Past Newsletters

Retirement is about more than just how much you save, it’s about saving smart and saving in tax-friendly accounts.

Many savings methods that are tax-friendly now can cost you in the long run, when you access your money – like your 401k. In addition to these types of accounts that offer tax benefits now, you also need accounts that take tax money now, but save you later. A balance of both is usually best for most people.

The important thing to remember is that no matter how you save, the government is going to want its cut, either now or later. What you want to do is spread out your tax burden to alleviate the burden as much as possible. This way you pay some now, but you also pay some later.

Tax diversification is essential to a smart retirement savings plan. If you are like most people, you’ll need some assistance with planning.

Want to know more! I can help!

The best year-end tax planning begins long before the holiday season arrives. What are three things you can focus on right now to help you come the end of 2015?

Tax Loss Harvesting: This involves selling an investment for which you are currently taking a loss and buying something similar to replace it. It allows you to maintain the spirit of your portfolio while also enjoying the benefits of a tax loss.

Make the Most of Your Retirement Plan Contributions: Every dollar you contribute lowers your tax burden now, so if you can’t increase your contribution for this year, get things set up for 2016.

In addition to your retirement, there might be other ways you can cut your tax burden. For instance, some college savings funds offer tax advantages.

You still have time to take advantage of the tax benefits available, but you need to act fast. Want to know more or speak to someone who can help you get your end-of-year plan in order? Give me a call!

It’s one of the most common retirement preparation questions: “Will I have enough income once I retire?”

Most people focus on savings, but you also need to factor in income. This requires budgeting and planning the distribution of your retirement savings, and for some people, continuing to work in a different capacity.

Experts recommend to aim for 80% of your pre-retirement income, but this varies from situation to situation.

And where that money comes from is different too, for different people. Some have pensions, others 401k or Roth retirement savings. You also need to factor in Social Security, which varies depending on the amount you contributed over the years.

So how can you plan without knowing exactly where you stand and how it will all shake out in the end? The best way is to find a professional advisor who knows the tricks and understands the system.

Want to learn more? I’m happy to help!

Avoiding identity theft and all it can cost you is getting more and more difficult. Despite security improvements in technology, it seems as though there is a new data theft story on a weekly basis.

What can you do to protect your identity and everything that is at risk if it is stolen? These tips can help:

Avoid public Wi-Fi use and make sure any sites you use that require privacy start with “https.”

Don’t store your credit card information on a website. It seems convenient, but it can also lead to big trouble.

Don’t ever email your credit card information to anyone. And if you must, send it in multiple emails.

Choose a credit card payment over other options. In most cases, credit card companies offer greater protection.

Monitor your credit report and consider a program that helps you do so. Many alert you the moment your social security and other personal information is used, so you know when there is a problem.

If you do not have a monitoring program, I have available the number one program called ID Shield. It includes a $5,000,000 service guarantee for just $10 per month. Call me for details.

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After-tax contributions are the least popular type of 401(k) contributions because they are made with already taxed money (similar to a Roth contribution0. The money grows tax-free in the account, but could be taxed upon withdrawal, like other 401(k) contributions. Essentially, the contribution is taxed twice, making it a usually unappealing way to contribution money.

Despite the disadvantages, there are a few reasons why you would want to make an after-tax contribution to your 401(k).

After-tax deferrals can go up to $53,000 or $59,000 on a dollar-for-dollar basis and include other contributions in 2015. If you max out your pre-tax contributions, you can still invest money in your 401(k) after taxes. The dollar-for-dollar contribution, as opposed to the profit-sharing contribution, can be higher and allows you to grow your savings even more.

Another benefit of after-tax contributions is the salary deferral limits that apply to other participant contributions do not apply in this case.

Recent IRS changes have made after-tax contributions more appealing to 401(k) plan participants. The changes allow for conversion to a Roth IRA, which was not an option prior to this year, and limited the benefit of making an after-tax 401(k) plan contribution.

Naturally, you need to have disposable income to be able to invest after-tax contributions, so if you are not comfortable there is no reason to worry about it. However, if you are comfortable and looking for more ways to grow your retirement savings, this can be a great option.

Want to know more? Let us know!

There is little you can do to reduce your 2014 tax burden at this point – unless you are self-employed!

Self-employed individuals have the option of setting up a Simplified Employee Pension (SERP-IRA) any time before the extended filing deadline of October 15th. This means there is still time to make a tax-deductible contribution and get deferred growth.

It is also possible to contribute to a Solo 401(k), but the plan must have been established by the end of 2014, so it’s too late to do much unless you have something already in place.

If you are self-employed and you haven’t already, now is the time to set up a retirement plan. You can adopt a SEP IRA or Solo K, which allows pre-tax contributions of up to $53,000 for 2015. These enhanced retirement plans can offer a number of benefits and get you in better shape for the future.

Whether a SEP IRA or traditional IRA is better for an individual varies based on a number of factors, so it is best to work with a financial planner to help you decide. In most cases, it’s a matter of how much you want to invest. Traditional IRAs cap contributions at $5,500 (or $6,500 for those 50 and over), while SEP IRA's allow contributions based on the lesser of 20% of net business income or $52,000 for 2014.

Want to know more? Give us a call with your self-employed tax questions!

The IRS’s new rule regarding IRA rollovers has put a damper on some the saving strategies of many.

According to the new rule, taxpayers can withdraw IRA assets from a traditional or Roth IRA and redeposit the funds into a similar account within 60 days without taxes or penalties. However, a court ruling determined the taxpayer can only complete one rollover per year. The finding was based on a tax attorney’s attempt to use the money within the 60 day grace period, but the court determined since the rule was intended to stop abuses such as this the attorney’s actions were not within the spirit of the rule. Now, the strategy is no longer an option.

Direct trustee to trustee transfers remain limitless. For instance, if you rollover without ever touching the money, you can continue to do so without being subject to the rules. The rule only applies if you want your old custodian to send you the cash to use for 60 days before sending it to the new custodian.

The main issue that has changed is investors can’t use short-term CDs to grow their savings. Now, if you use the CD-IRA rollover strategy twice in a year, one of the mature CDs will not be able to go back into your IRA.

If you fail to pay attention to the new rule, you could lose a large portion of your IRA to taxes, as well as the ability for future tax deferred investment growth inside of your IRA.

Want to know more or need assistance with your IRA? Give us a call!

If you are part of the Millennial generation and you think it is too early to begin retirement planning, think again!

Here are several things you can do to prepare for the future and start taking action now so you have a solid retirement savings built up by the time you need it.

Planning for your retirement while paying for today takes some multitasking. Start by funding an emergency savings account. It should include about 10 to 20 percent of each paycheck. This ensures you have money stocked up if you lose your job.

It is also important to establish a monthly budget. Since most people from this generation don’t use cash, it is important to keep track of what you are spending.

Another great preparation strategy is to maximize retirement account savings. If you are able to contribute pre-tax dollars to an IRA or 401(k), you should take advantage of that. This is especially true for those working for companies that offer matching plans. It’s free money – max out the opportunity!

Finally, tackle debt. The earlier you pay off debt the less you pay and the sooner you can begin saving. Once debt is paid off, do what you can to avoid more debt. Once debt is paid off, you can increase your retirement savings plan contributions by 1 or 2 percent.

The important thing is to create a plan. We can help! Contact us today to learn more.

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