Clients can use tax-free, non-alternative minimum tax municipal bonds to create a source of tax-free income, an advisor on CNBC writes. While long-term investors will be better off building a portfolio of equities and bonds than having a 100% bond portfolio, muni bonds are a good alternative to annuities and other fixed-income vehicles, according to the expert. Clients who invest in annuities will incur taxes and other costs, but they “can invest the same amount into a diversified municipal bond portfolio and pay no taxes and receive tax-free income until the bonds are called or mature.” To read the full…
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Many Americans have not saved a sufficient amount to retire comfortably. Financial advisors can help their clients determine not only when to retire, but also if they should consider working at least part time in their early years in retirement. Here are a few questions to ask to jumpstart the retirement planning process with clients. To read the full article in FinancialPlanning, click: Is Your Client Ready for Retirement.
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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 ThinkAdvisor, click: Seven Ways the New Tax Fight Could Hit Annuities.
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We mentally deposit money in buckets of current income, current assets, and future income. This instinctive categorization explains the popularity of so-called bucketing strategies for retirement income, whether segmented by time or type of spending. Michael Kitces, contributing writer for Financial Planning, explains how advisers can help overcome their irrational expectations. To read the full article in Financial Planning, click: Kitces: A New Hierarchy of Retirement Needs.
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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 Kitces, FinancialPlanning contributing writer, does an excellent job describing what to look for. To read the full article in the FinancialPlanning, click: Hidden Headaches of Jointly Owned Annuities.
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Plus: Bishop v. Commissioner Rules on When and Whether a Bad Debt Loss Can Be a Claimed Deduction In Schwab v. Commissioner, a case turns on when a variable universal life insurance policy is a taxable event. In Boone Operations Co., LLC v. Commissioner, find out when contributing fill dirt to the city of Tucson is or isn’t a charitable or taxable event.