Daniel has come to you for financial planning advice regarding IRAs and Estate Planning Techniques. He first, requests to change the beneficiary designation on his IRA to his very attractive dog sitter, Shannon. Daniel also tells you that he does not want his wife to know.

Daniel s neighbor has been telling him about the benefits of investing in a Roth IRA instead of a Traditional IRA. Daniels tax bracket during retirement is not expected to change from his current pre-retirement tax bracket. Daniel thinks he may benefit from opening an Roth IRA and making contributions into it instead of a Traditional IRA.

Additionally, his neighbor tells Daniel that a Stretch IRA offers a lot of estate planning benefits. Daniel is excited about this but tells you he has spoken with several firms an no one offers a Stretch IRA product.

1. How do you advise Daniel regarding the change of beneficiary requests? (Your answer should consider the requirements that govern your ethically as a CFP Professional as well as the rules for IRAs). Also, provide to Daniel in a written short answer explanation as well as proving mathematically that given his situation there is no difference for him as whether he invests into a Traditional IRA or Roth IRA.

2. What do you tell Daniel about Stretch IRAs ?

Your answer should include:

• If it exists, then explain what is a Stretch IRA
• How to set up Stretch IRA
• Explain to Daniel the pros or cons (as you see them) for a Stretch IRA.