Frank Oliver

Cash Value Life Insurance Can Generate Tax-Free Distributions

Multiple Savings & Investment Options with Cash Value Life Insurance Cash value life insurance can be a significant asset in retirement income planning because collateralized policy loans are not treated as income, so it’s not includable as income for Social Security benefit taxation. It also can be used for “bridging income strategies,” tax management and tax-free income. The savings and investment options can be tailored to your risk tolerance for product suitability. Cash value life insurance has four basic mortality crediting methods: participating dividends, interest rates, indices and subaccounts correlated to the market. Most crediting methods have some degree...

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QLACs Can Help You Manage Your RMDs

Qualified Longevity Annuity Contracts for Income & Tax Management A couple of years ago, to the amazement of the retirement community, the government created a deferral program for qualified plans called Qualified Longevity Annuity Contracts, or QLACs for short. The deferral period can extend up to age 85. Under QLACs, an individual can defer 25 percent of a qualified plan not to exceed $125,000. So, 25 percent of your qualified plans can defer required minimum distributions (RMDs). A QLAC can only be funded with a deferred income annuity, a relatively new product line manufactured by life insurance companies to...

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Seniors Need to Know How to Manage Their RMDs

Not Taking Required Minimum Distributions Means a 50-Percent Penalty Tax Most qualified plans fall under the Employee Retirement Income Security Act (ERISA) regulations. Your contributions are tax-deductible and accumulate tax-deferred, so sooner or later, distributions are taxable at ordinary-income tax rates. But to ensure Uncle Same receives his due, you must take require minimum distributions (RMDs) at age 70½. Failure to take adequate RMDs could result in a 50-percent penalty tax, one of the most punitive regulatory fines levied at non-compliant seniors. The benevolence of the government to offer these tax benefits for qualified retirement accounts is to encourage...

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Stretch IRAs Can Bequeath a Legacy from One Generation to Another

Stretch IRAs Can Be a Significant Wealth-Transfer Strategy Stretch IRAs are a powerful use of annuities inside an IRA that can impact a surviving spouse, children, grandchildren and perhaps even great grandchildren. A living legacy that can generate income and accumulate tax-deferred is a remarkable wealth-transfer strategy. Stretch IRAs have been around for decades, but it should be reintroduced as a retirement and asset transfer option. Legacy planning has generally focused on the most tax-efficient transfer of assets from one party to another within a family. Often, transferring assets requires the engagement attorneys and tax accountants to accomplish the...

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How Elastic Are Your IRAs?

Stretch IRAs Can Accomplish Double Duty for Your Retirement & Beneficiaries Individual Retirement Accounts (IRAs) have been around for more than 40 years through the Employee Retirement Income Security Act or ERISA. It’s a tax-deductible contribution plan that accumulates tax-deferred and is generally used for taxable retirement income. But there may be additional tax-advantaged distribution options that may benefit retirees as well as their beneficiaries. Content: IRAs accumulate tax-deferred, but not forever. Mandatory distributions come in to play at age 70½, where required minimum distributions (RMDs) or withdrawals are generated based on the Uniform Lifetime Table. Uncle Sam wants...

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