Dreos Financial Services

7/26/10

THANKS FOR NOTHING! Business Boosters of Obama are Now Backtracking

Business boosters of Obama are now backtracking.  Many of Barack Obama’s policy-boosters in what’s left of the U.S. business community are starting to do what I call the “Obamanomics Tap-Dance.”  And understandably so!

Pro-Obama elements of the business community are starting to offer up all sorts of interesting excuses and creative alibis to salvage their credibility in the wake of the White House schemes to control the Internet, destroy private-sector health insurance, and micro-manage financial transactions.  Especially as the economy continues to sink deeper and deeper into the abyss of “Obamanomics.”

An age-old lesson in tyranny is being learned anew.  As the German industrialist “pragmatists” who aided and abetted the national socialists in the early 1930s painfully learned, prosperity – indeed even humanity itself – suffers when extremists are handed power. 

It spells out how gullible business leader who initially cheered the Obama administration are now recoiling in horror as the U.S. sinks deeper into the jobless wasteland of Obamanomics.

In digesting what this administration is trying to do today, how important is it to circle the wagons and personally own especially money for future delivery in a way that it will not be impacted for years to come by the mistakes of today.  I continually talk about where the tax brackets may be 10, 20 even 30 years down the road,  don’t let it affect your ability to live your lifestyle with tax free dollars that won’t be impacted by the horrible mistakes made today.

7/12/10

Some of you have been listening to me for sometime talking about the Obama Administration’s spending and decisions like the healthcare legislation that he signed in April of this year.  Everything that he and his constituents in Congress are doing talks about higher Federal Income Taxes in the future and probably not too far down the road.  In my opinion it is imperative that if you are a Corporation take loans to fund your program and not have that charged out as personal income to you.  The tax free benefits on the back end, I promise you will be invaluable to offset the tax rate that will be forthcoming and the last thing that you want to do is have that tax rate impact your retirement.

Nearly buried inside the massive health care legislation that President Obama recently signed is a new 3.8% Medicare Surtax.

The effect of the 3.8% Medicare Surtax will be to raise the top income tax and capital gains tax rates for persons with overall income higher than $200,000 for single persons and $250,000 for married couples filing jointly.  There is a formula that includes calculating investment income but we will cover that at a later time.  While the 3.8% Surtax doesn’t arrive until 2013 you should start making decisions today to get your money out of the tax system.  I can’t stress strongly enough that a properly designed Private Pension Plan meets the criteria to keep these people from confiscating the money that you have worked so hard to keep.

There is a possible silver lining.  The good news is that the 3.8% Medicare Surtax doesn’t apply to cash withdrawals from non-MEC permanent life insurance policies (up to basis), or loans against such policies.  As a result, life insurance may appear even more attractive for income tax planning purposes.  The 3.8% surtax also doesn’t apply to qualified distributions from Roth IRAs or qualified annuities. 

Finally, while investment income doesn’t include distributions from traditional IRAs, qualified plans, active trade or business income, and income taken into account for self-employment income tax purposes, these sources may increase a client’s Modified Adjusted Gross Income and trigger the 3.8% surtax on any investment income.

Pay attention to the information that you’ll be receiving from this BLOG and research for yourselves and you will come to the same conclusion.  Start a Non-Qualified Plan as soon as your can and don’t let the government take your money going forward.

Over the last couple of months I’ve talked about the value, the reasons and all of the issues of safety of ownership with a Private Pension Plan.  The last few Blogs we have brought to light some very real concerns about Government takeover of your Qualified Plans, primarily the 401k’s and an IRA’s which represents mostly what  people today own.

TEN REASONS THAT YOU NEED TO BE VERY CAREFUL WHEN INVESTING IN ANY QUALIFIED PLANS

10.  It’s simply a tax trade off.  If your deductions during the years of contribution is less from a tax standpoint than what you would pay when you take retirement distributions you may want to look for an alternative idea.

9.  With the market in turmoil and the high cost of expenses connected with any Qualified Plan if you consider changing to conservative investments your trade off may net a very modest gain. 

8.  Qualified Plans are controlled by our government, changes in what you can contribute and where and how early or late you can start your retirement is all mandated by our elected officials in Washington.

7.  Because of the down economy and not making contributions every year creates a problem.  There are no provisions to make up missed contributions this can be devastating to your account at retirement.

6.  Ownership, control and the ability to make individual decisions concerning your Plan none of this is available when you contribute to a company sponsored Qualified Retirement Plan.

5.  The Qualified Plan losses in earnings can happen any year and there are no minimum guarantees when your portfolio in any year goes under water.

4. Business Owners who have a 401k for their employees may not contribute or match any contribution for their employees.  Conversely the owners will have a devastating result since they wouldn’t be able to match their own contribution.  Simply stated, they will come up woefully short at retirement. 

3.  Qualified Plans are a product of our Federal Government and you have no say in what they may do for years to come and how it could impact your Plan at Retirement.

2.  There is no good reason to do a Qualified Plan if you have an alternative choice.  There are alternative choices and most all of them give you individual control and ownership and protect you against any intervention to the assets of your Plan.

1.  With the deficit in the trillions and the government out of money, the only asset left for them to raid are Qualified Plans.  There is a movement afoot and the scariest reason ever is if they consider taking control of the assets in our Qualified Plans that could limit distributions to you at Retirement.