OFFICES OF PATRICK J. WEHRLY

December 4, 2009

“ BUT PATRICK MY INVESTMENTS ARE LOW-RISK AND SAFE”  (??)

Dad to daughter:         Hey are you feeling OK you don’t look well

Daughter to dad:         Well. . . . . . actually I am a little bit pregnant

Dad to daughter:         Honey, you could be pregnant or not but you cannot be a little bit pregnant  !!

Of course I am aware that in the investment arena there existing choices that are “safer” or“less risky” than other choices.  But the point I want to make here is some investments (like a rattlesnake loose in your house) have turned out far worse than anyone ever imagined.

For instance, I had lunch with a gentlemen who USED-TO-BE-RETIRED some time back and he told me the sad story about his investment in Top-rated, 5 star BANK bonds, issued by Washington Mutual Bank.  I could easily understand why he felt comfortable at the time with the size and strength of WAMU as I myself banked with them and thought they were a great bank.  And they were . . . . .  Sadly his “safe” investment in Top rated Bank Bonds cost him virtually his entire retirement savings of more than

$ 400,000.00.

Now immediately those in the investment-community start defending themselves and some of the damage that has been done to Retirement Portfolios.  They have made statements like “no one knew this was going to happen” or (one of my favorites) “ “well it was doing good when I recommended its purchase.”

But that is my exact point here.  Safe and Insured FIXED investments should receive more attention these days for that very reason.  Because the world is financially dangerous, volatile and somewhat topsy-turvy is the very best reason to think harder, invest safer and never hear a voice on the other end of the telephone trying to explain your losses.

Where to begin and how to get the “other side of the investment story ?”  Well,  PJWoffice.com

Would be a great place to start.  After spending some time there, give us a call and stop by for more specifics.

BRAINS DASHED OUT IN THE STOCK MARKET ? HERE’S GOOD NEWS
By: Patrick Wehrly RFC (pjwoffice.com)
BILLBOARD BY THE NORTH FREEWAY: “Closer to retirement at age 40 than age 50 ???

Despite all of the excitement over the ability of the wealthy to convert to a ROTH IRA starting in January 2010, a lot of people who could, did a conversion in 2008.

Shortly thereafter the value of the IRA started going down, down and down further which made the taxes they now had to pay (based upon the original value) much higher than intended !

Here’s the scoop. The Stock Market Losses (melt-down) were so bad the IRS actually had to allow taxpayers to Recharacterize (reverse. . . ) the conversion and avoid paying taxes on what used to be a large IRA.

How Sad.

What have things come to when the IRS has to step in and help taxpayers with their Stock Market Losses instead of doing whatever else they should be doing. Why should the IRS being assisting taxpayers in managing their IRA accounts in the first place ?

How Sad.

When again the IRS had to step in and suspend the Required Minimum Distributions from IRA accounts for the first time in history. Here again the Stock Market losses were so bad the IRS made the 1 year suspension so taxpayers could avoid having to make distributions from IRA accounts that were down some 50% or more in some cases.

By the by, there are a lot of seniors who should have taken their RMD anyways as many other tax issues are at play, some much more important than their losses. But you would need to give us a call or stop by for a more specific look at your situation.

The Lesson.

Maybe putting 100% of your IRA into the Stock Market is a bad idea. You are certainly welcome to contact our offices for some good news AND some good ideas.

Most people do not need a FINANCIAL PLAN !
By: Patrick Wehrly RFC (pjw.retirerx.com)

Well Patrick I plan to lose weight
I plan to learn Spanish
I am planning to have a great retirement. . . . .

A new client stopped by my office the other day to talk about her Financial Plan from a leading Stock Brokerage and she was so happy. She said “WOW now I am ONLY DOWN $ 284,900.00 ! And she proceeded to turn 3 or 4 cartwheels in front of my desk. Well you can certainly understand why she would be so happy with this type of great news . . . . . . .

She has a “plan” but her “plan” is not working and with only a few more years to accumulate assets for a retirement that can typically last more than 31 years she is in trouble. Why something like just eating out in good restaurants 2 or 3 times each week can cost more than $ 280,000.00 ($175.00 per week times 52 weeks times 31 years).

Well after she sat down and caught her breath, the following conversation occurred:

Patrick Wehrly: “you know fixed accounts really made a lot of sense for our clients last year”
Client: “well yeah, but my IRA is finally starting to grow again”
Patrick Wehrly: “I understand that but our clients are enjoying the same growth but with 100% of their principal instead of having to dig themselves out of losses”
Client: “well I just can’t live on 3% or 4% a year. . . . . . (but I am STILL down almost $ 285,000.00)

Maybe a lot of people in and around the Houston area need a Prescription instead of a “plan.”

As a Retirement Doctor (so to speak) I have been giving the same 3 Medications to my Tax and Retirement clients for many years. Those clients that have taken their medicine on a weekly or even monthly basis have very healthy retirement pictures.

I want to discuss these 3 medications in more detail in future articles.