Brokerage General Agency discusses Annuity and Qualified Maximization Strategy
Qualified retirement plans such as 401(k), traditional IRAs and Annuities are excellent vehicles for accumulation and to save for retirement because they can defer taxes for years and even decades. However, they're very poor vehicles for wealth transfer. When the time comes to begin withdrawing funds from IRA's, the money comes out and is taxable as ordinary income. The problem comes when you have an IRA and there is no need to actually pull income from it. In this scenario, it will sit and grow until the owner of the IRA passes away. These assets do indeed pass to a beneficiary (as opposed to probate).
When the beneficiary receives the inheritance, two things can happen.
Simply put, we are moving the client's heirs from a potential double taxation position into a tax free position while substantially increasing the amount of money received.
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