Advanced IRA Planning

Double the Returns of the S&P 500

Using The "Maximizer"

Copyright, The Wealth Preservation Group 2007

            I did a newsletter about five months ago on a concept called the Maximizer.  When I discussed the topic I did not discuss it in the context of an IRA.  Since I am doing a handful of e-mails on IRA planning, I thought it would be important to let everyone know that you can use the Maximizer inside an IRA.  The key to this plan is that you need an IRA administrator who can administer the entire plan within the self directed IRA.  

            I strongly recommend you learn this topic because it is first and foremost good for many of your clients and second, because it’s a terrific way for you to differentiate yourself from other advisors who are trying to give advice on IRA planning.  Also, if you are an attorney or CPA, knowing this topic will really help you when doing estate planning.

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           Would your clients like to nearly double the return of the S&P 500 while at the same time 100% principally protect 90% of their invested dollars?

            What are your client’s investment goals these days? 

            Are they still of the opinion that the stock market will average double-digit returns?  Did the dismal investment returns of 2000-2003 serve as a wake-up call to them and remind them that the stock market actually does go backwards?

            What are you doing to help them “protect” themselves?  Should you be helping them?

            Whether you are a financial planner, estate planning attorney or CPA/accountant/EA or an insurance agent, I would submit that you should be helping your clients protect their nest egg while still giving them the opportunity for upside growth in the market in the least risky manner possible.

            I’ve added this topic to the CWPP™ course and had tremendous responses from advisors of all kinds who have reviewed it.

            Just as a teaser for why you should review the PowerPoint presentation and attend the FREE webinar I'll be doing on this topic, think of the following and whether any of us really have any idea what the stock market is going to do going forward.  The following discusses Mutual Fund returns. 

             What happened to your money if you got into one of the top 10 funds at the tail end of 1999?  You would have lost a bundle.

            Which of the following companies would you have purchased back in July 2003?

      Wal-Mart:   One of largest companies in the world; consistent earner; pays dividends.

      K-Mart: Just emerging from bankruptcy; big marketing tie to Martha Stewart (who was looking at jail time); no anticipated dividends

            -In July 2003, Wal-Mart stock value: $56.08

            -In July 2003, K-Mart stock value: $24.20

            What happened?

            -In July 2004, Wal-Mart stock was valued at $51.76

            -In July 2004, K-Mart stock was valued at $76.80

            Look at a hypothetical and how much better the Maximizer does if the market goes flat.  FYI, the crossover point with the Maximizer is 15%.  If your clients are NOT earning more than 15% as an average rate of return in their stock and mutual fund portfolios, they would be better off financially with the Maximizer (and 90% of their money would be protected each year from downturns in the stock market).

            The Maximizer is not a difficult concept to grasp. Clients use two investment vehicles: 1) equity indexed annuities (EIA)s and 2) call spread options on the S&P 500.

            For more information the Maximizer, please click here or e-mail info@thewpi.org.