Retirement Planning

November 15, 2013   Retirement Planning

Hidden Fees in “Free” 401(k) Plans

Most American workers are somewhat familiar with the concept of a defined-contribution pension account, commonly known as a 401(k) plan. A worker with a 401(k) plan makes retirement savings contributions out of his or her paycheck, which are often matched by his or her employer. Simply put, a 401(k) plan is a savings vehicle to help care for you in your retirement.   What many Americans do not realize is that there are fees associated with 401(k) plans. Although fees must now be disclosed to all plan participants, a recent AARP survey revealed that 80% of 401(k) plan participants were unaware of the amount they were paying out in fees.   401(k) plan fees are collected, monthly, by the mutual fund that provides and manages your plan. These fees often represent four categories, (1)...
September 27, 2013   Retirement Planning

How Much Should I Save for Retirement?

When asked how much an individual should save for retirement, most will reply, “as much as you can.” Although this is a good aspirational goal, it provides no realistic framework for saving for retirement. In order to save for a comfortable retirement, it is important to set up a realistic savings target based on your income and situation.   The amount you will need to save depends on many factors including your anticipated lifestyle, and how many years you have until retirement. A standard number that works for most individuals is 15% of their take-home pay, over their working career. If you are closer to retirement, consider saving more, if possible.   When projecting retirement needs for your situation, begin by considering the age of the younger spouse, who presum...
September 19, 2014   Retirement Planning

Inherited Retirement Accounts: 5 Things You Need to Know

By Matthew T. McClintock, J.D. Vice President, Educational Content, WealthCounsel Almost everyone has some kind of retirement account—whether a 401(k), IRA or pension—so proper estate planning for these funds is essential. From tax treatment to beneficiary designations, Matthew T. McClintock, J.D., VP of Education with WealthCounsel, answers your questions.   Will my beneficiaries owe taxes on the retirement accounts I pass down to them? Probably. Assets like life insurance, real estate, vehicles and non-retirement investment accounts are not counted as income when they’re inherited. Retirement accounts, however? They’re “income in respect of a decedent,” and any amounts withdrawn from non-Roth accounts are subject to income tax at the beneficiary&...
June 26, 2015   Retirement Planning,   Trusts,   Estate Planning

Money Advice for Same-Sex Couples After the Supreme Court's Obergefell v. Hodges Ruling

By Matthew T. McClintock, J.D. Vice President, Education, WealthCounsel
Today’s Supreme Court ruling making same-sex marriages legal in all 50 states — Obergefell v. Hodges — has major financial implications for LGBT couples. The Court held that same-sex married couples are entitled to equal protection under the laws and that their marriages must be recognized nationwide. Here are the most significant impacts for same-sex married couples.The ability to file taxes jointly as a married couple (typically, the more a couple’s incomes differ from each other, the more they gain by filing jointly)The married couple’s state estate tax exemption (where applicable)The ability to access Social Security spousal and survivor benefits no matter where they live when they file (a recent analysis by Financial Engines estimated that...
August 2, 2013   Retirement Planning

Protect Your Pension Plan & Retirement Account from Creditors

Retirement accounts certainly rank within a person’s most valuable assets. This is why it is extraordinarily important to protect your retirement accounts from creditors such as former spouses, as well as those who have won judgments against you. When considering how to protect your pension plan, start by determining what protection strategies are available to you based on factors including the types of accounts you have and the laws of your state.   Luckily, the Employee Retirement Income Security Act (“ERISA”) protects most employer-sponsored retirement plans, such as 401(k) accounts, pension and profit-sharing plans, group health and life insurance plans, dental and vision plans, HRAs, HSAs, and accidental death or disability benefits. With a few exceptions, inclu...
August 16, 2013   Retirement Planning

Should I Accept an Early Retirement Offer?

While many workers dream of an early retirement, the decision to take an early retirement offered to you is a large decision that should not be taken lightly. There are both financial and emotional considerations that must be made.   Many people may not realize that there is a psychological impact of early retirement. If a person is not ready to transition from working a full-time job to experiencing a more leisurely schedule, he or she may find the adjustment difficult. People who have trouble with the transition may experience anxiety, along with other mental health problems. Therefore, before you consider the financial aspect of an early retirement, consider whether you are psychologically ready.   If you believe that you are psychologically ready for an early retirement, the...
October 15, 2010   Retirement Planning

Six Biggest IRA Beneficiary Form Mistakes

By Robert A. Ross, J.D.
Americans hold nearly $15 Trillion in IRA’s and other qualified plans. If you have a retirement plan you have made a series of very wise deci­sions. Now you must take steps to protect and preserve what you have worked so hard for.   Do you want your heirs to have to chase after the IRA money? Better make sure you have an up to date beneficia­ry form. On January 26, 2009, the United States Supreme Court unanimously ruled in the case of Kennedy vs DuPont that the plan administrator was not required to honor the divorce decree. William and Liz Kennedy were married in 1971 while William was an employee of DuPont and a participant in its Savings and Investment Plan. William designated Liz as the sole beneficiary of his plan benefits. When William and Liz divorced in 1994, the...
August 6, 2013   Retirement Planning

Successfully Passing the Family Business to Children

If you own and operate a business, you need to have a plan for the future of the business in the event you become unwilling or unable to manage it yourself. If you are like the many entrepreneurs who would like to pass the family business down to your children or grandchildren, it is important to create a plan now to ensure a successful transition.   If possible, begin business succession planning at least five years in advance of your anticipated exit. Even better, integrate your exit strategy into your business plan. Having a clear and integrated plan will give the transition process the best chance of success. When creating your business succession plan, keep your family members involved in the conversation so that they are not blindsided after your death.   One of the most im...
April 1, 2014   Retirement Planning

The Importance of Succession Planning

Many people think the purpose of estate planning is to make sure your assets and belongings will go to the people and organizations you want to have them after you die, with as little delay and costs (fees and taxes) as possible. And that is a correct purpose. But good estate planning goes beyond this—it plans for someone to take your place (a successor) when you are no longer able to perform your responsibilities due to death or incapacity.   Think of all the areas in your life that would need someone to step in and take your place in your absence. Whom do you take care of? Whom do you provide for? Whom do you guide or mentor? Here are some areas you may or may not have considered:  Your business. If you own a business, it provides for your family, your employees and your...
September 30, 2013   Retirement Planning

Three Common Retirement Planning Mistakes

As millions of baby boomers head into retirement, many discover that they were not as well prepared as they believed themselves to be. As individuals prepare for retirement, it is important to be aware of some of the more common retirement planning mistakes in order to avoid them in practice.   The first mistake is failing to get an early start to planning. The earlier an individual begins saving for retirement, the easier it will be to accumulate sufficient retirement resources. Younger people who are busy settling into their careers, getting married, and purchasing their first homes often defer their retirement planning. This can become dangerous in the long run.   The next mistake is underestimating retirement needs. Many people do not realize how much money they will need to...
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