Comments on: “Madoff” Your Clients With a Roth IRA Conversion http://annuityillustrations.com/?p=28 Annuity Marketing, Sales Ideas, Suitability, and Issues by Michael J. Prestwich Thu, 09 Sep 2010 01:17:14 +0000 http://wordpress.org/?v=2.5.1 By: Michael J. Prestwich http://annuityillustrations.com/?p=28#comment-2601 Michael J. Prestwich Mon, 20 Jul 2009 14:54:45 +0000 http://annuityillustrations.com/?p=28#comment-2601 I agree that there is no silver bullet or one-size-fits-all solution. That is why any planning tool needs to be flexible. It also needs to disclose when doing a conversion in not in the client's best interest. I agree that there is no silver bullet or one-size-fits-all solution. That is why any planning tool needs to be flexible. It also needs to disclose when doing a conversion in not in the client’s best interest.

]]> By: Seth Stewart http://annuityillustrations.com/?p=28#comment-2581 Seth Stewart Sun, 19 Jul 2009 13:30:45 +0000 http://annuityillustrations.com/?p=28#comment-2581 There are two ways to gauge success as an investor. Don't be fooled by simply gauging success on account balances. We suggest to our clients that they gauge success on buying power. If you truly understand this concept and can slowly convert to a Roth then the client is at a break-even from day one with all factrors being equal. Income planning is about positioning assets. We recommend to our clients to have a Roth IRA as the 10+ year income bucket. I have looked at the premium bonus issue from many angles. My advisce is that if you want to use any bonus to offset taxes then you should declare the conversion at the existing custodian before you transfer to the annuity carrier with a bonus. The bottom line here is that there is no "Silver Bullet" in planning for clients. There are two ways to gauge success as an investor. Don’t be fooled by simply gauging success on account balances. We suggest to our clients that they gauge success on buying power. If you truly understand this concept and can slowly convert to a Roth then the client is at a break-even from day one with all factrors being equal. Income planning is about positioning assets. We recommend to our clients to have a Roth IRA as the 10+ year income bucket. I have looked at the premium bonus issue from many angles. My advisce is that if you want to use any bonus to offset taxes then you should declare the conversion at the existing custodian before you transfer to the annuity carrier with a bonus. The bottom line here is that there is no “Silver Bullet” in planning for clients.

]]> By: Michael J. Prestwich http://annuityillustrations.com/?p=28#comment-2360 Michael J. Prestwich Fri, 10 Jul 2009 14:08:21 +0000 http://annuityillustrations.com/?p=28#comment-2360 You are correct -- keep the concept simple -- Roth IRA Conversion is really about paying lower taxes in the long run. Here are a few other ideas: 1) Roth IRA is not an "all or nothing" situtation. Your clients do not have to convert everything in 2010. This is simply an outstanding opportunity to spread taxes over several years. 2) The client can use qualified money to pay the taxes by taking distributions in 2009, 2010, and 2013 to pay the taxes on the 2010 Roth IRA Conversion that are due on April 15, 2012 and 2013. 3) Yes, the client must know that they cannot touch the newly converted Roth IRA for at least five years. Clients have at least three goals for their retirement assets: a) income b) leave money to heirs c) emergency fund Roth IRA money is better suited to all three goals -- if, as you stated earlier -- the client pays less taxes in the long run by doing a Roth IRA conversion. You are correct — keep the concept simple — Roth IRA Conversion is really about paying lower taxes in the long run. Here are a few other ideas:

1) Roth IRA is not an “all or nothing” situtation. Your clients do not have to convert everything in 2010. This is simply an outstanding opportunity to spread taxes over several years.

2) The client can use qualified money to pay the taxes by taking distributions in 2009, 2010, and 2013 to pay the taxes on the 2010 Roth IRA Conversion that are due on April 15, 2012 and 2013.

3) Yes, the client must know that they cannot touch the newly converted Roth IRA for at least five years.

Clients have at least three goals for their retirement assets:
a) income
b) leave money to heirs
c) emergency fund

Roth IRA money is better suited to all three goals — if, as you stated earlier — the client pays less taxes in the long run by doing a Roth IRA conversion.

]]> By: dixon cummings http://annuityillustrations.com/?p=28#comment-2348 dixon cummings Fri, 10 Jul 2009 05:28:14 +0000 http://annuityillustrations.com/?p=28#comment-2348 A. if they knowingly used unethical pratices yes I would take action. I like the fact that your Roth analysis will include the "Obama proposed new tax rate. QUESTION: IS NOT THE ANSWER TO ROTH OR NOT TO ROTH ONLY DEPENDENT ON 3 FACTORS? 1.) WHETHER THE CLIENT FEELS THAT HIS TAX RATES WILL BE HIGHER. 2.) THE CLIENT HAS NON-QUALFIED MONEY TO PAY THE CONVERSION TAX? 3.)THE CLIENT STILL HAS A TIME HORIZON OF AT LEAST 5-10 YRS BEFORE INCOME IS REQUIRED? A. if they knowingly used unethical pratices yes I would take action.

I like the fact that your Roth analysis will include the “Obama proposed new tax rate.
QUESTION: IS NOT THE ANSWER TO ROTH OR NOT TO ROTH ONLY DEPENDENT ON 3 FACTORS?
1.) WHETHER THE CLIENT FEELS THAT HIS TAX RATES WILL BE HIGHER.
2.) THE CLIENT HAS NON-QUALFIED MONEY TO PAY THE CONVERSION TAX?
3.)THE CLIENT STILL HAS A TIME HORIZON OF AT LEAST 5-10 YRS BEFORE INCOME IS REQUIRED?

]]> By: Michael J. Prestwich http://annuityillustrations.com/?p=28#comment-2305 Michael J. Prestwich Wed, 08 Jul 2009 23:50:57 +0000 http://annuityillustrations.com/?p=28#comment-2305 #3. Are you saying when someone knowingly uses unethical practices to rollover an IRA, that nothing should be done about it? What if this happens to one of your clients? I believe that any company should be able to create Roth Conversion software, but reps, broker-dealers, and marketing companies should make sure tools they use are accurate. #4. Perhaps you are right. Consumers need to take responsibilty for their retirement assets and make sure that they deal with knowledgeable, ethical, people. #3. Are you saying when someone knowingly uses unethical practices to rollover an IRA, that nothing should be done about it? What if this happens to one of your clients? I believe that any company should be able to create Roth Conversion software, but reps, broker-dealers, and marketing companies should make sure tools they use are accurate.

#4. Perhaps you are right. Consumers need to take responsibilty for their retirement assets and make sure that they deal with knowledgeable, ethical, people.

]]> By: dixon cummings http://annuityillustrations.com/?p=28#comment-2303 dixon cummings Wed, 08 Jul 2009 23:27:37 +0000 http://annuityillustrations.com/?p=28#comment-2303 CORRECTION: TO # 3 3. I am not going to be a spy and take my time to turn other people in. Have u filed a complaint with various regulatory agencies, law enforcement, sec, finra and FTC about these other companies whose roth conversion analysis YOU don’t like? CORRECTION: TO # 3
3. I am not going to be a spy and take my time to turn other people in. Have u filed a complaint with various regulatory agencies, law enforcement, sec, finra and FTC about these other companies whose roth conversion analysis YOU don’t like?

]]> By: dixon cummings http://annuityillustrations.com/?p=28#comment-2302 dixon cummings Wed, 08 Jul 2009 23:25:35 +0000 http://annuityillustrations.com/?p=28#comment-2302 You have good ideas & intentions but too extreme. Keep balanced. Feedback to your recommendations> 1. I agree 2. I agree 3. I am not going to be a spy and take my time to turn other people in. Have u filed a complaint with various regulatory agencies, law enforcement, sec, finra and FTC about these other companies whose roth conversion anayalysis don't like? 4. financial insitutions should not try to hold up a request from a consumer and act as some kind of body guard. give consumers some credit for understanding. How many layers of regulation do u want to have? if this multiplied nothing would ever get done. You have good ideas & intentions but too extreme. Keep balanced.

Feedback to your recommendations>
1. I agree
2. I agree
3. I am not going to be a spy and take my time to turn other people in. Have u filed a complaint with various regulatory agencies, law enforcement, sec, finra and FTC about these other companies whose roth conversion anayalysis don’t like?
4. financial insitutions should not try to hold up a request from a consumer and act as some kind of body guard.
give consumers some credit for understanding. How many layers of regulation do u want to have? if this multiplied nothing would ever get done.

]]>