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- FORSYTH COUNTY NEWS Sunday, March 14,2004
Tips for stretching out the life on your IRA
Much is being heard these
days of a new concept called
the “Stretch IRA". This
phrase is bantered about as
being the answer to the IRA
and estate concerns of many
investors.
It is important to under
stand what the phrase
"Stretch IRA” actually
means.
A "Stretch IRA" is not a
special type of IRA account.
In the “Stretch IRA" con
cept. financial institutions
are simply assisting their
clients, through the designa
tion of beneficiaries, with
ways to allow IRA assets to
continue to grow tax
deferred, after the death of
the original owner.
The goal is to avoid large,
lump-sum distributions to
the IRA owner's heirs, and to
spread out the distribution of
IRA assets to one or two
subsequent generations.
Family wealth may be
enhanced through the com
pounding effect of a multi
eenerational or "Stretch
IRA”.
The key benefits of the
"Stretch IRA" include:
• Family wealth may be
enhanced with this concept.
Careful beneficiary and
estate planning can mean
less estate tax and lower pro
bate costs at death.
• IRA assets keep grow
ing tax-deffered even as pay
ments are being made to
beneficiaries.
While minimum distribu
tions are being withdrawn
from the IRA. the bulk of the
assets continue compounding
on a tax-deferred basis.
• Those who have inherit
ed IRA’s are able to name
their own beneficiaries for
those accounts.
By naming his or her ow n
beneficiaries, the investor
who initially inherited the
IRA can continue the life of
the account to the next level
of beneficiary.
One key to "Stretch IRA"
planning is to avoid the com
mon mistakes so often made
by retirement plan investors.
Take the time to meet with a
knowledgeable financial
advisor and schedule a bene
ficiary checkup.
Be sure to address the
beneficiaries of all IRA
accounts, as well as your
retirement plans, annuities,
and life insurance policies
and avoid the following mis
takes:
• Naming your estate as
your beneficiary. This error
w ill make your estate subject
to the applicable state pro
bate laws which may delay
the amount of time it takes
for your heirs to receive your
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BUSINESS & INDUSTRY
STOCK MARKET UPDATE
market in brief stocks of local interest
A( the close of Sign Stock Last Change
March 12,2004 ATG AGL Resources 28.59 +0.23
BLS BellSouth Corp. 27.45 -0.05
DOW +111.70 DELL Dell Computer 33.05 +1.05
DAL Delta Air Lines 8.84 +0.32
F Ford Motor Company 13.29 +0.27
GM General Motors 45.39 +0.49
HD Home Depot 36.09
jaSaHMBR INTC Intel Corp. 27.71 +0.64
KO Coca-Cola Company 48.45 +0.27
MCD McDonalds Corp. 29.01 +0.31
S&PSOO +13.82 MSEr Microsoft 25.37 +O-28
PEP Pepsico Inc. 51.55 -0.15
RF Regions Financial 36.90 +0.57
Volume: SFA Scientific Atlanta 31.96 +l.ll
1,120.60 SGMS Scientific Games 17.51 +0.34
SO Southeni Company 30.15 +0.04
T AT&T 19.07 +0.07
TSN Tyson Foods 17.19 +0.05
UPS United Parcel Sen ice 68.95 +0.82
MAtnAn An an Wachovia Corp. 48.25 +0.50
NASDAQ +40.80 WX4T . co w
WMT Wal-Mart Stores Inc. 58.48 +0.58
Volume: John M. Weaver
1.984.70 Senior Vice President, Investment Officer
? “ st ' Wachovia
(678)455-0016 SECURITIES
IRA assets.
Your estate may also
incur additional costs associ
ated with your IRA being a
part of it.
• Not naming a benefici
ary. For any number of rea
sons. investors will not name
a beneficiary.
At death, your inheritance
is then directed by the
defaults in the particular IRA
contractual agreement.
These defaults may vary
from custodian to custodian.
This error may well result
in your retirement savings
going to your estate, rather
than individuals who could
benefit with more favorable
distribution and tax options.
* Not updating benefici
ary designations. The death
of a spouse, parent or sib
ling. marriage, divorce, birth
of a child or grandchild can
significantly change your
estate plan.
Periodic review of your
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Samemtha R Rensrm. Ml I Born tn Elberton ( reorgta she attend
cd North Creorgia College and State I ntveruty in Dahl* mega
(ieorgu graduating Summa Cum Liude with a BS in Biology
jgfc jft Attended Emory I mvcrsttv N liool of Medicine graduating firM tn
MF _ c lavs ant! also attended Emory for internship and residency training
o M ( completing residency training, stayed on with Emory’ Program
tor another year as Chief Resident in Internal Medicine After grad
BL Y tuting. srxmt 2 y ears in private practice in Alpliaretta before joining
BL f Gxnpfenmsnv Internal Medicine Group in March 2004 She has
B . ft expertise in the treatment of high bkxxi pressure. dialxtes A high
< holesterol. w ith added interest in the treatment of insomnia. fatkrue
& menopause* I>r Benson is currently accepting new patients l>r
Benson lives in Johns Creek area of Suwanee with her husband and
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American College of Physicians she
has special itnerest in cardiovascular L ———■— ■ - 1
risk reduction and PCOS
M< '/“cf/wr / /Vur son, Ml) M.S. ~ '
graduated with honors from the HF TV BH
University of Florida College of Hr v BB
Medicine She completed her residency F dr ’
•Hypertension at the Medical College of Georgia and is I
• lllfth Blood Prepare 1 diplomate of the American Board of I Jftih
Internal Medicine Dr Pearson also IBBy i |
•Heart Pwcatt holds a Masters degree in exercise phys hft.Jc L
•High Cholesterol iology. and is a member of The National BA? dr
.Aiiirwv/udMM Osteopo-rosis Foundation She is a
Aurrgy vsuima memlwr of the American tail lege of
•Kidney Diaowr served as a
•DeproiMkm faculty physician at the Emory Clinic BHKSsABI
and Emory University.
• women * Hraßh
•TlnTOkHMwr WISt., IM-C graduated with
J/ I honor, from Emorv Unlvenity School of
* «■ Medicine PhyskUn AwiMant program She lend,
•tHabem Kjo j great experience to patient care through awixl
• Annual Fliyakal ■■ ing the phyxkUn,
retirement accounts can help
assure the stretch-out of your
savings.
The rules regulating IRA
accounts are complicated.
Your age at death as well as
the individuals or entity
(estate, trust or charity) cho
sen as beneficiary will deter
mine the possibilities avail
able for creating a “Stretch
IRA”.
Glossary of terms:
Required Beginning Date:
April 1 of the year after the
year an IRA accountholder
turns age 70 1/2.
The first Required
Minimum Distribution
(RMD) must be taken by that
date. Subsequent RMDs
must be taken by Dec. 31 of
each year.
Lump Sum Distribution:
A beneficiary can take all the
funds from the IRA.
The distribution will be
fully taxable as ordinary
income in the year it is
taken.
5 Year Rule: A benefici
ary must deplete the entire
IRA during a 5-year period
that begins on Dec. 31 fol
lowing the death of the IRA
owner.
IRA Rollover: Roll IRA
assets into a new IRA in
his/her own IRA and take
distributions based on his/her
own Required Beginning
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THE CITIZENS BANK
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Date using the Uniform
Table.
Decedent IRA: In gener
al, take distribution by Dec.
31 of the year following the
IRA owner’s year of death,
based on the appropriate age
and life expectancy table.
Required Minimum Dis
tributions will then be taken
in each subsequent year.
Use of Disclaimer:
Disclaim (refuse) all or a
portion of IRA assets within
nine months after the IRA
owner’s death.
♦Naming a Trust, Charity
or Estate as an IRA benefici
ary may result in options that
use other ages/tables than
shown above.
As you plan for the
future, it’s important to be
well versed in the many
facets of retirement invest
ing.
The "Stretch IRA" may
be a concept that can benefit
you and your family.
Contact a Wachovia Securi
ties Financial Advisor to
learn about this and other
retirement strategies.
This column is produced
by the Financial Planning
Association, the membership
organization for the financial
planning community, and is
provided by John M. Weaver.
Sr. Vice President-Investment
Officer. Murphy Office
Center, 210 Dahlonega St.,
Suite 103-A, Cumming, GA,
with Wachovia Securities,
LLC. member NYSE and
SIPC, and a broker/dealer
member in good standing of
the FPA. Call John Weaver
at 678-455-0016.
Wachovia Securities does
not provide tax or legal
advice.
Please consult with your
The following chart
may be helpful:
Trust
Distribution based on
age of oldest trust bene
ficiary.
Five-Year Rule
Lump-Sum Distribution
Distribution based on
age of oldest trust bene
ficiary.
Lump-Sum Distribution
Charity, Estate
Five-Year Rule
Lump-Sum Distribution
Distribution based on
age of IRA owner at
death.
Lump-Sum Distribution
own tax and legal advisors
before taking any action that
would have tax conse
quences.
Insurance products are
available through insurance
subsidiaries of Wachovia
Corporation and other
underwriters. Not available
in all states.
Wachovia Securities is the
trade name used by two sep
arate, registered broker
dealers and non-bank affili
ates of Wachovia Corpora
tion providing certain retail
securities brokerage servic
es: Wachovia Securities,
LLC. member NYSE/SIPC,
and Wachovia Securities
Financial Network, LLC,
member NASD/SIPC.