First off, let me say that my mother is not sick or dying. I’ll admit that I was not thrilled that my mom planned her meeting with the funeral home on my birthday. I just looked at it as being a “circle of life” kind of day. My mother has been working on making sure all of those final decisions have been made for quite some time – this was the last piece to be completed. So why now? We just went through my father-in-law passing and his final plans had been made in advanced and paid for. This made my mother see how much easier things were for us to deal with at such a horrible time in a child’s life. That and the fact that is doesn’t get cheaper as the years go by.
Planning something such as a funeral while one is happy and healthy is a good thing. If there is no pressure or impending event driving the decisions, you can think calmly and clearly about what you would like as your final wish.

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My daughter will be graduating from nursing school this December and is planning her next step toward independence. She does not have any siblings, cousins are not close geographically, so we all want to make sure she can stand on her own two feet. The other night at dinner she told me she is very concerned about how to make a budget. Because I have an expense summary report, I can easily help her with this. Inside, I smiled when she voiced this concern, this is an adult concern, and maybe we won’t have to worry so much.
We have always discussed that she needs to save and not spend every cent she has, but she has not had a “real” job yet. We would like her to try to identify as many regular living expenses as she can, save 6 months of those expenses, which she should not touch, then move into her own place with confidence. We try to impress upon all of the 20 somethings that we meet that an emergency fund is a big deal. Having cash gives you choice- saving for yourself on a short term and long term basis is a must.
If my daughter’s concerns represent those graduating this year, we as parents can give ourselves a pat on the back that we have done something right for this next generation.

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Last year, the president introduced the myRetirement Account (myRA) for those who do not have access to corporate retirement plans in an effort to get more people to save for their own retirement. Employers have to set up direct-deposit capabilities for their employees to open a myRA. Other than the U.S. Office of Personal Management, no other employer has done this.
According to government sources, there are still a number of kinks to work out, thus, employers do not want to jump into the pond yet. The low income wage earners that are the target market for the myRA need to work on short-term emergency savings, get into the habit of savings, and then might take advantage of a long term plan such as the myRA.

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April 15th is fast approaching; you have your tax return done and find that you owe money that you don’t have. Where can you turn so you don’t end up compounding the problem by not paying?
• You can give yourself a loan by using a credit card. I caution you on this though. If you cannot pay your balance off quickly, you will be adding interest payments onto what you have charged to pay your tax bill.
• The bank of Mom & Dad (or other relatives). While I don’t feel that borrowing money from family members is a good idea, it is better than getting into trouble with the IRS. If you need to take this family member approach, then ask for money with a repayment plan.
• Take out a personal loan. If you have good credit, you can get a short term loan from your banking institution.

Next year, make sure you paying in as much as you owe this year, if not more, so you are not caught short again.

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Whether you celebrate Passover or Easter, I hope you have a solemn and happy holiday weekend.

For the second time in a year, I have received a call from a client stating that
they want to liquidate all of their accounts and move the assets to long term annuities. This does not happen often – in 32 year in business, you come to expect to lose a client or two, but these cases were different. Both clients are married and in their late 70’s or early 80’s, one member in each couple has been diagnosed with dementia. Each couple has more than one child listed as their contingent beneficiaries. Here is where it becomes messy.
In each case, a child that sees themselves as not being as lucky or successful as their siblings steps in to take over. These children, all adults, have convinced their parent that they can no longer make sound decisions for themselves and must allow them to take over. In each case, the movement of the assets have been to a place that offers less liquidity, more expense, and most important to this child, sole contingent beneficiary status.
The couples in these cases had listed all of their children as equal contingent beneficiary on their account; now all of the other siblings have been cut out and may not even know this. Confidentiality and fiduciary responsibilities only allow me to do little or nothing to notify the other siblings. It breaks my heart to see this happen more and more.
Families need to have open communications frequently to make sure that everyone is on the same page. These are the things that tear families apart forever.

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As you know, at age 70.5 you have to start withdrawing from your retirement accounts. We all have the choice to defer the first withdrawal. If you defer, you have to take that first withdrawal out by no later than April 1st of the following year. This is a mere 9 days away. If you miss this date you will pay a 50% under-distribution penalty. Please remember that you will also have to take another distribution for this year too.

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Q: Sadly, our Mother passed and there are 4 of us kids listed as equal beneficiaries. My sisters want to take their ¼ share in cash. Do I have to take my portion in cash also?

A: No, you do not. If you wish to open an Inherited IRA, you may do so. Each beneficiary may do as they wish with their own inherited portion.

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‘Tis the season for tax scams! I received a call from Joseph Smith, as have many other tax payers this year. Joseph had a very heavy accent and not good command of the English language. Needless to say, he does not work for the IRS. The IRS does not call people at home, they send registered letters. If you get one of these phone calls, here is what you need to do:
If you get an unsolicited email that seems to be from the IRS or a related agency, such as the Electronic Federal Tax Payment System (EFTPS), don’t reply, don’t open attachments and don’t click on links. Doing so can enable scammers to collect your personal information or infect your computer with malicious code.
Instead, report the phishing email by sending it to phishing@irs.gov.

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Many of my clients start serious retirement planning around the age of 57, with plans to work about 10 years beyond that age. But will you control the choice? Will you be forced to retire earlier than you have planned? Did either you or your partner fall ill and have to leave the work force? These are topics we worry about, maybe even talk about, but generally do not plan for. Beefing up your skills at your job and maybe even your muscles can help in these two examples, but you have to take a good hard look at your income and expenses to be able to overcome the choice of when to quit work being made for you.

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