Contact Information:
Laura Orsini / (301) 949-4449 / info@laserfg.com / www.laserfg.com
KENSINGTON, MARYLAND –- Investors must be extremely cautious and seek thorough analyses before converting the money in their qualified plans to Roth IRAs , says Samuel N. Asare, a senior financial strategist with the Kensington, Md.-based Laser Financial Group, LC.
“While it’s true that a new federal rule eliminates income limits on Roth IRA conversions beginning in 2010, the bulk of Americans being lured into such conversions could have done so under the old rules, given their modified adjusted gross incomes,” said Asare. “In other words, this is, in reality, nothing new.”
Unfortunately, many so-called financial advisors seem to have been unaware for all these years that by maximum-funding a permanent life insurance policy, within the confines of sections 7702 and 7702A of the Internal Revenue Code, their clients could have achieved the same general benefits offered by Roth IRAs, Asare explained.
“More importantly, anyone – regardless of their income – could have utilized this approach even before the introduction of Roth IRAs in 1997. The more serious question investors need to answer is, if they could have achieved the same result in years past, why make a change now?” emphasized Asare.
Investors should be particularly mindful of advisors who create a false sense of urgency based solely on generalizations. Instead, they should seek advisors who offer suggestions only after carefully reviewing the investor’s specific set of circumstances. Although most advisors have good intensions, the less scrupulous among them tend to place commission checks above honesty and diligence.
“An overwhelming majority of investors we have spoken to were unaware of basic facts, like that the gains on those converted funds become tax-free only after the account owners attain age 59˝ and have also satisfied the five-year baking period. Otherwise, they are subject to taxes and a 10 percent penalty,” explains Asare.
About Samuel N. Asare:
A maverick in the financial services arena, Asare is a Senior Financial Strategist with Laser Financial Group, LC. He is the creator of the Common-Sense Wealth Building Series.
Asare holds an MBA and is a Chartered Retirement Planning Counselor (CRPC), Charted Mutual Fund Counselor (CMFC), Certified Treasury Professional (CTP), and Certified Business Manager (CBM).
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