Redeeming amounts in excess of the required minimum distribution will exhaust the account at a faster pace, reducing or eliminating the effectiveness of the Stretch strategy. Distributing amounts more than the required minimum could subject those distributions to higher federal and possibly state and local income taxes.
There can be no guarantee that the second- and third-generation beneficiaries will continue the Stretch IRA strategy and may elect to liquidate the account at any time.
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We can not and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues. Projected return rates are hypothetical and have been selected by you and/or your financial adviser. They are not representative or suggestive of any Lord Abbett returns. Legislative and/or regulatory actions can affect your actual outcome either positively or negatively.
Minimum distributions must be taken from traditional IRAs by April 1 following the year that a person turns 701/2. A minimum distribution must be taken from the IRA in each subsequent year. Failure to take the required minimum distribution will result in a 50 percent penalty on the amount that was not distributed. Mandatory distributions that represent deductible contributions and all earnings are taxed as ordinary income. Mandatory distributions based on nondeductible contributions are tax-free.
The use of the calculators are provided for educational purposes only and is not meant as legal tax, estate planning or investment advice. Lord Abbett does not provide legal, tax or investment advice. The tax and estate planning information contained herein is general in nature, is provided for informational purposes only, is not individualized and is not intended to serve as the primary or sole basis for your investment or tax-planning decisions. Lord Abbett cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws which may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of such information. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. The results of these calculations are estimates based solely on user input and the assumptions of the calculator program. All examples are hypothetical and intended for illustrative purposes only. Lord Abbett makes no warranties with regard to such information or results obtained by its use. Lord Abbett disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Investment results do not represent the future performance of any Lord Abbett funds. You should consult with your legal or tax advisor before making any investment decision.