At sundown Friday we start the celebration of Passover. This holiday commemorates the Exodus of the Israelites from Egypt. This Friday is also Good Friday which leads into Easter, the holiest day in the Christian religion. These holidays bring to mind thoughts of renewal, faith, family, friends, and freedom.
My wish for you all is a solemn and joyous Easter and as we say at the end of the Passover Seder, “Next year in Israel”
Happy Holidays Everyone!
Last week, a couple came to see me for a complimentary consultation. One of the comments they made was they assumed I had a group of products that I was connected to for their investment portfolio. As an independent Certified Financial Planner™practitioner, nothing could be further from the truth.
My first concern when working with anyone is planning. As the Daughter of a builder, I am used to blueprints. I put together the financial blueprint for my clients. Only after being comfortable with the planning do I move on to the investments. My firm does not hold or offer any “house” investments. I have the freedom to shop the market place for the lowest cost, best mix of investments available to help my clients achieve their goals.
After 29 years in business, I have learned that providing good, consistent service with no agenda but to make my clients successful in retirement, is the right path for me to walk on. All I have to “sell” is my years of education, experience, and a love of working with my clients to achieve their retirement goals. I proudly say “I am my product”.
I take your current expenses plus inflation and compare that to all of your sources of income. I want to see if there is a surplus or shortfall. With those answers, I can help you plan for either situation.
He was self sufficient and healthy until just before he passed and a great addition to our daily family dynamic. Not all families are so lucky when a parent moves in. Generally it is because they can no longer take care of themselves. Here are a few tips for taking care of Mom & Dad:
Know what their needs are. By this I mean, prior to them moving in with you have you been seeing stacks of mail go unopened? Is there sufficient food in the fridge? Are they steady on their feet?
No one wants to lose their independence so pay attention to their frailties. Are they keeping track of money? How are they behind the wheel?
Do they need to move in or do they just need some light help? Many organizations have community care teams that will drive people to Dr. appointments and daily tasks. The roles may be reversing between you as the child and them as the parents, love and patience will make for an easier transition.
Congratulations! You have finally reached full retirement and you have accumulated $1 million in your retirement accounts. But do you really have $1 million?
Withdrawals from your retirement accounts, 401k, 403b, regular IRA’s, are fully taxable at ordinary income tax rates. After taxes, your $1 million may be closer to $750,000 or less.
It is important to decide which accounts to tap into first for your retirement income. Most retirees feel it is better to tap into taxable accounts first. This is, however, not always the best choice. You need to know what your tax bracket is in order to make the best choice for you. The wise decision might be to withdraw from both taxable and tax-deferred at the same time.
Please feel free to call me or send an email to nancy@financialgroup to determine what might be your best choice
Perhaps it is a good thing, perhaps not. If your Grandson needs to apply for financial aid, it would be best to keep the mutual fund in your name. If you keep the fund in your name, he will not have to report it as an asset.
If you wish to give it to him specifically for college, a better path might be to change the title of the account from your name to a 529 college savings fund with you as the custodian.
April 1 is the date of your first withdrawal the year after you turn 70 1/2. After the first year, your annual RMD must be withdrawn by 12/31. If you are still working and contributing to a 401k, you do not need to take withdrawals from the 401k until you do retire.
If you go to www.irs.gov and look for publication 590 you will find the withdrawal tables to be used.
If you care a lot about your future self, you will save more. If you care a little, not so much. The question then becomes – how can you save more than you already are? In the past we have discussed the “Latte Factor.” If you cut back the premium drinks you buy each week from one a day to 3 a week, you can save $10/week or $520/year. While this small change may not seem like much it does add up.
Another trick to keeping your savings is to open up an account with a banking institution that is not close to work or home. It is a chore to deposit into this account and a chore to withdraw. You pat yourself on the back for going out of your way to save for your future and give yourself another big pat for not making the trip to withdraw. Accounts that are not convenient make us think twice about withdrawing from them until we really need to.
Saving is what we have after we finish spending. If we can control spending we will be much better off
If you take the lump sum and live another 18 yrs, you will need to earn 4.16% annually to match the $2000/month. If you live longer, the annual return will have to increase. The monthly income is known but that does end at your death so you will need to make other provisions for your spouse.
I have a couple of friends in this situation and even the amicable ones are arguing over the tax issues. Here are a few key issues:
Do you file joint or single for the year of the divorce? Is filing as head-of-household better?
Who gets the exemption for the kids? Do we split the exemption?
How will you split your assets? Often, 50/50 based on dollar value is the basic but you need to look at cost basis; is an asset tax-free or tax-deferred.
Is there going to be alimony or child support? Make sure you know which of these will impact your taxable income for the coming years.
There is a lot of pain in divorce. By consulting a qualified tax professional your tax return can be less painful.