Retire Safe & Tax Free - Case Studies and Our Solutions


photo of Joanne and daugher

Case Study I: Never wants to run out of money

Joann is Age 54. She is divorced with one grown daughter age 28. Joann has been investing her old 401(k) money in Bond and Stock Mutual Funds for the past several years. Her original money was worth $320,000 but is now worth $265,000.

Joann wants to retire in ten years BUT wants to protect her money, guarantee a reasonable rate of growth and guarantee a minimum lifetime income she cannot outlive during her retirement. And when she passes she wants the remaining monies to go to her daughter.

Joann does not want to leave her money in Mutual Funds because there is NO way to protect her money, no way to guarantee a reasonable rate of growth nor guarantee a minimum lifetime income she cannot outlive. And she certainly cannot accomplish her goals where she is currently invested.

Solution:

Working with Archer Weiss, Joann selected an Equity Index Annuity where her money is protected and she is currently guaranteed a 6% minimum guaranteed rate of growth and guaranteed a minimum lifetime income of $22,423 annually for the rest of her life beginning at Age 65.

Case Study II: How to get the money from Dad

Jon is age 59. He is married with three grown children. He wasn't sure how he should name the beneficiaries of his IRA monies – in trust or to the children directly.

Solution:

Unless there are special needs, leaving money to a trust may prove to be a very costly tax burden to his heirs. Therefore, Jon's three adult children can be named as Designated Beneficiaries of his IRA monies. This means they must be identified as a natural person with a date of birth and social security number. In addition, they must be left a whole percentage of the IRA under current IRS rules.

Case Study III: Taxes are a "choice"

A CPA needed help because they had a client whose father had died leaving about $350,000 in an IRA. The client was coming to see the CPA the next day and he needed advice on how to instruct the client to "distribute" the funds as a check was already cut.

This is a well-respected and very successful CPA with many partners and a large practice. In fact the CPA teaches other CPAs about retirement. Over the past three years we had attempted to get the CPA to conduct client educational workshops with little success. The CPA saying he did not see the need!

He knew little and needed our advice because his client was coming in the next day and wanted his advice and did not want to "CASH THE CHECK!"

Outcome:

The reality is that a full distribution of the IRA has occurred and there is nothing anyone can do but pay the tax of $180,000!!!

Not only had the IRA been destroyed but the opportunity for the stretch was gone ending one of the most powerful wealth creation devices invented by man. That $350,000 IRA might have grown to $1,750,000 or more. Instead the highly confiscatory tax system would ravage it.

Solution:

Working with Archer Weiss, the accountant would have been advised against a full distribution and the maximum tax burden being paid by the client.

Marc H. Weiss, Archer Weiss Insurance & Financial Services, Inc. Please Call Toll free: 1-800-831-2901 or (818) 610-8560