G&G Associates Tax & Financial Consulting
The Best Government Loophole or Trick Ever
Hotep G&G Readers,
On December 31, 2010, the government will close an amazing loophole… one that affects 60% of the U.S. population.
In an attempt to collect taxes today to pay for its excesses, the government is promising to never tax our retirement money in the future. Let me explain…
It turns out, close to 90 million people are holding $7 trillion in either IRAs or 401(k) plans.
Some of you are holding it in the wrong accounts.
Do you have a Home-Based Business (HBB)? If not, Why? This is your quickest, safest and most assured way to get a GUARANTEED 25-35% ror on your investment. Remember, with a HBB you get to deduct over 422 business expenses. Without a business you get about 7-10 business deductions. Look at it this way…if you are in the 30% tax bracket (25% Fed & 5% state); for every dollar you deduct 30 cents goes to you. For every dollar you do not deduct 30 cents goes to Uncle Sam.
If I can’t show you how to save a $1000 on your taxes next year, then I’ll give you a free year’s subscription to the G&G Investment Society (GGIS) newsletter service. Somehow I think you can use the money more than your Uncle.
Give me a call and I’ll show you how to implement this strategy and keep 30 cents on every dollar by doing so as well. This is what you call SMART planning and investing.
When you put money in a traditional IRA or 401(k), the government defers taxing it until you start withdrawing the money after age 59 and a half. Roth IRAs are the opposite. You pay taxes on the money before you put it in. The money you earn in the account is tax-free
and you don't pay taxes when you take out your savings.
This year only, the U.S. government is letting everyone – no matter their income or assets "convert" retirement money in traditional IRAs and 401(k)s into a Roth IRA. To encourage you to do so, the government has sweetened the deal.
Usually, when you do a conversion, you pay the taxes in full at the time of the conversion. But right now, if you agree to convert to a Roth by the end of the year, you can delay paying the taxes until next year. You can even split the bill 50-50 between 2011 and 2012.
So, you have to make sure you have a professional taking care of your taxes who is familiar with this conversion to make sure you are covered and G&G Associates will be able to take care of you if you choose to make the conversion.
If you're one of the millions with a traditional IRA or 401(k), taking advantage of this loophole could save you thousands of dollars in retirement.
If you defer your tax bill and split it, you'll essentially get a tax-free loan for eight to 20 months. And T. Rowe Price data showed a 45-year-old man who puts $25,000 into a Roth ends up with $53,300 more by the time he is 85 than if he left it in a traditional IRA. And that even factors in a drop in his tax bracket from 28% today to 15%.
If your income tax rate will be the same as today or higher in your retirement, converting is even more attractive. And trust me, taxes are going higher in the future.
Next year alone, tax rates are scheduled to rise. The two top marginal rates are rising to 39.6% and 36% from 35% and 33%, respectively. It's only a matter of time before they rise again.
But perhaps the most powerful reason for converting to a Roth is the ability to continuously build money over both your lifetime and your beneficiaries'. I call it the "The Next Generation Plan" because it allows you to keep the money growing until you die. This is not true for traditional IRAs and 401(k)s.
When you turn 70 and a half years old, traditional IRAs require you to stop putting money in and start taking money out. It's known as the Required Minimum Distribution, or RMD.
Roth IRAs have no such rules. So using a Roth allows you to grow the account longer and take advantage of the power of compound interest under a tax-free umbrella.
Even better, you don't ever have to take money out of your Roth. The money goes tax-free to your spouse and your beneficiary.
Moreover, you can contribute money into the Roth at any age, as long as you have "earned income." This means at 75, 80, or 85, you can fund your account and continue to see it grow.
Converting to a Roth protects your retirement savings and allows it to grow in several ways. And now (with the 2011-2012 split available) is an ideal time to do it.
It's not often the U.S. government gives us a loophole this important to our retirements. But the feds are cash-starved and desperate to take in as much tax money as possible. The time to take advantage is now.
There are lots of things to consider before you make the conversion, and I didn't have room to go into all of them here. But if you want to set up a one-on-one consultation to discuss further, please contact me to set up an appointment.
With the falling dollar and the explosion in gold, silver, oil and other natural resource prices, you need to stay on top of your game and manage your “OWN Finances.”
Become a GGIS subscriber now and you’ll be sure that we make sure you stay on top of your Tax and Financial Future to make sure your BUSINESS … AT HOME is protected. Remember…most people look after their bosses business, but fail to look after their own Business At home.
Take advantage of our 2010 discount offer if you are not yet a member of the GGIS paid newsletter service and you’ll be on your way to knowing how to protect your portfolio...at least what’s left of it. I’ll keep you informed on the “REAL DEAL” in our economy so you can protect your wealth. So....Sign up today!!!
To become a member of the G&G Investment Society newsletter subscription, send an e-mail to GGIS@gngassoc.com and/or visit our website at www.gngassociates.net and click on the “Products & Services” link and we’ll get you signed up right away.
DON'T WAIT ANOTHER DAY!
- 1 year subscription - $49
- 2 year subscription - $84
- Lifetime subscription - $199
If you missed a past G&G article, click on the link below to visit G&G Associates archive:
Until the next time!
Asante Sana (Thanks)
Tax & Financial Consultant, RFC
866-361-3872 toll free fax
"Your mind is like a parachute, it only works when it is open."
P.S. If you're not a GGIS Paid Subscriber reader yet, it's not a bad way to start the year. The recent dollar rally has actually given everyone some new opportunities to invest on the cheap. And currently, our GGIS portfolio is packed with great plays to kick-start your "anti-dollar" portfolio for 2010. Click here www.gngassociates.net for details about how to subscribe now (and get access to our members only website where you get or all kinds of extra bonuses and premium reports), for just $49 a year or $199 for a lifetime subscription.
P.S. #2 If you are looking to Travel and looking for steep discounted travel, visit www.gngassociates.net, click on the “G&G Travel” link and let your travel planning begin. Let us know where you want to go and we’ll do our best to find you the best deal your money can buy.
LEGAL NOTICE: This work is based on SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. Nothing herein should be considered personalized investment advice. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.