Customer Reviews

Parlay Your IRA into a Family Fortune: 3 EASY STEPS for creating a lifetime supply of tax-deferred, even tax-free, wealth for you and your family

5 star:		(12)
4 star:		(4)
3 star:		(2)
2 star:		(1)
1 star:		(2)

 

 

This is both a very good and very bad book. Slott is a CPA and his bio indicates that he specializes in IRA law and estate planning. The retirement column in the Wall St. Journal uses him as an IRA expert. If you've seen Slott on PBS, you know he is also a pitchman and showman. This book is a mixture of expert IRA info and advice and wild overselling.

On the plus side:
This book is full of IRA information and good IRA advice presented in a very readable manner. I made dozens of notes in the front cover while reading this book. An excellent IRA reference. And I think the book does a service by pointing out that the IRA code has (sort of) a loophole that allows the 'effective' taxes paid on the IRA to be greatly reduced if the IRA is passed on to younger family members who should (Slott recommends) only take out the minimum annually over their lifetimes. Slott calls this the 'stretch' IRA.

On the negative side:
Your IRA can grow into a FAMILY FORTUNE, he screams, with pages of tables showing a 100 thousand IRA growing to millions (in one case to nearly 300 million if left to grow into well into the 21 century!). Nonsense, what about the time value of money? Slott never heard of it (or pretends he never heard of it). The reality, of course, is that if your income tax rate is, say, 33% then when you withdraw IRA funds you lose 1/3rd of it to taxes. The best that even a perfect tax strategy can do is recover this 1/3rd. Nice, but hardly a fortune.

Slott provides a useful check list of features an IRA contract should have. You would think that maybe he would read the IRA contracts of top IRA providers (like Fidelity, Vanguard) and tell us how they stack up? Nope, that's our job, not his.

Convert to a Roth IRA and your money will grow TAX FREE he screams. Slott's very positive on Roth IRA's, too positive. I worked through a Roth conversion example and find that the extra shielding that a Roth IRA allows can boost your after-tax returns a little. (Calculation details are in 'Roth Primer' section of the 'Charity' essay on my home page.) I calculate in a 6% market environment that Roth IRA will yield 6% vs an after tax yield for a traditional IRA of approx 5.4%, or an extra 0.6%/yr investment gain. However, there can be a serious downside to doing a Roth conversion that Slott doesn't mention. A large Roth conversion will likely be taxed at a much higher incremental income tax rate than normal minimum withdrawals, and since Roth has only a tiny yield advantage over a traditional IRA it could easily take a decade or more just to get even.

This book focuses on ensuring that your IRA is properly set up, so that it can be passed on to beneficiaries intact, effectively establishing a "stretch IRA". The stretch IRA describes an IRA held by a beneficiary, and which will pay out over their lifetime.

This book is very well organized, and the author is clearly very enthusiastic about his subject. He does quite well making his case, that you should ensure your IRA passes intact to a beneficiary, in that it can offer them HUGE tax advantages for their entire life time.

He is also quite good about explaining the steps you need to achieve this. Much of the book is reference material that will not apply to everyone at any given time, but that is not a real criticism. The book is cheap enough, and the sections that apply to all are worth the entire purchase price.

If you have an IRA, and you have any desire to pass your assets along to a beneficiary, this book is an excellent starting point.

Ed Slott is considered THE expert on stretch IRA's. Book is aimed at investors who will probably die before depleting their IRA funds. It explains how to structure a stretch IRA to pass this money on to future generations with minimal taxation.

Book is better organized than Slott's previous books. It is very readable. I keep it for a reference and have purchased additional copies for gifts.

This book shows you basically two options. Give most of your tax deferred assets to the government after you and your wife's death, or set it up so your kids and/or grandchildren get it. It is amazing how many financial and legal types that I have shown this too that didn't know about Stretch IRA's. Great book to teach you how to keep your hard earned dollars in the family instead of sending to the government.

[[ASIN:B000HT2P1Q Parlay Your IRA into a Family Fortune: 3 EASY STEPS for creating a lifetime supply of tax-deferred, even tax-free, wealth for you and your family].]
This is a great book. Really can be helpful if you have professionals who know what they are doing as the key is doing the correct thing at the correct time and making sure that those you bequeth the IRAs to also understand what to do.
I work in this area of financial planning/management so am not sure whether the "regular" person would understand it, but just having read this, it will be helpful if more professionals read it

I'm a tax accountant CPA like Ed Slott and I've been having a mid-life crisis of sorts regarding the value of tax-deferred savings. I decided to go back and reread the "conventional" wisdom before I disrespect it in front of my clients.

Ed Slott is one of the foremost experts on IRAs in the country. He knows every single nuance of how to milk and IRA to the absolute tip top tax advantage possible. He speaks from the same perspective as I do as a CPA tax accountant, except he writes for Money Magazine and the Wall Street Journal and I write for, uh, you.

I have to admit, I learned a thing or two that I either never knew or forgot about the nuances of inheriting IRAs. I'm glad I read this book as it is quite possible that I would be better able to advise clients regarding inherited IRAs after reading this.

My main problem with this book was that he lives in a bizarre world totally unlike mine. In his world people have millions of dollars in their IRAs and the main problem they have is how to keep from having to take any of their money out of there so it continues to defer taxes. In his world elderly parents die leaving their untouched retirement savings instead of living into their 90's in an $100K/year nursing home. In his world IRAs make 8% on average after inflation every year! (I want to visit that world!!!)

My clients almost never come to me to say, "My Mom left me $25K in an IRA, how should I best stretch that so that it grows tax deferred as long as possible?" Instead, they come to me at tax time and say, "Oh, and I got this weird piece of paper I don't know what to do with from when my Mom died and I inherited some money from her and I used it to pay down credit cards." In one actual case this year a client in a 0% tax bracket DID come to me for advice on the IRA and I told her to take it RIGHT THIS MINUTE (at 0% tax rate!) and buy physical gold with it. Each person's situation is different, but hardly anyone of them are interested in leaving that money untouched.

There really are some occasions when converting an IRA to a beneficiary IRA and taking distributions over the lifetime of the beneficiary is a good plan. I've got exactly one non-spousal person doing that right now out of 400 clients. What I'm telling you is that it is a RARE problem in my world.

This book assumes as a basic premise of all these calculations that you do not actually need any of this money for any reason at all during your lifetime or even your children's lifetimes, or even... uh... ANYONE's lifetimes. The whole point of the IRAs in this book is to defer the taxes for some unknown moment. It's as if he thinks "tax-deferred" means "tax avoided". He shows chart after chart detailing the miracle of tax-deferred compound interest. It really is a thing of beauty... if you don't take out the money.

In my world the moment actually DOES come when people need to access the money in their IRAs, and it almost always turns out to be paid at a higher tax rate than they have ever paid in their lives. Traditional IRAs are a sweet kiss of a tax deduction when you're earning money, but they slap you harshly when you go to withdraw it under most real life circumstances. I spend my time trying to convince people to STOP deferring taxes in years when they're in low brackets: convert to a Roth, withdraw it and buy tangibles, whatever: if you're in a 0% or 10% or even a 15% bracket now, what are you waiting for?

This book did not discuss what happens to you when you withdraw $100K from your IRA to buy into an assisted living center, how it makes your medicare be surcharged for being a "high earner" and how taxes phase in on your social security income or how it pushes your income into a higher bracket than you've ever been in during your lifetime.

Nor did this book discuss what happens when your only savings are in tax-deferred accounts and the inevitable happens and you need the money - because it is de facto your emergency account if that's the only place you have savings - and you end up being taxed at a higher bracket than ever before PLUS a 10% penalty.

Nor did this book discuss what happens when you put your money in a mutual fund with a 2% annual expense ratio and hidden fees of $2,000/year get siphoned off your income from your $100K nest egg. Or what happens when you put it in a CD making 2% when inflation is 3%.

In fact, this book did not discuss in the slightest bit the effective tax rate after inflation decreases the buying power of your nest egg and yet you have to pay taxes on the nominal value, leaving you with less actual buying power than ever.

Instead, Ed Slott works for the benefit of the governmentally-incentivized mutual fund industrv bonanza that is the modern IRA culture.

I'm not sad I read this book. It was a good overview of IRA laws. But it did nothing for helping me figure out how to plan for retirement. What it did do was to remind me to go make sure my beneficiaries were updated and fully filled out on each of our retirement accounts. That was nice. If you have an IRA you should do this. That's a good tip.

Here's another: don't buy this book if you aren't deeply interested in the problems of handling dynastic wealth. But if you happen to be sitting on IRA money you don't need, and/or you just inherited one you don't plan on using right away, it's worth taking out of the library.

Ed Slott is excellent in his field. I find his other books full of good information and alwasy watch when he is on PBS. The book has good informative for leaving your money to your loved ones, but, I wonder if the loved ones will leave the money in the IRA for it to grow or automatically take it out for immediated spending once they inherient it. A lot of people are in extreme debt and would see this as an opportunity to correct some of that debt. The concept is easy to understand, but I was looking for something for those of us who plan to spend every dime before we go. I will keep the book as a reference in case I change my mind.Parlay Your IRA into a Family Fortune: 3 EASY STEPS for creating a lifetime supply of tax-deferred, even tax-free, wealth for you and your family

Ed Slott provides focused directions on the many types of IRAs and how to best use them to maximize the transfer of wealth. He warns about and provides examples of the many legal pitfalls that may subject the inheritance to taxes and/or probate and greatly reduce amount available for distribution to heirs.

A Stretch IRA is Ed's favorite vehicle to maintain the tax shield for as long as possible to allow compounding to work its magic.

1) get a stretch ira instead of a regular ira to give your beneficiaries the combined benefits of extended compounding plus lower taxes
2) designate as beneficiary(ies) one or more persons of roughly equal age and healthiness, not a non-person entity such as a trust

In fairness, I think there was a third important point that you needed to know concerning what the beneficiary is supposed to do, but I lost patience having to read the same first two points over and over. The book also contains some generalized recommendations such as "make a spreadsheet of your assets".

In short, a disappointing purchase, waste of time and money.

Ed Slott is an advocate of the Roth IRA. His advice is to convert your traditional IRA to a Roth if you still have many working years ahead of you or if you're retired, but have sufficient liquid assets to pay the taxes on a lump sum conventional to Roth conversion.

FYI, the interest on a Roth is tax free, but you pay the taxes on the income deposited into the Roth, at the time of earning. The interest compounds bereft of taxation in a Roth and when you draw on it at retirement, it's also tax free. With a conventional, when you use that asset during retirement, you pay income taxes on it.