| There comes a point in life for many senior citizens | | | | Why not transfer $100,000 from the IRA account to a |
| when they recognize that they are really managing | | | | GIFT ANNUITY? By so doing, he would not only |
| assets for the benefit of their heirs. This point is | | | | satisfy the mandatory IRS withdrawal, he would |
| reached when they have resolved the problems | | | | develop a tax credit to help pay the tax on his |
| involving funding for unexpected health problems, and | | | | withdrawal. Quite important also, was this simple fact: |
| have also satisfied the question of having adequate | | | | he would receive $6,500 income from the annuity |
| lifetime income. | | | | every year for as long as he lived. |
| Sometimes it is possible to provide funding for health | | | | This money would be sufficient to pay the premiums |
| care needs in such a way as to benefit the heirs with | | | | for a last survivor life insurance premium with a face |
| the funds that are not lost to long term care expense | | | | amount of |
| because of good luck or good health. | | | | $200,000 |
| What we are talking about here is a form of life | | | | That is correct! You have just managed to transform |
| insurance recently made available to retirees that | | | | a $100,000 gift into a $200,000 benefit that you can |
| allows access to the insurance benefit if funds are | | | | dedicate to colleges expenses for grandchildren if you |
| needed for home care or for nursing facility care. For | | | | so wish, or to pay the tax bill on the remaining IRA |
| example, a $200,000 life insurance policy would allow a | | | | account. You also have done the following - |
| retiree to have $4,000 monthly to pay for care. If the | | | | Benefited a favorite charity |
| benefit was not used for such care, it would then be | | | | Satisfied a current IRS requirement for your IRA |
| available to the estate as a life insurance benefit, and | | | | account |
| those funds could then be available to fund a | | | | Received a tax deduction for the current tax year. |
| grandchild's college education. | | | | Reduced the ultimate tax owed on your IRA account |
| There is a way that allows retirees to set up VERY | | | | In the process, you have also eliminated the problem of |
| SIGNIFICANT educational funds for the grandchildren | | | | funding the cost of the insurance, since the check to |
| and to TAKE A TAX DEDUCTION for doing so. It | | | | pay the premium comes at the same time as the billing |
| combines two very efficient financial tools - | | | | from the insurance company. The funds are |
| A CHARITABLE GIFT ANNUITY | | | | guaranteed to last for your lifetime, and the insurance |
| LAST SURVIVOR Life insurance (A wealth | | | | costs are also guaranteed to never increase. |
| Replacement plan) | | | | You may wish to split the program into two segments |
| Let us look at an example: | | | | in order to benefit two separate charities, and spread |
| John is 72 years old and his wife is also 72. John has a | | | | the tax benefits over two tax years. You have a |
| substantial IRA account and is required to take money | | | | number of planning alternatives that your adviser can |
| from it each year even though he really would prefer | | | | help work out. |
| to allow it to remain in the account to grow free of | | | | Here is the question for you: If your circumstances |
| taxation. | | | | allow, is there any reason you would not make an |
| His adviser gives him this idea: | | | | investment with a guaranteed 2 for 1 return? |