(Presentations were created using Wealthy and Wise®.)
In Blog #10, I shared an Annuity Rescue Plan with you using Wealthy and Wise®.
Let’s look at an IRA Rescue Plan.
Defined contribution retirement plans like IRAs are tax efficient due to the deduction for contributions. They are also tax efficient due to their tax free growth.
They are not so tax efficient during retirement years due to taxable required minimum distributions (RMDs).
They are also not so hot when you die due to the income tax on the proceeds. (Although an IRA can pass income tax free to heirs using the “stretch” option, it is then fully taxable to the heirs as they make their RMDs.)
IRA Rescue Case Study
Alan and Marion Oliver are both age 60 and in a 35% income tax bracket. They don’t anticipate needing the RMDs from their IRA and wish they were not required.
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Current Plan |
Proposed Plan |
Transition from IRA to Survivor IUL:
- Liquidate the IRA over five years to produce level after tax cash flow of $73,335. (Wealthy and Wise calculates this via the last prompt in the lower left corner of the Defined Contribution sub-tab located on the Retirement Assets tab.)
- Use the level cash flow to fund the premiums on the life insurance policy.
- Compare the life insurance with keeping the IRA.
Here are the results:
Alan and Marion’s heirs inherit 58% more long-range wealth with the IRA Rescue Plan, and that wealth consists of income tax free life insurance proceeds -- unlike an inherited IRA with its taxable distributions. This has been accomplished not by diminishing their net worth, but in Alan and Marion’s case, their long-range wealth is increased by 49%. I hope you appreciate how remarkable this is -- net worth up; wealth to heirs up.
The IRA doesn’t stand a chance of surviving this analysis!
IRA Rescue provides you with a platform to discuss other planning opportunities with what is likely to be a very impressed client. You have secured $1.5 million in additional net worth and certainly you have some ideas on how that could be best utilized.
Wealthy and Wise evaluations typically require extensive data input as you usually need to enter details of various liquid and illiquid assets. The IRA Rescue strategy in this Blog requires minimal data input. I was able to put the case together in about 10 minutes. If you are brand new to Wealthy and Wise, be sure to ask for the Case Data file (Workbook) below and following its logic should be straightforward. Click on the Workbook file name when you receive it, and it will launch in your Wealthy and Wise System.
InsMark’s Referral Resources
(Put our Illustration Experts to Work for Your Practice)
We created Referral Resources to deliver a “do-it-for-me” illustration service in a way that makes sense for your practice. You can utilize your choice of insurance company, there is no commission split, and you don’t have to change any current relationships. They are very familiar with running InsMark software.
Please mention my name when you talk to a Referral Resource as they have promised to take special care of my readers. My only request is this: if a Referral Resource helps you get the sale, place at least that case through them; otherwise, you will be taking unfair advantage of their generous offer to InsMark licensees.
Save time and get results with any InsMark illustration. Contact:
- Ben Nevejans, President of LifePro Financial Services in San Diego, CA.
InsMark’s Digital Workbook Files
If you would like some help creating customized versions of the presentations in this Blog for your clients, watch the video below on how to download and use InsMark’s Digital Workbook Files.
Digital Workbook Files For This Blog
Download all workbook files for all blogs
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Note: If you are viewing this on a cell phone or tablet, the downloaded Workbook file won’t launch in your InsMark System. Please forward the Workbook where you can launch it on your PC where your InsMark System(s) are installed. |
If you are not licensed for Wealthy and Wise, contact Julie Nayeri at 1-888-InsMark (467-6275) or julien@insmark.com for licensing information. Institutional inquiries should go to David Grant, Senior V.P. at 1-925-543-0513 or dag@insmark.com.
Wealthy and Wise Testimonials
“Wealthy and Wise is the best -- and easiest to use -- wealth planning software I have ever seen.”
Simon Singer, CFP
InsMark Power Producer Encino, CA
“The reason I use InsMark products is because they are so good at explaining financial concepts to all three parties; 1) the producer trying to explain the idea; 2) the computer technician trying to illustrate it; 3) the customer trying to understand it.”
Rich Lindsay, CLU, AEP, ChFC
Pasadena, CA
“Major cases we are developing have all moved along successfully because of the sublime simplicity and communication capability of Wealthy and Wise. I guarantee that the proper use of this tool will dramatically raise the professional and personal self-image of any associate who dares to take the time to understand it.”
Phillip Barnhill, CLU
Minneapolis, MN
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