The far-reaching possibilities of the Stretch IRA – including potential tax-deferred growth, retirement income, and legacy planning make this strategy ideal for many pre-retirees and retirees.
- Helps investors stretch out their retirement distributions across generations
- Keeps more money in a tax-deferred account for potential continued compounded growth
- Allows the beneficiary to take distributions over his or her own life expectancy, which minimizes current income taxes due
- May appeal to pre-retirees who have assets in employer-sponsored retirement plans
- May appeal to retired individuals interested in legacy planning
- More than 80 mutual funds to choose from, including risk/reward based asset allocation funds and target date funds based on asset allocation strategies
- Global asset management expertise of MFS
- Account and fund information access via the Internet and telephone
- Customer service representatives available from 8 a.m. to 7 p.m. ET, Monday through Friday
- Required minimum distributions for owner must begin at age 70½
- Most owners use joint life expectancy from the uniform IRS table
When your client's retirement plan assets are distributed to him or her, the first step is to transition them into a Rollover IRA account and name his/her spouse or someone younger as beneficiary. When your client passes away, the spouse can become the owner of the IRA and name someone younger, such as a son or daughter, as the beneficiary. If each owner and beneficiary receive only the minimum required distribution each year during their lifetimes, the IRA has the potential to provide payments for many years.
MFS does not provide legal, tax or accounting advice. Any statement contained in this communication (including any attachments) concerning U.S. tax matters, was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. This communication was written to support the promotion or marketing of the transaction(s) or matter(s) addressed. Clients of MFS should obtain their own independent tax and legal advice based on their particular circumstances.
Keep in mind that all investments, including mutual funds, carry a certain amount of risk including the possible loss of the principal amount invested.
You should recommend products based on your client's financial needs, goals, and risk tolerance.