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IRA Optimization Issues

(1) Unfortunately, ordinary income taxes will have to be paid on your tax-deferred assets upon withdrawal, which could be in the form of RMD's (Required Minimum Distributions. This can present a problem if you don't need this income during your retirement. 

This RMD income could also push you into a higher tax-bracket and force you to pay the Medicare IRMAA tax as well. If you won’t really need this income for lifestyle purposes, we can show you how to use these dollars more effectively and eliminate the government and higher taxes? 

2) Even worse, if you want these IRA assets to be transferred to your non-spousal heirs upon the deaths of both spouses, you can no longer use the stretch IRA concept for these plans. Now,  all of these assets will need to be distributed to your heirs over a 10-year period.


This means the net income from these assets after taxes will be significantly reduced because your heirs will need to take these withdrawals over a much shorter period of time, even if they don't need the income. They won't have a choice. In addition, it could also increase your heirs overall taxes by potentially pushing them into a higher tax-bracket as well.

(3) Another question that normally arises is should you consider converting a portion of your IRA assets to a guaranteed income stream that could last for the duration of your life, thereby dramatically reducing the longevity issue.  In addition, research has also shown this will lead to a happier and more content retirement than relying solely on income derived from speculative securities that can go down in value? This seems to be particularly valuable for a surviving wife.

(4) Many of our clients are also concerned about the potential of a long-term care event that could have a devastating effect on their asset base. Absent a traditional LTC policy, are their any other options you should consider? (* To learn more, please visit the Asset-Based LTC tab. If you or a loved one are currently receiving care in your own home or in an assisted living or memory care facility, or could be in the near future, please visit the Immediate Care Plan tab for a solution you may want to consider)

(5) You've worked hard to accumulate the assets that are now in your IRA. Many of those dollars are most likely still in stocks to offset inflation and the loss of future purchasing power. However, if the majority of those stocks are invested in mutual funds, there may be a better option. An investment advisory account might help alleviate the four main problems with many mutual funds. (For a more detailed explanation, please visit the Mutual Fund Issues tab under the Investment Advisory tab)


  • Cost - A recent study developed by 3 major universities has determined the average annual cost for many funds to be in excess of 3%. A well-constructed investment advisory account that uses low cost underlying holdings, such as exchange traded funds or individual securities, may well have a total cost that not only compares favorably to a mutual fund but may often be significantly lower. This lower cost can have a significant impact on the value of an account.

  • Protection - An investment advisory account can implement a tactical realignment of multiple assets classes to include cash in periods of extreme volatility, with the capability to focus not only on asset appreciation but also asset preservation or protection.

  • Performance - An investment advisory account can provide a better value-added solution than a mutual fund, due to the potential for improved performance by avoiding or mitigating protracted periods of significant negative performance.

We realize that absolutely no one, not even the most astute professional money                  manager, can perfectly avoid the exact specific days of negative performance. Yet, the      chart above does indicate that significant improvement in performance is possible if            attempts are made to at least mitigate extended periods of negative performance.              And, that is exactly what a professionally managed investment advisory account                    attempts to do. This is especially true of a tactically managed account that attempts to        capture as much as possible of upside performance and avoid as much as possible              periods of negative performance. Most mutual funds do not have the flexibility nor the        inclination to even attempt to manage money in such a manner.

  • Taxes - We do not intend to provide tax advice and we encourage a client to consult with a tax professional for any individually specific situation. But in our opinion, one should carefully consider the many advantages of repositioning mutual fund assets even if a potential immediate tax liability may occur. Also, consider that any payment of current taxes will have the effect of increasing the cost basis of the new investment thus further reducing future tax liabilities. This matter of taxes also brings up another potential disadvantage of a mutual fund. Buys and sells of holdings within a mutual fund can and often do create tax liabilities, even in a year when no distributions from the account were processed and the fund may have actually lost value. Again, adding yet another reason that an investment advisory account has the potential to deliver overall improved investment results.


* Please visit the Investment Advisory tab to learn more about our management services.


(6) Many client's wonder if they still need their older life insurance policies and annuity contracts, and if so, are they still meeting their objectives? Or, should they consider a 1035 exchange to a more modern contract, as it may be more appropriate for their current situation? Is there anything wrong in getting a second opinion?

(7) We also find that many husbands are concerned (and rightly so), about the potential income drop for their surviving spouse due to a reduction in Social Security and possibly a reduction or elimination of income from the husbands pension. 

* We can provide answers for all of these issues. Please reach out to us to schedule some time for a discussion.​​

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