continuing education for cpas

©UFS

Continuing Education for CPAs

Presented By:

Title:

Stretch Your IRA Distributions

if YOU COULD CREATE THE RETIREMENT OF A LIFETIME

L0509038017[exp0410][xDC]



Metropolitan Life Insurance Company, 200 Park Avenue, New York, NY 10166.

New England Financial is a registered mark for New England Life Insurance Company, 501 Boylston Street, Boston, MA 02116, a MetLife company.

MetLife Insurance Company is registered with the National Association of State Boards of Accountancy (NASBA), as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State Boards of accountancy have final authority on the acceptance of individual courses for CPE credit.



AgendaAgenda

• The Stretch IRA Strategy

• How the Stretch IRA Strategy Works

• The Variable Annuity Stretch IRA



The Stretch IRA StrategyThe Stretch IRA Strategy

The Stretch IRA Strategy is a retirement planning strategy that helps:

• Minimize current income taxes

• Continue tax deferral

• Create a legacy

This strategy is designed for investors who will not need IRA assets for their own retirement income needs.




A successful Stretch IRA Strategy requires:

• An understanding of the Required Minimum Distribution (RMD) rules

• A review of beneficiary designations

• Educating beneficiaries about Stretch IRAs

• Planning for estate taxes




Understanding RMD rules:

• Required Minimum Distributions (RMDs) are amounts that must be withdrawn each year after an IRA owner turns age 70½, or

• Amounts that must be taken by beneficiaries after the death of an IRA owner.

(Roth IRAs are not subject to the RMD requirement)




Understanding RMD rules:

• Federal tax law only allows tax deferral until funds are withdrawn and requires that an IRA owner who turns age 70½ must begin withdrawing money and paying income tax on the withdrawals

• The IRA owner can take more than the RMD amount



Uniform Distribution Table

90

89

88

87

86

85

84

AGE

16.3

17.1

17.9

18.7

19.5

20.3

21.2

DIVISOR

11.48322.076

12.08222.975

12.78123.874

13.48024.773

14.17925.672

14.87826.571

15.57727.470

DIVISORAGEDIVISORAGE




How the Stretch IRA Strategy WorksHow the Stretch IRA Strategy Works

Beneficiary Options:

• Spouse

• Non-spouse



How the Stretch IRA Strategy WorksHow the Stretch IRA Strategy Works

• Keep IRA in decedent’s name• Treat inherited IRA as surviving spouse’s

own IRA• Disclaim and pass to contingent

beneficiaries• Take a lump sum distribution (tax concerns)

Spouse as sole beneficiary can:



How The Stretch IRA Strategy WorksHow The Stretch IRA Strategy Works

Non-Spousal, Non-Natural Beneficiaries may:

• Keep IRA in decedent’s name

• Withdraw entire account value within five years

• Roll over IRA to a decedent IRA in beneficiary’s name

• Take lump sum distributions (tax concerns)




CASE STUDY

• Larry is 61 years old and changing employment

• Larry decides to roll his $100,000 401(k) into an IRA

• Larry has a wife (Beth) and son (Tim)

• No future contributions are made to Larry’s IRA

• Only RMD amounts are withdrawn • Assumes a 6% rate of return in the

IRA



• Consider using a variable annuity as a funding vehicle

• Include your beneficiaries in the planning process

• Plan for estate tax contingencies

A Variable Annuity Stretch IRAA Variable Annuity Stretch IRA




In addition to tax-deferred earnings, a variable annuity offers:

• A wide variety of funding options• Professional money management• Optional protection features• Optional “living” benefits*

*Speak to your tax professional to determine if these benefits affect your RMD.

For any tax-qualified account, e.g. IRA, the tax deferred accrual feature is provided by the tax qualified retirement plan. Therefore, there should be reasons other than tax deferral for acquiring an annuity contract within a qualified plan, such as the other annuity benefits.




What Costs Are Involved?

• Separate Account Charges• Administration Charge• Contract Charge• Investment Management Fees and other expenses• Separate Account and other charges for optional

riders and benefits• Withdrawal charges – Possible Early Withdrawal Penalty




Include Your Beneficiaries In Your PlansSpousal Beneficiary:

• Treat as own• Keep IRA in decedent’s name

Non-Spousal Beneficiary:

• Treat as own—roll over assets to a decedent IRA

• Keep inherited IRA in decedent’s name

Other Options:

• Elect to receive immediate lump sum• Leave IRA in decedent’s name and have

balance distributed within five years




Plan For Estate Tax Contingencies

• Consult with your tax and legal advisors

• Share this information with your heirs



• The Stretch IRA Strategy A Program To Create A Legacy

• How The Stretch IRA Strategy Works Spreads Distributions Over time

• A Variable Annuity Stretch IRA Consider A Variable Annuity

SummarySummary



Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this document is not intended

to (and cannot) be used by anyone to avoid IRS penalties. This document supports the promotion and marketing of insurance products. Clients should seek advice based on their particular circumstances from

an independent tax advisor.

MetLife, its affiliates, agents, and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for

general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative

change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. Clients should

consult with and rely on their own independent legal and tax advisers

regarding their particular set of facts and circumstances.

Circular 230 DisclosureCircular 230 Disclosure



Variable annuities and variable life insurance are sold by prospectus only, which is available from a registered representative. Clients

should carefully consider the product’s features, risks, charges and expenses, and the investment objectives, risks and policies of the

underlying portfolios, as well other information about the underlying funding choices. This and other information is available in the prospectus, which should be read carefully before investing.

Product availability and features may vary by state. All product guarantees are based on the financial strength and claims-paying

ability of the issuing insurance company

The amounts allocated to the variable investment options of your account balance are subject to market fluctuations so that, when

withdrawn or annuitized, it may be worth more or less than its original value.

DisclosuresDisclosures



Peter Rosengard is an investment advisor representative and a registered representative of MetLife Securities, Inc. (MSI), which is a registered investment advisor and a member of FINRA/SIPC. Insurance offered through the Enterprise General Agency, Inc. (EGA), Somerset, NJ 08873, and the Metropolitan Life Insurance Company (MLIC), New York, NY 10166. Products and services offered through R4 Employee Benefit SolutionsTM and R4 EnterprisesTM are not guaranteed, endorsed or recommended by MLIC, MSI or the EGA. R4 Risk & Wealth SolutionsTM is a marketing name for Peter Rosengard’s firm.

• Not A Deposit • Not FDIC Insured • Not Insured By Any Federal Government Agency• Not Guaranteed By Any Bank Or Credit Union • May Go Down In Value

DisclosuresDisclosures

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