Many people would like to increase the amount of retirement income that they have to look forward to.
Meet Dr. Jo. He is 55, married and has some retirement plans installed for his practice but Dr. Jo has a problem that’s common to many high income individuals. He has a combination of qualified retirement plans and is making the maximum contribution possible but he’s still paying more income tax they would like and he’s interested in adding to his retirement income during the next TEN years, required as retirement so either in the charitable retirement UNITRUST, the credit.
Dr. Jo can set up a retirement credit just for himself without having to include the staff at his office, as he’s required to do with his other retirement plans. He can contribute up to 50% of his adjusted gross income, if he contributes cash. If he owns any appreciative assets such as stocks or real estate, he can contribute these instead of cash up to 30% of the suggested gross income and then any excess can be carried forward for an additional FIVE years.
The advantage of contributing appreciative property is that any Capital Gains are Tax By-Passed. Unlike his other retirement plan, Dr. Jo gets a partial income tax reduction. However, like his other retirement plans, the funds within the credit accumulate tax differed.
Dr. Jo likes a CRUT with the 5% required pay out that pays a retirement income starting at his age and he’s paid for as long as either he or his wife Mary live. But then by the CRUT will go to their church. He plans to contribute $50,000 per year for ten years.
As soon the CRUT earns 7%, from age 55 to 65, the trust assets were invested in such a fashion to produce an income of 1% and a growth of 6%. At age 65 the trust assets are repositioned to produce an income of 7% and no growth, so over the next ten years his total contributions to an amount $500,000.00 of which an $114,000/00 are going to be deductible. The account is going to have a value at that point of $698,000.00 that’s going to convert to a $48,900 per year income that’s going to last for as long as he or his wife Mary lives.
So based on their life expectancies, they are likely to extract over a million too. Then at the second of Jo or Mary to die, a gift to their church in the amount of $712,000.00 is going to be provided. So it’s Robert Cavanaugh with the Smart Giver.
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