showing posts with label Retirement. Show all posts
Showing posts with label Retirement. Show all posts
Friday, July 9, 2010
Wednesday, March 3, 2010
Friday, February 19, 2010
IRA Issues
Nationally, Americans’ retirement assets total more than $14.5 trillion. Even considering the recent bear market, this amount is up significantly over the last decade.
No matter the amount of your retirement assets, proactive planning is critical because of the sometimes confiscatory taxes these assets are subject to – up to 70% or more in certain circumstances. As you may know, traditional retirement assets are not subject to income tax until withdrawal – and because the withdrawals consitute income, the larger the withdrawal, the higher the tax rate. If you’re like many of our clients, you want these assets to grow to the maximum extent possible, since assets not taxed until withdrawal grow much faster than assets that are taxed every year.
I recently hosted a seminar on Asset Protecting IRAs and Qualified Plans (which includes 401(k)s, defined contribution plans, defined benefit plans, etc.) and learned several strategies that can help defer and perhaps eliminate the tax liability of these hard-earned assets, while at the same time legally protecting them from creditors. These strategies can also help coordinate retirement plans with your overall estate and financial planning objectives to ensure that those objectives are met.
No matter the amount of your retirement assets, proactive planning is critical because of the sometimes confiscatory taxes these assets are subject to – up to 70% or more in certain circumstances. As you may know, traditional retirement assets are not subject to income tax until withdrawal – and because the withdrawals consitute income, the larger the withdrawal, the higher the tax rate. If you’re like many of our clients, you want these assets to grow to the maximum extent possible, since assets not taxed until withdrawal grow much faster than assets that are taxed every year.
I recently hosted a seminar on Asset Protecting IRAs and Qualified Plans (which includes 401(k)s, defined contribution plans, defined benefit plans, etc.) and learned several strategies that can help defer and perhaps eliminate the tax liability of these hard-earned assets, while at the same time legally protecting them from creditors. These strategies can also help coordinate retirement plans with your overall estate and financial planning objectives to ensure that those objectives are met.
Thursday, February 18, 2010
Wednesday, December 2, 2009
Retirement Plan Trust Benefits
Establishing a Retirement Plan Trust and naming it as the beneficiary of an IRA or qualified plan can provide a number of benefits. These include:
- Spendthrift protection - Protecting the individual trust beneficiary from his or her temptation to waste "found money."
- Predator protection - Even if the individual beneficiary does not have spendthrift tendencies, there are many out there whose interest lies in separating the beneficiary from their money and property.
- Creditor protection - Ours is a litigious society in which we never know who is going to be the target of a lawsuit. A trust makes the beneficiary a less attractive "target."
- Divorce protection - With the national divorce rate above 50%, it is impossible to determine which marriages will stand the test of time. A Retirement Plan Trust keeps the inherited IRA from being divided or even lost in a divorce.
- Government benefits protection - As with divorce, whether a healthy beneficiary will suffer some catastrophe that makes him or her dependent on needs-based government programs is unpredictable. Inheriting an IRA can easily disqualify someone from receiving needs-based government benefits until the IRA is exhausted.
- Providing consistent investment management (often from the participant's investment advisor).
- Estate planning.
- Control over use of the retirement plan/IRA assets (e.g., to fund education, start a business, or buy the beneficiary's first home or, in the case of a mixed family, to prevent diversion away from the owner/participant's descendants).
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