Backstop Roth IRA & Retirement Plan Investing
Posted: Wednesday, September 02, 2009
by Rocco Beatrice
Estate Street Partners
Backstop Roth IRA & Retirement Plan Investing - Should Individuals Convert to Something Better?
Many investors still have fears that they will lose their money in the stock market. They are now scrambling to find ways to invest their retirement money so they can earn a return instead of losing even more money in the volatile stock market. Over the past 100 years, the stock market was one of the best places to invest. There were losses from time to time, but none as severe as in the past year since the great depression. This is why these people are becoming more interested in the other ways to invest their money and rebuild their retirement savings. A Roth on Roids™ is the perfect solution for the fearful baby boomers that seemed to have lost all they have earned in the market and a strategy to backstop Roth IRA. Now, there is this wonderful opportunity to regain those losses and earn tax-free income for the years ahead.
The purpose of a Roth IRA is for an emergency and retirement fund. You do not have much of an emergency fund left if you were among the unfortunate who lost a significant amount of money in the stock market in 2008. You may be interested in learning how to backstop your Roth IRA and reinvest your money to earn guaranteed tax-free returns instead of taking the unnecessary gamble with the stock market, which has no downside protection. If you are lucky enough to still have available funds to invest, why not place that money in an account that will be correlated with the market only in up years? The principal is also guaranteed, which means that in the end, you will have earned tax free income for retirement and you will never lose money in the market again.
How it works is they invest your money in interest bearing bonds. With part of the interest on those bonds they buy call options on the S&P500 index. So when the S&P goes up you also make money, but when the market goes down, you lose nothing. In fact, you retain some of the interest on the bonds.
Roth IRA Rules: Converting your Current IRA
Many of us who have an IRA account have been asked by financial advisors if we are giving thought to converting a traditional IRA to a Roth IRA. It is again important to understand the main difference between the two. With a traditional IRA, you will pay taxes when you begin to withdraw from the account. With a Roth IRA, you pay the taxes when the money is contributed, thus giving you tax free withdrawals later.
Backstop Your Roth IRA
One of the best ways to backstopping the Roth IRA slide is via the Roth on Roids™ which far exceeds both types of IRAs, yet it is more similar to a Roth IRA in some respect. You will have to pay the taxes up front when you open up a Roth on Roids™ account and you will also have the tax-free withdrawals later on during retirement. What differentiates a Roth on Roids™ from a Roth IRA is that there is a principle guarantee AND a guarantee of minimum rate of return. This is because your money will be guaranteed by a top-rated insurance company. It is similar to a regular bank account. Your money will grow in a safe environment and will provide you with tax-free income on the earnings and returns during your retirement.
Roth on Roids™ Conversion Option: The Best IRA Option to Backstop Roth IRA
Should you decide to convert your traditional IRA to a Roth IRA; the government will require you to pay the taxes upon the conversion. You can take the funds, all or partial, from your traditional IRA, pay the taxes, and convert to a Roth IRA. However, this is not your only conversion option! You can instead take those funds and convert them into a Roth on Roids™. There are huge benefits to taking this route, including no age qualifications and no need for earned income.
Many people still believe that the Roth IRA is their safest investment option. What you should consider is that politicians can change the rules at any time if they must figure a way to raise tax revenue. This means that they could institute a mandatory withdrawal, which would force you to remove the money instead of allowing it to grow. With a Roth on Roids™ this would never happen. Mainly because your money is invested with a life insurance company, it is not controlled by the government like an IRA is.
A Roth on Roids™ is in fact one of the safest and effective conversion options and backstop the Roth IRA. If you are considering converting your current IRA, perhaps you should talk with your advisor and examine the Roth on Roids™ option further. You will soon see that it is your best choice for rebuilding your retirement savings and to backstop Roth IRA, with minimum guaranteed returns and without a chance to ever lose money in the stock market again.
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