Generating Tax-Free Income

Roth Conversion Seminar

What You Need to Know About Roth Conversions Now

Thanks to the new 2010 Roth IRA conversion rules, anyone can create a tax-free
income stream in retirement. We’ll show you how to decide if a Roth is right for
you.

Wednesday, October 6, 2010
7:30 to 9 p.m.
Hilton Garden Inn
270 Route 59 West
Nanuet, NY 10954
(845) 623-0600

Featured Speaker: Larry Luxenberg

Larry is a Chartered Financial Analyst with 28 years experience as an institutional investor and
financial consultant. Larry specializes in retirement planning for Baby Boomers and strategies for
maximizing benefits for Social Security. A frequent speaker on retirement topics, Larry previously was
a securities analyst, mutual fund manager and hedge fund manager. He founded Lexington in 2001. He
has been widely quoted in newspapers and magazines and has appeared on CNBC and other television
and radio programs.

About Lexington Avenue Capital Management:

Lexington Avenue Capital is a full service
financial advisor offering financial planning and investment management specializing in retirement and
Social Security strategies. Investment Advisory Services provided through Partnervest Advisory
Services LLC, a Registered Investment Advisor. Lexington manages portfolios relying on institutional
class funds from Dimensional Fund Advisors (DFA). DFA manages assets exclusively for institutional
investors and clients of a select group of financial advisors. As of December 31, 2009, DFA assets
totaled $165 billion and it ranked among the top 10 U.S. mutual fund companies.


For additional information contact Lexington at luxenberg@lexingtonave.com

An Attractive Vehicle

A Roth IRA and Private Stock

Roth IRAs haven’t been embraced as fully as they should. They are an extremely attractive vehicle for many Americans. Part of the problem is that the reward comes after many years and patience doesn’t rank high among American virtues. Also, Roth conversions may require writing a check to the IRS sooner rather than later.

Recent tax law changes have made Roth’s particularly attractive for upper income households. Starting in 2010, the rules for establishing Roth conversions have been eliminated (limits for regular Roths are still in place). 

We have found Roth conversion accounts are a great place to hold private stock or other long dated assets that have a chance of significant appreciation.  The drawback of this option is that an investor loses the potential tax benefit of capital losses if the investment becomes worthless. If the investment appreciates significantly, though, the tax savings can be enormous. Using a Roth for this purpose also entails some attention to detail and additional paperwork. While the law permits this use, most custodians shy away from it because of the added complexity.  Some custodians do however specialize in non-standard assets and the effort to set this up can yield great returns.

Maximizing Benefits

Taking Social Security Seriously
 

For almost two-thirds of Americans, Social Security is more than half of their income in retirement. For most of the rest, it is an important part of their retirement spending. Despite the concerns we've seen reported in the press, Social Security is on a sound financial footing. With changes that we expect to happen over the next decade, the program should be around for a long time. Each year Social Security sends out $700 billion in monthly checks.

Given its importance, Social Security should be an integral part of everyone's retirement planning. Knowing the options for receiving Social Security payments and when to sign up is often complicated, especially taking into account the different ages of spouses, marital histories and other factors. We look at 13 variables in planning strategies for Social Security payments.

Getting the strategy right can make a difference of hundreds of thousands of dollars in lifetime benefits; sometimes between a comfortable retirement and concern in later years. Benefits are calculated based on a complex formula that involves a 35-year work history. Examining that record and taking corrective action years before retirement, can be important for many people.