photo by istock

A few years ago I was fishing with my daughter at a Strawberry Reservoir in Utah. The snowcapped mountains surrounded us, and the sun was shining. It was so beautiful and peaceful there.

As we sat on the fishing boat, I thought about my company, Paragon Wealth Management. Our office is different than most financial advisors. It is decorated with beautiful outdoor pictures and leaves are painted on the walls. We also have a nine and a half foot grizzly bear, a bobcat and a leopard. We brought part of the outdoors inside.

While we were fishing, I thought about the “Paragon Experience.” Our fishing trip reminded me of the experience we hope to provide our clients. It is not the typical financial advisor/Wall Street type of experience. It is something very different. We do our best to make their experience enjoyable and worry free. We treat their money as if it were our own. We treat our clients like family.

Our clients can talk to our exceptional client service team at any time if they have questions about their accounts or they need anything. Our team is always there for our clients’ needs.

We invite you to discover the “Paragon Experience” if you have not already. Visit our blog, www.moneymanagerslive.com to see photos of Paragon’s office. To learn more about Paragon and the “Paragon Experience,” visit our website, www.paragonwealth.com, or call 800-748-4451 to speak with a financial advisor for a complimentary portfolio review.

written by David Young, President of Paragon. You can contact him directly via email, dave@paragonwealth.com.

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions.  Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy.  All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice.  This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.  Past performance is not a guarantee of future results.

Photo by woodleywonderworks

One of the changes President Obama is proposing is automatically enroll workers into a retirement savings plan. The article below from www.financial-planning.com explains more.

Examining the Impact of Obama’s IRA Plan

Written by Ruthie Ackerman
Taken from Financial-Planning.com

With retirement savings dwindling President Obama has proposed as part of the 2011 budget proposal for workers to be automatically enrolled in individual retirement accounts.

The proposal would automatically deduct up to 3% of an employee’s salary straight from their paycheck and invest it in Roth IRAs, unless the employee chose to opt out, or chose to invest in a traditional IRA. This plan would be for employees who don’t have other types of pensions or retirement savings plans, about 80 million workers in all.

With the Auto IRA, employees would still have the opportunity to opt out of the program, but most don’t. The National Council of La Raza, the largest national Hispanic civil rights and advocacy organization in the United States, published a report in December revealing that when employees are automatically enrolled in retirement accounts, their savings rates jump to 80% from 20%.

This is especially important at a time when savings rates have tumbled. Last month Cogent Research released its 2010 Investor Brandscape report, which showed that the proportion of investors that hold a 401(k) plan has gone down significantly.

As of October, she said, only 59% of investors’ surveyed hold an employee-sponsored retirement account, down from 70% in October 2008. At the same time, younger investors are more likely to start their own businesses or freelance and aren’t necessarily working in traditional full-time jobs that offer employee-sponsored retirement plans. In addition, high unemployment is also cutting into contributions.

Employers with more than 10 employees, who have been in business for at least two years, would be required to participate in the automatic-IRA program.

David John, a senior fellow at the Heritage Foundation and managing director at the Retirement Security Project, said when he helped to write the proposal for the auto-IRA four years ago, he was open to auto-enrolling employees in either a traditional or Roth IRA. But “it turns out that the Roth is actually better for moderate and lower income workers because they may or may not have the sufficient tax liability to take full advantage of the deductibility of the traditional IRA,” John said in a phone interview on Tuesday.

The reality, he said, is for most families who earn around $35,000, they don’t owe much tax anyway so they don’t get much benefit from the traditional IRA given the fact that when they withdraw they would have to pay income tax on that money. On the other hand, he said, if they take a Roth when they retire they end up with tax-free income.

John said the auto-IRA isn’t only for new savers, but also for rollover savers who have lost their jobs and taken new jobs at smaller companies. The proposal would allow them to rollover their 401(k) into an auto-IRA and continue to save. Freelancers would also have the opportunity to enroll if they were part of an independent group which sponsored an auto-IRA program.

“For better or worse the traditional pension system is disappearing,” he said. “Unless you’re a career minimum wage worker social security doesn’t provide a level of income that’s sufficient. So either we can make it easier for people to save for retirement from the day they start to work until the day they retire or we’ll have millions of Americans who are poverty stricken in retirement.”

David Wray, president of the Profit Sharing/401k Council of America, a Chicago-based association of providers of 401(k)s and other profit-sharing plans, said in an interview in December that auto-enrollment only works when the participant views the plan as aligned with their own goals. Just having a default, auto-enrollment retirement savings plan is not sufficient. If it’s not coupled with “an aggressive education effort where the company goes and explains to participants in advance how important it is to save and why it is in their best interest,” Wray said.

When participants don’t understand why they should enroll, or in some cases, don’t even know they are enrolled in retirement savings plans, the result can be ineffective and costly.

Nonetheless, Obama has made auto-IRA and retirement savings an important focus of his administration and even mentioned it in his State of the Union address.

photo by Mike Baird

If you are thinking about a tax delayed savings plan, there are some things to consider. Below is an article taken from the Money Wise Blog with some information about tax delayed savings. Feel free to leave comments or questions.

Tax Delayed Savings
Written by Money Wise Blog

As you approach your golden years, you may be wondering about the various advantages and disadvantages of tax delayed savings plans. Although the idea not to pay taxes on their savings may seem attractive, there are fees to consider.

Another difficulty lies in determining which tax delayed savings plans your family is entitled to receive. Before you decide, you should carefully examine all options to determine which screen saver you.

There are many types of tax delayed savings. The most common is 401k. 401k employee pension plan offers a high maximum contribution limit and the ability to maintain interest over time. Just follow the 401k withdrawal rules and I understand that you have to pay taxes on the lump sum you take.

If you leave your place of work to the appropriate age for retirement, you will need to pay taxes and a penalty at the time - or roll your money into a IRA.

Individual retirement accounts (IRA or, for short), allows you to make thousands of dollars for your retirement, even though less than 401k. You do not have to pay taxes on income only after age 59 1 / 2.

You can see all the different types of MDR to see what you are entitled to, including: marital Pension IRA Deductible IRA or Roth IRA. In both 401ks and Franchise MRK, you only pay taxes when you begin withdrawing retirement.

Most people are not encouraged to go with their employers sponsoring retirement savings plan, if the company agrees to match your contributions.

Further, analysts recommend that you get into the money into your account IRA Roth; but you still pay taxes on your contributions, as usual, you can withdraw money at any time without penalty and your withdrawal will be tax-free from age 59 1/2 .

Tax delayed repayment of trust funds, consisting of various bonds, stocks and cash, are a good, low-maintenance place to invest your money.

To understand the difference between savings and taxed delayed tax savings, let’s look at some specific figures. If your monthly retirement savings contribution is $250, in 20 years you could save $81,897 after taxes.

Investing in a tax delayed savings plan, you would save $106,753, even after tax lump! Are you interested in the establishment must provide a significant cushion for your retirement.

You can jump for joy, that Uncle Sam’s cut you break. This, of course the generous thing, but as with anything, there are potential pitfalls. You may find that the administration, management, insurance and annual maintenance fees of records exceed the tax delayed savings you would get - especially if you are tempted to use your funds before you turn 60.

Many early retirees have been saddled with 10% fine or get stuck paying hefty tax when they prefer to take all their money in a lump-sum retirement benefits.

If you worry about your money and take advantage of any protection plan at your disposal, you can feel that hard FDIC does not cover tax delayed retirement, leaving you to pay for a separate defense.

Financial representative can help you determine if the tax delayed savings may be very suitable for your lifestyle. If you have some financial planning for retirement now, you can pave the way to your golden years with ease.