The Self-directed IRA

Building a Financially Secure Retirement

Today, successfully building a secure financial future with an adequate retirement nest egg is dramatically different than it was for previous generations.

Think about it. Many Baby Boomers will most likely not be able to rely on the same types of pension plans their parents enjoyed. Similarly, those younger than the Baby Boomers have their own concerns – primarily, whether or not Social Security will provide any income at all by the time they retire.

Despite these changes, one thing is certain: Taking personal responsibility in planning your financial future is more important than ever. The amount of retirement savings you accumulate will have a direct – and perhaps dramatic – impact on whether you’ll be able to maintain your standard of living when you retire. In other words, it’s largely up to you.

An IRA can be a powerful investment tool for helping you reach your goal of a financially secure retirement.

With experience in listening to the needs of investors, our financial advisors work with you to help design a retirement portfolio to meet your goals and objectives. By assisting you in your selection of investment products offered through Raymond James, we can provide a flexible, simple and cost effective way to help you save for your retirement ... your way.

It’s a Good Idea to Contribute to an IRA

When you are saving for your retirement, your money has to work as hard as you do. An IRA may help you reach your savings goals faster than many other alternatives because an IRA enjoys tax-deferred compounding. Since any earnings and gains that accumulate in your IRA are not taxed until they are withdrawn, they can go to work fully and immediately for you, helping you build a sound financial base for your retirement.

Sources of Retirement Income

To maintain their standard of living, most people will need more than Social Security and their company retirement plan. As this chart illustrates, the higher the pre-retirement income, the more significant personal savings become.

Assumptions: Retirement age of 65. The couple will need 70% of their pre-retirement income just to maintain their standard of living. Their company retirement plan was projected at 24% of pre-retirement income (based on Social Security Administration data).

This is a hypothetical example and is not intended to represent the performance of any specific security or portfolio.

New Rules for the Traditional IRA

Some noteworthy changes to IRAs that increase their impact on retirement planning occurred due to recent tax law changes.

Increased Contribution Limits

IRA contribution limits gradually increase, resulting in a $5,000 contribution limit in 2008.

Catch-up Provisions

People who attain the age of 50 before the end of the taxable year may contribute an additional $1,000 in 2006.

Rollovers

There is also greater portability between the various retirement savings alternatives and IRAs. Although previously prohibited, assets distributed from a governmental 457 plan can now be rolled into an IRA. Additionally, after-tax contributions made to a qualified retirement plan may be rolled into an IRA. Finally, amounts distributed to an IRA from a qualified plan, 457 plan or 403(b) arrangement may be moved into one of these plan types regardless of whether the original distribution originated from a similar plan.

The Cost of Waiting

Time is money

This chart illustrates the cost of delaying asset accumulation for retirement. Waiting one year costs more than $40,000, while delaying five years means losing out on more than $170,000.

This is a hypothetical example and is not intended to represent the performance of any specific security or portfolio. Withdrawals are subject to income taxes and, if withdrawn prior to age 59 1/2, may also be subject to a 10% federal penalty.

The Raymond James Self-Directed IRA Advantage

Flexibility

The Raymond James Self-Directed IRA allows many different investment options including common and preferred stocks, corporate bonds, government securities, mutual funds, variable annuities, CDs and REITs. It provides the flexibility and diversification necessary to respond to changes in the financial markets, while also enabling you to select those investments most appropriate for your financial needs and objectives.

Consolidated Recordkeeping

To keep up with the many IRA rules, as a taxpayer, you must maintain accurate and detailed records. Raymond James, as custodian, receives your contributions, provides detailed records of transactions, prepares statements reflecting all assets, makes distributions based on your instructions and handles tax reporting. You receive a consolidated statement refl ecting all account activity during the year.

Simplicity

If you maintain IRAs at more than one institution, it may be difficult and time-consuming to gather information for tax preparation each year. If you are currently receiving monthly or quarterly statements for all of your IRAs, you may be constantly overwhelmed with paper. Combining your assets in one IRA has distinct advantages. Transferring IRAs held elsewhere to a Raymond James Self-Directed IRA can be done quickly and easily. Most securities can be transferred to Raymond James without having to sell them.

A Cost-Effective Choice

You may be able to reduce the custodial fees you are paying. At Raymond James you can maintain your IRA for one reasonable annual charge. In fact, IRAs with a value of $250,000 or more pay no annual fee. A Raymond James Self-Directed IRA can offer you professional service from your personal Financial Advisor, substantial investment flexibility and access to our nationally recognized securities research capabilities.

Deductibility Limits for Traditional IRAs

Once taxpayers attain certain AGI (adjusted gross income) levels, the deductibility of their IRAs is gradually phased out until eventually no deduction is allowed.

In general, AGI includes total income from compensation or self-employment earnings, dividends, interest, and gains from the sale of assets such as stock – less certain adjustments. If you are not considered an active participant in an employer-sponsored plan, a full deduction is allowed regardless of your AGI or filing status.

If your are single, the new threshold for full deductibility has increased to $50,000 for 2006. The deduction is incrementally reduced for an AGI above $50,000, reaching zero at $60,000.

If you are married and filing jointly, the deductibility threshold increases in 2006 to $75,000, with a similar incremental reduction in deductibility for an AGI between $75,000 and $85,000 for 2006. This threshold also increases annually until 2007, reaching an AGI of $80,000, with the range for the incremental reduction stretched from $10,000 to $20,000. Thus, starting in 2007, the deductibility is phased out with an AGI between $80,000 and $100,000.

Preparing for retirement now can have significant impact on your standard of living later. By listening to you – your needs, ideas and dreams – your Raymond James financial advisor can help you establish retirement goals and recommend a plan designed to meet them.

Begin building your financial future today. Contact your financial advisor today for more information on the Raymond James Self-Directed IRA or use the convenient Office Locator to find our office(s) nearest you today.

IRA Deductibility Schedule

The Power of Tax Deferral

Tax-Deferred Account = $489,383
Taxable Account = $335,207

Assumptions: $4,000 contribution per year for 30 years at 8%; 25% tax rate.

This is a hypothetical example and is not intended to represent the performance of any specific security or portfolio. Withdrawals are subject to income taxes and, if withdrawn prior to age 59 1/2, may also be subject to a 10% federal penalty.