The Third Edition of Retire Secure has Finally Arrived!

The new edition of Retire Secure! A Guide to Getting The Most out Of What You’ve Got is the distilled and concentrated version of the recommendations we have developed over 30 years. It is particularly useful for IRA and retirement plan owners.

We will soon be sending our clients a copy with a personalized note directing you to what we think will be the most relevant sections for you to read. This personalization has been a huge project, but it’s something that I think will be enormously helpful to you.

Retire Secure! will be available for purchase in bookstores and on Amazon in October. However, if you absolutely cannot wait, the book is available for Kindle and Amazon pre-order here.

Amazon Kindle Pre-Order Retire Secure! James Lange

The core concepts of the current edition are similar to the two previous editions (Wiley, 2006 and 2009). Recent legislative changes, however, have led to important strategy adjustments that are incorporated in the latest edition.

  • In Part 1, The Accumulation Years, we include some new strategies that were not available in 2009.
  • In Part 2, The Distribution Years, we cover how to spend down retirement funds in the right order to manage your assets wisely, but that area is more complicated than ever because of some of the new tax laws. We have also updated recommendations for Roth conversions, and the impact of a potential new law for IRA and retirement plan owners and their families — the death of the stretch IRA. It could be devastating for your children. Though there is no perfect answer, I do address some of the best strategies I know to reduce the pain of the likely changes in the IRA law.
  • In Part 3, we’ve updated the Eddie and Emily Estate Planning case study. Essentially, it incorporates the updated Lange’s Cascading Beneficiary Plan, which many of you already have in your wills and trusts.

If you’ve read previous versions of Retire Secure!, I hope you’ll find the updates and changes enlightening. To make the new material easier to find, I have included a section that highlights the changes. And if you’re new to the book, I hope you’ll take this as an opportunity to really educate yourself on these principles and sound practices. There’s mathematical proof that optimizing the strategies you use to approach saving, investing, estate planning, and distributing assets could mean a dierence of millions of dollars over your lifetime and for your heirs.

It’s my fervent wish that Retire Secure! will help you live a happier, healthier, and more secure life!

Jim

The Death of the Stretch IRA: It’s Time to Review the Retirement Plan Beneficiary Rules

The Death of the Stretch IRA, James LangeThose of you who have been following me for a while know that that one of my most cherished mantras is “Pay Taxes Later!” An extension of that mantra was my recommendation that, upon your death, your beneficiaries continue to take advantage of the minimum distribution rules to “stretch” your IRA for as long as possible so that they could achieve the maximum tax-deferred growth possible. This used to be a fairly straightforward concept but, with the increase in second and third marriages, as well as non-traditional marriages, it has become much more complicated.

To add to the confusion, there is increasing pressure from Congress to eliminate the Stretch IRA. This would be a very good time to review your retirement plan beneficiary rules, because you might want to change your designations. Non-spousal beneficiaries may soon be required to withdraw and pay taxes on inherited IRAs within five years. This idea was first introduced by Senate Finance Committee Chair Max Baucus in 2013, and was thankfully withdrawn for lack of support. It reappeared in 2013 as part of President Obama’s budget proposals, and again in 2013 as part of a bill to reduce student loan debt. Killing the Stretch IRA, they felt, would provide enough revenue to reduce student loan rates for college tuition for one year. That bill was passed by the House but died in the Senate by only two votes. Then in 2014 and 2015, President Obama’s budget proposals again included a provision to kill the Stretch IRA. It seems clear to me that this measure, or a similar one, may eventually pass.

So who should be named the beneficiary of your retirement plan? Is one option better than another? Chapter 13 answers these questions assuming that the benefits of the Stretch IRA will continue under the current rules, and also presents some options that you can consider if the Stretch IRA is eventually eliminated. This chapter also offers some guidance in naming trusts as beneficiaries. If done properly, this can protect your assets from your child’s creditors, including their former spouses.

Don’t forget to stop back soon for a sneak peek at Chapter 14, which expands on some concepts critical to understanding the benefits of the Stretch IRA!

Jim

P.S. Here’s a video on The Death of the Stretch:

Jim Lange, Retirement and Estate Planning A nationally recognized IRA, Roth IRA conversion, and 401(k) expert, he is a regular speaker to both consumers and professional organizations. Jim is the creator of the Lange Cascading Beneficiary Plan™, a benchmark in retirement planning with the flexibility and control it offers the surviving spouse, and the founder of The Roth IRA Institute, created to train and educate financial advisors.

Jim’s strategies have been endorsed by The Wall Street Journal (33 times), Newsweek, Money Magazine, Smart Money, Reader’s Digest, Bottom Line, and Kiplinger’s. His articles have appeared in Bottom Line, Trusts and Estates Magazine, Financial Planning, The Tax Adviser, Journal of Retirement Planning, and The Pennsylvania Lawyer magazine.

Jim is the best-selling author of Retire Secure! (Wiley, 2006 and 2009), endorsed by Charles Schwab, Larry King, Ed Slott, Jane Bryant Quinn, Roger Ibbotson and The Roth Revolution, Pay Taxes Once and Never Again endorsed by Ed Slott, Natalie Choate and Bob Keebler.

If you’d like to be reminded as to when the book is coming out please fill out the form below.

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Ways to Cut Taxes for the Next Generation – Consider Gifting Money to Children

gifting money to children lange financial groupIn January of 2015, President Obama proposed eliminating the tax-free benefits of Section 529 college savings plans. Under his proposal, savings would grow tax-deferred, but withdrawals would be taxed as income to the beneficiary (usually the student). His belief was that taxpayers who save in 529 plans are families who can better afford the cost of college than everyone else. In reality, it is estimated that close to ten percent of 529 accounts are owned by households having income below $50,000, and over 70 percent are owned by households with income below $150,000. What isn’t surprising, though, is that the tax revenue realized by this action would have been significant, because as of the end of the 4th quarter of 2014, the assets held in 529 and other college savings plans reached almost a quarter of a trillion dollars. How many students would have been forced to apply for loans if they had been required to pay tax on withdrawals from their college savings plans? Fortunately, the House of Representatives thought differently than the President and, in February of 2015, they passed HR 529. This bill not only maintains the tax-free status of 529 plans, but also makes them more flexible and easier to use. Hopefully the Senate will follow the House’s lead and pass a companion bill with similar provisions.

Do you have college savings plans established for your children or grandchildren and, if so, were you aware of this attack on their tax-free status?

Gifting money to children

Contributing to college savings plans for children and grandchildren is a form of gifting, which is a topic that I discuss in detail in Chapter 11 of Retire Secure!. Gifting money to children is an excellent way to minimize taxes at your death, and, depending on the amount gifted, can also provide the recipient with tax-free income. Unfortunately, strategies that reduce taxes frequently come under fire and it is critical that you stay on top of the rules. Also discussed in this chapter are the perils of gifting to relatives in an attempt to avoid seizure of your to pay for nursing home care. It’s a bad idea – don’t even think about it – but it is still beneficial to understand the laws on this subject.

Many couples are not aware that the American Taxpayer Relief Act of 2012 introduced a concept called portability that makes estate taxes less of a concern for many individuals than in the past. If you have not had your estate plan reviewed since 2012, you should read Chapter 11 to learn about the potential pitfalls of what I call “The Cruelest Trap of All”. Since the passage of this act, many estate plans are outdated and could cause the surviving spouse to be disinherited at the first spouse’s death.

Gifting money to children strategies, and the tax implications of gifting, should be a critical part of every estate plan. Changes in legislation that were not anticipated at the time the plan was established, though, can make your plan ineffective and in some cases disastrous. As much has changed in this area; please read Chapter 11 thoroughly to see how you might be affected.

Stop back soon!

Jim

Jim Lange, Retirement and Estate Planning A nationally recognized IRA, Roth IRA conversion, and 401(k) expert, he is a regular speaker to both consumers and professional organizations. Jim is the creator of the Lange Cascading Beneficiary Plan™, a benchmark in retirement planning with the flexibility and control it offers the surviving spouse, and the founder of The Roth IRA Institute, created to train and educate financial advisors.

Jim’s strategies have been endorsed by The Wall Street Journal (33 times), Newsweek, Money Magazine, Smart Money, Reader’s Digest, Bottom Line, and Kiplinger’s. His articles have appeared in Bottom Line, Trusts and Estates Magazine, Financial Planning, The Tax Adviser, Journal of Retirement Planning, and The Pennsylvania Lawyer magazine.

Jim is the best-selling author of Retire Secure! (Wiley, 2006 and 2009), endorsed by Charles Schwab, Larry King, Ed Slott, Jane Bryant Quinn, Roger Ibbotson and The Roth Revolution, Pay Taxes Once and Never Again endorsed by Ed Slott, Natalie Choate and Bob Keebler.

If you’d like to be reminded as to when the book is coming out please fill out the form below.

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Retirement and Estate Planning Case Study: Plan with the Big Picture in Mind

Knowing that many people aren’t as enthusiastic as I am about topics like taxes, interest rates and so on, I tried to make Retire Secure! as reader friendly as possible.  Even so, I know there are still folks out there who find it difficult to apply the concepts outlined in the book to their own personal situations.  It’s for those people that I wrote Chapter 10, a Retirement and Estate Planning Case Study on Eddie & Emily.  It is a real life retirement story loosely based on an actual client who came to me with some concerns.

Chapter 10 is written from this couple’s point of view.  It walks the reader through the thought process that these clients went through as they entered retirement, and how we helped them achieve peace of mind about their concerns.  Every client’s situation is different, so it would wrong to imply that one course of action is always better than another.  Since we helped them plan with the big picture in mind, though, they were confident that the decisions that they made were the best possible for themselves and their children.

Stop back soon for a peek at Chapter 11.  It’s a lot more technical than Chapter 10, but contains important information on the best ways to transfer wealth to your heirs.

See you soon!

Jim

Jim Lange, Retirement and Estate Planning A nationally recognized IRA, Roth IRA conversion, and 401(k) expert, he is a regular speaker to both consumers and professional organizations. Jim is the creator of the Lange Cascading Beneficiary Plan™, a benchmark in retirement planning with the flexibility and control it offers the surviving spouse, and the founder of The Roth IRA Institute, created to train and educate financial advisors.

Jim’s strategies have been endorsed by The Wall Street Journal (33 times), Newsweek, Money Magazine, Smart Money, Reader’s Digest, Bottom Line, and Kiplinger’s. His articles have appeared in Bottom Line, Trusts and Estates Magazine, Financial Planning, The Tax Adviser, Journal of Retirement Planning, and The Pennsylvania Lawyer magazine.

Jim is the best-selling author of Retire Secure! (Wiley, 2006 and 2009), endorsed by Charles Schwab, Larry King, Ed Slott, Jane Bryant Quinn, Roger Ibbotson and The Roth Revolution, Pay Taxes Once and Never Again endorsed by Ed Slott, Natalie Choate and Bob Keebler.

If you’d like to be reminded as to when the book is coming out please fill out the form below.

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More on The Traditional IRA vs Roth IRA

Retire Secure A Guide to Getting the Most Out of What You've Got, James Lange 2015Over the years, I’ve been challenged by clients who present me with questions that even King Solomon in his infinite wisdom couldn’t answer. Other questions, complicated though they might be, are much easier to manage because they can be solved by running the numbers.

Chapter 3 of the new edition of Retire Secure! quantifies a number of “what if” scenarios that are frequently presented to me by my clients. What if I’m in an average tax bracket, and I need to cash in my retirement account? What if I’m in the highest tax bracket, and I need to withdraw all or part of my retirement account? What if I’m in a high tax bracket now, but am in a lower tax bracket when I need to withdraw all or part of my retirement account? What happens if I’m in a high tax bracket now, but I lose my job and am in a very low tax bracket when I need to withdraw all or part of my retirement account? What happens if I’m in a high tax bracket, but my heir is in a low tax bracket? All of these are very significant considerations if you have to choose between a Traditional IRA vs a Roth IRA.

Questions like these can be accurately answered by using quantitative analysis. Chapter 3 presents a series of hypothetical scenarios which prove that certain tax situations definitely do favor the use of one type of account over another. In some situations, the Traditional IRA is better, and in others, the Roth IRA is better. If your choice is Traditional IRA vs Roth IRA, you may find some of these scenarios thought-provoking. As with the previous chapters, the assumed rate of return has been reduced to a conservative 6%, so the differences in the illustrations will be even more pronounced if you earn a higher rate of return on your own investments. The illustrations should only be used as a general guide. In order to get the most accurate answer for your specific situation, please consider asking us to run the numbers for you.

All this discussion about the Traditional IRA vs Roth IRA debate reminds me: you really should take a look at my next post about Chapter 4. It delves into some surprising new details about spending retirement accounts!

Jim

Jim Lange A nationally recognized IRA, Roth IRA conversion, and 401(k) expert, he is a regular speaker to both consumers and professional organizations. Jim is the creator of the Lange Cascading Beneficiary Plan™, a benchmark in retirement planning with the flexibility and control it offers the surviving spouse, and the founder of The Roth IRA Institute, created to train and educate financial advisors.

Jim’s strategies have been endorsed by The Wall Street Journal (33 times), Newsweek, Money Magazine, Smart Money, Reader’s Digest, Bottom Line, and Kiplinger’s. His articles have appeared in Bottom Line, Trusts and Estates Magazine, Financial Planning, The Tax Adviser, Journal of Retirement Planning, and The Pennsylvania Lawyer magazine.

Jim is the best-selling author of Retire Secure! (Wiley, 2006 and 2009), endorsed by Charles Schwab, Larry King, Ed Slott, Jane Bryant Quinn, Roger Ibbotson and The Roth Revolution, Pay Taxes Once and Never Again endorsed by Ed Slott, Natalie Choate and Bob Keebler.

If you’d like to be reminded as to when the book is coming out please fill out the form below.

The Third Edition of Retire Secure! is almost complete!

Retire Secure! Third Edition, A Guide To Making The Most Out Of What You've Got, James LangeThe Third Edition of Retire Secure! is almost complete!

We are tying up loose ends on Retire Secure!: A Guide to Making the Most Out of What You’ve Got, which will have all the tables and charts updated with current numbers, and will include new information, some of which we have outlined below. We expect to have the book printed by spring 2015.

The Third Edition of Retire Secure! will offer updated numbers for all of the advice and planning in our earlier editions, plus:

  • New Taxes Aimed at High-Income Taxpayers
  • Changes in Capital Gains Tax Rates Create New Opportunities
  • Income Taxes Are Now More Important Than Estate Taxes for Most People
  • The Death of the Stretch IRA
  • Proposed Required Minimum Distributions on Roth IRAs
  • Roth IRA Conversions Can Still Be a Good Idea

We look forward to continuing to offer all our clients and prospective clients what we believe is some of the most solidly researched and analyzed information on retirement and estate planning.

Jim LangeA nationally recognized IRA, Roth IRA conversion, and 401(k) expert, he is a regular speaker to both consumers and professional organizations. Jim is the creator of the Lange Cascading Beneficiary Plan™, a benchmark in retirement planning with the flexibility and control it offers the surviving spouse, and the founder of The Roth IRA Institute, created to train ad educate financial advisors.

Jim’s strategies have been endorsed by The Wall Street Journal (33 times), Newsweek, Money Magazine, Smart Money, Reader’s Digest, Bottom Line, and Kiplinger’s. His articles have appeared in Bottom Line, Trusts and Estates Magazine, Financial Planning, The Tax Adviser, Journal of Retirement Planning, and The Pennsylvania Lawyer magazine.

Jim is the best-selling author of Retire Secure! (Wiley, 2006 and 2009), endorsed by Charles Schwab, Larry King, Ed Slott, Jane Bryant Quinn, Roger Ibbotson and The Roth Revolution, Pay Taxes Once and Never Again endorsed by Ed Slott, Natalie Choate and Bob Keebler.

If you’d like to be reminded as to when the book is coming out. Please fill out the form below.

Save