The Future of Self Direction
By Stephanie B. Mojica
certain legislators are in-
creasing the RMD age to
age 75 and removing the
option of life expectancy
payments from a benefi-
ciary’s options. Overall
IRAs are still a great way
to save for retirement
however, better under-
standing of the types of
IRAs available are still
one of the major hurdles
that tax payers face in
making the decision of
how, when and what type
of IRA to fund. Finan-
cial institutions have the
challenge of educating
their current customers
and potential clients of
the benefits available
under current tax law as
well as exposing these
clients on a broader
range of investments that will help maxi-
mize the growth in their retirement plans.”
Let’s take a brief overview on the two
types of IRAs. The first one is the Tradi-
tional IRA. In 2014, each person
with an IRA can contribute up to
$5,500. Whether or not the Internal
Revenue Service (IRS) considers
it a tax deduction depends upon
the type of account the investor
chooses. Though members of the
general public typically think of
IRAs as a way to fund retirement,
many people with whom Ruiz has
T
hough there have been a
number of financial indus-
try-related initiatives in the
U.S. Congress in recent
years, the future of IRAs,
or, individual retirement arrangements,
seems pretty safe from major legis-
lation, according to IRA expert John
Paul Ruiz, QKA CISP.
Ruiz, director of professional
development for The Entrust Group
in Oakland, California, has more than
two decades experience in the financial
services industry.
“There has been no new legislation
that has been passed affecting individ-
ual retirement arrangements recently,”
Ruiz said. ”There are however several
concepts that are out on the table
including Automatic IRA arrangements
for employers who currently do not
offer an employer sponsored plan in
the Presidents Budget proposal for
several years now. Other significant
proposals that have been introduced by
worked use the accounts as a form of “leg-
acy planning.” In other words, they wish
to leave assets other than life insurance
policies to their relatives or other benefi-
ciaries, such as charities.
The traditional IRA, established under
the Employee Retirement Income Security
Act of 1974 (ERISA), is the most common
form of IRA chosen among American
investors, according to Ruiz. Traditional
IRAs allow potential tax deductibility of
contributions. Individuals who are already
covered by an employer-sponsored plan,
such as a 401(k), as an example, will be
‘Only about 17.5 percent of Americans with
retirement plans choose Roth IRAs, which
may be due to misunderstandings about the
potential benefits of Roth accounts...’
Realty411Guide.com
PAGE 38 • 2014
reWEALTHmag.com
Exclusive interview with the Director of Professional Development for The Entrust Group