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Life insurance 101

Stretch your IRA across generations

A gift in your will: Getting started

Paying for college without sacrificing your ‘nest egg’

2013 Estate Planning An advertising supplement produced by Peninsula Daily News and Sequim Gazette




How will you be remembered? submitted by UNITED WAY OF CLALLAM COUNTY What do you care about? Can you make a difference in your community? Do you want to see results of your gift while you are alive or leave a gift in your will? Do your children need what you leave them, or can a portion be given to something else you care about? The Clallam Community Foundation is a collection of separate funds established to provide health and human services to residents of Clallam County. Even with a modest bequest or a small gift, you can make a difference. The foundation offers a tool to arrange gifts supporting a particular issue or agency you are passionate about. Donors can arrange for college scholarships or an annual distribution to an agency until a gift is exhausted. The foundation encompasses three types of funds: United Way Funds, Named Funds and Partner Organization Funds. Distributions are made from earnings of each fund, while the principal is preserved as a permanent endowment.

United Way Funds Distributions from United Way Funds in the

foundation are determined annually by the United Way Board of Directors. Earnings from the agency’s undesignated fund are transferred to United Way and then allocated among the partner agencies who receive year-round funding from United Way or used as grants to help agencies identify new sources of support. Earnings from the McCool Fund are dedicated to early learning and fund Great Beginnings projects to help children and families be ready for school. The Orville Ninke Fund was established to assist low-income seniors with unmet needs, from basic utility bills to home repairs that will enable an elder to remain in their home.

Named Funds Named Funds are created by individuals or families to honor a loved one and continue a legacy of giving. United Way works with representatives of the fund to make distributions in line with the donor’s wishes. A Named Fund can be directed toward a general purpose, such as services for youth, or toward a specific list of agencies. Many of the foundation’s Named Funds are scholarship funds to benefit students from particular schools or pursuing a specified course of study.

Partner organizations Eleven Clallam County nonprofit organizations have established funds within the Clallam County Community Foundation. These organizations have committed to creating a permanent endowment to ensure a continued source of revenue to further their missions in support of Clallam County residents. United Way of Clallam County welcomes donations to the Community Foundation for the benefit of any of these organizations: • Clallam County Literacy Council • Dungeness Valley Health & Wellness Clinic • First Step Family Support Center • Juan de Fuca Festival of the Arts • North Olympic Timber Action Committee • Olympic Peninsula YMCA • Peninsula Behavioral Health • Port Angeles Food Bank • Serenity House of Clallam County • St. Andrew’s Place Assisted Living • Volunteers in Medicine of the Olympics Clinic There are many ways to create or contribute to an endowment fund. Your estate attorney, financial planner or insurance agent can help determine which type of legacy gift best fits your wishes and needs. For more information on setting up a fund, or making a contribution to an existing fund contact United Way at 360-457-3011 or send an email to info@unitedwayclallam.org. What will your legacy be?

Named Funds Representatives of these funds may recommend charitable organizations to receive grants and/or award scholarships to Clallam County students. In 2012, eight grants and 20 scholarships were distributed totaling $40,125. Bright Haygood Copsey Scholarship Fund Karen Byrd Scholarship Fund Community Service at Work Fund Fish Family Fund Hull Family Fund The Clallam Community Foundation is a collection of separate funds established by individuals, families and charitable organizations – a community of donors. What will your legacy be? We can help you explore how to create your own lasting investment in the future of Clallam County and its citizens. It’s easier than you might think to create a fund to support the causes you care about. The Clallam Community Foundation also accepts donations to any of our existing funds.

Carol Munro Memorial Fund Mac & Phyllis Munro Memorial Fund Michael Sindars Scholarship Fund Mac Ruddell Community Fund Whatton Family Fund

The United Way of Clallam County Funds Distributions from United Way Funds are determined annually by the United Way Board of Directors. 2012 distributions include: $17,000 from the Undesignated Fund to United Way’s annual fundraising drive $33,000 from the McCool Fund to Early Learning grants $8,000 from the Orville Ninke Fund to assist Clallam County seniors with urgent needs

For more information on the Clallam Community Foundation, contact United Way of Clallam County. info@unitedwayclallam.org www.unitedwayclallam.org/clallam-community-foundation


PO Box 937, Port Angeles WA 98362 360-457-3011




Life insurance 101: What you need to know story by BRANDPOINT

Life insurance. Everyone says it’s important, but it can be a difficult topic to talk about and even more difficult to understand. However, it is critical to understand this topic because of its importance to building your financial strategy. Life insurance can help you provide for the people and organizations you care about. Choosing the right life insurance solution gives you peace of mind knowing your loved ones will be taken care of. ● Term life insurance — Temporary life insurance that offers a death benefit and is generally less expensive than permanent insurance. It’s ideal for short-term life insurance needs, like when you are raising a family, paying off a mortgage or starting a business. ● Whole life insurance — Permanent life insurance that gives you a guaranteed death benefit, guaranteed level premiums and a guaranteed cash value that increases each year. The guarantees are contingent on all premiums being paid and no loans or changes being made to the contract. ● Whole life plus term protection — Permanent life insurance with added flexibility. It lets you “dial in” your premium to the level of whole life and term insurance desired. This insurance offers lifetime protection through a blend of whole life insurance plus term insurance and paid-up additional coverage. ● Universal life insurance — Permanent life insurance

that allows you to increase or decrease your death benefit and your premium is flexible; subject to any limitations in the contract. Accumulated value in a universal life contract earns interest at the current rate, with a minimum rate stated in the contract. ● Variable universal life insurance — Permanent life insurance that gives you a flexible premium and the potential to build accumulated value. However, death benefits and other values may vary because you direct how the cash is invested among the investment portfolios offered. The investment performance has no guarantees, and you could lose money.

How much life insurance should you have? When purchasing life insurance, think about your goals for your overall financial strategy, your economic value to your loved ones and your wishes for your survivors. First, you’ll need to calculate your economic value — the value of your future earnings over your lifetime. To do so, consider the following factors: ● Your current annual earnings. ● The amount your annual earnings increase. ● How many years you plan to work until retirement. ● The rate of return you expect your invested assets to earn. Use these numbers as a starting point when you sit with a

financial professional to determine the level of coverage you might need. Remember to consider how much of your future economic value you want to replace in the event of your death. This will depend on the financial goals you set for yourself and your survivors. Life insurance is an essential part of any healthy financial program. It is important that you choose what’s right for you and your situation, and that you plan accordingly with a licensed professional.


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Overcoming the top challenges of being retirement-ready story by BRANDPOINT It’s no secret that Americans aren’t saving enough for retirement. Many people are coming up short when it comes to funding their nest egg. But why is the problem so widespread? Insight can be found in the human behaviors that tend to get in the way of saving adequately. Now is the perfect time to learn more about the most common hurdles of retirement savings. Five challenges to being retirement-ready include:

1. Living longer

Did you know a baby born today is more likely to live to 100 than to be born with blue eyes? People are living longer, and it’s hard to know how long you’ll live. You may live many years beyond retirement, a time when you’re no longer creating income. The challenge is we still believe we’re living to 70 or 75 — but think about it: how old is the oldest person you know alive today? Chances are, you know someone who is well into their 90s. Saving for retirement now prepares you for the exciting possibility of having a longer retirement.

2. Procrastination

It’s human nature to procrastinate. And while some things take the same amount of time to do whether completed today or a year from now, others only get harder to do the longer you delay them.

Saving for retirement is one example. Every year you don’t save for retirement is less money you may have when it comes time to retire, making it that much more difficult to reach your goals and pursue your dreams.

3. Optimism

People in general are optimistic, which is a wonderful quality, except when it comes to retirement planning. It’s easy to think bad things won’t happen including unexpected health issues, loss of a job or a bad accident. It’s important to be realistic when planning for retirement and always plan for the unexpected.

4. Following the pack

Humans are social beings. If enough people are doing something, we tend to want to follow because we assume there must be a good reason. The urge to follow the pack can get us in trouble, though, particularly when it comes to saving and investing. Make sure you define your own goals for retirement and work with a financial adviser to create an individual plan that works for you.

5. Instant gratification

The newest car, computer or video game — it’s easy to feel like they need to keep up with the Joneses. Spending too much on impulse purchases rather than funding savings can be devastating, particularly

for your retirement. Learning to delay gratification and keep a budget is key. We all want to imagine living out our dreams in retirement, rather than worrying about money. Whether you’re in your 20s or your 50s, retirement savings should be top of mind. In addition to conquering the top challenges of retirement readiness, here are three simple things you can do today to ensure you’re on the right path:

1. Workplace retirement opportunities

If your place of work offers a retirement program, sign up for it as soon as possible. From employer matches to potential tax benefits, retirement programs deliver numerous positives for employees. Remember, compound interest is an important factor in building retirement income, so it literally doesn’t pay to put saving off.

2. Diversification

Putting all your eggs in one basket is risky when it comes to retirement funding. A diversified investment strategy can help protect you from the unexpected.

3. Financial planner

Working with a professional can help you learn about various savings options for reaching your personal retirement goals. The expertise of a financial planner can make the stressful and confusing process easier.

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Support your Peninsula funeral homes submitted by DOUGLAS TICKNOR of Drennan & Ford Funeral Home and Crematory While at dinner with friends recently, we discussed the economy, jobs and how buying local supported our community here on the North Olympic Peninsula. I listened as the “corporate big-box stores” were lambasted, how they were taking funds out of the local economy, endangering the local businesses with their cheap products and labor, etc. Having worked nearly half of my 22year career at Drennan & Ford Funeral Home and Crematory in Port Angeles, I wanted to know if this same attitude applied to using locally owned funeral home and crematory services when planning ahead. Surprisingly, it did not. There really wasn’t a reason. “We never really thought about it” was what I heard. Most people only plan one or two funerals in their entire lives. We aren’t exactly the type of business one pops into to browse. We don’t have shiny cool gadgets in version 15.1 or organic sections of items you use every day (thank goodness!). With this in mind, allow me to tell you why you should shop local for your prearranged burial or cremation arrangements. The difference between local and we’ll call them big-box funeral stores is huge. Most people don’t see the difference because they only have those one or two experiences making arrangements. The following represents just a few all-too-common things that I see happening in our county. A woman called me (we’ll call her Flo) to ask if I would please come to her home as quickly as possible. Her husband had died suddenly and was on the floor of their bathroom. The police were there waiting with her. Flo had made pre-arrangements with a big-box funeral store and was told it would be about 18 hours before they could come. They had neglected to inform her that they don’t have a funeral

home on the Peninsula. The funeral home also didn’t tell her that the guy who is on call that evening may be coming from across the state. They also failed to tell her that her husband would be transported to another county for the cremation as they didn’t have a crematory locally. There are several big-box funeral stores that sell prepaid funeral and cremation plans locally. Make sure you can deal directly with the owner or a Washington state-licensed funeral director. Otherwise, you are likely talking to a commissioned salesperson or someone who won’t be there when you need them. A small cemetery called me with a huge problem. There was a graveside service scheduled for, well, right now. The big-box funeral store showed up with the casket but no grave liner. That’s the box that goes into the grave and protects the casket from being crushed by heavy equipment like a backhoe. Without a grave liner, they couldn’t bury the casket. Whenever we go to this particular cemetery, we always brought one. The out-of-town big-box store didn’t know. They weren’t from around here, and not all cemeteries are the same. The burial was delayed. I could go on, but I’ll close with a new issue. Social media has really caught on. One local family was so angry about what happened after they used a bigbox funeral store, they came in to share their story. After using their services, a friend showed them Facebook posts where the employee of the big-box funeral store was talking about their loved one, and not in a professional manner. The unlicensed employee was just a guy who answered an ad for employment. He now tells stories on the Internet of his adventures in “picking up dead bodies,” as he put it. When it comes to selecting where to plan your funeral or cremation arrangements, choose a locally owned funeral home where 100 percent of its employees are licensed professionals.

Douglas Ticknor is a licensed funeral director and embalmer at Drennan & Ford Funeral Home and Crematory in Port Angeles, the only locally owned funeral home and crematory in Clallam County. He can be reached at 360-457-1210 or douglas@ drennanford.com. For more information, visit drennanford.com or find it on Facebook.

your legacy their future

Your legacy is an expression of your personal values, intentions and priorities towards that which you care most about To ensure that the money you’ve worked a lifetime to acquire is protected for the next generation, there are several options you can discuss with your investment professional: • Life insurance options • Long-term care insurance • Travis Bergland by calling (800)800-1577 to discuss your legacy.

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Paying for college without sacrificing your ‘nest egg’ story by BRANDPOINT As high school seniors prepare to graduate, many of their families are preparing to send them off to college. Tasked with more than goodbyes and packing, these families are working to balance important competing financial goals, from paying for their children’s college to saving for their retirement years. Having the right financial plan in place can help families prepare for rising tuition costs without compromising their retirement “nest egg.” One place mass affluent parents are less likely to look for funding their children’s college education is from their retirement savings. In fact, only 22 percent of mass affluent parents (those with $50,000 to $250,000 in investable assets) who saved or are saving for their children’s college education said they would be willing to cut back significantly on their retirement savings to pay for their children’s college, according to a Merrill Edge Report. As mass affluent parents continue to prioritize their retirement savings, many are instead relying on student loans (37 percent), scholarships/grants (36 percent) and state and/or federal financial aid (26 percent) to fund their children’s college education.

Understand your entire financial picture and create a financial road map

Consider alternative financing/savings opportunities Today, more than half (56 percent) of mass affluent parents are not personally willing to incur debt for their child to attend the college of their choice. As tuition rates continue to skyrocket, parents will want to start saving as early as possible and explore

alternative options to pay for tuition. To start, they might consider opening a 529, UGMA (Uniform Gifts to Minors Act) or other education savings plan in their state. One-quarter (24 percent) of mass affluent parents who are saving for college and who have children younger than 18 are not confident they will reach their target savings goal by the time their child is ready to go to college. That means many families will turn to financial aid and student loans to cover tuition costs. With 37 percent of families planning to utilize student loans, it’s vital for parents to educate their children on the financial responsibility of student loan payments and the potential financial impact they could face post-graduation.

Cutting back to save more As increasing tuition bills become a reality, it’s essential for parents to also increase their amount of savings. While few are willing to cut back on important financial goals like retirement savings, more are willing to scale back on personal luxuries including a new car (51 percent), family vacations (43 percent) and a new home (42 percent). Sixty-five percent of mass affluent parents believe

Having the right financial plan in place can help families prepare for rising tuition costs without compromising their retirement “nest egg.”

When beginning to think about the cost of a child’s college education, mass affluent parents should take a look at their entire financial picture. From mortgage payments to retirement savings goals, considering financial priorities will help mass affluent parents determine how much they are able to contribute. They should also consult with a financial adviser or utilize a streamlined investment platform. Parents also want to estimate how much college will potentially cost and what they can realistically afford. Additionally, mass affluent parents need to determine what they already have saved. The 2013 Spring Merrill Edge Report shows that half (51 percent) of mass affluent parents who have or will save for college have saved just $20,000 or less for their child’s college education. With yearly in-state tuition rates climbing to more than $22,261 for the 2012-2013 academic year, according to the report “2012 Trends in College Pricing” by The College Board, current savings will likely only cover the tuition bill for freshman year. Once parents have assessed their entire financial picture on their own or with a financial adviser, they should create a financial road map to help them stay on track to pursue their goals.

that the cost of a college education is worth their return on investment. By planning ahead, saving earlier, utilizing financial resources and offerings, and cutting back on personal luxuries, today’s mass affluent parents can work toward their retirement savings goals, while also helping their children receive a college diploma.




Investment and retirement terms explained story by METRO NEWS GRAPHICS Financial jargon can make the process of getting one’s finances in order and making smart economic decisions a bit of a challenge. To the average person, figuring out terminology can be a stumbling block and a hassle some want to avoid. However, it’s important to know some of the lingo associated with financial planning to ensure money is being saved and spent in a responsible way. ● 401(k): In the United States, a retirement plan where money is diverted into an account and then invested. Current income tax is deferred until the money is withdrawn upon maturity. ● Amortization schedule: A comprehensive schedule of payments determining the breakdown of the mortgage amount, interest, principle received and balance due through each period of the loan until the loan balance reaches zero. ● Annuity: A stream of fixed payments that is generally paid as part of a life insurance policy or retirement fund. responsibility of managing their inheritance, whether submitted by TED RIPLEY of Ripley Law Firm ● Appraisal: An estimated value of property used it is large or small? Part of the answer to finding the most often in real estate transactions. ● Bankruptcy: A legally declared inability of an When the subject of estate planning comes up, one of missing piece is to review the current plan to see if it will successfully pass on important family values. individual or organization to pay their creditors. the first questions is “Do you have a will?” Values-based planning has received more attention ● Dividend: A portion of a company’s profit paid to As important as the answer to that question may be, common and preferred shareholders. I would suggest that an even more important question in the press and media in recent years. But how do you do it? The dividend is paid in a fixed amount for each is “Have you prepared your heirs?” One of the techniques that some parents and grand- share of stock held, whether in cash or more stock. Your answer to this question will have a much ● Hedge fund: An aggressive investment fund longer-lasting impact than the allocation of your assets parents use to pass important values to future generations is to include some charitable giving as part of generally open to a limited number of investors. after your death. their estate plan. ● Interest: Fees paid on borrowed assets. We have all read stories of the million-dollar lotto Our community is blessed to have a wide diversity ● IRA: Individual Retirement Accounts were winner who faces bankruptcy a short time after his or of community organizations, from animal rescue and initially set up in 1974 to provide a retirement option her winning ticket was redeemed. protection to veterans support and women’s, children’s for individuals who were not covered by an employerFor some individuals, the receipt of an inheritance and family organizations. sponsored plan. Eventually, it was opened up so may have the same tragic result. Determining how We don’t have a local zoo to complete the alphabetianyone younger than 70 could donate up to a certain to provide for your heirs in a way that will not cause cal range of nonprofit beneficiaries, but we do have a amount of income a year. them harm takes careful consideration. ● Liquidity: The ability to turn assets into cash Let us examine some of the reasons this subject may raptor center, Olympic Game Farm, a Humane Society and lots of animal possibilities. without losing a lot of value. be overlooked: These organizations all reflect different ways of ● Longevity risk: The risk a pension fund or life ● The process of addressing the preparation of heirs insurance company takes on when offering its plans, for the responsible stewardship of an inheritance takes making the community and world a better place. Involving heirs and beneficiaries in the process of due to the increasing life expectancy rate. time and effort. selecting and making financial distributions to orga● Pension: A deferred compensation scenario ● Preparing heirs involves much more than downnizations can provide an educational experience and whereby where an employer pays an employee a loading a will form and allocating assets among your generate passionate supporters who are able to see the portion of income based upon length of service and children or other family members. benefit of helping others. employee age. ● Some people may believe that there is no solution Taking the time and effort to find the missing piece Some pensions can be contributed to by the employthat can be of help in their situation. in your situation can provide peace of mind in knowing ee himself or herself, with the employer matching the ● Developing and maintaining relationships is an that your planning will benefit the people and causes contribution. important life skill and may be part of the answer. ● Portfolio: Collection of stocks, bonds and money ● People may not be aware of where to get help with that are important to you. market instruments owned by an individual or the process of preparing heirs. company. What professionals would be appropriate to consult ● Prime Rate: A term applied in many countries to and how extensive and expensive will it be? Ted Ripley is an estate plana reference interest rate used by banks. ● There may be a perception that preparing heirs is ning attorney and certified legacy ● Principal: The original amount of debt on which only important for the “wealthy.” adviser. He may be reached at interest is calculated. What steps can a parent or other person take in 360-457-0451 or via email at ● Rollover: This term is used for moving a retirepreparing the heirs so that the inherited wealth is RipleyLawFirm@olympus.net. ment plan into a different one, generally when leaving a force of good in the lives of their loved ones and not legacy & estate planning a job. Usually there is a set time period in which the a burden? rollover must occur so that a penalty isn’t issued. What should the heirs be doing to prepare for the

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A gift in your will: Getting started submitted by JAMIE MACIEJEWSKI of Habitat for Humanity of East Jefferson County Most people volunteer their time or money at some point in their lives to further the charities and causes they believe in. A gift in your will forges your legacy and allows you to keep on giving after your lifetime. A gift in your will or living trust is called a charitable bequest, and it offers these main benefits: • Simplicity. Just a few sentences in your will or trust are all that is needed. The legal bequest language for Habitat for Humanity is: “I, [name], of [city, state, zip code], give, devise and bequeath to [full name of organization, for example, Habitat for Humanity of East Jefferson County] [written amount or percentage of the estate or description of property] for its unrestricted use and purpose.” • Flexibility. Because you are not actually making a gift until after your lifetime, you can change your mind at any time. • Versatility. You can structure the bequest to leave a specific item or amount of money, make the gift contingent on certain events or leave a percentage of your estate to one or more charities. • Tax Relief. If your estate is subject to estate tax,

your gift is entitled to an estate tax charitable deduction for the gift’s full value.

How it works

Your gift can be made as a percentage of your estate. Or you can make a specific bequest by giving a certain amount of cash, securities or property. After your lifetime, the charity receives your gift.

To make a charitable bequest, you need a current will or revocable living trust.

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>> Continued on Page 9


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big difference in furthering a cause you are committed to, with minimal impact on your loved ones. Putting your family first For example, if you intend to divide When planning a future gift, it’s someyour estate equally between your three times difficult to determine what size children, each one will receive 33 1/3 donation will make sense. percent. Emergencies happen, and you need However, if you leave 10 percent to the to make sure your family is financially charities you believe in, each child will taken care of first. receive 30 percent of your estate, not a Including a bequest of a percentage of significant difference. your estate ensures that your gift will reIf you have found joy and fulfillment main proportionate no matter how your during your lifetime by responding when estate’s value fluctuates over the years. disaster strikes, easing the plight of child abuse victims, providing animal Leave “10” welfare services, supporting the arts, You might consider 10 percent as a seeing church ministry flourish or buildbenchmark for charitable giving through ing homes through Habitat for Humaniyour will. ty — then multiply your joy by providing Ten percent of your estate can make a a gift that will give beyond your lifetime.

Jamie Maciejewski loves seeing people find joy in helping others. She spends her days as executive director of Habitat for Humanity of East Jefferson County and can be reached at director@habitatejc.org.

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Dungeness Cemetery Only • Sequim About Habitat for Humanity in Jefferson and Clallam counties County, giving 44 children the chance to grow up in safe, decent and stable conditions. The 24th home is under construction in Port Angeles. A store, 728 E. Front St. in Port Angeles, was established to help raise funds to build homes for families in need in Clallam County. For more information or to donate or volunteer, visit habitatclallam.org or call 360-681-6780.




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• Habitat For Humanity of Clallam County is a locally run affiliate of Habitat for Humanity International, a nonprofit ecumenical Christian housing organization. Habitat for Humanity works in partnership with people in need to build and renovate decent, affordable housing. Houses are then sold to those in need at no profit. The organization has built 23 homes in Clallam


• Habitat for Humanity of East Jefferson County builds and repairs simple, decent houses in partnership with people in need. Participants put in 250 to 400 “sweat equity” hours as a down payment on their home and pay for the cost of materials through a 20- to 30-year mortgage. Since its founding in 1998, the organization has built 31 houses, recycled three and repaired six homes, providing simple, decent, affordable homes for 40 families with more than 70 children. Habitat is funded by donations and by the volunteer-operated Habitat stores at 2001 W. Sims Way in Port Townsend and 294963 U.S. Highway 101 in Quilcene. For more information or to donate or volunteer, visit habitatejc.org or call 360-379-2827.




assets can remain invested tax-deferred. Using this strategy, you withdraw from your IRA only the required minimum distributions (RMDs) you must take after reaching age 70½. If your beneficiaries take the proper steps, they could stretch the value of your IRA over many years. As the owner of the account, you may want to make sure your beneficiaries are aware of the potential advantages of the Stretch IRA concept.

How a Stretch IRA works When your retirement plan assets are distributed to you, the first step is to transfer them into a Rollover IRA and name your spouse as beneficiary. When you pass away, if your spouse survives you, he or she has the right to roll over the remaining assets into an IRA in his or her own name and name a new beneficiary, such as your son or daughter. When your spouse passes away, your son, daughter or other beneficiary could take payments over his or her own life expectancy and name another beneficiary. Take a look at the following example to see how it might work.

Stretch your IRA across generations money in their IRAs for their own retirement needs, the Stretch IRA strategy allows your beneficiary to take distributions over his or her own life expectancy. The named beneficiaries, who are usually younger than the original IRA owner, may be able to take distributions based on their own life expectancies. This can potentially lower annual income tax liability and allows taxes to potentially be deferred on any growth of assets in the IRA. The younger the beneficiary, the longer the IRA

submitted by CASI FORS of Fors Financial Consulting

The assets in your Individual Retirement Account (IRA) could help you create a source of income for several generations of your family. To help create this legacy, follow the Stretch IRA strategy.

Leave a legacy, minimize taxes Designed for individuals who will not need all the


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Stephen retires at age 65. He has accumulated $100,000 in assets. He establishes a rollover IRA, and he and his heirs follow the stretch strategy. Three generations benefit over nearly six decades.

Assumptions: • 6 percent annual return on account. • Examples assume federal taxes at a 25 percent rate. >> Continued on Page 11


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Stephen retires at age 65. After participating in his plan for 20 years, he has accumulated $100,000 in assets. He establishes an IRA rollover and names his wife, Eliza, age 59, as beneficiary. Stephen passes away at age 68. Eliza rolls Stephen’s IRA into an IRA in her name and makes her daughter Anne, age 31, her beneficiary. Eliza turns 70½ and starts to take the required minimum distributions based on the Uniform Lifetime Table. Distributions based on the Uniform Lifetime Table are based on the joint life expectancy of the IRA owner and a hypothetical beneficiary exactly 10 years younger. Eliza passes away at age 80 having netted, after taxes, $76,698. Anne, age 50, maintains the account as a beneficiary IRA, names her son Sean as her beneficiary and continues to receive required minimum distributions over her own single life expectancy. Anne passes away at age 76. Throughout the 26 years, she received $304,523 net after taxes. Sean, age 46, starts to receive Anne’s remaining distributions. He receives $267,070 net after taxes. Hypothetical results are for illustrative purposes only and are not intended to represent the future performance of any investment product. Rates of return will vary over time, particularly for long-term investments. There is no guarantee the selected rate of return can be achieved. Investments will fluctuate and may be worth more


Is a Stretch IRA right for you? The stretch strategy may or may not be a good idea for you. It is important to note that the Stretch IRA is designed for investors who will not need all the money for their own retirement needs. As a starting point, you should talk with your financial or tax adviser. The investments you choose should correspond to your financial needs, goals and risk tolerance. The information contained in this article was reprinted with the permission of MFS Investment Management.


Estate Planning

For assistance in determining your financial situation, consult Casi Fors, an investment professional, at 360-457-6116, Fors Financial Consulting, P.S. Securities offered through LPL Financial. Member FINRA/ SIPC.

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or less than their original value. Keep in mind this illustration is based on a 57-year time period and current tax laws. It is not possible to predict how tax laws may change over this period.




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Special Sections - Estate Planning 2013  


Special Sections - Estate Planning 2013