Who needs life insurance? These days, the answer is, "Almost everyone." That includes:

Young Adults
As you might imagine, parents of minor children are at the top of the list of those who probably need life insurance. If one "breadwinner" were to pass away, life insurance payments could make it possible for the survivor to maintain the family's quality of life, send the children to college, and continue to set aside money for retirement and other long-term goals. But young adults don't necessarily need children to need life insurance. For example, newlyweds might purchase life insurance so that if one were to die, the other could use the proceeds to help repay significant debts, such as a mortgage or car loan. Generally speaking, life insurance is cheaper and more easily obtained at younger ages.

Empty Nesters and Retirees
Even if your children are grown up and financially self-reliant, life insurance may still be an important part of your financial strategy. After all, a widow or widower may still need to pay off a mortgage and other debts as well as continue to plan for a comfortable retirement. Naming grandchildren or adult children as beneficiaries of your life insurance policy may also enable those family members to accomplish important goals long after you're gone. Also, life insurance can help you accomplish a number of estate planning goals.

Business Owners
Offering life insurance as a workplace benefit can help a business owner attract and retain valuable employees. Also, naming the business as the beneficiary of a policy on a key employee can make it financially possible for the business to hire and train someone to replace that individual after his or her death. And life insurance proceeds can also make it possible for surviving partners or family members to eventually purchase a deceased owner's share of the business.

For information on the uses and benefits of life insurance at every stage of life, please contact your registered representative.

Lifetime Financial Group, LLC
30 W. Broad Street, Suite 300

Rochester, NY 14614

(585)325-2525

Tracking #623098

If the current income restrictions associated with Roth IRAs prevent you from using one for your own planning purposes, consider taking steps to ensure that your children or other younger family members establish and fund a Roth IRA of their own. Roth IRAs offer ample tax benefits for retirement — particularly for younger investors. Yet perhaps the more long lasting benefit of the Roth IRA can be realized when it is used as a wealth transfer mechanism.

Roth IRAs for Minors
One of the main contributors to successful retirement planning is time — the more of it you have, the better the result. For this reason alone, setting up a Roth IRA for a child can be one of your best long-term planning strategies. When investment compounding has upwards of 50 years to run its course, even a relatively modest savings rate can produce substantial wealth.

There is no minimum age requirement for opening a Roth IRA, and many IRA providers will accept accounts for minors. In most cases, the only real issue is whether the child has taxable earned income. Fortunately there is no requirement that the same "earned income" is the money that funds the IRA. If your child earned income from a summer or part-time job, but then spent it, there is no restriction on using money provided by parents to establish and fund the IRA account.

You can contribute up to $5,000 to a Roth IRA in 2009 as long as your child earned at least that much. However, contributions cannot exceed your child's income for the year. Contributions to a Roth IRA are not tax deductible, but earnings are never taxed provided your child meets the distribution requirements — chief among them waiting until at least 59 ½ before tapping the account.¹ While he or she probably cannot imagine ever being that old, there are other ways to put Roth IRA savings to good use prior to age 59 ½, such as the purchase of a first home.

Wealth Transfer with a Roth IRA
As effective a retirement planning tool as a Roth IRA can be, its greatest strength may be its potential as a wealth transfer instrument. Unlike traditional IRAs, minimum distributions are not required from Roth IRAs once the owner reaches age 70 ½. Therefore, a child theoretically could have held a Roth IRA his or her entire life never having tapped into it and then pass it on to his or her beneficiaries upon death. At this point the account would fall under the same minimum withdrawal rules that pertain to traditional IRAs. However, beneficiaries may choose to string out those withdrawals over many years, continuing to earn tax-free income on the remaining account balance.

The hidden value of the Roth IRA is its exceptional growth potential. If heirs decide to spend or withdraw Roth IRA assets immediately upon inheritance, the Roth's strategic value as a wealth transfer tool is lost. If however, they choose to let the Roth IRA continue to grow and only withdraw what is required by law each year, the true power of the Roth IRA can be realized.

¹Distributions from a Roth IRA may be tax free if you are at least 59 ½ years old and have owned the Roth IRA for at least five years; your withdrawal of up to $10,000 (lifetime limit) is applied to a first-time home purchase; or you die or become permanently disabled.

Lifetime Financial Group, LLC
30 W. Broad Street, Suite 300

Rochester, NY 14614

(585)325-2525

Estate Planning

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Insurance Needs for Every Stage of Life

Tracking #623098

Roth IRAs — Powerful Planning Tools for All Generations

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