Not All Inherited IRAs are Created Equal
Wednesday, 24 February 2021
If you’ve inherited an IRA, it’s important to know that not all inherited IRAs are the same. If you’ve inherited one from a non-spouse, you will need to be aware of a different set of rules. While not necessarily complicated, they differ enough from the standard IRA rules that it is worth it to understand what actions you can and cannot take. Below we’ll review eight things you should know as a non-spouse beneficiary of an inherited IRA.
: How to Lower Your Adjusted Gross Income – and Your Tax Burden
Wednesday, 10 February 2021
If you reached age 70 ½ in 2019 or age 72 in 2020 and you are financially comfortable in retirement, there is a way to relieve part of your tax burden. If you find you don’t need your full retirement income and you are being taxed every year from your IRA Required Minimum Distributions (RMDs), making a Qualified Charitable Distribution (QCD) from your IRA is a strategy to remove some of that tax burden.
More and More Investors are Aligning Their Dollars with Their Values
Monday, 18 January 2021
2021 has arrived, and with it, the fresh start to a new year. It is a good time to rethink the investment landscape and take a closer look at avenues you may not have explored in years past. One investment strategy that has proven to have staying power in the last year is ESG, which stands for Environmental, Social, and Governance investing. This strategy allows investors to align their values with their dollars and support companies that align with what is most meaningful to them.
There is a misconception that making an ESG investment requires you to sacrifice earnings to make an investment based on your values. Over the past year, however, we’ve seen the market affected in many ways by COVID-19 and social equality movements, and the numbers have shown that sustainable ESG investments are not limiting portfolio growth but outperforming their counterparts instead.
Understanding Whether You’re Eligible to Benefits Based on Your Ex’s Earnings Record
Monday, 28 December 2020
Understanding the ins and outs of Social Security benefits can be a challenge, especially when it comes to special considerations like divorce and Social Security benefits for ex-spouses. If you are 62 or older and had a previous marriage that lasted at least ten years, and you have not remarried, it’s possible you are eligible to collect Social Security benefits based upon your ex-spouse’s earnings record. This rule can be a lifesaver if you don’t have a lot of qualifying earnings of your own, as it can put additional money in your pocket on a monthly basis.
Here’s what you need to know:
Why retiring early could be the best retirement goal for you
Monday, 14 December 2020
Is early retirement a good idea? To some people, it sounds like a dream come true, complete with lots of travel and time with family and friends while you’re still young and healthy enough to enjoy it fully. To others, it may seem risky and even irresponsible. Below we’ll discuss considerations to help you determine whether early retirement may be the right plan for you.
Tips for preparing for your retirement as an entrepreneur no matter where you are in your career
Monday, 30 November 2020
No matter what stage of your career you are in, if you are self-employed, your retirement should be a top priority. If you do not have any retirement savings in place, now is the time to create a portfolio that will start a steady cash flow into your retirement accounts. If you already have a jump start, it is important to ensure you are maximizing your potential. Whether you are early, mid-, or late-career, there are always ways to maximize your savings. Continue reading for tips catered to where you are in your career.
What You Need to Know About Three Common Types of Equity Compensation
Monday, 16 November 2020
Many large companies now offer their executives company stock as a form of compensation. Stock compensation can make for a fantastic opportunity to build wealth, but it’s important to understand exactly what it means. There are both risks and tax implications to consider, which may vary depending upon the type of stock compensation you’re given. Below we’ll discuss the three most common forms of equity compensation – that is, non-cash pay – and review the implications of each.
Too Many Retirees Fail to Properly Budget for their Health Needs
Wednesday, 30 September 2020
Planning for retirement isn’t complete without budgeting, and it’s tempting to focus on all the fun things you’re planning – travel, golf, and spoiling your grandkids, to name a few. After all, you worked hard to make it to this point and it’s natural to want to enjoy your nest egg. You’ve earned it! However, your retirement budget will be about much more than your vacation bucket list and greens fees. In fact, much of it will go toward necessary costs, and chief among these is health care in retirement.
It’s probably not a surprise to you that health care won’t be a minor line item in your retirement budget. Much has been made in recent years of the fact that retirees can expect to pay hefty sums for medical care, even after they become eligible for Medicare at age 65. A recent study by Fidelity showed that a 65-year-old couple retiring in 2020 will pay nearly $300,000 in health care costs over their lifetime.
That number can certainly feel overwhelming. So, where’s a soon-to-be retiree to begin? Below we’ll cover three steps you can take to plan ahead, as well as minimize your health care expenses in retirement.
Creating a Tax-Efficient Retirement Plan Can be More Complex Than You May Think
Wednesday, 09 September 2020
If anyone ever describes the United States Tax Code as “simple” or “straightforward” then it’s a clear sign they know very little about it! In truth, it is one of the most complex administrative codes in the world, and this becomes all the more accurate when you’re about to retire and you have to determine how your various sources of retirement savings income will be taxed. (Spoiler alert: many of them will have different tax treatments!)
Below, we will review the different types of retirement savings and how the IRS taxes each one. In doing so, we hope to give you a sense of what you might owe, as well as whether it makes sense to adjust your retirement savings strategy.
This Year has Heightened Financial Fears, but it's Possible to Move Forward Confidently
Wednesday, 19 August 2020
Although the year isn’t over yet, 2020 has certainly been one for the books. None of us could have predicted a pandemic, let alone the financial implications this health crisis has created for many people. It has changed the way we work, the way we interact with the people we love, and the way businesses serve their customers and clients. And, the COVID-19 pandemic plunged the U.S. economy into a recession.
While experts say all indications are that the recession is likely over now, many people are still feeling the fallout from the last several months. The possibility of a recession always heightens fears, and the reality of what we have recently experienced as a nation has many people wondering how we move forward when so much remains uncertain. Below, we’ll discuss the most common recession fears, as well as how to combat them.
Five Considerations to Help You Start Planning
Monday, 03 August 2020
Too many entrepreneurs develop the habit of putting all their focus on building, nurturing, and growing their business, without giving enough forethought to their own eventual retirement. It can often take several years to plan the successful sale of a business, so it’s smart to get started as soon as possible on creating a business succession plan to layout your strategy for passing your business to someone else.
As you begin, we recommend asking yourself the following five questions:
What are your retirement goals?
While it may not be in your nature, this type of planning requires you to slow down, look inward, and think about what you want out of retirement for yourself and your family. How do you want to spend your free time? Who do you want to spend it with? Do you have hobbies and interests you’ll further cultivate? Are they mostly outdoor or indoor activities? Will you move from your current home or stay put? Make sure you spend time thinking about these questions and more so that you can plan a retirement that feels fulfilling and meaningful to you.
What will your transition into retirement look like?
There are many different strategies you could choose for your exit plan. Some business owners choose to make the transition slowly, going from full-time work to part-time in a stair-step plan that helps you exit gradually over the course of a year or two. Conversely, you could choose to remove yourself from business operations much more quickly and leave things in the hands of a successor you hand-selected. Regardless of the type of transition you have in mind, you should map out a timeline and think through how long it will take for you to feel comfortable transferring clients or customers to someone else.
Strategic Planning for Life After the SECURE Act
Tuesday, 21 July 2020
The Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law in December of 2019, bringing with it some meaningful changes to the rules governing retirement savings. Among other changes, the SECURE Act eliminated the so-called “stretch” IRA for the vast majority of beneficiaries. This change could prove troublesome for those who have built some of their long-term financial plans around passing down an IRA to heirs – or inheriting one themselves.
If you find that your future plans were disrupted by the elimination of the stretch IRA, you’re not alone. Below, we’ll dig into the details of the change and provide guidance on what steps you might consider next.
Understanding the Changes
In years past, the stretch IRA provision allowed someone who inherited an IRA to withdraw the funds as slowly as they wished. This allowed many people to use their inherited IRA as a source of income for life. Per changes in the SECURE Act, the funds in inherited IRAs are now required to be withdrawn in full within ten years (with a few exemptions, discussed below).
How Our Emotions and Biases Impact Our Financial Decisions
Monday, 22 June 2020
When it comes to financial decision-making, we are oftentimes our own worst enemies. Human nature makes us susceptible to emotional responses, lack of willpower, overconfidence, and personal biases that impact our money mindsets and our financial decisions. Any one of these things can lead us to make less-than-wise decisions with our money, and this is certainly true when it comes to our investments.
As in many areas of life, we all make smarter decisions when we become aware of our inherent weaknesses and put measures in place to overcome them. Understanding more about the psychology around investing is one way to protect yourself from yourself.
In his bestselling book, The Little Book of Behavioral Investing, author and expert James Montier discusses some of the most important behavioral challenges facing investors. He also shares time-tested advice on how to avoid investment pitfalls and achieve your wealth-building goals. Below, we’ll review several of his key concepts.
Planning Ahead with a Trusted Team Can Ease the Financial Transition
Wednesday, 10 June 2020
These past few months have been filled with a collective sense of grief over what many of us have lost: loved ones, financial stability, job security, a sense of freedom, or normalcy. While all of these are incredibly hard to deal with in their own ways, losing your life partner is uniquely devastating, and navigating the aftermath on your own can be incredibly difficult.
When you lose your spouse, you can feel adrift, untethered, and fearful of what the future may hold. While you’re in the midst of tragedy, it can be difficult to simply get through each day, let alone make important decisions and think through the implications for your finances. This is why it is so important to plan ahead by assembling a team of trusted advisors who can help to make the financial transition as smooth as possible during your time of grief.
Family members, trusted friends, financial advisors and attorneys can all play a role in helping you accomplish the following steps after you’ve lost your spouse:
Learn All You Need to Know About these Sweeping New Provisions.
Monday, 25 May 2020
With so much focus on the economic volatility and stimulus packages stemming from the COVID-19 pandemic, many people have overlooked a piece of far-reaching new legislation signed into law in late 2019 meant to alleviate America’s retirement savings crisis. Called the Setting Every Community Up for Retirement (SECURE) Act, it took effect on January 1, 2020 and there are significant provisions that may impact your retirement planning.
Here are a few SECURE Act changes to know.