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  • Retirement income is highest in these US cities

    Retirement income is highest in these US cities

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    (NewsNation) — Retirees in the Washington, D.C., area have the highest retirement income in the nation, according to a new study.

    The analysis by SmartAsset found residents of Arlington, Virginia, had the highest retirement income, with an average of $90,140. Cambridge, Massachusetts ($79,563), and The Woodlands, Texas ($79,539), were second and third on the list.

    Of the 345 large cities analyzed, three of the top eight were in the Washington, D.C., area. Most of that stems from higher pensions, IRAs and other retirement accounts rather than Social Security, the report noted.

    Multiple California cities cracked the top ten, including Berkeley ($78,949), Carlsbad ($74,345) and Thousand Oaks ($73,634). Highlands Ranch, Colorado, and Naperville, Illinois, were also high on the list, with retirement incomes above $75,000.

    The city totals were calculated using U.S. Census data and include all income from retirement accounts such as pension plans, IRAs and 401(k)s as well as Social Security income. “Retirees” refers to people aged 65 or older.

    Retirement plans like 401(k)s and IRAs make up the bulk of most people’s retirement income, and a surging stock market has helped boost those balances recently.

    Last quarter, the number of retirement account millionaires rose to a record 485,000, up 15% from the quarter prior and a 43% increase from a year ago, according to new data from Fidelity.

    Individuals in that group had been in their 401(k) plans for an average of 26 years at an average contribution rate of 17%.

    However, those accounts are not the norm and make up just 2% of the roughly 24 million defined contribution plan accounts at Fidelity, Bloomberg reported.

    Instead, SmartAsset’s city analysis suggests most retirees live on much less than the typical American household.

    Across all large cities, the average retirement income was $52,723, well below the median household income of $74,580. That gap underscores the financial anxiety many are feeling today.

    “You look at your 401(k) and your savings, and to make ends meet, you start taking out $100 here and $50 there. Before you know it, it’s gone,” Shari Evans Buford, a Florida retiree, told NewsNation.

    According to a recent AARP survey, one in five Americans over age 50 have no retirement savings, and nearly two-thirds are worried they won’t have enough money to support themselves.

    A typical person now thinks they will need $1.46 million to retire comfortably, even though savers have only set aside $88,400 on average, a Northwestern Mutual survey found.

    As a general rule of thumb, Fidelity suggests having ten times your preretirement income saved by age 67 in order to maintain your current lifestyle.

    But with inflation eating away at Americans’ budgets, many retirees, upwards of 12%, have “unretired” this year.

    Shinobu Hindert, a financial educator, said other would-be retirees are taking a “soft retirement,” where they cut back on hours but continue working for the benefits.

    “They’re not completely exiting the workforce altogether, but they’re finding a part-time job that may provide extra health coverage,” Hindert said on NewsNation’s “Morning in America.”

    SmartAsset’s report suggests Social Security will be the primary source of income for many. In 14 of the cities studied, residents relied on Social Security for more than half of their retirement income, including those in Brownsville, Texas; South Bend, IN; and Spokane, WA.

    In dollar terms, retirees in Ann Arbor, Michigan, ranked highest for Social Security income at $30,428, followed by Carmel, Indiana ($30,069), and Goodyear, Arizona ($29,157).

    According to federal data, the average Social Security payment for retired workers was $1,915 per month in April. However, the size of that check varies depending on how long someone worked, what they made and when they started collecting.

    This year, an average of almost 68 million people will receive a Social Security benefit each month, and by 2035, the number of Americans aged 65 and older is set to hit 75 million.

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  • We’re 54, have $4.5 million in savings but don’t know how to withdraw it in retirement. What should we do?

    We’re 54, have $4.5 million in savings but don’t know how to withdraw it in retirement. What should we do?

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    My wife and I are both 54 years old and have accumulated a taxable account totaling $2.3 million, and retirement assets totaling $2.2 million. We hope to retire at 55, and we are wondering about the best way to take our distributions. Clearly we will not touch the qualified money until we reach 59½.  

    I understand the 4% rule, but when it comes to taking the money, is it better to have a set monthly, quarterly, or annual withdrawal, or is it better to take a lump sum? I can see myself going crazy trying to time market tops in order to take distributions. I was planning to take money off the table after the peak in 2021. I purposely held out until 2022 for tax purposes and that backfired.  

    Is the best course of action to set it and forget on a monthly, quarterly, or annual basis?

    See: I’m 54 and the primary earner but ‘professionally, I am exhausted’ — we have $2.18 million but what about healthcare?

    Dear reader, 

    You touch on a really common issue retirees have: the distribution phase. 

    For decades, Americans are told to save, save, save for retirement, but then they get to the point where they need to start using the money…and that can be a complicated process. Retirees need to have an idea of how much to withdraw, what that distribution’s impact will be on the rest of their nest egg, what to expect come tax time and how not to use that money too quickly. 

    Like so much in personal finance, the answer to your question is highly dependent on individual circumstances. I’ll get to that in a minute. 

    First, a note about the 4% rule. This rule is meant to be a guideline. For some people, 4% is too much, while for others, it isn’t enough. Experts have argued its applicability, too — Morningstar, for example, said retirees could use a rate of 3.3% and would have a 90% probability of not running out of money in retirement. 

    Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column

    Before you commit to the 4% rule (which, of course, you can always adjust as the years go on), do a few quick calculations on how much you expect to spend in retirement — with a buffer included — and see what the percentage of your total retirement savings actually is. You may be able to retain more in your retirement assets than you expected. 

    If you’re still not sure on how much to take out, perhaps start a bit more conservatively in an effort to preserve your investments. The less money you take out, the more in your accounts that can continue to grow.

    Also, be aware of something called the “sequence of returns” risk, which is when your portfolio value drops too quickly at the beginning of your distribution journey. The result could be less than ideal for your account.

    Read: The Decumulation Drawdown: How spending became the big dilemma in retirement

    Pay attention to the tax implications of your decision, and consider consulting a qualified financial planner and/or an accountant to help you run the numbers. There are plenty of factors you have not included in your letter, such as if any of that money is in Roth accounts, and even then, a qualified financial planner can get into the granular details to help you make the most of your retirement spending and savings. You might find making Roth conversions to be beneficial as your taxable income drops — it’s also a way to avoid required minimum distributions down the road. 

    Also, you’re right not to touch your retirement assets until you’re 59 ½ years old (and for readers who are unaware, that’s when most retirement account assets become available without incurring a penalty). There are exceptions, such as the “55 rule,” which is when you are allowed to withdraw from your retirement account after separation from service if you are 55 or older. The account you can withdraw from must be linked to the job from which you’re separating, and there may be other stipulations attached. Check with your employer about what you are and aren’t allowed to do with your retirement plan. 

    Now, how often to distribute. This will depend on your comfort level, but some advisers suggest pulling six to 12 months’ of monthly expenses in a money-market account and then creating a paycheck effect. “Setting up monthly or biweekly distributions will create the feel of still working and help you stay within your budget,” said Brian Schmehil, a certified financial planner and managing director of wealth management for The Mather Group. 

    Also see: At 55 years old, I will have worked for 30 years — what are the pros and cons of retiring at that age? 

    Make sure the accounts you’re drawing from have shorter investment horizons and are in less risky investments, which will help you “continue to spend what you want to spend and accomplish your goals without having to be overly mindful of market volatility,” Schmehil said. This is in line with the bucket approach, which is when your assets are divided into various investment horizons. The least risky is in your shorter-term “bucket,” whereas the investments with the most risk are earmarked for the long term. 

    Having a monthly distribution schedule might help keep you in check. “I like to use monthly for most people,” said David Haas, a certified financial planner and owner of Cereus Financial Advisors. “It keeps them thinking about a monthly budget if they have a propensity to spend too much.” 

    Keep in mind how many variables can change over the course of your retirement. For example, if you switch up where your retirement money comes from — your taxable account, your retirement accounts, Social Security, etc. — your tax liabilities could change. Also, inflation might have an impact on your spending, or how quickly you draw down your distribution. Your risk tolerance may also transform, especially as you get older and you see your nest egg dwindle or you face market volatility. The frequency in which you take your money might change too, and if it does, that’s OK.

    Readers: Do you have suggestions for this reader? Add them in the comments below.

    Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

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  • We’re 54, have $4.5 million in savings but don’t know how to withdraw it in retirement. What should we do?

    We’re 54, have $4.5 million in savings but don’t know how to withdraw it in retirement. What should we do?

    [ad_1]

    My wife and I are both 54 years old and have accumulated a taxable account totaling $2.3 million, and retirement assets totaling $2.2 million. We hope to retire at 55, and we are wondering about the best way to take our distributions. Clearly we will not touch the qualified money until we reach 59½.  

    I understand the 4% rule, but when it comes to taking the money, is it better to have a set monthly, quarterly, or annual withdrawal, or is it better to take a lump sum? I can see myself going crazy trying to time market tops in order to take distributions. I was planning to take money off the table after the peak in 2021. I purposely held out until 2022 for tax purposes and that backfired.  

    Is the best course of action to set it and forget on a monthly, quarterly, or annual basis?

    See: I’m 54 and the primary earner but ‘professionally, I am exhausted’ — we have $2.18 million but what about healthcare?

    Dear reader, 

    You touch on a really common issue retirees have: the distribution phase. 

    For decades, Americans are told to save, save, save for retirement, but then they get to the point where they need to start using the money…and that can be a complicated process. Retirees need to have an idea of how much to withdraw, what that distribution’s impact will be on the rest of their nest egg, what to expect come tax time and how not to use that money too quickly. 

    Like so much in personal finance, the answer to your question is highly dependent on individual circumstances. I’ll get to that in a minute. 

    First, a note about the 4% rule. This rule is meant to be a guideline. For some people, 4% is too much, while for others, it isn’t enough. Experts have argued its applicability, too — Morningstar, for example, said retirees could use a rate of 3.3% and would have a 90% probability of not running out of money in retirement. 

    Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column

    Before you commit to the 4% rule (which, of course, you can always adjust as the years go on), do a few quick calculations on how much you expect to spend in retirement — with a buffer included — and see what the percentage of your total retirement savings actually is. You may be able to retain more in your retirement assets than you expected. 

    If you’re still not sure on how much to take out, perhaps start a bit more conservatively in an effort to preserve your investments. The less money you take out, the more in your accounts that can continue to grow.

    Also, be aware of something called the “sequence of returns” risk, which is when your portfolio value drops too quickly at the beginning of your distribution journey. The result could be less than ideal for your account.

    Read: The Decumulation Drawdown: How spending became the big dilemma in retirement

    Pay attention to the tax implications of your decision, and consider consulting a qualified financial planner and/or an accountant to help you run the numbers. There are plenty of factors you have not included in your letter, such as if any of that money is in Roth accounts, and even then, a qualified financial planner can get into the granular details to help you make the most of your retirement spending and savings. You might find making Roth conversions to be beneficial as your taxable income drops — it’s also a way to avoid required minimum distributions down the road. 

    Also, you’re right not to touch your retirement assets until you’re 59 ½ years old (and for readers who are unaware, that’s when most retirement account assets become available without incurring a penalty). There are exceptions, such as the “55 rule,” which is when you are allowed to withdraw from your retirement account after separation from service if you are 55 or older. The account you can withdraw from must be linked to the job from which you’re separating, and there may be other stipulations attached. Check with your employer about what you are and aren’t allowed to do with your retirement plan. 

    Now, how often to distribute. This will depend on your comfort level, but some advisers suggest pulling six to 12 months’ of monthly expenses in a money-market account and then creating a paycheck effect. “Setting up monthly or biweekly distributions will create the feel of still working and help you stay within your budget,” said Brian Schmehil, a certified financial planner and managing director of wealth management for The Mather Group. 

    Also see: At 55 years old, I will have worked for 30 years — what are the pros and cons of retiring at that age? 

    Make sure the accounts you’re drawing from have shorter investment horizons and are in less risky investments, which will help you “continue to spend what you want to spend and accomplish your goals without having to be overly mindful of market volatility,” Schmehil said. This is in line with the bucket approach, which is when your assets are divided into various investment horizons. The least risky is in your shorter-term “bucket,” whereas the investments with the most risk are earmarked for the long term. 

    Having a monthly distribution schedule might help keep you in check. “I like to use monthly for most people,” said David Haas, a certified financial planner and owner of Cereus Financial Advisors. “It keeps them thinking about a monthly budget if they have a propensity to spend too much.” 

    Keep in mind how many variables can change over the course of your retirement. For example, if you switch up where your retirement money comes from — your taxable account, your retirement accounts, Social Security, etc. — your tax liabilities could change. Also, inflation might have an impact on your spending, or how quickly you draw down your distribution. Your risk tolerance may also transform, especially as you get older and you see your nest egg dwindle or you face market volatility. The frequency in which you take your money might change too, and if it does, that’s OK.

    Readers: Do you have suggestions for this reader? Add them in the comments below.

    Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

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  • I’m a single dad maxing out my retirement accounts and earning $100,000 – how do I make the most of my retirement dollars?

    I’m a single dad maxing out my retirement accounts and earning $100,000 – how do I make the most of my retirement dollars?

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    Dear MarketWatch, 

    I make over $100,000 a year, and expect to for the foreseeable future. As of now, I am contributing 8% of my income to my 403(b) with a 3% 401(a) match; all Roth. It would be more, but I am maxing out a Roth IRA and an HSA as well each year. I am a single father with a 9-year-old daughter, and do not have plans to marry, so I’m planning everything as single. I expect house to be paid off when I (plan to anyway) retire at age 65. I plan to collect Social Security at 67.

    My question is, should I move my 403(b) & 401(a) income to pretax dollars, since I expect to be in a lower tax bracket echelon once I retire? Or leave it at Roth. I’m hoping for some advice on what would generally be the most prudent option to maximize retirement dollars. 

    See: I’m a 39-year-old single dad with $600,000 saved – I want to retire at 50 but don’t know how. What should I do?

    Dear reader, 

    First, congratulations on maxing out your Roth IRA and HSA and contributing to your other retirement accounts — managing that while being a single dad and paying off a home is no simple task. 

    You’ve asked the age-old retirement planning question: should I be investing in a traditional account, or a Roth? For readers unaware, traditional accounts are invested with pretax dollars, and the money is taxed at withdrawal in retirement. Roth accounts are invested with after-tax dollars upon deposit, and then withdrawn tax-free (if investors follow the rules as far as how and when to take the money, such as after the account has been opened for five years and the investor is 59 ½ years old or older).

    As you know, the rule of thumb for choosing between a Roth and a traditional account comes down to taxes. If you’re in a lower tax bracket, advisers will typically suggest opting for a Roth as you’ll be paying taxes at a lower rate now versus a potentially higher one later. For a traditional, you may be better off if you’re in your peak earning years and expect to drop a tax bracket or more at the time of withdrawal. 

    One of the greatest challenges, however, is knowing future tax brackets. You may think you’ll be in a lower one now, but you can’t be sure. We also don’t know what tax rates might even look like when you get to retirement. The current tax rates are expected to increase in 2026, when the brackets from the Tax Cuts and Jobs Act are set to expire. Congress may do something before that, or after of course.

    Check out MarketWatch’s column ‘Retirement Hacks’ for actionable advice for your own retirement savings journey 

    That being said, if you believe you’ll be in a lower tax bracket in retirement, it doesn’t hurt to have some of your money go in a traditional account. Having tax diversification can really work in your favor, too. It allows you more control and freedom when retirement does come, as you’ll be able to choose which accounts you withdraw from and how to save the most on taxes. The more options, the better. 

    You should do your best to crunch the numbers now, and then make a plan to do it every year or so until you get to retirement. Here’s one calculator that can help

    Make estimates where you have to, and factor in inflation — I’m sure we’ve all seen how inflation can impact personal finances in the last year alone. There are a few other things you can do to make these calculations. For example, get a sense of what your Social Security income may be by creating an account with the Social Security Administration, which will show you what you could expect to receive in benefits at various claiming ages. Also add in any other income you may get, like a pension.

    After you calculate what you expect to spend in retirement, you can figure out what your withdrawal needs will be — and how that will impact your taxable income depending on if the money comes from a traditional or Roth account. Remember: Withdrawals from Roths do not increase your taxable income, whereas traditional account investments do when taken out.  

    Keep in mind, Roth IRAs have one really great advantage over traditional accounts — they are not subject to required minimum distributions, which is when investors must withdraw money from the account if they haven’t yet done so by the mandatory age. Traditional employer-sponsored plans, like 401(k) and 403(b) plans, are subjected to an RMD. Roth employer-sponsored plans have also had an RMD, though the Secure Act 2.0, which Congress passed at the end of 2022, eliminates the RMD for Roth workplace plans beginning in 2024. (The Secure Act 2.0 also pushed the age up for RMDs to 73 this year, and age 75 in 2033.) 

    Also see: We want to retire in a few years, and have about $1 million saved. Should I move my money to a Roth, and pay off my $200,000 mortgage while I’m at it?

    Traditional versus Roth accounts are just one piece of the puzzle in retirement planning, though. There are many other questions you need to ask yourself, and a financial planner if you’re interested and able to work with one. For example, what rates of return are you anticipating on your investments, and how are your investments allocated? What state do you live in now and will that change in retirement (that will affect your taxes). Are you concerned about leaving behind an inheritance, and have you considered life insurance? And even before you get to retirement, as a single dad, do you have a will, healthcare proxy and disability insurance in the event something unfortunate happens? 

    I know this may feel overwhelming, especially when you’re taking into account calculations and estimates for years and years from now, but it will all be worth it. Consider working with a qualified financial planner, or talking to someone at the firm that houses your investments, and don’t feel obligated to stick with whatever you choose until you retire. As with many things in life, retirement plans tend to change and adapt as you do. 

    Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

    Readers: Do you have suggestions for this reader? Add them in the comments below.

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  • Goldco Precious Metals Named to Inc. 5000 Fastest Growing List for Third Straight Year

    Goldco Precious Metals Named to Inc. 5000 Fastest Growing List for Third Straight Year

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    Press Release



    updated: Aug 29, 2017

    Goldco Precious Metals is pleased to announce that Inc. Magazine has ranked Goldco #670 on its annual Inc. 5000 list of the 5,000 fastest growing private companies in the United States.

    This marks the third consecutive year that Goldco has made the Inc. 5000 list of fastest growing private companies. Goldco debuted on the list in 2015 as the 16th-fastest growing private company in the nation and the 7th-fastest growing private company in the Los Angeles area.

    “At Goldco we want to make sure that our clients have every opportunity to maximize the value of their savings…”

    Dwight Flenniken, Executive VP of Marketing

    “The fact that we have made this list three years in a row is a testament to the quality service we provide to our clients,” said Trevor Gerszt, Goldco’s CEO. “Our clients understand the importance of diversifying their portfolios with precious metals, and they know that Goldco will work with them to protect their hard-earned assets.”

    Goldco remains the 3rd-fastest growing precious metals company and the 2nd-fastest growing precious metals IRA company in the United States.

    “Maintaining our growth in a market as competitive as precious metals isn’t easy. But our focus on customer service ensures that our customers keep coming back to us, and that they recommend us highly to others,” said Howard Aronson, Goldco’s Executive Vice President for Sales and Marketing.

    Goldco’s latest endeavor is the development of CoinIRA, one of the nation’s first Bitcoin IRAs. CoinIRA allows its customers to tap into the meteoric growth in value of cryptocurrencies by allowing them to invest in Bitcoin. The company hopes to benefit investors even further by expanding its investment options to include other digital currencies such as Ethereum and Litecoin.

    “At Goldco we want to make sure that our clients have every opportunity to maximize the value of their savings. That’s why we’re excited to offer this new opportunity for investors to maximize their return on investment by taking advantage of the exponential growth in cryptocurrencies,” said Dwight Flenniken, Goldco’s Executive Vice President for Marketing.

    About Goldco

    Founded in 2006, Goldco is ranked as the nation’s top retirement service company for gold and silver IRAs. The company specializes in wealth and asset protection, offering a range of retirement investment accounts including traditional and self-directed IRAs, as well as IRA and 401(k) rollovers. Goldco’s exceptional growth reflects the increasing desire among Americans for retirement options that offer a high degree of protection from market instability. To learn more about how to protect your retirement accounts, please visit goldco.com or call (855) 465-3472.

    ###

    Source: Goldco Precious Metals

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  • Goldco Announces Exclusive Offer for Eligible Investors

    Goldco Announces Exclusive Offer for Eligible Investors

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    Press Release



    updated: Apr 11, 2017

    The month of April is a time of chaos and stress for many taxpayers. April 15th is just around the corner; it is essential to make contributions to your IRA before its deadline.

    With stock market volatility and fear of the market bubble that is expected to burst, an increasing number investors are steering away from paper backed assets and moving towards precious metals like gold and silver to provide a hedge against inevitable economic crisis.

    If you act today:
    Goldco is providing an exclusive offer to those who invest in a new Gold IRA before April 15.

    This exclusive offer will not be available for long. The deadline is April 15. Qualifying members will receive up to $3,000 in free silver coins for rolling over their IRA or 401(k) into gold or silver.

    It is important to open a Gold IRA before this deadline. By doing so, qualified investors maximize their potential for success by making a contribution of up to $6,500 (depending on age) for the prior year.

    “We are getting so many phone calls from investors who are wary of the market’s volatility levels. Our goal is to get as many people as possible on the safe side before it’s too late,” says Trevor Gerszt, CEO of Goldco.

    Rolling over a current IRA or 401(k) into a safe haven asset is the smartest decision investors could make, especially with the situation the markets are in today.

    The volatile stock markets are a continual concern for investors. More Americans are looking to protect their financial future by investing in a Gold IRA. There’s no better time to act than today while this limited time offer still lasts.

    About Goldco
    Goldco is ranked as the nation’s top retirement service company for Gold and Silver IRA. In 2015, they ranked number 30 on the Los Angeles Business Journal’s list of 100 Fastest Growing Private Companies in Los Angeles County. This exceptional expansion greatly reflects the increasing desire among Americans for retirement options that offer a high degree of protection from market instability.

    To learn more information on how to protect retirement accounts, please visit www.goldco.com or call  (855) 465-3472.

    Source: Goldco

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  • Goldco and Ron Paul Announce Exclusive Partnership

    Goldco and Ron Paul Announce Exclusive Partnership

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    Ron Paul is going to be working alongside the Goldco team to continue educating investors on the importance of protecting your hard earned IRA and 401(k) accounts.

    Press Release



    updated: Mar 15, 2017

    Goldco and Ron Paul are proud to announce an exclusive partnership making Dr. Paul the chief ambassador for the Goldco brand.

    Ron Paul is going to be working alongside the Goldco team to continue educating investors on the importance of protecting your hard earned IRA and 401(k) accounts.

    “We couldn’t have found a better fit than Dr. Ron Paul because his views strongly exemplify our mission here at Goldco; that is to protect hardworking Americans from devastating financial losses caused by inevitable economic downfalls,” says Trevor Gerszt, CEO of Goldco.

    About Ron Paul
    Ron Paul is America’s top voice for liberty, prosperity and peace. As a former member of the U.S. House of Representatives, Dr. Paul is a longtime proponent of the gold standard, constitutional government, low taxes, free markets and a return to sound monetary policies. He ran for President of the United States three times: as the Libertarian Party nominee in 1988 and as a candidate in the Republican primaries of 2008 and 2012.

    Dr. Paul chose Goldco as the only Gold IRA company he trusts, because as he states, “Goldco’s team of representatives portray a high level of professionalism and work ethic; they would never push a sale that they don’t believe is in the best interest of their customers.”

    “I can’t think of a better person to represent Goldco than Ron Paul. I am really looking forward to this partnership,” says Dwight Flenniken III, EVP of Marketing.

    Blake Skadron, Director of Sales adds, “I have great respect for him and am thrilled to be working alongside him to continue protecting our clients’ financial future.”

    About Goldco
    Goldco is ranked as the nation’s top retirement service company for gold and silver IRA. In 2015, they ranked number 30 on the Los Angeles Business Journal’s list of 100 Fastest Growing Private Companies in Los Angeles County. This exceptional expansion greatly reflects the increasing desire among Americans for retirement options that offer a high degree of protection from market instability.

    To learn more information on how to protect your retirement accounts please visit www.goldco.com or call  (855) 465-3472.

    Source: Goldco

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