The Retirement Savings Time Bomb And How to Defuse It
By Ed Slott Reviewed By Allen Young
(ISBN–13: 9780142003770)
The title of this book conjures up theimage of a great explosion about to occur. What is the “time bomb”? At somepoint in the future all those who have an IRA, 401(k) or other retirement plan that provides tax–deferral will have to pay taxes on their account.
In addition to income taxes, there are potential estate taxes and possible penalties.The result is that without good professional advice and planning, people and their heirs could see the IRS become the biggest beneficiary, receiving 70 percent or more of the account’s value. With the baby boomers reaching retirement age and with the previous generation reaching mandatory distribution age, this event will multiply rapidly and cause explosion after explosion.
Because of these ticking dangers, this book is a financial goldmine for those planning to start a retirement program and for those who have a retirement fund. It is also for the beneficiaries of a retirement fund or for anyone on the brink of taking retirement income. Information in this book reduces frustration and emotional upheaval by preventing costly mistakes that dwarf one’s return on retirement savings. The book provides insight that can ensure either the owners of the retirement dollars or the designated heirs receive the maximum amount possible from their retirement savings.
The book teaches how to take advantage of the benefits allowed in the tax code and avoid unnecessary taxes and penalties so that youand your heirs keep more and the IRS gets less.
The author, Ed Slott, CPA, professional speaker and respected tax adviser, is rightly touted as America’s IRA expert. He boils downthe thousands of pages of the tax code and IRS rulings, extracts must know data and communicates it in non–technical terms that the average person can fully grasp. The whole book resonates with rational and practical advice that, if followed, will make a positive difference.
One major distinction with his book in comparison to others, is the detailed knowledge shared by the author about the “back–end” trip wires that can cause your account values to decline significantly upon retirement or during the distribution phase. Many books and professionals accentuate the accumulation phase to such an extentthat the distribution phase is often not discussed, which is where most of the problems occur. Slott’s book offers ample advice on how to ensure this does not happen.
The advantages and disadvantages of the various types of retirement tools and plans are reviewed, and the book provides strategies whereby a person can “stretch” his or her retirement savings to benefit subsequent generations. It lays out a 5–step action plan for protecting your retirement accounts from all the bad things that can happen. Both retirement–plan owners and beneficiaries should pay close attentionto the step entitled “Avoid the Death Tax Trap.”
The knowledge obtainable from this book can easily be put into practice and can save you thousands of dollars by revealing how to wisely and properly set up your retirement account and to avoid the pitfalls that lurk around the corner for poorly constructed accounts.You owe it to yourself and your heirs to read this book.
