Five Reasons to Make an IRA Part of Your
Planning Strategy
IRAs typically give investors access to a wider range of investment options than workplacesponsored plans, such as a 401(k).
Nearly 50 million American
households own an IRA, but it is
often an overlooked component
of most investors' financial planning strategies. In fact, over the
past two years, only 15% of
households that were eligible to
contribute to an IRA did so.
Have you forgotten your IRA? If
you don't have one, should it be
part of your overall investment
plan? Here are some compelling
reasons why this vehicle can help
you plan for your future.
1. Tax deferral:
Traditional IRAs allow your investment earnings to grow taxdeferred until withdrawn, typically at retirement. For 2011, the
maximum contribution is $5,000,
but for those aged 50 and over,
the limit is $6,000. The limits are
the same for a Roth IRA, but to
be eligible to fully contribute, an
investor must have a 2011 modified adjusted gross income of less
than $107,000 for singles and
$169,000 for married couples filing jointly. Singles earning up to
$122,000 and couples earning up
to $179,000 are eligible for partial
contributions.
2. Deductibility:
If you are a single taxpayer who
doesn't participate in an employer
-sponsored plan and you earn less
than $56,000 in 2011, you can deduct your contributions to a traditional IRA off your income taxes.
Couples earning under $90,000 are
also eligible for a full deduction.
Partial deduction limits also apply,
up to $66,000 for singles and
$110,000 for couples. Note that
Roth IRA contributions are not
deductible.
3. Investment flexibility:
IRAs typically give investors access to a wider range of investment
options than workplace-sponsored
plans, such as a 401(k). Depending
on the financial institution you use
to open your account, you can invest in a broad array of mutual
funds, ETFs, individual stocks and
bonds, CDs, annuities, even commodities and real estate.
4. Convertibility:
Traditional IRA holders can convert to a Roth IRA to enjoy some
of the additional benefits listed below. But before you decide make a
switch, be sure to investigate the
tax consequences of such a move.
Additional Benefits of Roth
IRAs
 Qualified tax-free withdrawals: Since Roth IRAs are funded
with after-tax dollars, your withdrawals are tax free, as long as
you have held the account for at
least five years and are over age
59 1/2.
No RMDs: Unlike traditional IRAs, Roth IRAs are not subject to required minimum distributions (RMDs) once the accountholder reaches age 70 1/2.

Contact our office to discuss a
strategy for your IRA or to see if
investing in an IRA makes sense
for you.
March 2011 — This column is provided through
the Financial Planning Association, the membership organization for the financial planning community, and is brought to you by Paul Light, a
local member of FPA.
5. Portability:
If you have assets in an employersponsored plan and you leave your
job, you can easily roll over those
assets into an IRA. Rolling over
your assets can make sense, particularly if you change jobs frequently and don't want to devote too
much time to coordinating and
tracking your accounts.
Investment Advisory Services offered through Light Financial Services, Inc. a Registered Investment Advisor.
Volume 9, Issue 2
J U LY 2 0 11
Paul Light, CFP®
Time for a Mid-Year Financial Checkup?
It’s not what most people would consider summer fun, but a mid-year review of your financial situation can be
time well spent. Here are a few of the
big issues to tackle:
Taxes: If you received a sizable refund
in April or found it necessary to turn
over the seat cushions to pay Uncle
Sam, it’s definitely time to reassess
what you’ll owe at tax time next year.
Part of that might include harvesting
losses in your investment portfolio and
using them to shelter gains that may
result from necessary rebalancing.
encourage you to have between
three to six months of living expenses in an emergency fund. If
you don’t have that minimum, go
back to your spending review and
see where you can start building.
College savings: If you are saving
for your child’s education or your
own, check to see if you’re on track
with the savings goals you made for
the year, and better yet, take some
time to read the latest news on financial aid. Schools change their
financial aid policies in subtle ways
each year, and it’s best to study the
Retirement savings: If you are maxed concept of college saving and finanout on your employers retirement plan, cial aid early in the process rather
that’s great, but experts stress you may than try to make up for lost
need other resources to retire comforta- knowledge late in the game.
bly. Check your existing IRAs and other accounts to see if you can deposit Reset special goals: If you are gothe maximum by the end of the year.
ing to need to replace your car, see
if you can direct more money into
Reserve fund: Most financial experts your down payment fund so you
don’t have to take out a huge loan
at purchase. If there’s a vacation
Tidbits…
you want to take by the end of the
45…Percentage of baby boomers who say year or a special household purchase you want to make, focus on
they check their retirement account balances at
the cash you’ll set aside to make
least once a week
(MetLife)
that happen.
Source: Journal of Financial Planning June 2011
8.8…National unemployment rate as of the
end of the first quarter 2011. Nevada had the
highest at 13.2 percent; North Dakota had the
lowest at 3.6 percent
( Investment News)
Source: Journal of Financial Planning June 2011
1220 Main Ave, Ste 225
Fargo, ND 58103
Phone: 701-356-5106
Toll Free: 1-888-246-1397
Fax: 701-356-4301
E-mail: [email protected]
Inside this issue:
Time for a Mid-year Financial Checkup?
1
Financial Confidence a Chief
Concern for Women
2
Market Outlook and Dow
Jones Industrial Average Celebrates a Birthday!
3
Feel free to contact our office and
schedule an appointment for your Five Reasons to make an IRA
mid-year financial review. As al- Part of Your Planning Strateways we are here to you achieve gy
your financial goals. Have a great
summer!
4
The information contained in this newsletter is derived from sources believed to be accurate. You should discuss any legal, tax or
financial matters with the appropriate professional. Neither the information presented nor any opinion expressed constitutes a
solicitation for the purchase or sale of any security.
Financial Confidence a
Chief Concern for Women
For working women, employersponsored retirement plans, such
as a 401(k) or 403(b), are probably the most important saving and
investing tool they will ever use.
Women seem to be of two minds
when it comes to their relationship with money and investing.
On the one hand, two-thirds of
women polled recently consider
themselves to be the "CFOs" of
their households -- strong, even
dominant, managers of family
finances. Yet another study found
that women are significantly less
confident about making their own
investment decisions than men.
Whatever the reasons, there are
real, tangible reasons why gender
plays a critical role in an individual's long-term financial wellbeing.
The Gender Gap -- A Reality
Check
Here are the facts. Generally
speaking, women earn less than
men, live longer than men, and
often take time out of the workforce to have children or to care
for aging parents. As a result,
women are often playing "catch
up" when it comes to saving for
important life goals, such as
funding their own retirement.
Beating the Odds
Despite these challenges, all
women -- whether single, married, or divorced -- should make
planning for retirement a lifelong
endeavor. No matter what your
age or situation, it's important to
start planning for your future
now. Here's how to get started.
Have a clear picture of your
current finances. Create a net
worth statement that defines
your assets minus your liabilities. In order to determine if
your net worth is appropriate for
your age, income, and personal
circumstances, you'll need to
analyze your spending and saving habits and create a workable
monthly budget.

butions for those aged 50 or older.
Traditional and Roth IRAs offer
another way to save for retirement,
even if you're married and don't
work outside of your home.
Be realistic about how much it
will cost to live. The costs of
health care, housing, and many
other basics are rising faster than
the overall cost of living. Be sure
to factor that reality into your
overall financial plan.

Feel free to call and set an appointment if you need help with any of
the above steps – our goal is to
help our clients have a secure financial future.
Source: Mass Mutual Retirement Services, March 2011
Save as much as you can.
For working women, employersponsored retirement plans, such
as a 401(k) or 403(b), are probably the most important saving
and investing tool they will ever
use. In 2011, most individuals
enrolled in such a plan can put
away up to $16,500, plus an extra $5,500 in "catch up" contriWomen
Life Expectancy at age 65
17.2
19.9
Average wage differential
$1.00
$.077
Receive pension benefits
43.2%
29.4%
Average annual pension payout
$19,557
$12,127
The U.S. stock market took a
breather during the second quarter
of 2011. After a very strong first
quarter, the stock market lost momentum during May and June. The
markets seemed to be especially
worried about Greek debt issues, a
U.S. economy that appears to be
slowing, and an ongoing weak
housing market, among other perceived problems.
Economists and market experts are
currently debating whether the
slowing economy is simply entering a temporary “rough patch” or
is it heading towards another recession. There is no shortage of
opinions regarding this issue. Unfortunately, no one has a crystal
ball and only time will tell. As
baseball legend Yogi Berra said,
“It is tough to make predictions,
especially about the future.”
could have thrown darts at a dart
board and been just as accurate as
the professionals!
Most studies have made clear that
economists and so-called “market
experts” are no better at forecasting the future than you or I. In
one of the best know investigations into the value of “expert”
opinions, University of California
psychologist Philip Tetlock solicited predictions from 284 professional economic and political
forecasters, asking them to rate
the probability of several potential outcomes. Most of the questions had only three possible outcomes. Yet the experts picked the
correct answer less than one-third
of the time. In other words, you
If the experts can’t agree, and the
value of their opinions are questionable, what is the average investor to do? As always, I believe that
the best course of action is to focus
on the three factors that you can
directly control:
1. How much you save
2. How much risk is appropriate
for your specific situation
3. How you can minimize the
amount of debt you carry
Feel free to call if have any questions concerning your finances or
investments.
Dow Jones Industrial Average Celebrates a Birthday!
On May 26th the Dow Jones Industrial Average turned 115
years old. The Dow Jones started
in 1896 as an “average” of 12
stocks. At that time the prices of
the stocks were added and then
divided by 12 in order to arrive at
a price. In 1916 20 stocks were
used to compute the price and
then in 1928 the number was
changed to 30 and a divisor other
than the number of stocks was
introduced to compute the price,
and so it became and index rather
than an average.

Men
Light Financial Services, Inc.
Market Outlook
or 47% of the time. The Dow was
unchanged on 337 days, or 1% of
the time.
It is interesting to note, that the
average gain was .72% on each
“up” day and the losses averaged
.75% each “down” day. The data
shows that the Dow does have an
upward bias, but by less of a
margin than many people believe.
The Dow has seen more than
31,530 trading since its inception. The Dow rose on 16,403
trading days, or 52% of the time,
and fell on 14,789 trading days,
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