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If you're looking for a more creative solution to your IRA problems, consider this:
A 70-year old man was in a difficult situation when it came to his IRA program. He was about to be required to take his RMD - Required Minimum Distribution with this IRA. With $4 million in his IRA, the amount of income he would have to take would create an income tax greater than what his wife and him spent each year to live.
He needed help. He didn't need the income to live on, but was required and mandated by the government to take that income from his IRA.
Every year, he was making 6% of his $4 million. The solution wasn't to take the minimum the government required - it was to take what he was making: $240,000 a year (6%). The income tax would be $100,000, leaving $140,000. Based on his wife's age of 64 and her good health, and the fact that they were both non-smokers, he created a $10 million of life insurance on a completely tax free basis.
The bottom line is this: with $4 million in an IRA, it would be worth less than $1.5 million at death if he was to die yesterday. Even after 29 years, it would only be worth about $5 million. By channeling it into life insurance, he now had $10 million he could leave to his family - tax free. The remaining $4 million in the IRA could go as a donation to a foundation after his death.
He had turned $4 million into a net amount of $14 million.
The Howard Kaye Insurance Agency deals with financial matters like estate planning, asset protection, 401K and IRA solutions to help you create and preserve your wealth. For more information, please visit www.howardkayeinsurance.com or call 1-800-DIE-RICH (343-7424).
These informational materials are not intended, and should not be taken as medical advice on any particular set of facts or circumstances. You should contact a physician for advice on specific health problems. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the television station.