Issue link: https://resources.envestnet.com/i/1528460
9 FOR HOME OFFICE AND ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC. Tax savings Strategies Roth conversion Show how converting a Traditional IRA or an employer retirement plan to Roth assets impacts your tax burden and the assets left to heirs. Based on the clients' projected taxable income during retirement, auto calculate the amount to convert that maximizes the use of a selected tax bracket. For personal tax savings • Reduction in future RMDs • Lower tax bracket now than in the future ĵ Often at the beginning of retirement before RMDs and Social Security begin ĵ Use financial plan to determine years of lower brackets ĵ Consider delaying Social Security to further push tax bracket down in earlier years ĵ Keeping future MAGI low, may benefit future health care costs as well as Net Investment Income Tax ĵ Uncertainty about future changes to tax rates For legacy planning • Increase flexibility of heirs by removing inherited RMDs • Heirs can make tax free withdrawals from Roth, would be taxed on qualified Qualified Charitable Distributons (QCDs) Show the impact of making direct distributions from an IRA to a qualified charity in retirement. Qualified Charitable Distributions will be tax-free withdrawals that also offset RMDs in that year. Using our QCD strategy, you can determine a percentage of the clients RMD they would like to direct toward the charity of their choice, reducing their taxable income. A few things to note: • Made permanent by the PATH (Protecting Americans from Tax Hikes) Act of 2015 • Distributions made directly from IRA (SEPs and Simples as well) to qualified charity (no donor advised funds, private foundations, etc.) • Must be 70½ or older • Limited to $100K in QCD value • Must be completed by Dec 31st to count toward your current year's RMD • For RMD satisfaction, it must be the first distribution of the year • Keep documentation to substantiate gift Charitably motivated • During client discovery, determine if the client is charitably inclined. • From the financial plan results, determine if there is a capacity for significant charitable gifts • Desired charity must be a 501(c)(3) organization or place of worship