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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Q: If I make my 45yr. old son joint on my IRA can I stretch out the required distribution?

A: First off, it is an Individual Retirement Account, there can only be one owner. Your required minimum distributions are based on your age as the owner. The “stretch” provision for withdrawals refers to the required minimum distributions taken by a non-spousal beneficiary. This allows your son to stretch the withdrawals out over his life expectancy when he inherits your IRA.

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Q: My Wife & I will both be 70.5 this year; can we take our combined RMD from my IRA versus taking some from both of our IRA accounts?
A: Oh if it that were only a choice, but sadly, no. Each taxpayer has to take their RMD from their own accounts. If you do not take the required withdrawal, you will pay a 50% under distribution penalty.

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I just spent four days in the farm country of Ohio visiting my Sister. Here is what living there can teach us about financial planning.
Planning is everything. Everything is an hour away by car. You do not go anywhere without a list. Just like your financial planning, you have to know what you will need and how long it has to last.
Make sure you have a nest egg. We talk about making sure you have enough in an emergency fund, this is the “emergency fund” planning I learned. Because everything is an hour away, you have to make sure the there is plenty of food in your freezer and pantry. You do not let your car run low on gas.
The early bird does catch the worm. I walked in the morning past huge corn and soybean fields. The farmers that planted early had large, healthy looking fields. If you take all of the time you have to prepare for your financial future, you will also have a large harvest.

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