Among the lessons of the recent financial crisis is the need for virtually everyone — young and old — to acquire a basic knowledge of finance and economics.
-Ben Bernanke
Check out our new flipbooks – there is so much to learn!
http://www.tools.financialgroup.com/learning_center/flipbooks
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Recently, I was asked if retirement accounts from multiple sources could be blended into one IRA account. The answer is yes. There is now a “however” added to that yes.
Starting in 2015, only one rollover from an IRA can be made to another IRA per 365 day period. If you have multiple IRA accounts that you wish to consolidate, it will now take longer. This rule does not apply to a Direct Rollover form an employer plan to an IRA, or Trustee to Trustees transfers. You could process a Direct Rollover and an IRA transfer in the same 365 day period.
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A: For every year beyond your full retirement age, up to age 70, your Social Security benefit will be increased by 8%. In addition to that you may also receive a higher cost-of-living adjustment. Simply put, delaying when you receive your Social Security will mean more dollars paid to you each month.
To learn more about this and other Social Security concerns, you can sign up for our Social Security Boot Camp by following this link:
http://financialgroup.com/social-security-maximize-your-benefits
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The Social Security Administration (SSA) began phasing out mailed statements to most workers in 2011 to save an estimated $70 million a year. Instead, the agency directed workers to track their future benefits online using a secure website.
Congress, however, passed a bill last year requiring the SSA to resume mailing the statements.
The agency said Tuesday that many workers will now start receiving paper statements in the mail every five years, starting a few months before their 25th birthday. Once workers reach 60 they will get them every year.
If you have not been keeping track of your benefits by logging on to www.ssa.gov, you now have the opportunity to check via the paper statement. I noticed that there were two years reporting zero income on my statement. I know darn well I paid taxes those years. Without checking what had been reported on my record, I never would have been able to correct this error.
Payments from the SSA are one part of your retirement; please make sure your records are correct.
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Q: We are doing some Medicare planning by looking at a Medicare Trust and have been told the 529 college saving account we have for our grandson may cause a problem. We were told we need to reduce our “countable resources”. We opened the 529 in our name so our daughter and grandson do not have to report the account. We wanted to help them possibly get scholarships or grants. Which is more important now?
A: This certainly is a tough question. Not every child is a lucky as yours, having a grandparent save for their college. That being said, long term medical cost can potentially overrun the total of any college costs. You should change the ownership of the 529 account to that of your daughter and plan for your medical future.
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I have had a number of people tell me that they would like to listen to our radio program, but something seems to get in the way. We have podcasts of the broadcast available every day, here is the link:
http://financialgroup.com/on-the-money-show/
Now you can listen at a time that is convenient for you. Thank you for asking!
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Unless she had a living will. Joan Rivers has been a beloved entertainer for almost 60 yrs. We all have read about her current, tragic health problems. I feel for her daughter. As the Mother of an only child, you don’t want to put the burden of such heavy decisions on one head. If she has a living will, she has made these decisions easier for her daughter.
This is what a living will can do:
planning ahead, you can get the medical care you want, avoid unnecessary suffering and relieve caregivers of decision-making burdens during moments of crisis or grief. You also help reduce confusion or disagreement about the choices you would want people to make on your behalf.
Please see a qualified Estate Planning Attorney while you are happy and healthy to get this important document completed.
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This is a question I was recently asked by a woman who wanted to discuss her husband’s upcoming retirement. She told me that they are very comfortable right now managing their investment but need a road map to see if they are on the right path.
“Why, yes I can” was my response. In my opinion, the road map is an important first step when planning for retirement. I want to know where you are now as far as sources of income, upcoming life cycle events, how you are living your life, and what your dreams and desires are. I also want to know what your sources of income in retirement might be, as well as what retirement means. Will one or both work at something part time? On a contract basis? Volunteer? Help out family? Retirement comes in many different shapes and sizes. I also want to know if provisions have been made for long term care and succession planning.
All of these points are important in determining if there will be enough income and how your assets should be invested.
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This is a very good question, one I am faced with every day while helping my clients plan for their retirement. At our firm, we have put together a comprehensive expense report. When totaling living expenses, many people just look at the basics; mortgage, power, phone, internet, food, and travel. We try to cover all of the expenses of every day life. Following are a few items that we also look at. Pet care, which can be a big expense depending on how many pets you have and their ages. Personal grooming, just because you have retired does not mean you will stop getting your hair done, buy new clothing, or exercise. Charitable gifts and celebrations generally do not stop due to retirement. The amounts spent might be less, but we are still celebrating birthdays and still being generous to the charities we love.
Health care is often an underestimated expense in retirement. I like to look at what a client is spending pre-retirement and will add ½ extra to that expense. I will take the total of my client’s current expense and add a 3% compounding inflation factor to that total. If I am wrong and overestimate inflation, the client will be better off.
Over estimation of expense in retirement is not a bad thing.
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