Peter C. Karp

William,

The short answer is yes. You have to be careful taking monies out of your IRRA or you will trigger income taxes. The way it works is this: You take the money out of your traditional or Roth IRA and then replace the cash (the same amount that you withdrew) within 60 days. If you do these things, the withdrawal of IRA money and subsequent redeposit is treated as a tax-free rollover transaction -- even though it's effectively the same as taking out and repaying a short-term loan from your IRA. Here are a few things to watch out for: The money you've withdrawn (borrowed) must be redeposit back into an IRA within 60 days. Otherwise, the withdrawal is treated as a taxable distribution, and you can't put the money back into your account. Also, you may owe state income tax, too. So avoid unnecessary stress by re-depositing the money with at least a day or two to spare. Just so you know, the 60-day period starts on the day after you receive the withdrawal (the borrowed amount). You must report the entire amount of any IRA withdrawal on line 15a of your Form 1040 for the year of the withdrawal. If you then re-deposit the amount tax-free you enter a taxable amount of zero on line 15b. Write Rollover next to line 15b. Now the IRS has been properly notified about your tax-free short-term IRA loan deal. Please confirm and consult with your CPA, we are not tax advisors. Given the potential tax traps, you may want to look for other alternatives before using this strategy to solve short-term cash flow problems. But done right, you won’t find a better deal. If you have additional questions please call Karp Capital for other financing and financial planning strategies.

Disclosure: The posted information is for informational purposes only. This message does not constitute an offer to sell or a solicitation of an offer to buy any security. All opinions and estimates constitute Karp Capital's judgment as of the date of the report and are subject to change without notice. Accordingly, no representation or warranty, expressed or otherwise, is made to, and no reliance should be placed on, the fairness, accuracy, completeness or timeliness of the information contained herein. Securities offered through Financial Telesis Inc., member SIPC/FINRA. Financial Telesis Inc. and Karp Capital Management are not affiliated companies.

Jean,

Short answer = false.

Social Security is based off of your top 35 earning years. If you don't have 35 years of earnings then zeros count.

You can improve your social security payout by continuing to work and adding higher income earnings to your track record.

The answer is that social security is going to your top 35 years of earnings history.

Michael,

No, I do not see this proposal gaining any traction as there is a savings crisis in this country. Social Security is strained given the number of baby boomers retiring. The government does not have the money to provide matching contributions to participant accounts as they have other priorities. As the saying goes….talk is cheap.

The posted information is for informational purposes only. This message does not constitute an offer to sell or a solicitation of an offer to buy any security. All opinions and estimates constitute Karp Capital's judgment as of the date of the report and are subject to change without notice. Accordingly, no representation or warranty, expressed or otherwise, is made to, and no reliance should be placed on, the fairness, accuracy, completeness or timeliness of the information contained herein. Securities offered through Financial Telesis Inc., member SIPC/FINRA. Financial Telesis Inc. and Karp Capital Management are not affiliated companies.