By Andy Ives, CFP®, AIF®
IRA Analyst
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Oftentimes with these articles, I compare certain retirement account rules to arbitrary items. A creative metaphor or simile can help the reader grasp a concept. For instance, past entries have referenced revolving doors, hurricane preparedness, Bloody Mary cocktails, Charlie Brown’s Halloween costume, genies in lamps and even Indiana Jones. But I was struggling. No single comparison seemed to carry the weight necessary to create an entire Slott Report submission. So, here is a 6-pack of random summertime similes and other retirement account comparisons.

“Beer Dive.” I live in a wonderful community with a golf course, tennis courts, swimming pools, walking paths, parks and even a waterslide. During the Fourth of July holiday, a neighborhood parade kicks off several events at the main pool – food trucks, face painting for the kids, live DJ…and the annual Beer Dive! Roughly 20 cases of assorted cans of beer are dumped into the deep end. Some float, some sink and scatter across the bottom. Adults ring the pool, shoulder to shoulder. When the whistle blows, a chaotic scramble of thrashing water follows. Participants swarm and grab and stuff as many beers into their bathing suits as possible. (I think the record is 11.) Ah, capitalism! Also, you keep every beer you snap up. No one taxes potentially 35% of your haul. A Roth IRA beer dive!

“Pub Crawl.” My family and I do a pub crawl at the beach – visit a handful of locations and enjoy a beverage at each. The rotation includes a dive bar, tiki bar, fish shack, rooftop bar, burger joint and a restaurant on the pier. Diversification! We invest a little time at each locale and experience the different vibes. Some places are just opening, some are already buzzing with energy upon arrival. The fish shack bar is air-conditioned and poorly lit. The dive bar is blazing hot on the sand. The tiki bar takes only cash, but no shirts or shoes are required. By spreading our time across multiple providers, we ensure a full day of entertainment.

“Beach Umbrellas.” Two multi-color umbrellas shield us from the sun. How people can spend any time on the beach with no protection boggles the mind. To sit on a towel in the direct heat and risk getting burned seems unbearable. Thankfully, IRA accounts have two umbrellas – state-level creditor protection (for lawsuits), and $1,512,350 in bankruptcy protection (not including former plan dollars rolled into an IRA, which maintain 100% bankruptcy protection).

“Lost Child and a Lifeguard.” From the shade of my beach umbrellas, I saw a little boy – maybe 6 years old – searching for shells. As the tide ebbed, he used a yellow plastic sieve to screen sand and uncover treasure. Focused on his hunt, he drifted too far from his family and became lost. I did not know he was lost until he approached a man who immediately waved down a passing lifeguard in an ATV. From a distance I saw the man and lifeguard talk to the boy. He stared at the sand, nervous. When he looked up, he pointed back in the direction he came, and shrugged his shoulders. The lifeguard spoke into his radio, listened, and after a moment, smiled. The lifeguard shook hands with the man, put the boy in the passenger seat of the ATV, said “Hang on,” and looped back to reunite the little treasure hunter with his family.

Professional guidance. Many are blinded as they seek fortune via get-rich-quick schemes. Stray too far from your investment objectives, and a financial advisor can pull you from the riptide of an unsuitable investment and guide you back. Just hop on the ATV with the surfboard on top.