Q: I have to take distribution of my first Required Minimum Distribution from my IRA and do not have enough cash in the account. I do not want to sell any of my holdings. How can I move the required amount?
A: You can do a transfer in kind of assets to a non-retirement account. What this means is: move stock or mutual fund shares that equal your RMD, intact, to your non- retirement account.
disclosures:http://www.hechteffect.net/?page_id=31
When going through a divorce the big items are the ones that are discussed, fought over, and settled. You discuss alimony, child support, living arrangements, dividing up assets. What about your tax return? You can file joint for that last year together if you wish. If filing joint, you may not suffer any adverse effects, if filing separate, you may.
Recently, I was asked to report the cost basis and gain/loss on some previously jointly held holdings for a divorced couple. Even though one Spouse had inherited all of the assets, they were moved to a joint ownership with the non-inheriting Spouse’s social security as primary on the account. There happens to be a taxable loss from one of the holdings that will now benefit the non-inheriting Spouse.
A final tax return needs to be discussed and written into the divorce decree. You may be leaving something on the table that you wish you had not.
disclosures:http://www.hechteffect.net/?page_id=31
Roger Johnson, CFP & Nancy Hecht, CFP
On The Money 101:
What is a “Stock Split”?
This Weeks Email:
My wife and I have an adjusted gross income of just over $200k and we both contribute to our 401k’s at work. Can we still contribute to Roth IRA’s as well?
Us a “Backdoor Roth” IRA
Show Topics:
Energy Independence by 2017! What that means to us, the US?
The Market is up! Is it time to sell?
WSJ .com Market beat article April 1st, 2013 “Dow Nearing a Peak” that was 12% ago!
disclosures:http://www.hechteffect.net/?page_id=31
When this happens, the first thing you need to do is contact the lender. Heirs get an initial 6 months to payoff the loan. Her lender will send out an approved appraiser within 30 days of being notified of her death. The amount that will be due to settle the reverse mortgage will be the lesser of the loan or 95% of the appraised market value of her house. One thing to note is that a reverse mortgage is a “non-recourse” mortgage. This means that if the appraised value is less than the loan balance, then lender cannot go after the heirs for the difference. So what happens next?
If you decide to sell the house, it must be listed for at least the appraised value. Adding an additional 5% to the sale price might help offset some of the costs.
If there is no equity in the house, you might just want to hand the keys back to the lender. This is called a “deed in lieu of foreclosure” and is a perfectly acceptable choice. If necessary, you can request a 90 day extension while trying to figure out what is the best path for you.
Dealing with the death of one’s Mother is never easy. You have to act somewhat quickly when a reverse mortgage is on the property, but with an extension, you can relieve some of the pressure when making the right decision for you.
disclosures:http://www.hechteffect.net/?page_id=31
This Saturday hear
Nancy Hecht CFP® and
Joe Bert CFP®
co-host our program
“On The Money”!
They’ll be discussing . . .
• Affordable Health Care? How this may impact your retirement planning.
• Listener Question: Q: Should I pull $200k from my 401k to pay off my mortgage?
THIS WEEK’S “On the Money 101”:
What does “Years Certain Annuity ” mean?
Call or eMail
Your Questions:
407-290-0058 OR
1-800-328-5858
Nancy@FinancialGroup.com
Joe@FinancialGroup.com
Listen for details about
our upcoming workshops:
Countdown to Retirement
Saturday, April 26, 2014 – 11:00am – 1:00pm
Hosted By: Roger Johnson CFP® and
Estate Planning Attorney Jodi Murphy, J.D.
A light lunch will be served
Social Security Boot Camp:
Claiming Strategies
Thursday, April 24, 2014 – 6:00pm – 7:30pm
Hosted by: Nancy Hecht CFP®
and Denise Kovach CFP®
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SHREDDING EVENT
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Saturday,
April 19th
One of the aspects of the Roth IRA that everyone loves is no RMD at age 70.5 like all other qualified retirement accounts require. One proposal in President Obama’s 2015 is the implementation of this game-changer. RMD for Roth accounts. Why require a withdrawal from an account that accumulates earnings tax deferred and anything withdrawn after 5 years comes out tax free? The tax free part is exactly the reason why.
Many years ago when the Roth IRA was developed, you could convert your IRA to a Roth and take 4 years to pay the tax on the amount converted. Many, many people took advantage of this option knowing that their withdrawals, after 5 years, would come out when they wanted to take them with no tax. If you are forced to pull funds from an account that has these provisions, your only choice is to reinvest the funds into something taxable. You may only pay capital gains on the reinvestment, depending on where you deposit those funds, but you will now annually pay tax.
This is what it is all about. Getting more tax dollars into the system.
disclosures:http://www.hechteffect.net/?page_id=31
Who hasn’t thought about what they would do or buy if they suddenly came into a lot of cash? There is the trip, or the car, or the debts to pay off, or the charity to support that we all think of. Most often, we come into these sudden large sums of cash through the death of a loved one. Sudden wealth, no matter how it comes to you, can be overwhelming. Generally, there is no need to do anything or make decision quickly. Generally, the best thing to do initially is nothing. Leave the accounts as they are for a moment and do your homework.
In the past week I have had this very conversation with the families of two of my clients who passes well into the 80’s. Their children are the surviving heirs and are at various stages of life. The two families felt comfort when I told them they did not have to do anything with their Parents’ account immediately. With both families there will be tax returns to file and Required Minimum Withdrawals to be taken. After that we can address the needs and dreams of each of the children as they feel fit to deal with this emotional and financial change in their lives.
Yes, there has been conversation about a car and a trip, but initially, both families have decided to do nothing. They are grateful for what they have received and the memory of their loved ones.
disclosures:http://www.hechteffect.net/?page_id=31
This is the actual notice my Husband received last week regarding our new coverage post Affordable Health Care Act. We are both self-employed so there is not a group for us to have health insurance through. Here is what we received:
This is just for Male age 55-64; we also have 2 Females adding additional cost.
Monthly HealthPlan Cost before Federal Health Care Reform $380
Monthly HealthPlan Cost after Federal Health Care Reform $883
Portion of cost due to Health Care reform:
Cost of new benefit $193
Cost to cover everyone $269
New tax $ 46
Percentage difference in Health Care Costs 132.2%
We did not pick the top of the line plan. We picked a plan that would allow us to keep most of our Doctors. Our total premiums right now are $1900/month. If we wanted to take a plan that would only cost $1500/month, our total out of pocket for 3 adults would have gone from $5000/year to $15,000/year.
I say again: affordable?
disclosures:http://www.hechteffect.net/?page_id=31
Q: What should I be saving for first, my retirement or my child’s education?
A: Anything you can do for your retirement needs to be first. If you have the ability to save pre-tax through a 401k or 403b, do it. Pre-tax saving puts whole dollars to work for you and will have a smaller impact on your spendable dollars vs. after-tax savings. With potentially more spendable dollars, you can then start an education savings account for your child.
disclosures:http://www.hechteffect.net/?page_id=31
http://seminolemagazine.com/2014/02/18/your-financial-checklist-for-2014?tracking=related
DISCLOSURES:http://www.hechteffect.net/?page_id=31