RSSCategory: Blogs

Jul

20

Are you Aware that Health Savings Accounts can be Retirement Assets?

Are you aware that Health Savings Accounts can be retirement assets?

Health Savings Accounts are used in conjunction with high deductible medical plans.

HSAs are not just for paying doctor and prescription bills. HSA contributions are deductible above the line so they reduce taxes in your earning years.

Contributions made to your account remain until withdrawn. The interest earned in the account is tax-deferred.

Once enrolled in Medicare, contributions to HSAs are not allowed BUT…

Funds left in the account can be used during retirement to pay for Medicare parts B & D with tax free money.

We Can Help. Call us TODAY at (435) 655-0508!

Jul

6

What are some examples of Tax Traps in Retirement Years?

What are some examples of tax traps in retirement years?

One, not understanding that eighty-five percent (85%) of your Social Security benefits can be subject to income taxes.

Two believing that there is no way to minimize taxes in retirement.

Three, withdrawing funds from different accounts in the wrong order.

Four, making a lot of taxable money within two years of the retirement age (66) or in one year during retirement.

Five, failing to understand that costs for Medicare Parts B and D are subject to increased premiums based on crossing certain Modified Adjusted Gross Income (MAGI) amounts.

Some of the increased premiums are draconian. Not understanding the tax code can be detrimental to your financial health in retirement.

We Can Help. Call us TODAY at (435) 655-0508!

Jun

21

Tax Planning: How to Prepare for Taxes at the End of the Year

Here are some tips to help you lessen your tax burden at the end of the year:

First, Be aware of any tax changes that will take place in the new year so you can use them to your advantage. Review your cost basis so you can make informed decisions about the sale of your assets. Realign your portfolio for the best overall after-tax return. Accelerate losses to offset gains. You can take up to a loss of $3,000 in excess of gains each year, but avoid wash sale rules. Or you may want to consider a delay in using loss carry-over if your bracket will be higher the next year. Be aware of additional taxable income available yet stay within your current tax bracket. Consider either accelerating or delaying deductions to arrive at the best tax strategy for you. Consider paying state estimated and real estate tax installments early, if it works to your advantage.

Tax and financial planning involve complex calculations, so seek a professional to maximize your overall tax strategies.

Jun

6

What is the Best Strategy to Withdraw Funds in Retirement?

What is the best strategy to withdraw funds in retirement?

Conventional wisdom would suggest withdrawing funds from accounts in the following order:

First, from taxable accounts. Second, from tax deferred accounts. Third, from tax free accounts. Fourth, from non-qualified accounts.

Is Conventional Wisdom always correct? Not all the time! Why?

Maximizing Social Security benefits is always the goal because it’s often the only source of income with a cost of living adjustment, thus increasing the benefit each year.

Increased benefits often translate to increased benefits for a surviving spouse.

Achieving lower taxes while postponing Social Security benefits could make withdrawing funds from tax free accounts first, not third, the best decision!

We Can Help. Call us TODAY at (435) 655-0508!

May

30

What are Required Minimum Distributions and How are They Determined?

What are required minimum distributions and how are they determined?

Beginning at age 70.5, you must begin to withdraw money from your retirement accounts every year. The amount is determined based on your life expectancy as contained in the IRS tables. Required minimum distributions are computed by dividing the account balance at year-end by the life expectancy factor.

Assuming a husband and wife are about the same age, then this factor at age 70 is 26.4 years. Alternatively, you can multiply your account balance by 3.65%, which is 100 divided by 26.4. The first required minimum distribution must be withdrawn by April 1st of the year following the year that you turned 70 and a half.

Subsequent required minimum distributions must be withdrawn by December 31st each year. Every year, your required minimum distribution will increase over your lifetime.

If you want an estimate of your required minimum distributions each year, let us do the math for you and help you develop a winning strategy.

May

16

How Will Divorce Affect Your Finances?

How Will Divorce Affect Your Finances?

Divorce has a psychological, emotional and financial impact on an entire family. The financial impact can be considerable as income changes and costs for support rise. Be prepared. Statistics show that only 42% of custodial single parents who are awarded child support in 2011, for instance, received all of the child support money that was due.

Nine states are community property states, which means assets acquired during the marriage by either spouse will generally be divided equally. The remaining states are based on equitable distribution, which does not necessarily mean an equal distribution. The court will consider many tangible and intangibles in coming to a decision on how to divide your assets. People facing divorce sometimes don’t get all they deserve because they’re anxious to get it over with.

But don’t rush through this. Don’t willingly give up what you have a right to, especially if you have custody of children since your financial situation impacts them as well. If you and your spouse can’t come to an amicable agreement about the terms of your divorce, you will each most likely consult an attorney. Be sure to also consult a financial advisor to seek investment planning advice prior to a divorce settlement.

You’ll want to assess the real value of your assets and take tax consequences into consideration. For help with this difficult situation, give us a call today.

May

2

What’s the Difference Between a Will and a Living Trust?

A “Living Trust” is a trust you created that is active while you are alive versus a Testamentary Trust which becomes active at your death. When you create a Living Trust, you ensure that your assets will be disbursed efficiently to the people you choose after your death.The big advantage to a Living Trust is that the trust doesn’t have to go through probate court like a will does.Probate can be expensive in attorney and court costs while also causing long and frustrating delays.

A Living trust is an arrangement under which one person, called a trustee, holds legal title to property for another person, called a beneficiary.You can even act as your own Trustee if you’d like.When you create a trust, the titling of assets is changed into the trust’s name, as if it was a living entity. Specific details of your wishes upon death can be provided for in the trust.But not everyone needs a trust. Transfer of assets at death may be handled through a beneficiary designation on some holdings and investments.If you’re using beneficiary designations, make sure all your paperwork is up to date. For instance, if you get divorced, be sure to remove your ex-spouse as a beneficiary.

For more information about how to plan well for your family’s future, give us a call today.

Apr

18

How to Protect Yourself From Identity Theft

How to Protect Yourself From Identity Theft?

What is the real cost of identity theft? It goes beyond just financial loss.

In the past, identity theft happened when someone stole your wallet or picked through your trash or your mail. Today’s theft is much more sophisticated. Today, it’s cyber crime, and there are over 1.5 million victims daily.

The information targeted is your bank account information, Social Security number, or credit card information. Computers, smart hones, and even hacked ATM machines are sources under attack.
Sometimes it is beyond your control. Even big, reliable companies have their systems hacked.

Beyond the financial costs, there are legal costs and time needed to restore your good credit. It can take years to recover. In the meantime, your credit rating may be affected, disqualifying you for loans, or your employment may be affected.

There are several steps you can take to help protect yourself. You need strong online passwords that include upper and lower case letters, numbers, and symbols. Do not provide financial information on public networks and use only reliable websites to purchase goods.

Early detection is critical, so monitor your financial statements weekly. Freeze accounts if you suspect any irregularity and set up alerts when activity falls outside of set parameters.

We can help provide you with resources and guidance so that you can protect your accounts from identity theft.

Apr

4

Are There Any Education Savings Accounts That I’ve Never Heard of That I Should Know About?

Are there any Education Savings Accounts I’ve never heard of that I should know about?

Are there any special Education Savings Accounts that you should know about?

Coverdell Education Savings Accounts (Coverdell ESAs) allow for educational expenses.

Contributions are tax-deferred but are not tax-deductible.

Contributions are limited to two thousand dollars ($2,000) per year and are subject to Modified Adjusted Gross Income limits.

Contributions must be made prior to the student’s eighteenth (18th) birthday.

Unlike five twenty-nine(529) Plans, which are used for post high school education expenses, ESAs can be used for K through twelve (K-12) education expenses.

If established when a child is very young, a substantial investment can be achieved.

Examples of qualifying K through twelve (K-12) expenses aretuition, academic tutoring, books, supplies, equipment, computers, internet access, and required uniforms.

We Can Help. Call us TODAY at (435) 655-0508!

Mar

21

Reverse Mortgage – Is it Right For You?

http://www.SavingInvestors.com
(435) 655-0508

Reverse Mortgage-Is it Right for You?

In a “regular” mortgage, you make monthly payments to the lender. In a “reverse” mortgage, you receive monthly payments from the lender, and generally don’t have to pay it back for as long as you live in your home. You are basically taking equity out of your home in the form of monthly payments made to you. The loan is repaid in full when you die, sell your home, or when your home is no longer your primary residence. If you make more money on the sale of your home than was required to pay off your mortgage, you get to keep the proceeds. These proceeds are generally tax-free, and many reverse mortgages have no income restrictions.If you’re 62 years old or older – and looking for money to finance a home improvement, supplement your retirement income, or pay for healthcare expenses – you may want to consider a reverse mortgage. It’s a product that allows you to convert part of the equity in your home into cash without having to sell your home or pay additional monthly bills. These reverse mortgage loan advances are not taxable, and generally don’t affect your Social Security or Medicare benefits. Terms and conditions can vary widely among lenders.

A reverse Mortgage may help fill in the gaps of retirement income
shortfalls. Give us a call today to find out if a reverse mortgage is right for you.