11.5 Ira Essentials for Retirement: The Essentials You Do Not Know About Iras and Did Not Know to Ask...

© 2015 Dr. Kevin Skipper, ChFC. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

Published by AuthorHouse 02/21/2015

ISBN: 978-1-4969-6306-2 (sc)

ISBN: 978-1-4969-6305-5 (hc)

ISBN: 978-1-4969-6304-8 (e)

Library of Congress Control Number: 2015900328

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Contents

Acknowledgments

Introduction: Dr. Kevin Skipper’s Story

Chapter 1: What Flavor Should I Choose for my IRA?The Evolution of IRAs

Chapter 2: Which Retirement Plan Do I Choose for My Business?

Chapter 3: Which Plan Do I ChooseWhen I Don’t KnowWhich Plan to Choose?

Chapter 4: Common Mistakes with Retirement Accounts

Chapter 5: IRA Rollover Rules: When to Roll Over or Not

Chapter 6: Choosing an Advisor with Expertise in IRAs

Chapter 7: Answers to Your IRA Questions

Chapter 8: Investment Philosophy and Your IRA

Chapter 9: The Second Half of the IRA Game

Chapter 10: Beneficiary Distributions and Estate Planning

Chapter 11: Lessons from the Worst IRA Mistakes and Strategies for How to Avoid Them

Appendixes: Essential Tables and Resources for Your IRA

Acknowledgments

One of them, when he saw he was healed, came back,

praising God in a loud voice. He threw himself at

Jesus’ feet and thanked him.

Luke 17:15

No one wakes up one day and calls himself or herself a success. I was given three bits of advice as a young man:

1. Only take your advice from people who are where you want to be in life.

2. Your past does not have to equal your future.

3. You are the summation of the people you associate with, books you have read, and the tapes, CDs, or DVDs you listen to or watch.

When I look at those whose advice I took and followed, I want to thank them for helping me along the journey of life. There were many who molded, guided, encouraged, and directed the path of my life. I always want to be like the man in the Bible who went back to say thank you for the contribution to my life.

My wife, Audrey:

I want to award her in writing a PhT degree. That stands for a doctorate of Putting Hubby Through. People sometimes say to me, You are so smart! I say, You only read it after Audrey has edited it. Audrey edited hundreds of pages of materials for my bachelor’s degree, Master of Divinity, and doctoral dissertation. Audrey has attention to detail that is amazing and has made possible every degree, paper, letter from the office, and this book. I am so grateful to have her in my life to help me with the things in which I am so weak and she is so strong. She is the one who should be called Dr. Audrey Skipper, my cherished wife, business partner, author, and soul mate.

Joel and Kristin:

I shall never forget the two most life-changing days of my life: April 19, 1981, and January 9, 1985. These are the dates that Joel and Kristin, my children, were born. On these dates, I was reminded that I am a father, with all the privileges and responsibilities that come with the duty. I am grateful to have both of them as business partners and appreciate all that they have become as young adults. I hope they know that all I have done is to seek to do my best to care and provide for them.

Mom and Dad:

Mom and Dad are no longer with us, but I know that they would have a kind word for the writing of my first book. My dad had a humorous saying: Buy your books … sent you to school … still dumb as a box of rocks. Maybe at times I was the box of rocks, but through the help of others, I have sought to be the best I can be.

Randall Jones:

Growing up in a divorced home, I did not have a dad at home every day, but my mom took me to church. There, I found some men who guided and encouraged me as a young boy. My Sunday school teacher, William Drew, my RA teacher, Hollis Squires, my church bus driver, Freeman Todd, and my youth leaders, Ray Holland and Dennis Williams, gave me spiritual guidance and helped me with the essential values to succeed.

My pastor, Randall Jones, was like a father to me. He believed in me and gave me guidance in my education. He taught me the art of people skills and public speaking. Some people ask me when I started in radio. It officially began in Columbia, South Carolina, in October 1994. But in reality, it began in 1977 when Randall Jones let me do the daily church radio show. Randall Jones was always there for me and has been a great man in my life, and he married Audrey and me in 1978.

Steve Worthy:

I started in financial services in the summer of 1991. I was walking down Main Street in Columbia, South Carolina, literally going door to door. I walked into the John Hancock office and met Steve Worthy. Steve looked at my résumé with all the religion and theology degrees and said, Kevin, I have never met a Christian who wanted to make a lot of money.

I said, Well, Steve, I guess I am like no Christian you have ever met. That day began a fifteen-year mentorship. I thank Steve for his contribution to my coaching and guidance in the financial services industry.

Dan Taylor:

Dan was my coach in Dan Sullivan’s strategic coach program for three years. He was one of the smartest, most hardworking, and funniest people I have ever known. He and I started The Parent Care Show. He was an inspiration in life and in his final days. I appreciate his contribution to my life.

Ed Slott:

Ed Slott is the author of The Retirement Savings Time Bomb … and How to Defuse It: A Five-Step Action Plan for Protecting Your IRAs, 401(k)s, and Other Retirement Plans from Near Annihilation by the Taxman.

My journey in IRA knowledge began over twelve years ago when I had Ed Slott as a guest on my radio show. I then attended one of his two-day IRA conferences in Chicago (which I would recommend to all advisors). From there, I was asked to join Ed’s elite IRA advisor group, of which I was a part for ten years. As a part of this group, we met two to three times each year for advanced training in IRA planning. I will forever be grateful for the training I received from IRA expert Ed Slott.

Denise Appleby:

My current IRA mentor and technical consultant is Denise Appleby. When I have a very technical IRA issue, I call her and get chapter and verse. She has been a vital resource in making sure that the technical matters in this book were accurate and current. She can be a valuable resource for advisors, CPAs, and attorneys who read this book and need an IRA expert to assist them. She can be reached at www.applebyconsultinginc.com or by phone at (973) 313-9877.

When they say, No man is an island, it is the truth. We are all the summation of those who touched our lives. I am fortunate to have been touched and blessed by some amazing people. I dedicate this book to those who have made me the man I am today. Thank you!

Introduction: Dr. Kevin Skipper’s Story

But by the grace of God I am what I am, and his grace to me was not without effect. No, I worked harder than all of them—yet not I, but the grace of God that was with me.

1 Corinthians 15:10

Imagine a little boy out on the playground forty years ago and someone going up to him and asking, What are you going to be when you grow up?

I didn’t stand up and say, When I grow up, I want to be an IRA expert and have my own radio show and weekly television segment and write a book and own a financial services practice and be happily married with my children and wife in business with me.

Growing up in a single-mom home, I didn’t know if we were going to have food to eat sometimes, much less dream about going to college or getting several degrees. I just went to work at an early age to help Mom make ends meet. There were times when things got so tough that Mom had to go on food stamps for a while. I remember being so embarrassed that I wanted so badly to work enough and save enough so that money was not the most important thing.

When my older clients say to me, You are too young to remember the Great Depression, I reply, You mean the one in 1929, or the one I lived through in 1969 when I was ten years old? When I share some of my story, they know that I understand the retiree’s mind. They know that I know that they worked hard to get what they have, and they want an advisor who can help them with strategies that seek to grow it and preserve it because it was too hard to come by.

One of the reasons I enjoy working with retirees is that the older generation had such an impact on my life. Growing up in a church in Conway, it was the retirees who encouraged me, taught me Sunday school, and showed an example for me to follow about life, marriage, church, giving back to God what is his, and being a good steward of all that God has given to us. They helped me believe in myself and helped guide me with wisdom and insights in so many ways.

In my early years, I was considering doing ministry work in my teens and twenties. I attended the University of South Carolina, where I studied religious studies, psychology, and counseling. I then attended Southwestern Baptist Theological Seminary in Fort Worth, Texas. There, I learned much about ministry and business. While serving a small church in west Texas, I had one of the largest newspaper routes in the city of Fort Worth for the Star-Telegram, throwing about eleven hundred papers per day.

From there, I moved back to South Carolina and pastored a large church while completing my doctorate at Southeastern Theological Seminary in Wake Forest, NC. It was there that I learned that my ministry would be outside the traditional church. For the next four years, I helped people with counseling in my own marriage and family counseling practice. It was there that I discovered that financial and family counseling can go hand in hand, and thus I began my financial counseling practice in the summer of 1991.

I began my career in financial services with John Hancock Financial, where I would stay for several years. Today, I am a financial advisor with LPL Financial, and I meet with many each week to discuss investment, retirement, and estate-planning strategies.

You may ask, What qualifies you to write a book on IRA and retirement planning? That is a great question that you deserve an answer to. I could say that it is because I have worked with clients and their IRAs for over twenty years. I could say I am a chartered financial consultant (ChFC) and had training on retirement planning. The best answer is that, about ten years ago, I met IRA expert Ed Slott, and I had him as a guest on my radio show. I then proceeded to read all of his books on IRA planning and then attended his seminars on IRA planning. I was a member of his elite IRA advisor group for ten years. Each year, we spent two weekends studying the latest news and strategies to help our clients with their IRAs. So I would answer that from my advanced training in IRA planning, I have acquired the knowledge needed to put these thoughts into book form to help you move toward your retirement and IRA goals. My suggestion to you is that if you do not use us to help you with your IRA, you would do well to consider using a trained advisor from the elite IRA advisor group to give you guidance. You can find a list of the advisors at www.irahelp.com.

And in this book, I have enjoyed working with Denise Appleby. She is one of the most knowledgeable and well-known experts on retirement and IRA plans. She and I hope that this book will be a great tool for your retirement planning.

My Mission

When I started in this business many years ago, people would say, I have a CPA or an attorney or a financial advisor.

My response used to be, Well, I guess they have it all taken care of and you don’t need our expertise or knowledge. After seeing so many planning mistakes, I never assume that all things have been discussed until I have talked with the client. This is never truer than in the area of retirement and IRA planning. Many clients and advisors know about these plans, but they do not know these plans in depth. When someone describes how an attorney or CPA recommended something and that advice was wrong, the need for a book like this becomes clear. The purpose and mission of this book is to help you have a deeper grasp of the language, concepts, and strategies with IRAs so that you can make the best decisions about the biggest asset you have.

How to Use This Book

If you have an IRA, 401(k), or other retirement plan, this book is important for you to read. It is likely that you have heard about how to invest your IRA, but what happens to the IRA in the future when you pass or your spouse passes? This book lays out the journey and strategies of what happens to the IRA and the tax strategies on how to keep most of your IRA from the IRS.

Preretirement: If you are five years or fewer from retirement, this book helps you understand the decisions that you will face in the near future. It will give you the road map that you will need to follow with your IRA.

Retiree: If you have already rolled your retirement plan to an IRA, this book can serve as a checkup. Did you make the right moves? Are you working with the right IRA advisor? Do you have your beneficiaries in place? Are there ways that you can improve the investment, safety, and structure of your IRA today and when you are gone?

Retirement workshop: If you have picked up this book and have not attended one of our seminars, you may want to attend. They will take the concepts and strategies in this book and present them to you in a workshop format. You can learn more about upcoming seminars at our website: