EFTA01454211.pdf

Optimizing Retirement Income without the adverse U.S. tax consequences typical of If your client contributes $5 million to a PPVA offshore investments. Moreover, the client's portfolio account or taxable account and allows that money should be sheltered from U.S. taxation during his stay in to accumulatefor la 20 or 30 years. and then the the United States. client takes equal distributionsfor the next 20 years, here's what the annual distributions will befor each Retirement Planning scenario Many clients, especially business owners, are subject to qualified plan limitations and can't put as much as they would like into tax-deferred retirement vehicles. Taxabk mestmert &cart (alter tax) • PVJA mrestmenl anon! (after tax) These clients could use a PPVA investment account as 2500.000 a simple, yet effective, tax-deferred savings vehicle. The tax-deferred accumulation allows the PPVA account 2.0041.000 9.95410 1500.000 t1.0:6.912 1,000,000 910,12COspemismomm 9a223 44444,44-444444444—saumonow 5503.120 503.0430 $50.01MMIXIOSINVIIPSMIXIRS s•-)oi :d elapiE? :ay-evEr-•r:):: 0 rive;y: n 0 10 20 Yeas 9J 40 50 Assumes 1.5 cocert of kncl mageort lees adal peent reanettu kat mom( lees ona S5 (Ikon ermstnert n a laxibk a«c(ni ard a vitae *Tent ouble Emuities mount 75 went °treated gait ae Wel at ordm n(ere rates:aid no +sithlethals ae male Niue a;e 591 Maw korne Um* is assumed to be 4)3 Ducal litir I allTsi Ascent ttereher to generate substantial incremental retirement income (mild gans tax rate is 20.7 percent in Yea I &IN I percent thereakt. Assures relative to a taxable investment account. Ow Areinxsanert rnyugament lees aten'ttax &Wile in tne taxatie "Optimizing Retirement Income," this page, shows iwslinert u(contdue to Ile 2 peKertot aflusialuoss t itietdd ft( how much more can be withdrawn each year from a milted (Worts Distrtutior6 ae shown on artend-ohea basis retirement account allowed to accumulate for different periods. When allowed to accumulate for 20 years, a - SAL.! Fund 5C-TVICE'S PPVA investment account allows a client to withdraw almost 50 percent more per year for 20 years than a tax- able account. liquidity notices are submitted to the investment manag- ers in a timely fashion. Practice tip: Consider allocating the most tax-ineffi- cient segment of a client's portfolio to the PPVA invest- Foundations with UBT Investments ment account. This will optimize the leverage derived Many charities and charitable trusts allocate to asset from deferring the investment gains from current period classes that are deemed to be active business interests, taxation. The PPVA provides significant flexibility in rather than passive investments. These asset classes gen- managing a client's retirement income, because sched- erally generate UBTI; for example. timber, certain types uled withdrawals can be postponed or accelerated as of real estate, energy transportation and master limited needed. If the PPVA investment account values arc partnerships, which can create current tax liabilities and allocated to alternative asset class investment vehicles, even endanger the charitable entities tax-exempt status. careful planning is necessary to assure that the required A PPVA investment account could be a simple, effective 24 TRUSTS 4 ESTATES / wealthmanagement.com DECEMBER 2012 CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0112192 CONFIDENTIAL SDNY_GM_00258376 EFTA01454211