Optimus-masthead
News & Views 
Summer Edition 
 

August 27, 2015



I hope all is well.  In this edition of News & Views, I will discuss the benefits of an IRA Rollover and a Durable Power of Attorney, plus an update on the recent stock market action.  As always, please contact me with any questions or suggestions you may have.

IRA Rollover
When & Why?

Whether you are changing jobs or retiring, rolling over your retirement plan to an Individual Retirement Account (IRA) may be the best option for you.  Here are some reasons why:

 

More Investment Choices - IRAs can have virtually unlimited investment choices including mutual funds, ETFs, stocks, bonds, etc.  More investment choices allows for greater diversification and provides the necessary investment tools for managing your account.

 

Easier Management of Retirement Assets - Consolidating retirement accounts into an IRA makes it easier for you to view your assets in one place, makes managing the assets easier for your advisor, and it simplifies the process of calculating your Required Minimum Distribution (RMD).

 

Control Over Tax Withholding Upon Withdrawal - When you withdraw assets from a qualified retirement plan (401k, 403b, etc), there is a mandatory 20% federal tax withholding whereas with an IRA, you decide how much (if any) tax you want to withhold from your distributions.


 

Durable Power of Attorney
You (and your close relatives) May Need One

If you or a close family member becomes physically or mentally incapacitated, who will make the financial decisions?  In many cases, a Power of Attorney is required by financial institutions and others to act on behalf of another person.  Here are some benefits of a Power of Attorney:

Control - A Power of Attorney allows you (not a court) to decide who will make important financial decisions for you in case you become incapacitated. 

Protect Assets - A Power of Attorney allows your appointed agent to pay your bills, file your taxes, buy/sell property if necessary, enter into a caregiver agreement for you, and speak on your behalf to Social Security, Medicare, etc.

 

MARKET UPDATE - August Jolt Wakes Up Investors
What Is Going On & Why?

The U.S. stock market dropped more than 10% this month (but has since recovered half of the drop).  That is notable because we haven't seen a drop of this magnitude in several years, although historically a 10% "correction" occurs once every year and a half.

Slowing global economic growth, massive global debt, and talk of rising interest rates in
the U.S. have ignited the selling.  While I do see significant headwinds, my longer-term indicators are not yet flashing "red", so we are riding out the bumps for now.
 
For conservative investors that are solely invested in bonds, the stock market drop has had no direct impact on your account.  For everyone else, this is part of the normal volatility associated with long-term investing.

IF the trend of the stock market deteriorates further and my longer-term indicators turn negative, adjustments will be made to your account in an effort to protect it from a major bear market.
 
Sincerely,
 

Paul Hewitt
 
 
(949) 727-4734 x1