RETIREMENT PLAYGROUND

Tax Hikes Are on the Way - Positioning Your Retirement Money

2012-03-26T09:00:00.000-04:00

You won't be terribly surprised to learn that the Congressional Budget Office (CBO) has recently released a new report confirming the likelihood of tax rates going up 30% or more over the next tow years.

This will be due to the expiration of the Bush tax cuts at the end of this year and corresponding massive increase in the national debt. In the just the past 3 years, our runaway national debt has soared from $9 trillion to over $15.3 trillion and there are no signs of it slowing down.

In response, President Obama has been openly calling for higher taxes, which means that married couples earning over $200,000 and singles earning over $100,000 may find themselves paying tax rates as high at 62.5%. Sadly, a poll taken in late last year indicates that many Americans appear eager to "tax the rich" out of a sense of making the wealthy pay what politicians say is their "fair share".

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Who Owns Life Insurance And Why?

2012-03-19T09:00:00.000-04:00

Last week I spoke about why you should dislike using mutual funds as your primary investment. This week I am talking about Life Insurance. Now let me be clear, like mutual funds, life insurance will not make you wealthy. However, it will provide a hedge against inflation and will protect you from the tax man.

Interestingly, most of the mass media “financial experts” tell people to buy term insurance and invest the difference, while some tell you how bad insurance is as an investment. Well, as usual, their advice runs contrary to what the wealthy actually do.

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Why you should hate mutual funds?

2012-03-12T17:30:00.000-04:00

There are three reasons:

1. Very Little Diversification - There is an open secret in the investment world that diversification is for suckers or at least for folks that will never capture wealth. You see, mutual funds were invented as a marketing strategy. After academic finance disclosed you could reduce risk (variance) by diversification, Wall Street companies knew they could market this to average folks. Previous to mutual funds and the idea of diversification the average person felt that investing in the stock market was like gambling and shied away from it. But those folks in Wall Street knew a good marketing opportunity when they saw one and ran with it. Diversification reduces the variance to a point where the likely outcome is single digit returns. Single digit returns are fine if all you want to do is beat inflation, but it will never create wealth. What started as propaganda aimed at getting average folks to own stock has turned into common advice that is normally wrong. Every wealthy person from Warren Buffett to Donald Trump when being honest tell us that concentration is the way to go. Diversification before we obtain wealth is a fear based strategy. People think by diversifying, when things go badly, they can hang on to some of their wealth. Unfortunately, diversification is a block to building wealth, so they are protecting themselves from a loss that means nothing. Since fear keeps most folks from building wealth, when they hear diversification can protect them, they jump at it. Its a perfect fit for a fear based environment. Not that fear is a totally wrong emotion to have for the middle class. After all this is a group that is experiencing the economic changes most acutely.

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Why EIUL Makes Sense?

2012-03-05T09:00:00.018-05:00

I am a big believer in equity indexed universal life insurance as well as a seller of it. I have had my own EIUL for a number of years and it has performed exactly as it was advertised too. Since I decided to sell the product, I have learned quite a bit about the product and the tax codes that make it work so well. Here are some key points for anyone interested in the product:

1. It is permanent insurance, therefore has all the good and bad of an insurance product. Primarily the bad part is the front loaded expenses (over the first 10 years). So this product is not one to be entered into on a whim. This is a decision you make and live with. Now the good part. If you have dependents or heirs then the insurance aspect is a great bonus to most retirement plans. How many 401Ks/IRAs do you know of that will pass on 5 to 10 times the invested value to your spouse? But most of all that is why you really don’t need to worry about the front loaded expenses. If you die prematurely, no one will worry that you paid a lot of expenses in the first 10 years will they? In the long run the expenses will cost you between .5% and 1.5%. This is actually below the average expenses from the mutual fund industry.

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Happy Birthday Dr. King

2012-01-16T10:04:00.000-05:00

Just Win...

2011-10-19T23:15:00.000-04:00

The Time For Action Is Now

2011-10-07T17:19:00.000-04:00

We all know the story of the shoemaker whose children went without shoes and the roofer who never got around to fixing his leaky roof. Except for the details, their stories may not be too different from our own. Despite knowing that we need to be doing something about planning for our personal financial goals – whether it is saving for retirement; doing a better job of managing our debt, or setting money aside for our children’s college education– most of us put off doing anything about it for one or both of two reasons: we aren’t sure where to begin, or we don’t think we have sufficient assets to make it worthwhile.

The truth is, there is no single place to begin when it comes to planning for your financial future; and there is no level of income or assets one needs in order to make the process worthwhile. You can take action regardless of where you are in life, and regardless of how much money you have (or don’t have).

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Financial Advise... Who Gets It?

2011-09-30T17:05:00.000-04:00

Americans who are most in need of formal financial advice are the least likely to seek it, as access to affordable, professional guidance remains out of reach for those with lower income and education levels.

“The advice market does not serve the vulnerable populations — the low-income populations, minority neighborhoods, as well as, other parts of the market. It’s an issue. The marketplace is not equal in terms of access,” says Michael Collins, director of the Center for Financial Security and author of the recent research paper “A Review of Financial Advice Models and the Take-Up of Financial Advice.”
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One-Third of Retirees Receive Annuity Income

2011-09-23T17:00:00.000-04:00

Over one-third of retirees receive income from annuities, but for the majority, instruments provide just 4% of their income, according to a report released Sept. 16 by LIMRA.

“The majority of current retirees relies primarily on pensions and Social Security to meet their daily expenses, with annuities making up only 4 percent of their income,” Jafor Iqbal, associate managing director of LIMRA Retirement Research, said in a press release.

Older retirees were most likely to receive income from an annuity. Almost half of those in their late 70s had an annuity, while just 19% of those under 65 did.

The study found that while household income has little effect on who receives annuity income, household assets are a strong indicator of who receives such income. The percentage of households with under $75,000 who rely on income from an annuity and those with more than $75,000 differed by just five percentage points.
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We must not let our rulers load us with perpetual debt!

2011-08-20T07:33:00.000-04:00

“I am not among those who fear the people. They, and not the rich, are our dependence for continued freedom. And to preserve their independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts, as that we must be taxed in our meat and our drink, in our necessities and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses; and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes; have no time to think, no means of calling the mis-managers to account; but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers. Our landholders, too, like theirs, retaining indeed the title and stewardship of estates called theirs, but held really in trust for the treasury, must wander, like theirs, in foreign countries, and be contended with penury, obscurity, exile, and the glory of the nation."

Thomas Jefferson

The 4 Things That Make 90% of Americans Poor

2011-08-02T17:22:00.000-04:00

According to Robert Kiyosake, best selling author if Rich Dad Poor Dad, there are really only 4 things that make the majority of Americans poor. Take a look at this 5 minute video.

The 4 things that make 90% of Americans poor:

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We have a 1950s level of taxation and a 21st-century-sized government

2011-07-25T17:40:00.000-04:00

Americans are paying the smallest share of their income for taxes since 1958, a reflection of tax cuts and a weak economy, a USA TODAY analysis finds.

The total tax burden — for all federal, state and local taxes — dropped to 23.6% of income in the first quarter, according to Bureau of Economic Analysis data. By contrast, individuals spent roughly 27% of income on taxes in the 1970s, 1980s and the 1990s — a rate that would mean $500 billion of extra taxes annually today, one-third of the estimated $1.5 trillion federal deficit this year.
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Happy Independence Day! God Bless America!

2011-07-04T11:39:00.000-04:00

The Jet Plane Of Financial Vehicles

2011-06-20T09:00:00.022-04:00

I've explained in previous articles why I believe that the 401K, IRA and other qualified plans need to be retired. These three videos explains the benefits of an IUL contract over traditional and qualified retirement savings plans.

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What Is Estate Planning Part 2

2011-06-15T23:37:00.001-04:00

According to Joe Pippen author of Ask an Attorney, everyone has three primary options in estate planning.

Option 1: Do Nothing
The most popular option is to put off planning indefinite and hope that the need to plan will go away. This is clearly the worst option, although 60-70 percent of Americans choose those option.

If a person fails to plan his estate, the state he resides in plans it for him. Every state has a written a Will for everyperson who fails to create his own. This is called a statutory Will. The statutory Will that the state creates for you decides how your estate will be distributed and who will be named your personal representative. The state also decides who the guardian of minor children will be and makes many decisions that individuals should make for themselves.

Many Americans Will Not Be Able to Retire Until Their 80s - How About You?

2011-06-14T15:11:00.001-04:00

According to a new report, many Americans will have to work into their 80s before being able to retire. The lower your income, the longer you'll have to work. Those making $11,700 or less, will have a 50% chance of retiring by 84. Those making $72,500 and up, will have a 50% chance of retiring at age 65.

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What Is Estate Planning? Part 1

2011-06-14T12:43:00.003-04:00

Estate planning is much more than just having a will. In a broader sense, it is the process of creating and implementing a program for the protection and transfer of wealth.

Just as each person is unique, so is the estate planning for each person. Estate planning begins during your life and can continue long after your death. It is the understanding of your own limitations and the planning for possible guardianships and incapacity problems far in advance. Estate planning is also the process of simplifying the procedure of distribution and using methods to save taxes, probate, and administrative expenses.

Many people think they have “too little” to be concerned about estate planning; however, in most cases, this is not true. In fact, I have read studies which indicate that there is a much higher percentage of administrative costs in a small estate than a large estate.

The Best Investment Ever Made

2011-06-10T12:06:00.001-04:00

I figured that I would start my tribute to dads early this year.

I'm blessed to be a father to 3 amazing young ladies and a grandfather to 4 beautiful little girls. Being a father isn't easy by any stretch of the imagination, but I've learned that being a dad yields incredible dividends and gets easier if you just keep on trying and growing.

I learned this from a man that made being a dad look so easy... I know now that it wasn't. Thanks Dad.

The Hidden Wealth System Tax Savings Strategy

2011-06-08T12:00:00.017-04:00

You probably think that you’re already doing all you can to maximize your income and minimize your taxes but, the U.S. tax code is complex and confusing. Trying to take maximum advantage of the tax code can be more than a little complicated. However, not taking advantage of all its provisions can reduce the value of your capital assets and the income they produce for you by hundreds of thousands of dollars; especially over 20 or 30 years of retirement.

The Hidden Wealth System Tax Savings Strategy is a comprehensive approach that uses a combination of six techniques and several provisions of the tax code to minimize your taxes and maximize your income. It is not tax advice or tax preparation, but a comprehensive tax strategy that uses a combination of six techniques and several provisions of the U.S. tax code to minimize your taxes and maximize your income. This is accomplished by simply rearranging the way you own and use your capital assets.

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A little-publicized tax code could help save you money

2011-06-06T18:43:00.002-04:00

Most individuals are unaware of a little-known tax code that's available to all investors regardless of their income or net worth.

The internal code section for this tax break is IRC 7702. One of its components refers to the tax-advantaged growth of the cash value inside of a life insurance policy. If properly structured, an individual has the opportunity to both grow their investment money and access their money (before or after age 59 1/2) without ever paying taxes on the gains.

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The Greatest Salesman In The World: Scroll One

2011-06-06T14:05:00.000-04:00

Today I begin a new life.

Today I shed my old skin which hath too long suffered the bruises of failure and the wounds of mediocrity.

Today I am born anew and my birthplace is a vineyard where there is fruit for all.

Today I will pluck grapes of wisdom from the tallest and fullest vines in the vineyard, for these were planted by the wisest of my profession who have come before me, generation upon generation.

Today I will savor the taste of grapes from these vines and verily I will swallow the seed of success buried in each and new life will sprout within me.

Education is not a Substitute for Work

2011-05-23T08:32:00.000-04:00

No one can get something for nothing. Everything worth having has a definite price, and that price must be paid. The rules of personal achievement are as definite as the rules of mathematics. If every there was a true science, it is the science of personal achievement described in the seventeen principles of this philosophy.

An open letter of apology from the economy

2011-05-20T17:40:00.001-04:00

From an article in a local paper:

I'm sorry,

To state the obvious, it hasn't been pretty these last few years, especially for the job market. I am aware of the anger, and I don't blame you. This whole thing got away from me. But I think it's time we made a fresh start.

Here's what I propose:

The Best Valentines Gift Is To Guarantee Your Family's Financial Future

2011-02-13T20:35:00.001-05:00

The largest asset that almost every American family has isn't their house, car, or their business, it's their future income. This is the income that your family will benefit from over the next 20, 30, or 40 years. This money is what your loved ones are depending on to pay the mortgage, the car note, the utilities, house hold expenses, college educations, medical needs, maintain your standard of living in retirement, and finally to pay for your funeral expenses once you die.
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Guaranteed Income for Life

2011-02-12T05:43:00.002-05:00

Stretch your retirement savings with an annuity.

Retirees who watched in horror as their account balances plunged along with the stock market now face a new challenge: how to generate enough income to pay their bills.

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