Tax Secrets: IRS simplies rules for IRA

And qualified plans

Ready? Everybody on their feet. A standing ovation for the IRS.

For my entire professional life — over 50 years — I have been convinced that the guys who write IRS regulations have only two buttons. Complex and more complex. Finally, hurrah! Someone invented a simple button.

The new regulations, involving the distribution rules for all qualified plans and IRAs (collectively “PLANS”), are a delight. Simple. And best of all, very beneficial: (1) Whether you are 70.5 years old (age at which you must start taking distributions) or older; (2) or are still accumulating funds in your plans.

What you are about to read should change your financial and tax planning for life … for the better. Make copies of this article and pass it on.

The IRS has created a new easy-to-use table that shows how to determine the required minimum-dollar amount of your distribution each year (after you reach age 70.5). Here’s a sample of this all-important table:


Age Period Percent

70 26.2 3.817%

75 21.8 4.587%

80 17.6 5.682%

90 10.5 9.524%

100 5.7 17.544%

Example: Joe reaches age 75 in 2008. The balance in his IRA (actually an old rollover IRA) at the end of 2007 was $400,000. Joe’s minimum distribution for 2008 is $18,349 (21.8 divided into $400,000). Hey, that’s only 4.587 percent of his $400,000 account balance. So, if Joe’s IRA earns more income than the distribution amount, the IRA balance will grow rather than shrink.

Remember, the rules determine the smallest amount that must be withdrawn each year. You can withdraw more (but not less) in any year. If your spouse is 10 years younger than you, special rules allow you to lower the dollar amount to be distributed.

Okay, now the big question. What should you do now with your plans? Whether you are 35 or 75 or any other age? I must confess, we began to search for an answer many years ago. Why? Because, the uncertainty of the stock market (not to mention the market’s current devastating downturn) caused readers of this column to call for new ideas.

Following is a two-step strategy that typically will multiply the dollars in your plans (which will ultimately be distributed to you and your family) by 10 times or more:

Step 1: Manage all or a portion of your plans funds so that the plans will generate an income with a larger percent return than the required minimum distribution percent. (See sample table above).

Can the funds in your plans be managed in such a way as to consistently get higher rates or return than the required minimum distributions? At last the answer is yes! Thanks to a new concept a member of my network discovered. What is the concept? Ingenious capital/money management software called “Your Private Bank Trading/Money Management Software.” (software, for short). It is fully automatic, requiring no personal management time by those who use it. If you are like me and the other people who learned what the software does, you are about to be delighted. What does it do?

Since it began trading/managing accounts in March 2002, the software consistently earns its users in the range of four percent a month. (Past results in no way predict future results). The software can be used to manage any excess funds you have: For example, personal, in trust or in a business account. However, our interest, at the moment, is this two-step plan: The software paves the way for the next step.

Step 2: If you are insurable or need life insurance you can reap a bonus. For example, it is easy to multiple $500,000 in plans to $5 million (or more), depending on your age and insurability. The software is perfect to accomplish this step.

The concept is simple: Use the higher income to pay the insurance premium (ultimately, creates tax-free wealth at your death), yet your plans continue to grow in value. The distribution rules assure you that the funds will be there to take care of your premiums and your required retirement payments.

You owe it to yourself and your family to retain an experienced professional to help you explore how to bring insurance coverage (it can be second-to-die) and the Software into your qualified plan and IRA life.

Yes, I know. You have questions and want to learn more. So, if you want to jump-start your learning experience, send a fax to 847-674-5299 (or e-mail to with your name, age (and spouse’s name and age, if married), dollar value of each qualified plan and type of plan (or IRA) and your phone numbers (day, evening and cell). Also estimated original funding amount (minimum $100,000) for your trading/money management account. Please mark “software” at the top of your fax.

Irv Blackman, CPA and lawyer, is a retired founding partner of Blackman Kallick Bartelstein, LLP (CPAs) and Chairman Emeritus of the New Century Bank (both in Chicago). Contact Irv at 847-674-5295 or Visit

© 2008 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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