Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Putnam IRA

1,634 views

Published on

Turning IRA assets into income. Strategy that can help you meet your income and legacy objectives, by seeking to minimize taxes.

Published in: Economy & Finance, Technology
  • DOWNLOAD FULL BOOKS, INTO AVAILABLE FORMAT ......................................................................................................................... ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Be the first to like this

Putnam IRA

  1. 1. S h i f t i n g i n t o r e t i r e me n tTu r n i n g I RA as s e t s i n t o i n c o me Not FDIC May Lose No Bank Insured Value Guarantee EO032 274522 4/12 |1
  2. 2. You can’t take adistribution before age59½ without penaltyCalculating requiredminimumdistributions iscomplicatedTax benefits stop at thedeath of the IRA owner EO032 274522 4/12 |2
  3. 3. Don’t be slowed by penalties before age 59½• Access your IRA penalty free through substantially equal periodic payments No penalty Age for Age 59½ distributions 70½ Penalty for Must begin distributions distributions Withdrawals are subject to income tax and those made before age 59½ may be subject to an additional 10% tax. EO032 274522 4/12 |3
  4. 4. Follow Rule 72(t) straight to penalty-free distributions• You must take systematic payments for five years or until you reach age 59½, whichever is longer• Avoids the usual 10% additional tax on taxable IRA distributions made before age 59½* * Distributions taken prior to reaching age 59½ are normally subject to an additional 10% tax. Distributions of deductible contributions and earnings will be subject to federal income tax. EO032 274522 4/12 |4
  5. 5. How does it work?Bob retires at age 50 Sally retires at age 57He must stick to the She must stick to thedistribution schedule for distribution schedule for9.5 years (until age 59½) 5 years (until age 62) EO032 274522 4/12 |5
  6. 6. The road you take makesa differenceDistribution method Life expectancy Amortization AnnuityYear 1 $2,924 $3,699 $3,681Year 2 3,148 3,699 3,681Year 3 3,400 3,699 3,681Year 4 3,661 3,699 3,681Year 5 3,940 3,699 3,681A one-time switch from either the “amortization” or the “annuity” method to the “life expectancy” method.This hypothetical example assumes a 50-year-old, traditional IRA owner, an account balance of $100,000 with an 8% annualized rate ofreturn, and an interest rate of 1.4% in conjunction with the IRS mortality table. Performance is not indicative of any Putnam fund, which willfluctuate.Not all required years of distribution are shown. EO032 274522 4/12 |6
  7. 7. You can’t take adistribution before age59½ without penaltyCalculating requiredminimumdistributions iscomplicatedTax benefits stop at thedeath of the IRA owner EO032 274522 4/12 |7
  8. 8. Mapping your RMD involves careful planning• You must start taking distributions from your traditional IRA by No penalty April 1 of the year after Age for Age you turn 70½* 59½ distributions 70½• IRA regulations make taking distributions Penalty for Must begin easy and relatively distributions distributions favorable from a tax standpoint * Note that these distributions are required of traditional IRA owners. Roth IRA owners are not required to take distributions during their lifetime. EO032 274522 4/12 |8
  9. 9. The express route to your RMD has four checkpoints Just keep in mind Date You must start taking minimum distributions by April 1 of the year after you turn 70½ Calculation method There is one simple calculation method* Beneficiary You may change beneficiaries whenever you wish without affecting the amount of your lifetime distributions Penalty for failure Equal to 50% of the minimum required to withdraw distribution not taken* IRA owners who have a spousal beneficiary who is more than ten years younger than the IRA owner may opt to use the IRS joint life expectancy table. EO032 274522 4/12 |9
  10. 10. You can’t take adistribution before age59½ without penaltyCalculating requiredminimumdistributions iscomplicatedTax benefits stop at thedeath of the IRA owner EO032 274522 4/12 | 10
  11. 11. Extend your roadtrip with a Stretch IRA• Extend tax deferral No penalty• Increase Age 59½ for distributions Age 70½ compounding potential Penalty for Must begin distributions distributions• IRA income for heirs EO032 274522 4/12 | 11
  12. 12. Spousal beneficiary• Once RMD for the year of death has been made, a spouse beneficiary may take over decedent’s IRA and treat it as his or her own (assuming certain requirements are met) – Spouse can calculate RMDs, if required, based on the uniform distribution table – Name new beneficiaries• Spouse can also transfer funds to a beneficiary IRA – If the beneficiary spouse is under age 59½, he or she can access the IRA assets immediately without incurring a 10% early withdrawal penalty – Spouse beneficiary may still opt to treat the beneficiary IRA as his or her own at any time in the future EO032 274522 4/12 | 12
  13. 13. How does it work?Spousal beneficiary example YE AR 0 0 Bob (age 65) rolls $200K into an IRA and names wife, Sally (age 60), as sole beneficiary EO032 274522 4/12 | 13
  14. 14. How does the spousalbeneficiary work? YE AR 0 5 Bob dies at age 70. Before commencing RMDs, Sally (age 65) elects to treat the IRA as her own and designates their son, Bruce (age 40), as her IRA beneficiary RMDs have not started EO032 274522 4/12 | 14
  15. 15. How does the spousal beneficiary work? Y E A R 1 0• Sally dies in Year 10 at age 70 before commencing RMDs.• The following year, Bruce (age 45) begins receiving payments based on his (much longer) life expectancy under the new IRS regulations. He names his wife, Wendy, as his beneficiary. Year 11 distribution $12,019 Year 0 Year 10 Year 20 Year 30 Year 40 Year 50 $3.2 million in income based upon an initial investment of $200,000 and cumulative annual distributions of 39 years. This hypothetical illustration assumes an 8% annualized return and that distributions are kept to the required minimum. It does not represent the performance of any Putnam fund or investment. Investors should consider various factors that can affect their decision, such as possible changes to tax laws, the impact of inflation and other risks including periods of market volatility when investment return and principal value may fluctuate with market conditions. EO032 274522 4/12 | 15
  16. 16. How does the spousalbeneficiary work? Year 49 distribution $270,526 Year 40 distribution $124,329 Bruce dies at age 74. Wendy continues the established distribution schedule. No rollover is available Year 30 distribution $54,566 Year 20 distribution $24,506 Year 11 distribution $12,019Year 0 Year 10 Year 20 Year 30 Year 40 Year 50$3.2 million in income based upon an initial investment of $200,000 and cumulative annual distributions of 39 years. This hypothetical illustrationassumes an 8% annualized return and that distributions are kept to the required minimum. It does not represent the performance of any Putnam fund orinvestment. Investors should consider various factors that can affect their decision, such as possible changes to tax laws, the impact of inflation andother risks including periods of market volatility when investment return and principal value may fluctuate with market conditions. EO032 274522 4/12 | 16
  17. 17. How does the spousalbeneficiary work?Total of 39 annual distributions$3,200,000 was distributedfrom the accountYear 0 Year 10 Year 20 Year 30 Year 40 Year 50$3.2 million in income based upon an initial investment of $200,000 and cumulative annual distributions of 39 years. This hypothetical illustration assumesan 8% annualized return and that distributions are kept to the required minimum. It does not represent the performance of any Putnam fund or investment.Investors should consider various factors that can affect their decision, such as possible changes to tax laws, the impact of inflation and other risksincluding periods of market volatility when investment return and principal value may fluctuate with market conditions. EO032 274522 4/12 | 17
  18. 18. Non-spousal beneficiaries• IRA owner may designate a non-spousal beneficiary, including a minor• Upon reaching age 70½, owner begins RMDs• When IRA owner dies, the beneficiary may establish RMDs based on his/her own life expectancy and name a new beneficiary,* even if RMDs have already started* Special rules may apply if the designated non-spouse beneficiary is a non-person, such as an estate, trust, or charitable organization. EO032 274522 4/12 | 18
  19. 19. How does the non-spousalbeneficiary work? YE AR 0 0 Betty (age 60) rolls $200K into an IRA She names her sons — Max, age 34, and Sam, age 40 — as beneficiaries EO032 274522 4/12 | 19
  20. 20. How does the non-spousalbeneficiary work? YE AR 1 0 0 Betty begins RMDs using the IRS’s simple calculation method Year 10 distribution = $16,480 EO032 274522 4/12 | 20
  21. 21. How does the non-spousalbeneficiary work? YE AR 1 0 2 Betty dies at age 72 after receiving $53,443 in distributions over 3 years IRA split evenly between sons Max and Sam EO032 274522 4/12 | 21
  22. 22. How does the non-spousalbeneficiary work? YE AR 1 0 2 Sam (now age 52) decides to liquidate his portion of the account immediately Sam’s lump-sum distribution = $243,158 EO032 274522 4/12 | 22
  23. 23. How does the non-spousalbeneficiary work? $243,158140,000 Y E A R 1 2120,000 Sam receives $243,158.100,000 In the year following Betty’s death, 80,000 year 13, Max (now age 47) begins 60,000 taking distributions based on his 40,000 single life expectancy 20,000 0 Year Year Year Year 1 10 12 49 Annual distributions: Betty Sam MaxThis hypothetical example assumes an 8% annualized return with distributions on an initial $200,000 investment based initially on the uniform distributiontable. After the owner’s death, distributions are based on the non-recalculated single life expectancy of a single beneficiary. Distributions are taken at theend of the year and are kept to the required minimum. Performance is not indicative of any Putnam fund. EO032 274522 4/12 | 23
  24. 24. How does the non-spousalbeneficiary work? $243,158140,000 Y E A R 4 9120,000100,000 Max’s IRA is depleted. Total of $1,436,936 received 80,000 in distributions 60,000 40,000 20,000 0 Year Year Year Year 1 10 12 49 Annual distributions: Betty Sam MaxThis hypothetical example assumes an 8% annualized return with distributions on an initial $200,000 investment based initially on the uniform distributiontable. After the owner’s death, distributions are based on the non-recalculated single life expectancy of a single beneficiary. Distributions are taken at theend of the year and are kept to the required minimum. Performance is not indicative of any Putnam fund. EO032 274522 4/12 | 24
  25. 25. How does the non-spousalbeneficiary work? Total distributionsMax has received $1,436,936over $1 millionmore than Sam $243,158 $53,443 Betty Sam MaxThis hypothetical example assumes an 8% annualized return with distributions on an initial $200,000 investment based initially on the uniform distributiontable. After the owner’s death, distributions are based on the non-recalculated single life expectancy of a single beneficiary. Distributions are taken at theend of the year and are kept to the required minimum. Earnings on Sam’s distribution are not reflected. Performance is not indicative of any Putnam fund. EO032 274522 4/12 | 25
  26. 26. Three helpful facts on the roadto retirement• You can take a distribution before age 59½ without penalty• Calculating RMDs is straightforward• Tax benefits can continue after the death of the IRA owner EO032 274522 4/12 | 26
  27. 27. What’s next?• Consider how much IRA income you may need in retirement• Complete a Putnam IRA checklist and inventory• Check your IRA beneficiary designations, but know that they can be changed without affecting RMDs• Ask your financial representative about ways to help make the most of your IRA EO032 274522 4/12 | 27
  28. 28. This information is not meant as tax or legal advice.Please consult your legal or tax advisor before makingany decisions.Investors should carefully consider the investmentobjectives, risks, charges, and expenses of a fundbefore investing.For a prospectus, or a summary prospectus ifavailable, containing this and other informationfor any Putnam fund or product, call your financialrepresentative or call Putnam at 1-800-225-1581.Please read the prospectus carefully before investing.Putnam Retail Managementputnam.com EO032 274522 4/12 | 28
  29. 29. S h i f t i n g i n t o r e t i r e me n tTu r n i n g I RA as s e t s i n t o i n c o me Not FDIC May Lose No Bank Insured Value Guarantee EO032 274522 4/12 | 29

×