Wisdom Video Vault
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Tips, Tricks & Tools For Your Retirement Future
RETIREMENT PLANNING
You’ve been saving for your retirement for decades. Don’t undermine your own plans by making these 5 common mistakes when you retire.
If you’ve become the beneficiary of an IRA or other retirement account, it’s important to know your options. You can take the money out in one lump sum. This requires opening an account called an Inherited IRA in your name for correct IRS reporting. That lump sum may be taxable depending on whether the original contributions were pre- or post-tax. Or you can open an Inherited IRA and leave it alone to grow tax deferred.
What are required minimum distributions and how are they determined? Beginning at age 73, you must begin to withdraw money from your retirement accounts every year.
There are ways to protect yourself from negative returns in the early years of your retirement, including reducing risk in your portfolio and modifying spending in down market years.
If you’re changing jobs or retiring, it’s important to know the rules regarding moving funds from your employer sponsored retirement plan. The wrong move could cost you in income taxes and early withdrawal penalties.
When should I retire? Should I retire early or defer it?" Deciding when to retire may not be just one decision, but a series of decisions and calculations. For example, you’ll need to estimate not only your anticipated expenses but also what sources of retirement income you’ll have and how long you’ll need your retirement savings to last.
SOCIAL SECURITY PLANNING
Is it possible to increase my Social Security benefits? The answer is yes, there are 3 basic ways you can boost your benefits; work more years, earn more in annual income, and claim benefits later.
As life expectancy has grown, your retirement now can last between 20 and 30 years. So Social Security planning is critical, no matter how much money you have. It can make a difference of hundreds of thousands of dollars.
Many people believe Social Security will pay for their retirement, but Social Security was designed to be just a complement to a pension and investments. So, don’t rely only on Social Security for your retirement because it probably won’t be enough to maintain your current lifestyle.
WOMEN & MONEY
As multitaskers, women have learned that having a plan and learning to delegate are essential to accomplishing the things that are important to you.
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.
ESTATE PLANNING
The durable power of attorney is a legal document that allows a trusted person to act in your place if you're incapacitated. If you are unable to act on your own due to accident or illness, they can step in to take action for you. They can pay bills, control investments, or even make decisions about health care issues.
Estate planning isn’t just for the rich, it is a necessity for everyone, and estate plan will allow you to pass along what you own to whom you want to receive it, the way want them to receive it, and when you want them to receive it.
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.
TAX PLANNING
Tax efficient investing involves strategies to help reduce the impact of taxes. Investments have three tax flavors: taxable, tax-deferred and tax-exempt. Taxable requires gains to be paid as they are earned each year. These include investments like CDs and money market funds. Tax-deferred gains remain sheltered from taxes until withdrawn for retirement at age 59 ½ like 401(k)s or IRAs. Tax-exempt interest is not taxable either by federal or state taxes.
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.
A question we're commonly asked is, "Is it possible to drastically reduce taxes in retirement, or even eliminate them? It’s possible, but you must start planning before you retire.
PLANNING FOR YOUR FUTURE
The death of a spouse is one of the most devastating events of a person’s life. During this difficult time, do not make any major financial decisions right away. Allow yourself time to only deal with the emotions of your loss.
Always choose someone who understands your situation and focuses on providing for your needs. Ask us about our experience and our methodology to provide for your needs today.