How to spend all of your retirement funds, die broke, but STILL, provide tax-free funds for your children

                                                       

                            Retirement Planning Made Easy

                                           Author,: Randy Taylor, Lic. # 0643596,

                                            Calif.  Retirement specialist since 1983.                                         

                                           Published in financial periodicals since 1998.

                                           Copyright, Creative Commons Licensing. This article 

                                           may be copied or re-distributed as long as it is copied in

                                           it's entirety and not altered in any way.

The Problem: How Can I defer taxes on my retirement until needed, spend it all and still pass on a financial legacy to my children income tax free?

The solution: Combining the benefits of two safe financial vehicles to do all of the above.

Step #1: Making sure that you will accumulate saving tax-deferred without losing any of your current funds to bad investments, taxes, or stock market fluctuations.

Step # 2: Keeping the savings accounts safe while deferring taxes on future income received.

The closer that you get to retirement the more important it becomes to keep all or most of your 

nest egg safe so that it will be there when you are no longer working and need it the most.

Annuity savings accounts are often the best solution if your goal is future income payments.

Why choose an annuity savings account instead of a bank c.d. or possibly a bond?

 This is easy!  Annuities are designed specifically for retirement purposes and offer 3 major benefits for the retiree:

                   1.) Income tax deferral on all interest until it is received.

                   2.) Guaranteed safety of principal and a minimum interest rate if held 

                   3.) Any unspent funds pass to your heirs at death without the need of a will or trust.

There are approximately 1.200 insurance companies to choose from in most states. (1,274 in California for example) You will want to find a company that has minimal exposure to junk bonds so that they can stay competitive while you are growing your account. 

What type of annuities are best for retirement and which product features should you consider?

                 1.) Variable annuities are best suited for those that want maximum upside growth potential but may not offer safety of principal as a result

                 2.)  Fixed Indexed annuities have minimum interest rate guarantees and no exposure to decreases with the market drops if they are used specifically for retirement purposes.

#3)  How to provide  an income tax free account for your children after you have passed away.

A simple solution would be to buy a life insurance policy equal to the value of your retirement account projection payable to your children. This gives you "permission" to spend everything you own on your retirement since the children will still get theirs income tax free when you are gone.

Very important:

Both of above alternatives offer an option to have a guaranteed level & in some cases and increasing income payment for life that is often higher than bonds. For a 65 yr. old this could be in the 6% range for life, even if the entire account is spent. The variable annuities might pay out approximately 1% less but offer more money if you cash the account in in 1 lump sum. These alternatives involve paying from .75 of 1 % to 1.5 % approximately in exchange for lifetime payments should the product itself perform poorly.

Summary:  This is not meant to be specific legal, tax, or investment advice but is offered up rather for entertainment purposes and a different point of view. An honest and experienced multiple company insurance broker or financial planner can help you with this. Do not make any purchases or transfers of any type before sitting down with your advisors.

I personally am still accepting new clients in the California area for those that would like a second opinion of life insurance, annuity savings accounts, or legal shield/ identity shield programs.

I can be reached at the links below. If you find this article helpful; please share it in it's entirety without alteration via social media.

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Life insurance and I.R.A. Account Specialist
Serving clients and brokers since 1983
(916) 601-5270

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HOW TO REVIEW REDUCTION IN INCOME TAX RATES

TEMPORARY REDUCTION IN INCOME TAX RATES EXTENDED:

Today's topic is the temporary reduction in individual income taxes.  If you would like additional information on this topic, please call my office at: (916) 601-5270

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Reduction in Income Tax Rates

Reductions in income tax rates in excess of 15% were scheduled to remain in effect through 2010, at which time they were subject to "sunset" provisions, meaning that income tax rates would revert to 15%, 28%, 31%, 36% and 39.6% after 2010.  The 2010 Tax Relief Act, however, extended the lower income tax rates through December 31, 2012. 

Income Tax Rates

Tax Years	Lowest Bracket	2nd Bracket	3rd Bracket	4th Bracket	5th Bracket	Highest Bracket
2011 - 2012	10%	15%	25%	28%	33%	35%
2013 and later	No 10% bracket	15%	28%	31%	36%	39.6%

Planning Note:

Consider using tax savings to fund an IRA, 401(k) or other tax-favored plan.

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10% Tax Bracket

The availability of the 10% bracket was scheduled to expire at the end of 2010, after which the lowest tax bracket would be 15%.  Thanks to the 2010 Tax Relief Act, however, the 10% tax bracket has been extended through 2012.  If "sunset" provisions take effect at the end of 2012, the 10% bracket will disappear and the lowest tax rate will be 15%.

10% Tax Bracket Thresholds

Filing Status	2011 - 2012	2011 and later
Married, Filing Jointly	$14,000 ($17,000 in 2011)	No 10% bracket
Single Taxpayers	$7,000 ($8,500 in 2011)	No 10% bracket

Brought to you by:

Randy Taylor

Randy Taylor Financial Services

Gold River Drive

Gold River, Ca 95670

916-601-5270

cycle.1@live.com

http://finsecurity.com/RTaylor

The purpose of this newsletter is to provide information of general interest to our clients, potential clients and other professionals.  The information provided is general in nature and should not be considered complete information on any product or concept described.  For more complete information, please contact my office at the phone number above.

MEDICARE IS IT BANKRUPT ALREADY?

FIRST THE BITTER REALIZATION THAT SOCIAL SECURITY IS IN JEOPARDY AND NOW:

MEDICARE, WILL IT BE BANKRUPT?

Blog entry by Randy Taylor Financial Services, Randy Taylor
                       (916) 601-5270 for life insurance or IRA savings account estimates.

This author tends to think that we have to prepare for the worst. We should use  long term care insurance for health catastrophies, and retirement income via indexed annuity savings accounts or others, to replace or protect us against a Social Security downfall.

  Read this interesting 3rd party article regarding the instability of Medicare and make your own conclusions
NaturalNews) - Almost every American who has read a newspaper, watched T.V. or signed onto the Internet in the past few years knows that Medicare, one of the government's largest entitlement programs, is in financial dire straits and is heading for insolvency. What you may not know is that Medicare bankruptcy is closer than even the most pessimistic of previous estimates.

An annual report issued last week by the trustees of Medicare said the program won't have enough funds to pay full benefits by 2024, a full five years sooner than last year's estimate and one that may yet be even rosier than reality.

"Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided," a summary of the report said.

Moreover, a statement issued with the annual report by Treasury Secretary Timothy Geithner said more must be done to boost financing for the program, such as "contain health-care costs," lest Medicare - and the government's other healthcare entitlement programs - become "unsustainable."

The truth is, the program has long since been "unsustainable," because for years it's been little more than a Ponzi scheme, as tax dollars from one generation are used to finance previous - and future - generations.

Investigative journalist John Stossel says what's really going on with Medicare is that the young are picking up the healthcare tab for senior citizens, even those who are financially well-off. And while today's Medicare recipients did, in fact, contribute to the program from their own paychecks when they were still working, experts Stossel says "the average Medicare beneficiary today collects two to three times more money than he paid in."

"We locked up Bernie Madoff for running a Ponzi scheme. Medicare is a bigger one," says Stossel.

Worse, the unfunded portion of Medicare is bad and getting worse. A 2008 assessment by the program's trustees found that Medicare's unfunded liability portion is $74 trillion, five times more than Social Security's unfunded liability. And the government only expects its healthcare outlays to grow.

One of the reasons why Medicare - and any government-run healthcare system, for that matter - is so expensive and an impediment to better healthcare in the first place is because it is a system that is inherently inefficient. And that built-in inefficiency is why so much Medicare money is wasted on entire industries like Big Pharma.

"While our health-care system has some of the most innovative treatments in the world, Medicare's payment system imposes many barriers to innovations in using those treatments efficiently and effectively," says John C. Goodman, president of the National Center for Policy Analysis. "In normal markets, cost efficiencies and quality improvements mean larger net revenues when an entrepreneur finds a better way to provide products or services. By contrast, entrepreneurial efforts under Medicare all too often find their greatest reward when they exploit the system by finding ways to bill more for more services, rather than improve it."

Goodman says studies show that patients - especially those who are chronically ill - "can often manage their own care as well as, or better than, conventional physician care, and at lower costs, when given the support they need."

Now that Medicare's officially broke, what better time to implement real healthcare reform and let people pursue their own, natural, solutions?

Learn more: http://www.naturalnews.com/032452_Medicare_bankruptcy.html#ixzz1Mvx92xOP

It is o.k. to reproduce this blog entry as long as it is copied in it's entirety and not altered in any way.  For unbiased estimates or information regarding life insurance or fixed annuity savings account comparions; contact Randy Taylor below:

 Randy Taylor Financial Services
 Randy Taylor

 (916) 601-5270

Copyright, Creative Commons License, 5/20/2011

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8 Most Common Tax Audit Triggers. California or Federal

THE I.R.S. HAS ADDED MORE AUDITORS. AVOID MAKING COMMON MISTAKES THAT CAN TRIGGER AN AUDIT.
( The following article is reprinted for entertainment only. You should consult with your tax preparer before filing your taxes or for tax advice.)

The April 2nd, 2011 Wall Street Journal warns against 8 Audit Triggers to Know About:

Mortgage Interest Deductions Over $50,000.

Large charitable contributions, especially of non-cash items.

Schedule C business losses of more than 2 years in a row.

Home-buyer tax credit.

Rental Real Estate, especially with losses.

Payouts to subchapter S owners who earn little or no compensation.

Large Deductions in relation to income,especially for business
travel or entertainment.

Home Office - maybe if high.

The final word is that you are best advised to always seek the counsel of
a trained tax professional so that you don't miss important deductions or file
incorrectly. This summary is an excerpt from The Wall Street Journal and not meant
to be taken as tax advice.
For IRA product options call me directly: Randy Taylor 1 (916) 601-5270
FOR SPECIFIC TAX ADVICE:
In the Sacramento Valley I recommend:
George De La Mora at (916) 760-2480 Elk Grove

KEEPING YOUR FINANCIAL ADVISOR OR INSURANCE AGENT HONEST

Article #2 in the series:  How to evaluate and compare an insurance company for financial strength.
Ask your advisor for a "Vital Signs Report" for any insurance company you are considering.

A "Vital Signs" report is an objective spreadsheet that summarizes and compares up to 8 insurance companies on 1 page; for several important financial safety criteria. This can help protect you from a biased or commission driven advisor from offering a company to you that is considered less than acceptable by honest and client focused advisors. You can even specify which companies you would like to compare.

What kind of information is on a Vital Signs Report?
First of all, 5 different and qualified rating agencies analyze key criteria such as the relative risk inherent in any insurance companies investment portfolios, asset growth, bonds in default and what types of investments the carriers are holding.

How can a layman interpret the results?  This is made easy for you.
Each of the 5 rating services assigns a percentile rating to each carrier on the report.
The 5 ratings are then averaged and assigned a composite rating known as a "Comdex percentile"  The higher the number, the safer the company is considered to be. My opinion is that an insurance company should have at least an 80% Comdex rating.

Aren't all insurance carriers about equal?
Not really.  The example attached shows for example, that Transamerica Life has a strong Comdex rating of 93%; an elite number;while the well known AAA has only a 60% rating.


Are there safeguards for doing business with companies licensed in California?
Yes, there is a California Guarantee Association that protects the consumer up to certain limits for life insurance and annuity claims; but an agent is not allowed to discuss that with you prior to a sale since it is considered unfair marketing.
In summary, you should not only expect your advisors to make product recommendations from companies that are competitive; you should also ask for a financial safety comparison of the specific company recommended versus other companies that your advisor has researched. The vital signs report is an industry standard that is recognized and used by the more diligent advisors.
This article is not offered as investment advice; but is offered as a tool to help the layman compare insurance companies for financial strength. 
A sample report is available by calling the phone number below and leaving your email address.
Randy Taylor
1(916) 601-5270

KEEPING YOUR FINANCIAL ADVISOR OR INSURANCE AGENT HONEST

Article #1:  Funding your child’s college education:  Scam or Savior ? :  Tax-free policy loans from life insurance policies as a savings or income producing vehicle for your child may not provide enough income.  Read this blog to see the pros and cons.

Pros:  A properly designed life insurance plan can provide a death benefit to provide for college or other expenses as well as a tax-deferred savings vehicle with tax free policy loans. This only works though if the policy is designed with the client’s interest first.

Buyer Beware:   First:  It is illegal for an insurance agent or advisor to refer to a life insurance premium as an investment or a contribution.  It must be designated as a premium,.           Second: An improperly designed life insurance policy that uses a normal premium schedule will pay your agent handsomely but not provide you with enough savings. Using life insurance as an investment vehicle for the sole purpose of paying for your child’s college education may not work unless you pay attention to careful principles outlined below:

How to design your policy properly if at all:

            “Overfund” your policy with cash but follow the IRS Guideline Premium Tests:  In general, a single deposit is the best way to do this since the savings element of the policy has the potential to grow more quickly.  Important , If you exceed the Single Premium guideline premium rules; all policy loans may be taxable; not tax –free.

You can also use a premium schedule of  7 years or even an ongoing guideline level premium . To make sure that your agent is not designing the policy to have a higher commission and consequently; a smaller savings element; ask him to show you on the required computer printout what the single, 7 payment, and guildeline level premiums are. You are best suited to pay the maximum under these guidelines without exceeding them.  They are disclosed on all insurance company  official printouts.           

Allow 15 years or longer for the savings to accumulate:  The policies work on compounded tax-deferred interest. If a child is already 10 years old for example, and enters college at age 18; there would only be 8 years or so before the first loan is taken out.  Therefore there usually would not be enough time to accumulate interest.

Ignore computer projections that are illustrating 10% ;to 12 % returns. Even indexed universal life insurance plans that have some built in safety factors; often over estimate the yearly expected returns.  If an insurance company were to actually deliver these high interest rates routinely; they would have to increase the internal charges for the insurance.  Increasing the insurance costs; reduce your yearly yields.

Plan on keeping the life insurance in force until death.   If the policy is surrendered loans in excess of your cost basis may be partially or completely taxable.

This is important.  You  cannot defer taxes on life insurance , tax income and then cancel an insurance policy without having a potential for taxes to be due.

In summary while most advisors are honest; you should protect yourself  somewhat by working with a broker that will compare several companies for cash values and company financial stability.  Ask also for a “ Vital  Signs” comparative report which shows the different companies financial ratings from 5 different 3^rd party sources. A single A.M. Best report is usually not enough. This article is not meant to given tax or investment advice. Always consult your accountant, attorney,  for more specific advice.