Dear Friends Family,

So far, this summer is shaping up to be a scorcher! We hope this letter finds you staying cool despite the intense heat across the country. The CDC recommends checking on those at high risk, drinking plenty of fluids, reducing strenuous activity, taking cool showers, and wearing lightweight clothing. Please take this heat risk seriously.

Our topic this month is retirement saving within your business organization.

For clients saving through their company’s 401(k), a new option in 2006 is the Roth 401(k). Please ask your employer if this is currently available or expected soon. We strongly recommend using this option when available. The same $15,000 annual contribution limit applies, but it’s funded with after — tax dollars. All distributions are tax — free at retirement — meaning all growth and income accumulated during your career can be withdrawn without taxation. As with all 401(k) assets, they are protected in the event of personal bankruptcy. At age 70½, distributions can be rolled into a Roth IRA at your discretion.

Our recommendation is based on the following assumptions:

– Taxes will rise over time — they are currently at historical lows.
– Life expectancies continue to increase — many of us could live to 100.
– We do not rely on government assistance in retirement.
– Inflation and rising interest rates remain long-term threats.

For small business owners and self-employed clients, two strong options are the Self — Employed 401(k) and the SEP IRA.

Self-employed individuals and owner-only businesses may be able to save more for retirement through a 401(k) plan. The Self-Employed 401(k) is available to sole proprietors, partnerships, corporations, and S—corporations. Contributions are generally fully deductible from taxable income, which can substantially reduce your current income tax. If you already have a business retirement plan, you may be able to roll over or transfer those assets into this type of 401(k).

With a SEP IRA, the business owner and any eligible employees each establish separate SEP IRA accounts. Employer contributions are then made directly into each eligible employee’s SEP IRA.

We would be happy to review your retirement savings plan and discuss other options individually. Please don’t hesitate to call — we’re here to help! Enjoy the rest of your summer, and we look forward to speaking with you soon.

Warm regards,

Katz Family Financial