Louisville, KY – May 9, 2016 – With an estimated $30 trillion predicted to be transferred from Boomers to their heirs over the next three decades[i], now more than ever, advisors are helping clients appraise how their wealth will be distributed to the next generation. Jefferson National, the leading distributor of tax-advantaged investing solutions for Registered Investment Advisors (RIAs), fee-based advisors and the clients they serve, has enhanced its suite of wealth transfer and legacy planning solutions with the launch of a new ‘Restricted Stretch’ payout option for Monument Advisor, its Flat-Fee Investment-Only Variable Annuity (IOVA)[ii].
This new Restricted Stretch payout option provides RIAs, fee-based advisors and their clients with a simplified solution to stretch income over an heir’s lifetime, while also maintaining control over how that wealth is distributed—without the cost and complexity of other legacy planning solutions. It is a type of Non-Qualified Stretch, utilizing non-qualified dollars, which allows clients to restrict distribution options, by requiring beneficiaries to take only the required annual minimum distributions (RMDs). This allows clients to create predictable and reliable income streams, while at the same time helping ensure that this wealth is likely to last for an heir’s lifetime. And because the assets may remain invested in the market, this wealth may continue to benefit from the compounding power of low-cost, tax-deferred growth for the next generation. The Restricted Stretch is the latest payout option offered through Jefferson National’s Monument Advisor, which also offers Lump Sum, Five-year Payout, Non-Qualified Stretch, and Annuitization.
“Using this new Restricted Stretch payout option with our flat-fee IOVA is an effective solution for advisors and clients who need additional tax deferral to build wealth, and also want more control over how that wealth is distributed, by giving clients assurance that their legacy is being passed down according to their requests,” said Laurence Greenberg, President of Jefferson National. “The great transfer of $30 trillion in wealth represents a massive opportunity for advisors to deepen the relationship with their clients and their clients’ heirs—and Monument Advisor’s new Restricted Stretch payout option can add tremendous value for any advisor trying to retain clients’ heirs and build a multi-generational practice.”
“Clients want flexibility and control over how their assets will be distributed, and using the Restricted Stretch payout option with Jefferson National’s Investment-Only VA provides a unique solution to help clients accumulate more wealth during their own lifetime, and then efficiently transfer their wealth, while maintaining control of how it is distributed over their heir’s lifetime,” notes Jorge Padilla, CFP, Senior Client Advisor at Lubitz Financial Group. “Without an effective plan for the transfer of wealth, clients’ heirs may be subjected to a number of factors—estate taxes, probate, creditors and lawsuits—that can destroy the value of the legacy which our clients have worked so hard to create.”
In addition to its new Restricted Stretch payout option, Jefferson National is now offering a new planning tool that advisors can use to demonstrate to their clients the value of “stretching” wealth with a low-cost Investment-Only VA as part of their legacy plan.
Jefferson National’s new Non-Qualified Stretch Calculator can illustrate the value of “stretching” IOVA distributions to heirs, rather than transferring a single, taxable lump sum distribution. Instead of paying higher taxes on a single lump sum, both the distributions and the resulting tax liabilities are stretched over a beneficiary’s lifetime. And Jefferson National Monument Advisor’s flat-fee of only $20 per month—just $240 per year—can allow even more wealth to accumulate tax-deferred. The tool calculates Required Minimum Distributions based on proposed beneficiary ages, and illustrates the account value over time, factoring in the benefit of tax-deferred growth versus the impact of RMDs. It also allows the user to factor in any additional contributions, as well as the impact of other distributions, underlying investment costs and advisory fees.
To demonstrate the value of “stretching” wealth with a low-cost Investment-Only VA, and generate a client-approved proposal, advisors can visit: https://www.jeffnat.com/advisor/comparison/stretchcalc.cfm
To learn more about leveraging Jefferson National’s Restricted Stretch payout option, a simplified solution to help clients maintain control of how their wealth is distributed over an heir’s lifetime, financial professionals are invited to register for this webinar taking place on May 12th using this link: restricted_stretch_webinar
For more information on the Restricted Stretch payout option, financial professionals can download this Restricted Stretch Infographic: https://infogr.am/_/EbHnVSncft4CLzA6bzQN
[i] “The Greater Wealth Transfer: Capitalizing on the Intergenerational Shift in Wealth,” Accenture (2012)
[ii] Mogel, Gary S. (2005, June 6), Flat-fee variable annuity makes its debut. Investment News. Retrieved from http://www.investmentnews.com/article/20050606/SUB/506060708
Leigh Browder | Associate Account Executive
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