How Baby Boomers Can Financially Have a Happy Retirement!

7/8/2015 AZ Republic by Dr. Harold Wong

About 80 million Baby Boomers were born after World War 2, from 1946-64, and now 10,000 Boomers turn 65 every day. Many Boomers plan to work past 65 because they don’t believe their money will last in retirement. They face 3 major risks to a Happy Retirement:

  1. Low Wage Increases and Uncertain Employment: Ten years ago, the U.S. median family income was $50,000 and it’s at the same level today. The Great Recession caused a loss of 10 million jobs. While many of these jobs have returned, they are not with the same pay and full benefits.
  1. Low Interest Rates: When the stock market crashed in 2008, Federal Reserve Chairman Ben Bernanke said his goal was to drive short-term interest rates as close to zero as possible and he succeeded. If you deposit $100,000 at Wells Fargo in a 1-year CD, you get $50 interest at the end of the year. Today, the interest yield on a 10-year U.S. Treasury Note is 2.31% and 3.10% on a 30-year U.S. Treasury Bond. The U.S. Bloomberg Corporate Bond Index is at 3.37% and the Bloomberg Municipal Bond Index is at 2.66%.
  1. Uncertain Future Stock Market Returns: A recent June 9, 2015 article states that one must lower one’s expectations of stock market returns, “Exclusive: Vanguard Founder John Bogle Projects ‘Nominal to Zero” Real Returns Over the Next Decade” by Wayne Duggan, found in Because of the unpredictability of future stock market returns, the recent academic literature has lowered the “4% Rule” to the “2.8% Rule”. This means that if you have saved $1 million, you can withdraw $28,000 and then increase it by about 3% each year to account for inflation; and have a good chance of not depleting life savings to zero before your death.

There are 3 things that Baby Boomers can do to Financially Prepare for a Happy Retirement:

  1. Save substantially more: For decades, the field of financial planning says that one’s goal is to save 10% of one’s income. This is not enough! I had a recent discussion with one of the Vanguard employees who manage the $billions of Google 401k money. We both agree that one has to save 20-25% of one’s income to have the same income in retirement as when working.
  1. Maximize Social Security income: “Among elderly Social Security (SS) beneficiaries, 52% of married couples and 74% of unmarried persons receive 50% or more of their income from Social Security”, “How Social Security Strategies Affect Your Retirement” by Dr. Harold Wong, May 23, 2014 AZ Republic. If your SS income at 66 is $1,600 monthly, it would be $1,200 if you took SS early at age 62 versus $2,112 if you took it at 70. Yet, only 1.2 % of men and 2% of women waited until age 70. The average SS check was $1,294 in 2014.
  1. You Must Consider a Private Pension: In July, 2014, a nurse age 62 deposited $250,000 into this concept. When she retires at age 70, she will receive $25,000 per year, guaranteed as long as she lives. Her cash flow alternatives for the same $250,000 were: $125 interest from Wells Fargo; $5,000 from a 10-year Treasury Note; $7,500 from a 30-year Treasury Bond; or an average $5,000 dividend yield from the U.S. stock market. There is virtually nothing else that pays a higher rate of guaranteed cash flow than a private pension.

Free Seminars: “How to Maximize Your Social Security and Other Retirement Income” will be held Saturday, 7/18/2015, 10:30 am-12:30 pm. “How Baby Boomers Can Financially Plan for a Happy Retirement” will be held Saturday, 7/25/2015, 10:30 am-12:30 pm. Both seminars will be at the Desert Foothills Library, 38443 N. Schoolhouse Road, Cave Creek, AZ 85331. Please RSVP at (800) 955-1408.

For a private consultation, contact Dr. Wong at (480) 706-0177;, or For his archived research, click on

Secrets to Maximize: Retirement Income with Social Security, and Asset Protection with the Rockefeller Trust

6/10/2015 AZ Republic by Dr. Harold Wong

John and Mary Jones are both age 66 and have worked their whole lives. They got lucky with some private company stock and are worth $21 million. What are some of the strategies they could consider?

Maximize Social Security (SS) Retirement Benefits with the File and Suspend, Spousal, and Widow Survivor Benefit Strategies!

Age 66 is considered Full Retirement Age for their SS benefits and John would get $2,500 per month. However, he would get 32 percent more (or $3,300 monthly) if he waited until age 70. Mary would receive $800 monthly if she took SS at age 66 or $1,056 if she waited until age 70. To maximize joint SS income, John should File for SS at age 66, but Suspend taking it until age 70. Mary can use the Spousal Benefit and take half of his $2,500 at age 66, or $1,250 per month. She does this for 4 years until she turns 70. She decides to retire from her job at age 66. Let’s summarize what the couple has done:

  • Mary gets $1,250 monthly for 48 months from age 66 to 70, a total of $60,000. She will continue to take this as long as John is alive.
  • By waiting to take his SS until age 70, John gets $800 more each month. From age 70 until his death at age 85, this is $144,000 more. Just as importantly, he will provide the greatest Spousal Benefit possible for his wife Mary.
  • If John dies at age 85, Mary must remember that she will get just one SS check, whichever is highest. She will then switch from her own Spousal Benefit SS check of $1,250 to his $3,300 check (now her Widow Survivor Benefit), or $2,050 more each month. If she dies at 95, this will be an extra $246,000 over the next 10 years.
  • Note: No Cost of Living Adjustment (COLA) increases to SS benefits were considered in order to make this scenario easier to calculate.

They want to protect their two kids and 4 grandkids from divorce, lawsuits, and estate tax with the Rockefeller Trust.

If they were to both die in a car crash, they would owe about $4 million of estate tax. They decide to spend $80,000 annually for a guaranteed cash value life insurance policy with a second-to-die death benefit of $4 million. This policy will be held in the Rockefeller Trust, and so the $4 million will pay off the current estate tax and not be considered part of their taxable estate. Had they owned the life insurance policy personally or in their Revocable Living Trust, the $4 million would be part of their taxable estate and create another $1,600,000 of estate tax (40 percent rate currently in 2015).

They transfer most of their estate into the Rockefeller Trust. If their two kids each have 3 divorces, their spouses cannot get any of the assets in the Rockefeller Trust. If the four grandkids each have a bad lawsuit judgment, the creditors cannot get any of the assets. When the kids or grandkids die, there is no estate tax. They can even restrict the heirs to receive income only, so the principal remains intact. They have now bomb-proofed the family assets, just like the Rockefellers and Kennedys have.

Free Seminars: On Thurs. 6/18/15, 6:30-8:30 pm, “Secrets of the Rockefeller Trust” will be given, preceded by a light supper from 6-6:30 pm. On Sat. 6/20/15, 10-12 noon, “How to Maximize Your Social Security & Other Retirement Income” will be given, followed by a light lunch from 12-1 pm. Both seminars will be held at Keller Williams University, 2077 E. Warner Road, Suite 110, Tempe, AZ 85284. Please RSVP at (800) 955-1408.

Contact Dr. Wong for a private consultation at (480) 706-0177 or For future seminars, click on For his archived research, click on

Common Sense IRA and 401(k) Strategies

5/6/2015 AZ Republic by Dr. Harold Wong

For many, especially in the Baby Boomer generation, most of their financial assets are in their IRA or 401(k). Here are some strategies that can make a big difference for your retirement:

  1. Maximize your annual contribution to your IRA and get the full employer match to your 401(k). Suppose you earn $60,000 and the employer will match 50 percent of your 401(k) contribution up to 5 percent of your income ($3,000). The employer match is then $1,500 and you have a total of $4,500 saved. If you contribute $5,500, the maximum IRA contribution in 2015 (and it’s $6,500 for those age 50 or over), you will have saved $10,000. This $10,000 contribution may save you at least 20 percent income tax, or another $2,000. If you do this for 30 years, such as age 35-65, and earn an average 4 percent annual return, you will have $699,940 at age 65.


  1. Seriously consider a Roth IRA instead of a traditional IRA. In our example above, if you contribute $5,500 to a Roth IRA, you will not be able to deduct the $5,500 and will not save $1,100 of tax. However, this means that any earnings for the rest of your life on a Roth IRA are non-taxable. If you started saving $5,500 in a Roth IRA and did this for 30 years, with an average 4 percent return, you would have $320,806 at age 65. Of this $165,000 would be your total contributions and $155,806 would be tax-free earnings. I know that everyone wants to minimize their taxes every year, but you won’t even notice the $1,100 of annual tax savings that you don’t get. The average person who goes to Starbucks spends at least $6 a day, 5 days a week, which totals $1,560. Just bring a thermos of coffee or tea to work. When you retire, it’s a relief to know that any income from a Roth IRA is tax-free. Warning: if you have high income, you may be restricted from contributing to a Roth IRA.


  1. Rollover your 401(k) to an independent IRA as soon as your employer allows. Many studies have shown that the same mutual fund held in a 401(k) has higher fees than if that investment was held in an independent IRA. Wall Street knows that money is trapped for years in a 401(k) and employees are restricted to the investment choices allowed in their 401(k) plan. Suppose you could reduce fees by only 1 percent and could earn only 1 percent more if you had more choices in your independent IRA. If you rolled out $500,000 from your 401(k) at age 60, and the net return (after fees) was 5 percent instead of 3 percent, you would have $1,039,464 instead of $778,983 by age 75 or $260,481 more.


Most employees do not realize that most employers allow you to do an “in-service” distribution of your 401(k) funds to an IRA of your choice. Normally, one has to be at least age 59.5. However, if you are laid off, quit, or are fired, you are now free to rollover your 401(k) to an IRA at any age. If the “in-service” distribution provision is not in your 401(k) plan; complain to your human resource department or the president of your company. The company can ask the 401(k) provider to add the “in-service” distribution provision.

Free Seminars: “Common Sense Financial Strategies” will be on Wednesday 5/13/2015 from 6:30-8:30 pm, preceded by a light supper from 6-6:30 pm. “Secrets of Roth and Multi-Generational IRA’s” will be held on Saturday, 5/16/2015 from 10-12 noon, followed by a light lunch from 12-1 pm. Both seminars will be held at Keller Williams University, 2077 E. Warner Road, Tempe, AZ 85284. Please RSVP at (800) 955-1408.

For a private consultation, contact Dr. Wong at (480) 706-0177,, or For his archived research or future seminars, click on

When You Take Social Security Affects Your Retirement!

May, 2015 CITY SunTimes by Dr. Harold Wong

The Social Security Press Office has published a Fact Sheet that gives some interesting numbers. In 2014, There 39 million retired workers who receive $1,294 in average monthly benefits; 8.8 million disabled workers who receive $1,146 per month; and 6.2 million Survivors who receive $1,244 per month.

Social Security (SS) is the major source of income for most of the elderly. Nearly 90 percent of individuals age 65 and older receive SS benefits. This represents about 38 percent of elderly income. Among elderly SS beneficiaries, 52 percent of married couples and 74 percent of unmarried persons receive 50 percent or more of their income from SS. Among elderly SS beneficiaries, SS is 90 percent or more of the income for 22 percent of married couples and about 47 percent of unmarried persons.

Many workers take SS too early, given their retirement goals. An April 22, 2014 article by Mandi Woodruff found on, cites new data released by the SS Administration. For 2012, 37.2 percent of men and 42.4 percent of women took SS at age 62, the earliest age that non-disabled individuals can take SS. Only 5.2 percent of men and 11.4 percent of women waited until age 66 (considered your full retirement age for workers who were born 1943-54) to start taking SS benefits. Only 1.2 percent of men and 2 percent of women waited until age 70, when one gets 32 percent more than age 66.

Example: I met Helen about 5 years ago. She was a divorced real estate agent in Oregon, but the market fell apart. Luckily, she was able to move to the Phoenix area and got a job at a hospital where she earned about $50,000 annually until age 70 and then took SS. Her benefits were $2,400 a month, instead of only $1,250 a month had she taken SS at age 62. Note: in virtually all incomes that I have seen, one gets almost double the SS benefits at age 70 compared to age 62.

She owned her home free and clear, but had to pay $600/month to the community park owner for the land rent, given that she owned the manufactured home but not the land. If we add all utilities, including cable TV, high-speed internet, and phone, it was another $250 per month. If she had taken SS at age 62, she would only have $400 per month to cover all other expenses, including food, healthcare, car, and fun. Life would be very grim. Because she was receiving $2,400 a month SS, she was able to lead a normal life, such as buying the groceries she wanted and going out to lunch with her girlfriends.

Private Pension Plan Offsets Future Inflation: Helen had only $150,000 in her IRA and about $30,000 of cash in the bank. She understood that with only 4 percent annual inflation, what cost $25,000 today will cost $37,006 in 10 years when she is 80. She deposited $100,000 of her IRA in a private pension at age 70 and it will generate $10,256 of annual income, starting at age 77, for the rest of her life. The 10.256 percent of annual cash flow is guaranteed and her principal is not at risk in the stock market. This is substantially more than what her IRA was generating.

Contact Dr. Harold Wong at (480) 706-0177 or  For his previous research, go to For his future seminars, click on


What Warren Buffett Might Say about “When to take Social Security?”

4/15/2015 AZ Republic by Dr. Harold Wong

Warren Buffett, for those who don’t know, has the nicknames such as “The Oracle of Omaha” or “The Stock Market King”. He owns over 80 companies, lock stock and barrel. He has owned household names such as Dairy Queen, See’s Candies, and Geico for decades. The Forbes 400 survey in 2015, ranked Warren Buffett, founder of Berkshire Hathaway, as the 2nd wealthiest man in America. He’s worth $67 billion and only Bill Gates of Microsoft, worth $81 billion, is richer. He has given away nearly $23 billion to charity over his 84 years of life. Warren Buffett is ranked the 3rd wealthiest person in the world, behind only Bill Gates and Carlos Slim Helu of Mexico.

Buffett got his Master’s degree in economics from Columbia University in 1951 and returned to Omaha, NE. When asked many times why he moved back to the middle of nowhere (compared to Wall Street, America’s stock market and financial capital), here’s Buffett’s response (paraphrased): “If I had stayed on Wall Street, eventually I’d be subject to group thinking and be just as much of an idiot as most of them…” Instead, he likes nothing better than to be left alone, studying annual reports and thinking of his next company to buy.

Buffett’s Rule #1 is: Never Lose Money!

Most people start their Social Security Retirement Benefits at age 62, the youngest you can start. Only 5.2 percent of men and 11.4 of women waited until age 66 (considered your full retirement age for workers who were born between 1943-54). For every year that you wait after age 66 to take your SS benefits, you get 8 percent more. So, if you wait 4 years until age 70, you get 32 percent more. For most, you get 70-90 percent more SS benefits at age 70 than age 62. Source: “How Social Security Strategies Affect Your Retirement” by Dr. Wong, published 5/23/2014 in The AZ Republic.

Buffett would say that you are violating his Rule #1. Buffett is extremely logical in anything that he does in the financial world. My observation is that most people take SS early because of emotional reasons. “God-darn it, they’ve been taking SS taxes out of my paycheck for decades; the moment I get old enough to collect, I’m going to stick it to the man.” Buffett would probably say: “Where in the world of money can the average person get a guaranteed 8% increase for every year he waits to take SS, without risking any of his investment capital?”

Another famous saying by Buffett is “Be fearful when others are greedy. Be greedy when others are fearful!” When most take their SS benefits at 62, they are either greedy (“I want it now”); or they are fearful (“SS may run out of money”). Either is illogical. Wall Street insiders have a crude saying “The masses are asses.” This means that you should do the opposite of what most people do. If almost everyone is taking their SS benefits early, you should take them as late as possible. You should take them at age 70 because you do not get a raise if you wait beyond age 70 to take your SS benefits.

Free Seminars: On Thurs. 4/23/2015, 6:30-8:30 pm, “Secure Your Financial Future: Lessons from Warren Buffett” will be the topic. It will be preceded by a light supper from 6-6:30 pm. On Sat. 4/25/2015, 10-12 noon, the topic will be “How to Maximize Your Social Security & Other Retirement Income”. It will be followed by a light lunch from 12-1 pm. Both seminars will be held at Keller-Williams University, 2077 E. Warner Road, Tempe, AZ 85284. It’s ¼ mile W. of the 101 freeway on the S. side of Warner Road. RSVP is required at (800) 955-1408.

If you want a private consultation, contact Dr. Wong at (480) 706-0177,, or For his archived research, click on

The Benefits of a Multi-Generational IRA

April, 2015 CITY SunTimes by Dr. Harold Wong

Many have substantial amounts kept in tax-deferred retirement accounts, such as an IRA, 401(k), 403(b), TSA, or 457 plan. All of this money is either tax-deferred wages or profits from a self-employed activities. For those who own businesses that make substantial profits, even larger amounts may be stored in a SEP-IRA, family 401(k), defined contribution, or defined benefit plan. For simplicity purposes, this article will designate all of these tax-deferred retirement accounts as an IRA. This article will cover the benefits of establishing a Multi-Generational IRA (MGIRA).

If you, John Smith, are married and designate your spouse Mary as your primary beneficiary, when you die the spouse has two choices. She can rollover all of your IRA funds into her own separate IRA, Or, she can designate your IRA funds as an inherited IRA, such as John Smith, deceased, IRA for benefit of Mary Smith. Either way avoids immediate taxation. However, if she does not implement the MGIRA strategy, upon her death all the IRA money gushes out typically in the year of her death and is taxed to the beneficiaries (typically the kids).

The benefit of the MGIRA strategy is that upon the death of the IRA owner, the funds can go to the kids or grandkids without all of it gushing out and being taxed immediately. If you had $500,000 in your IRA and 2 kids, without the MGIRA, each would get $250,000 in a lump-sum. If each kid had a good income, the extra $250,000 income would probably push them into the 40% combined federal and state income tax bracket. This would result in $100,000 of tax paid by each of your kids. If you had two 40-year-old twins as your only kids, a MGIRA would allow each to distribute only $5,868.54 from their $250,000, allowing most of it to grow. Per the IRS Required Minimum Distribution (RMD) rules, each year they would have to distribute a bit more, but most would remain in the IRA, growing tax-deferred.

Warning: Virtually no company 401k and few financial institutions allow a true MGIRA strategy when one has multiple kids and/or grandkids. A true MGIRA strategy allows one to name multiple beneficiaries, and each kid or grandkids is distributed their own RMD based on their separate age. Think about the company you work for. Assume that you have 2 kids, ages 30 and 40, and 3 grandkids ages 5, 7, and 10. Once you quit working, you are no longer making that company money. Does that company have the computer system or the desire to pay out the correct RMD every year to your 5-year-old grandchild for the next 90 years (assuming he lives until age 95)? If they don’t pay out the correct RMD, there can be up to a 50% penalty.

At least 90% of my clients, once they know that the MGIRA strategy exists, prefer that the kids and grandkids get an annual check every year for the rest of their life and are restricted from raiding the IRA principal. This way, it becomes (after your death) a lifetime annual gift to them. When we do the analysis, $300,000 deposited in a MGIRA can become $1-2 million of total income over the life of young kids or grandkids. However, the MGIRA is set up so that you retain total control, and can spend all the income or principal if you need it.

Contact Dr. Wong at (480) 706-0177 or For his previous research, go to For his future seminars, click on

Retirement Planning for Success

3/27/2015 AZ Republic by Dr. Harold Wong

Retirement is not what most people in American think about until they hit 50. Then, many panic as they realize they have not saved enough. Several years ago, I wrote an article, citing a study that surveyed families whose total household joint income was between $50-100,000 annually. Of those in their 50s, the average savings (not counting any home real estate equity, personal property such as cars, and any pensions) was under $30,000. What do you do if you are in your 50s and have not saved enough?

Plan on working until age 70 so that you can maximize your Social Security retirement benefits. The average Social Security (SS) check for retired workers in 2014 was $1,294. Among elderly SS beneficiaries, 52 percent of married couples and 74 percent of unmarried persons receive 50 percent or more of their income from SS. Among elderly SS beneficiaries, SS is 90 percent or more of the income for 22 percent of married couples and for 47 percent of unmarried persons.

By working until 70, one can get 80-90 percent more SS income than if one started SS benefits at age 62. Yet, only 5.2 percent of men and 11.4 percent of women waited until age 66 (considered Full Retirement Age for older Baby Boomers). Only 1.2 percent of men and 2 percent of women waited until age 70. For more information, read my 5-part Social Security series, with the first article published on 5/23/2014, found online on

Really understand and follow Warren Buffett’s Rule of 100. This means one subtracts one’s age from 100, and this is the maximum percentage of one’s life savings that should be in “red money. This is also known as risky money”, which is any asset that can lose principal. Example: if the average age of a couple is 58, no more than 42 percent of their life savings should be invested in risky assets. When one reaches age 50 and realizes one has not saved enough, many will panic and say to themselves “The only way I can retire is if I take huge risks with my money to try to make huge returns”. That’s akin to the gambler at a blackjack table who started with $100,000 but has lost $50,000. It’s tempting to “double down”, but that usually means losing most of your life savings faster.

Understand that it is impossible to reach the “Efficient Frontier” the way most people invest. Harry Markowitz won the Nobel Prize in Economic Science in 1990 for his pioneering research on modern portfolio theory. Here’s a passage from Wikipedia, “A Markowitz Efficient Portfolio is one where no added diversification can lower the portfolio’s risk for a given return expectation (alternately, no additional expected return can be gained without increasing the risk of the portfolio). The Markowitz Efficient Frontier is the set of all portfolios that will give the highest expected return for each given level of risk. These concepts of efficiency were essential to the development of the capital asset pricing model.” It’s mathematically impossible to reach the “Efficient Frontier” with only stocks and bonds, which are the two basic asset classes that have historically composed Wall Street investments. Most investors have an inefficient portfolio, meaning they are taking way too much risk for the returns they get; or, are getting way too little return for the given level of risk they take.

Free 6-hour “Retirement Planning for Success” course: will be held Part 1: Wednesday 4/8/15, 1-4 pm and Part 2: Friday 4/10/15, 1-4 pm at Desert Foothills Library, 38443 N. Schoolhouse Road, Cave Creek, AZ 85331. Please RSVP at (800) 955-1408. The course is free but many students will want to purchase the optional student workbook for $15, cash or check only, at the class. The class is based on recent academic research.

Contact Dr. Wong at (480) 706-0177,, or For his archived research or seminar schedule, click on


Secrets of the Rockefeller Trust

3/25/2015 AZ Republic by Dr. Harold Wong

In September, 1992, I came from UC Berkeley to the Phoenix, AZ area for a 2-year research project. For a year, I wrote a column, Asset Protection, in a legal publication. Every month, I would research and publish on a concept in advanced estate planning or asset protection that was little known. For example, Limited Liability Companies had recently become legal in CA, but were not yet legal in AZ or many other states. After a year of research, I developed a seminar “Secrets of the Rockefeller Trust”, that became the most popular seminar in Sun City, AZ. This seminar has not been given in 21 years.

Revocable Living Trust: is the standard in the estate planning field for the last 40 years. The main advantage of a Revocable Living Trust (RLT) was that assets put into the RLT did not go through probate. Probate can be quite costly, depending on the state where the individual dies, and total fees to attorneys and the court can be 2-8% or more of the value of the estate. Even worse, the probate process is public and the whole process can take a year or even years. In certain cities known for corruption, there have been cases where the courts and attorneys have taken a huge percentage of the estate assets.

The main limitation of a Revocable Living Trust is that there is no asset protection. The average age of those who have attended my 50 plus seminars every year in AZ is 75. Most are grandparents. If a grandchild visited and borrowed their car, and then hurt someone badly in an auto accident while they were drunk, the injured persons could sue the grandparents who owned the car. They could lose everything, including assets inside the RLT.

The Rockefeller Trust was pioneered by John D. Rockefeller, who at one time controlled 90% of the oil refining capacity in America. He consolidated much of the oil industry and was considered the wealthiest man in the world. Between 1860 and 1960, he, and his son known as “Junior” donated over $1 billion. Famous heirs include Nelson Rockefeller, the multi-term Governor of New York, who became VP of the U.S under President Gerald Ford. John D. Rockefeller created the Standard Oil and Trust to consolidate the oil industry. The Rockefeller family eventually had hundreds of trusts to protect their assets and keep their activities highly secret.

Advantages of a Rockefeller Trust (RT): One can pass assets across several generations, without each generation being hit hard with estate taxes. If your kids or grandkids get divorced, the spouses cannot get any of the money in the RT. A huge advantage is protection against creditors and lawsuits. Fife Symington, the former Governor of AZ, was on the board of Western Savings and Loan, which went under during the Savings and Loan Crisis of the 1980s. The law firm, CPA firm and all the directors were sued. He was the only one that did not have to pay, as his and his wife’s assets were shielded in RTs.

Free Seminars: “Secrets of the Rockefeller Trust” will be held Thursday 4/2/15, 10-12 noon, at the Golden Corral Surprise; Thursday 4/9/15, 10-12 noon, at the Golden Corral Mesa; and Saturday 6/6/15, 10:30 am -12:30 pm at the Desert Foothills Library in Cave Creek. Registration is restricted to those with at least $1 million estate size. Please RSVP at (800) 955-1408.

For those who have at least $500,000 in financial assets, there is a separate seminar “How You Can Maximize Your Social Security & Other Retirement Income”. This will be held: Sat. 4/4/15, 10-12 noon at the Golden Corral Surprise; Sat. 4/11/15 10-12 noon at the Golden Corral Mesa; and Sat. 5/2/15, 10:30 am–12:30 pm at the Desert Foothills Library in Cave Creek. Please RSVP at (800) 955-1408.

Contact Dr. Wong at (480) 706-0177;, or For his archived research and other seminars, click on


Why You Should Consider a Roth IRA Conversion!

March, 2015 City SunTimes by Dr. Harold Wong

Thousands have attended my retirement and tax planning seminars in the last 6 years and many complain about taxes. For many Baby Boomers, the majority of their savings is either in 401k plans or IRA’s. They may want to consider a Roth IRA conversion.

Imagine you are a farmer in Mobridge, South Dakota, a small town where the entire population of the county is 2,000. It’s early March, 2015 and you hear a knock on the door. “Hello, Farmer John, I’m from the IRS and I’m here to help you. The Federal Government is experimenting with a new tax system and here’s how it works. We can go right now to your barn and take the physical weight of your seed corn that you plan to plant in April. I will then tax you on its value in 2015. If you take that choice, no matter how much corn you grow on your farm, there will be no tax after 2015 for the next 3 generations.” You stand there in silence, trying to understand exactly what he has said.

The IRS man continues: “However, I know that farmers are very conservative. You probably don’t want to try a tax system that is something different from what you have experienced for your entire life. If you stay with the current tax system, I will come back at the end of this year’s harvest, and tax you on the value of the physical weight of the mature corn kernels, the corn cob, and the 7-foot-tall corn stalk. In fact, I will return every Thanksgiving dinner and tax you on every harvest that this farm produces as long as your family owns this farm.”

After spending a few minutes considering the IRS man’s offer, Farmer John remembers going to a seminar “Secrets of the Roth and Multi-Generational IRAs” that he attended at one of the Cave Creek libraries during January, 2015. He realizes that the physical weight of the corn seed right now is far less that the total weight of the corn plant at harvest, especially when the weight of future harvests will be taxed for the next 80+ years. He tells the IRS man: “I understand that you think that the physical weight of all this seed, held in a self-directed IRA, is worth $300,000. If I convert this to a Roth IRA, you will tax me on $300,000 and never come back. Over the next 80 years, this farm will produce $300 million worth of corn crop, and my family will not have to pay any tax for 3 generations. I will gladly accept your offer. Now I finally understand what a Roth IRA conversion is all about”.

P.S. Farmer Brown is in a 33.33% tax bracket and normally would have to pay $100,000 of tax on the $300,000 taxable income that would occur from the Roth IRA conversion. However, he remembers a strategy from a series of articles, “Secret Advanced Tax Strategies”, found at Farmer Brown buys a $300,000 combine that he needs for the upcoming harvest, and deducts the full price. This creates $300,000 of tax deduction to offset the $300,000 of taxable income from Roth IRA conversion. So, Farmer Brown pays NO TAX on his $300,000 Roth IRA conversion. He turns to his wife and says: “The IRS man wanted me to pay $100,000 of tax, but we farmers aren’t as dumb as we look”.

Contact Dr. Harold Wong at (480) 706-0177 or For his previous research or future seminars, go to www. or

Affording Retirement Travel

If you’re like most people who think about retirement, you probably imagine traveling in your golden years. Before you browse Acapulco websites and whip out the credit card to buy your ticket, make sure your finances can handle your trip.

First, don’t wait to fulfill your dream. Enjoy the items on your bucket list now while you are healthy enough to walk easily. If that list involves extensive travel that’s suddenly possible with free time after working, realize that seeing the world isn’t cheap.

You can do two things to afford it: increase your spendable income and decrease your travel expenses.

The bonds trap. In today’s virtually zero-interest world of bank accounts, increasing income can be a huge challenge. You either risk your savings in the stock market, hoping for more-or-less continual appreciation of your equities, or you go into bonds.

Except bonds might well be the next big crash. If interest rates finally rise from today’s historical lows, bond values will decrease substantially. In June 2013, the well-known brokerage firm Oppenheimer issued a report entitled “Effect of Higher Rates on Fixed Income Portfolios,” widely taken as a warning about bond investments.

As noted in the report, an interest increase of three percentage points will nearly halve the value of a 30-year U.S. Treasury bond; a jump of only one percentage point will cause an 18% drop in this bond’s value. You take a big loss after even the smallest budge upward in rates.

You have options. Consider a personal pension, where you contribute part of your salary (omit “salary” and replace with the word “savings”) to a financial institution that in turn invests your money to build a lump-sum available (omit “a lump-sum available to you at retirement” and replace with “a lifetime pension income for you at retirement”) to you at retirement. These pensions are based on actuarial principles that offer a higher cash flow than most alternatives.

For instance, if you are 70, deposit $200,000 and wait five years to start withdrawals, you can often get about $17,000 to $18,000 of annual income for the rest of your life. This can fund a lot of travel, particularly when you mix one big foreign trip with two cheaper domestic ones each year.

Look for bargains. You can find many websites to one-click breaks on airfare, hotels, car rentals and all-inclusive packages. Innovative thinking helps, too: Just consider the Gentlemen Host Program.

The cruise industry has long known that older, single women constitute a significant share of shipboard vacationers. These women, often either divorced or widowed, enjoy cruises for the organized activities, lavish dinner and drinks and the entertainment after the dinner. Only thing missing: someone to dance with.

Gentlemen Host, a placement program operated through Compass Speakers and Entertainment, matches groups of such female travelers with outgoing, unmarried conversationalists – who preferably can cut a serious rug on the dance floor. The requirements of the hosts are extensive and activities strictly platonic; participants’ (replace “participants” with “hosts’”) cruises are almost free.

How much of your nest egg and estate on travel? About three years ago, I met a couple in their 80s who had been educators in public schools. They retired about three decades before and took two cruises each year since.

With only some $80,000 saved for retirement through their entire lives, the couple relied on generous teachers’ pensions and Social Security to fund extensive travel. They estimated that they spent slightly less than $700,000 on the cruises – but the trips were a big life dream.

The couple expected to leave nothing except their house to their kids.

Dr. Harold Wong Blogsite