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Here’s an estate-planning technique that allows you to lower the tax sting to your heirs, and that reduces your retirement income in case you don’t think you will need all of your Individual Retirement Account funds in retirement. It’s called a “stretch IRA,” or “Multi-generational IRA,” a complex investment tools that allow you to extend the tax-deferred status of your IRA long after your death.

By naming your children and grandchildren as the beneficiaries of your retirement assets, you enable them to stretch out the annual distributions of that IRA over the course of their lifetimes.

Structuring the stretch
There are four primary approaches to structuring a stretch IRA; the traditional, spousal-rollover, participant-direct and the mixed, or combination, approach.

In the traditional set-up, your spouse is the primary beneficiary and your children or grandchildren are the contingent beneficiaries, however distributions and income tax deferral are extended only through the life expectancy of the oldest beneficiary. By using the Spousal Rollover Approach instead, your spouse remains the primary heir and children or grandchildren become the beneficiaries with their own IRAs. This strategy allows the distributions and income tax deferrals to extend through-out the lifetime of the beneficiaries you name. That, in turn, provides significantly more tax deferral and a much longer opportunity for that IRA investment to grow.

If neither you nor your spouse need to dip into the IRA during your lifetime, you could also consider structuring your multi-generational IRA using the Participant Direct approach, which can provide the greatest tax benefit of all.

Using this strategy, you’ll be asked to break up your retirement assets into several different IRAs like the spousal rollover-except that your children and grandchildren, not your spouse, are listed as the primary beneficiaries, so you can lower the amount of the minimum distributions you are forced to take out once you hit age 70-1/2, and leave more money behind for your heirs.

Lastly, there’s the Mixed approach. A combination of strategies from the stretch IRA, it is structured as a spousal rollover with the remainder under the participant direct category. You may want to give this strategy a closer look if the surviving spouse does not need the IRA assets, but reigns while he or she is still alive. Consult a qualified financial planner experienced in Stretch IRAs for more specifics on these plans and which approach is right for you and your family.

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Jeff McLeod is a fixed index-linked retirement income annuity specialist.
To get a copy of the Buyer’s Guide visit happyretiree.com/ happyretiree.com/ HappyRetiree.com/ HappyRetiree.com/

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UK car insurance companies make substantial profits every year because a large number of existing customers just accept the renewal quote from their car insurance provider and don’t bother to compare premiums.

Many people assume that because their first years premium was competitive they will continue to get good value for money from the same insurer. In fact, as an existing customer renewing your car insurance policy, you could be paying for discounts your insurance company offers to attract new customers.

This is a common way for UK car insurance companies to get new customers onto their books.

Become a New Customer Again

A simple way to ensure you don’t pay more than a new customer for exactly the same cover is to become a new customer again.

Instead of just accepting your renewal premium, get a quote from your current insurer as a new customer. This will expose any discount given by your insurer to new customers which you will be paying for if you renew as an existing policyholder.

Call the insurers advertised phone number or get a quote from their website, but don’t use the contact details from your renewal pack as this will result in policyholder rates.

Shop Around

Armed with the best quote from your current insurer compare it against at least ten other car insurance companies. The internet makes this far less hassle than it used to be and you can now get multiple quotes from major insurers using comparitive car insurance sites such as Moneysupermarket and Screentrade.

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No Comments » Posted by Matt Cubb / Uncategorized