Hope everyone is enjoying summer. I'm starting to feel like a duck with all the rain we've been getting; not to mention how humid it gets. Guess that's life in the south in summertime. There are some new and exciting things that have taken place since last month, and new things on the horizon.

A) We have just come out with a new Fixed Indexed Annuity that has some very good features, such as a 12% premium bonus, 20% penalty free withdrawal after the first year, and total return of premium after the 3^rd year! It has opportunities for over a 30% gain in a year (2.7% monthly cap strategy), gains are "LOCKED IN" each year, and since it's an FIA there is no risk to principle due to market loses if they should occur. To learn more, just give us a call or email us.

B) Kelly and I are in the process of developing our own radio show! I always wanted to be a disc jockey, but never in my wildest dreams did I think I'd be on the radio discussing financial matters. We should launch within the next month on WSIC AM 1400 in Statesville. Our time slot is 10:00 AM - 10:30 AM on Saturday mornings. So tune in if possible.

C) I'm also is the process of writing my first book. Many of my clients and folks that have been reading my Lake Norman magazine articles and other articles I've written have asked me to put our strategies into book form. This is something I've been thinking about for quite some time, and now I've finally started with outlines, titles, and formulating all my ideas and experiences into written form. I hope to have it wrapped up by the end of this year.

Please pay particular attention to this month's "Thought for the Week" updates from Global Financial Private Capital (our institutional wealth managers). They are very current, and spot on as far as economic conditions, especially the article about bonds, in my opinion. Be assured, our institutional investment team is working overtime to grow and protect assets in this difficult time.

We hope everyone enjoys the long holiday weekend and has a safe and happy 4^th of July! Hopefully the rain won't dampen the fun too much!

Until next month,

James D. Stillman

One of the questions I get asked most as an investment advisor has to do with IRAs, 401(k)s, or any plan made up of "pre-tax" dollars. These are plans where you get the advantage of writing off your contributions each year, and have the tax deferred until a later date. Therefore, all monies in the plan are still taxable at "ordinary income" rates when money is withdrawn. Remember, if you defer the tax, you defer the tax calculation. There will also be a 10% penalty assessed by the IRS if you withdrawal money before age 59 ½. However, there are certain hardship rules that can allow you to draw funds before 59 ½, in some cases.

IRA plans then require you to take "Required Minimum Distributions" starting in the year you turn age 70 ½. The penalty for not taking required IRA withdrawals is 50% of what your RMD amount is - Ouch! All IRA withdrawals are taxed at ordinary income tax rates, at the time they are taken. Depending on how income is drawn, this can also trigger taxes on social security income.

There are also taxes to be paid by beneficiaries, if an IRA is inherited. In other words, most IRA plans are big "tax bombs" just waiting to blow up. We've seen cases where heirs have lost upwards of 70% of inherited IRAs due to taxes. Income taxes, federal & state estate taxes, widowed spouses claim single instead of joint, etc.

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