Strategies

[Kathleen Reynolds]

#3672

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• Traditional IRA This strategy is included by default. This strategy is best described as “Do-Nothing”. It’s included in the analysis because it allows the user to compare strategies.
• Convert in a Single Year, Taxable Asset pays Conversion Tax Include this strategy if you want to do a single year conversion and have the taxable asset fund pay the conversion tax. If the taxable asset is underfunded, this will be noted in the output, and the program will continue to liquidate the converted asset to satisfy the conversion tax. Make sure you enter a sufficient balance, or have the program auto calculate the Taxable Asset balance based off the events in the analysis.
• Convert in Multiple Years, Taxable Asset pays Conversion Tax Include this strategy if you want to do a conversion over several years and have the taxable asset fund pay the conversion tax. If the taxable asset is underfunded, this will be noted in the output, and the program will continue to liquidate the converted asset to satisfy the conversion tax. Make sure you enter a sufficient balance or have the program auto calculate the Taxable Asset balance based off the events in the analysis.
• Convert in a Single Year, Converted Asset pays Conversion Tax Include this strategy if you want to do a single year conversion and have the Roth asset pay the conversion tax.
• Convert in Multiple Years, Converted Asset pays Conversion Tax Include this strategy if you want to do a conversion over several years and have the Roth asset pay the conversion tax.
• Purchase Life Insurance, Death Benefit to Taxable Asset Include this strategy if you want to purchase life insurance. Premiums will be paid out of a liquidation order: a) After tax RMDs calculated for the year, b) Taxable Assets, c) Roth Assets, and lastly d) IRA Assets. This liquidation order is also used for Living Expenses. The idea is to liquidate assets where the tax implication is the least first.
• Name a CRUT as an IRA Beneficiary Select this strategy if you wish to setup a CRUT as the beneficiary of an IRA. At the time of death, the IRA owner would utilize this feature in case the beneficiaries are not exempt according to the SECURE Act. This model allows a Charitable model to be created, to provide a similar schedule to the Stretch IRA which is no longer available to non-exempt beneficiaries. In some cases, this model will not be beneficial, but with a younger beneficiary, the results can be fruitful.
• Name a CRAT as an IRA Beneficiary Select this strategy if you wish to setup a CRAT as the beneficiary of an IRA. At the time of death, the IRA owner would utilize this feature in case the beneficiaries are not exempt according to the SECURE Act. This model allows a Charitable model to be created, to provide a similar schedule to the Stretch IRA which is no longer available to non-exempt beneficiaries. In some cases, this model will not be beneficial, but with a younger beneficiary, the results can be fruitful.
• Qualified Charitable Distributions (QCD) Select this strategy if you want to illustrate QCDs that can minimize the owner’s tax liability. The rules allow for this distribution to start at 70½ and allows for up to $100k a year to be removed from the asset without causing a tax event.

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