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Tax Traps for Divorcing Clients

The surprise split of Amazon CEO Jeff Bezos and his wife MacKenzie puts advisors on alert: Are you prepared with appropriate retirement and tax advice if your clients divorce? It’s unlikely that Bezos will have to crack open his Amazon 401(k) or IRA to get through this event. But for your average client, that’s exactly where most of their wealth may be. To read the full article in Financial Planning, click: ...

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This Failing Market Offers an Opportunity to Cut Your Taxes in Retirement

If stock market volatility has drained value from your traditional IRA, this might be a good time to convert the account into a Roth IRA to take advantage of tax-free asset growth. The move may be especially appealing for retirees who have delayed their Social Security benefits and are younger than 70½. To read the full article in CNBC, click: This Failing Market Offers an Opportunity to Cut Your Taxes in R ...

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Another Crack in Bankruptcy Protection for Clients

Retirement assets received in a divorce settlement may be available to creditors, a federal court has ruled. The decision may have far-reaching consequences for clients. To read the full article in Financial Planning, click: Another Crack in Bankruptcy Protection for Clients. ...

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Beware of Hidden Taxes in Retirement: Retirement Scan

Retirees may face a more complicated tax situation than when they were still working.  For example, a portion of their Social Security benefits may be taxed at the federal level if their combined income, which is their adjusted gross income, plus any non-taxable interest and 50% of their benefits, exceeds a certain limit.  Their retirement benefits may also be subject to state income taxes.  Those who reach ...

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Enough About Social Security: For Some, Pensions Are the More Immediate Issue

With the Social Security Administration’s recent update on its long-term financial health, advisors and their clients now have a new time frame for the anticipated depletion of the retirement program trust fund. Unless Congress acts, the trust fund is expected to run out of money in late 2034, at which point Social Security will be able to cover just 77% of retirement benefits. To read the full article in F ...

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Could this Simple Social Security Strategy Solve the Retirement Crisis?

The key to implementing this suggested strategy is establishing auto-IRA plans to workers who lack a 401(k) option with a preset percentage of wages to be contributed to the plan.  This would create a retirement nest egg that would not be linked to any one employer, but rather would stay with the worker throughout a career. To read the full article in FinancialPlanning, click: Could this Simple Social Secur ...

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Why Aren’t Clients Using QCDs? Help Them!

Qualified charitable distributions can offer a tax-saving opportunity, and they may be more advantageous to consider under the new tax law.  QCDs, which are available only for certain clients, count toward required minimum distributions and are excluded from income. To read the full article in InvestmentNews, click: Why Aren’t Clients Using QCDs?  Help Them! ...

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Get a Tax-Smart Plan for In-Retirement Withdrawals: Retirement Scan

Retirees with multiple retirement accounts are advised to have a tax-efficient way of tapping into these accounts to minimize the tax bite, writes Morningstar's Christine Benz.  Retirees who have reached the age of 70 1/2 should take required minimum distributions from tax-deferred accounts, while those who are younger should draw from their taxable accounts, selling assets with the highest cost basis first ...

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Seven Ways the New Tax Fight Could Hit Annuities

What Tax Reform Could Mean for Annuities Republican lawmakers have said a tax overhaul framework would retain incentives meant to encourage retirement security, but uncertainty remains about the direction that reform will take.  This article summarizes several ways changes in federal tax laws could affect annuities, charitable giving, and other aspects of retirement planning. To read the full article in Thi ...

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Treasury Ends myRA Retirement Savings Program

Due to “extremely low” demand and high costs, the Treasury Department announced that it is ending the myRA retirement savings program.  Treasury says it is notifying participants about the ending of the program and giving them information on how to move their myRA savings into Roth IRAs. To read the full article in The Tax Adviser, click: Treasury Ends myRA Retirement Savings Program. ...

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An Alternative to the 4% Rule

Ditch the 4 Percent Rule.  Here's How to Handle Your Retirement Withdrawals It might be time to scrap the 4% retirement rule, as it could be unsafe if there are large portfolio losses in the early years of retirement.  Here are three factors to weigh when developing a financial plan. To read the full article in CNBC, click: An Alternative to the 4% Rule. ...

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When You Should Establish an IRA as a Trust

The Benefits of Setting Up a Trusteed IRA Trusteed individual retirement accounts are not right for every circumstance, but they can provide additional control over assets.  For example, trusteed IRAs can help clients determine what happens to assets after the death of a beneficiary, which can be especially useful for clients who have been married multiple times.  Talk with your clients about trusteed and o ...

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Some of the Biggest Estate-Planning Mistakes People Make

Estate Planning Missteps Create a Burden for Beneficiaries Mistakes such as failing to create an inventory of assets, having too many accounts or not including a see-through provision in a trust can complicate matters for beneficiaries who are left behind after a client dies.  Proactive planning can help simplify the situation for a client's loved ones. To read the full article in Kiplinger, click: Some of ...

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A Tax Nightmare: Excess IRA Contributions

We’re quickly approaching the time of year when most contributions are made to IRAs and Roth IRAs.  But there are limits to how much can be contributed to an IRA, and exceeding them can result in costly penalties.  Ed Slott, CPA, tells us what to look out for. To read the full article in Financial Planning, click: A Tax Nightmare: Excess IRA Contributions. ...

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7 Retirement Planning Steps Late Starters Must Make

How to Make up for Lost Time with Retirement Savings People who are behind schedule on retirement savings can take several steps to make up the difference.  These include making use of catch-up contributions, selecting funds with low investment fees, and postponing required minimum distributions, if possible.  Damian Davila offers some useful tips. To read the full article in Wise Bread, click: 7 Retirement ...

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Big IRAs and 401(k)s are at Risk: Where Else to Save?

Looking Beyond the 401(k) to Save for Retirement If proposals to curb the size of individual retirement accounts and 401(k)s take effect, clients with large IRAs and 401(k)s will need to consider alternate methods of saving for retirement.  Darla Mercado, Personal Finance Writer, discusses a few options including, deferred compensation plans, health savings accounts, and after-tax contributions to 401(k)s. ...

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Hidden Headaches of Jointly Owned Annuities

Hidden Headaches of Jointly Owned Annuities Annuities are considered wonderful vehicles for savers, no more so than for married couples.  The opportunity to obtain tax-deferred growth in a non-qualified deferred annuity is a key feature, particularly for individuals in high tax brackets who have already maxed out other available tax shelters.  However, annuities present a significant complication.  Michael ...

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Pick the Right Retirement Plan–for Both You and Your Employees

Three Pointers for Choosing a Company Retirement Plan Simple IRAs and 401(k)s are typically the best retirement-plan options for companies with more than 10 or 15 employees.  Kathy Kristoff, finance writer, explores what to consider when setting up such plans, including the safe-harbor provision and the discrimination tests that apply to 401(k) plans. To read the full article in Inc., click: Pick the Right ...

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Avoid the Social Security Tax Trap

There's a window of opportunity before clients reach age 70 in order to mitigate some of the bite.  Paul Norr shares some great tips to prepare your clients for their future years. To read the full article in Financial Planning, click: Avoid the Social Security Tax Trap. ...

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