Your IRA is a Joint Account With the IRS

Were you told these things when you opened your IRA or other retirement account?

1. The contribution that you make to your IRA or other retirement account is tax deductible, meaning that you'll receive a tax deduction for the contribution that you make to your account.

2. Assuming your IRA or other retirement account experiences growth, that growth occurs on a tax deferred basis, meaning that no tax is paid on growth until such time as a withdrawal is made from the IRA account.

3. At retirement or whenever you elect to use your retirement for income you will likely be in a lower tax bracket. That may allow you to take a tax deduction when you are in a higher tax bracket, enjoy tax-deferred growth when in the higher tax bracket, and then when taking withdrawals during retirement when you're in a lower tax bracket.

Did they all turn out to be true? No! The tax laws changed.

So what are the alternatives? 


You have 3 options.

1. Pay the IRS their share. Or if you die your heirs will pay your share at their tax rate.

2. Donate your share to charity in which case the IRS will donate its share to charity.

3. Create a legacy for your family with the IRS's share of your account.

Which do you prefer? Which makes the most sense for you?

We create IRA maximization plan for qualifying individuals to create a "Family Bank"by IRS guidelines, this is a tax free vehicle by the Deficit Reduction Act and Pension Protection Act of 2009.

If you qualify you can use the money from your IRA to fund your family bank. The family bank allows for tax free withdrawals and can be used for any purpose during your lifetime. If you qualify your IRA becomes the "seed money" for your family bank and if you die the money from the bank goes to your heirs tax free.

In order for your IRA to be the ideal funding source it must have the following characteristics.

1. You must have access to the money if needed.
2. The fund must have potential for growth.
3. The fund have protection against loss.
4. The money has to be guaranteed to pay to seed the bank.


If you would like to know more about this concept call me for an appointment and I will be happy to explain the concept to you when you come in. You can call at 610-695-8748 or email me at roy@yourwealthadvocate.com or click here.

Do you know what the VIX index is? Should you?

A google search will readily let you know what the VIX index is and what it measures in the financial markets. Taken from the CBOE website: "The CBOE Volatility Index^® (VIX^®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world's premier barometer of investor sentiment and market volatility."


Now many financial Gurus have long stated the phrase that "if the VIX is high it is time to buy and if the VIX is low that it is time to go." 


An interesting correlation is that as we reach the top of the valuation in the market the VIX is very low and when the market bottoms out the VIX is high. The Dow and S&P are at one of its highest points recently and the VIX is at a 57 month low. The question remains, is it time to get out of the market? Or do we become complacent and see if it is going to go higher.


If you have been advised properly since 2008 your portfolio should be at about where you were before the crash. Maybe it is time to take some dollars off the table.




Now is the time to act.

Are you at or near retirement? Do you think that it would be a good time to investigate protecting yourself from loss? If you want to discuss your options give me a call at 610-695-8748 and I can show you some of your options. or email me at roy@yourwealthadvocate.com.