RATIONAL INVESTING
IN AN
IRRATIONAL WORLD

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THE STRONGEST PRINCIPAL
OF GROWTH
LIES WITHIN HUMAN CHOICE

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RETIREMENT PLAN CONCERNS?
CALL A PAISLEY ADVISOR
AND SLEEP EASY TONIGHT

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Active Strategic Management

  • Wealth Management / Financial Planning

    Wealth management is an investment advisory discipline that incorporates financial planning, investment portfolio management and a number of aggregated financial services. Contact a Paisley Financial Associate to learn more about how we can provide for you. 

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  • 401 K Plans

    A 401k retirement plan is a special account funded through pre-tax payroll deductions. Funds in the account can be invested in stocks, bonds, mutual funds or other assets, and are not taxed on any capital gains, dividends, or interest until withdrawn.

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  • IRA Rollovers

    An IRA is an Individual Retirement Account, and provides either a tax-deferred or tax-free way of saving for retirement. There are many varieties of IRA's please read more on the link below to see which is right for you.


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  • Educational Plans

    A 529 plan is a tax-advantaged investment vehicle in the United States designed to encourage saving for the future higher education expenses of a designated beneficiary. Many different plans exist. Learn more to see which is right for you.


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  • Alternative Investments

    Alternative investments are instruments such as physical gold or other commodity based ETF's such as oil or lumber which can be used as a hedge or inflation hedge against an overall portfolio.

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  • Independent Research

    Paisley Financial provides timely and accurate research on markets, companies and industries. Our team offers more than three decades of experience as well as time held relationships with industry experts that will bring the highest quality of knowledge to our customers.

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IRA & IRA Rollovers

Whether you are self-employed, or work for an organization an IRA can be one way to increase your retirement nest egg. There are many different flavors of IRA's that you can choose from but let's focus on a Traditional IRA here.

Overview:
An Individual Retirement Account, commonly called an (IRA), is a personal retirement savings plan available to anyone who receives taxable compensation during the year. For IRA contribution purposes, compensation includes wages, salaries, fees, tips, bonuses, commissions, taxable alimony, and separate maintenance payments. The Individual Retirement Account (IRA) brings together two tremendously powerful forces, both of which benefit you and that is compound interest and tax savings.

Husbands and wives may each have an IRA, even if one person in that marriage is not working. One person's annual contribution, whether made to just one or to multiple IRAs, is limited to the lesser of total taxable compensation or to the normal yearly amount. (Talk to your Paisley Advisor for up to date contribution limits) Persons age 50 or older may make an additional catch-up contribution which may increase over time.

Contributions:
There is no minimum or required IRA contribution, and all earnings on the amounts in an IRA are untaxed until withdrawn. In the case of the Roth IRA, withdrawals may even be tax-free provided certain minimum rules discussed later are met.

Contributions may or may not be deductible in the tax year made, depending on the owner's income tax filing status, adjusted gross income (AGI), and eligibility to participate in a tax-qualified retirement plan through employment. If the traditional IRA owner participates in an employer's qualified retirement plan on any day in the tax year, the deductibility of contributions declines to zero between certain AGI ranges.

Withdrawals:
Money may be withdrawn from an IRA at any time, but on withdrawal it may be taxed and/or penalized. Withdrawals from a traditional IRA will always be taxed, either in whole or in part, at ordinary income tax rates. Except as noted below, withdrawals from a traditional IRA prior to age 59 1/2 will result in a 10% excise tax as well as an ordinary income tax. The potential income taxes and early withdrawal penalties on Roth and Education IRA withdrawals will be discussed in subsequent articles.

If nondeductible contributions were made to a traditional IRA, part of any withdrawal from that IRA will not be taxed. The calculations for deriving the taxable and nontaxable part of the withdrawal are too complicated to cover here. For those who may face this problem, the IRS has a handy-dandy way to make that calculation. It's called Form 8606, a tax document that must be completed and filed with your income tax return to report both nondeductible traditional IRA contributions and withdrawals whenever they occur.

Mandatory distributions for traditional IRAs must begin no later than April 1 of the year following the year the IRA owner reaches age 70 1/2. Failure to take required minimum distributions at that age results in a 50% excise tax on the amounts not distributed.

There are eight exceptions to the 10% penalty for IRA withdrawals prior to age 59 1/2. The early withdrawal penalty does not apply to distributions that:

• Occur because of the IRA owner's disability.
• Occur because of the IRA owner's death.
• Are a series of "substantially equal periodic payments" made over the life expectancy of the IRA owner.
• Are used to pay for un-reimbursed medical expenses that exceed 7 1/2% of adjusted gross income (AGI).
• Are used to pay medical insurance premiums after the IRA owner has received unemployment compensation for more than 12 weeks which is very germane in the current climate.
• Are used to pay the costs of a first-time home purchase (subject to a lifetime limit of $10,000).
• Are used to pay for the qualified expenses of higher education for the IRA owner and/or eligible family members.
• Are used to pay back taxes because of an Internal Revenue Service levy placed against the IRA.

401K Fees:
If you have changed jobs or are recently unemployed, now is a great time to review and roll over your 401(k) plan to an IRA with a Paisley Financial Advisor. If money is tight it just makes good sense to see exactly what kind of fees you are paying. For example, in your ordinary 401K plan there can be, Mutual Fund Fees, Sub Transfer Agent Fees, Sales Fees, Third Party Administrator Fees & Manager Fees and these can all add up over time. In an IRA most of these fees are eliminated and there is full transparency so you know what the costs are. There is no cost to you for discussing your plan. Give us a call and we can break out most of the fees for you on the funds themselves and where we can't we can arm you with the right questions to ask your Plan Sponsor.

Closing:
The bottom line, is the current economic climate shows that saving for your retirement is more important than ever. As 2008 showed, many people close to retirement will now have to continue working because their retirement funds were severely damaged because their advisor let them down.

If you have concerns about how your manager will handle the next problem or are tired of answers like, "what can I do when the whole market is down", then please give us a call. As long-time hedge managers we can tell you that there are indeed things you can do to protect your future and you do not have to sit idly by.

It costs nothing to sit down with us to look over your investments. At the very least you will walk away with a knowledgeable perspective of your current financial situation so you can make an informed decision moving forward. Give us a call today!

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