RE “ROMNEY built a golden IRA while he was at Bain” (Page A7, Aug. 11): The Internal Revenue Service limits only contributions, not investment results. The fact that Mitt Romney has accumulated at least $20 million in his IRA represents results far beyond the ordinary. It also represents a higher level of risk than most retirement-oriented investors can or should assume.
But as F. Scott Fitzgerald wrote, the super-rich “are different from you and me.” They can afford to take more risk and, in Romney’s case, ride along on Bain Capital deals. We would all love the opportunity to invest with Romney. However, the Securities and Exchange Commission protects investors from the sort of risks Romney took on by requiring that they be “qualified” with incomes over $200,000 annually or assets over $1 million.
The article did not point out that IRAs can be used as charitable gifts. It’s not a stretch to imagine that, given his record of charitable giving, Romney may use this money for that purpose. In other words, the IRS’s loss would be charitable organizations’ gain.
However, to paint Romney’s use of simple tax strategies available to all taxpayers as somehow wrong is another attempt to create envy at a time when many are looking at their own IRAs and 401(k) plans, which are just now recovering from the meltdown. Yet in the end, wasn’t Romney just investing in what he knew best — his own firm and its ability to choose deals designed to give its investors the best return?
The writer is an enrolled agent, licensed by the Internal Revenue Service, and a certified financial planner.