Monday, August 24, 2015

The ONE Inherited 401(k)/IRA Mistake that Could Be Your Worst IRS Nightmare

The One Inherited 401(k)/IRA Mistake that Could Be Your Worst IRS Nightmare

As the proverbial saying goes, “life happens.” And as part of the natural progression of life, sooner or later, we are all bound to lose someone near and dear  – and that person may have listed us as a non-spouse beneficiary of his/her 401(k), traditional IRA, or another kind of qualified plan.

 No, Im not trying to suggest what you should do with your inheritance. That will be totally up to you. However, if you intend to roll over money left to you in a qualified plan by someone other than your spouse, you must tread cautiously. And thats because the manner in which you go about it could land you in some very hot waters with the IRS.

Let me use this recent case involving one of our clients to illustrate my point. She recently lost her mom, of whose IRA she was the beneficiary. The custodian of the IRA sent her a check made out in her (the clients) name and explained to her that insofar as she deposited it in an IRA within 60 days, she would avoid having to pay taxes on the entire check, come tax time.

While that may sound like a pretty standard thing, it’s completely wrong, untrue, and inapplicable in this situation. The so-called “60-day-indirect-rollover” rule does not apply if you are a non-spouse beneficiary. What’s more, there’s no exception under the Tax Code – Section 408(d)(3)(c) – for non-spousal beneficiaries who accept checks made out in their names, even if you turn around and deposited it into an inherited IRA the very next moment.

So, but for the fact that my client has a pretty sharp advisor who knows what hes talking abouthey, its OK for yours truly to take some credit every now and thenshe would have been set up for a very nasty surprise come next April 15th when the IRS came knocking: that she would have to pay tax on her entire inheritance check. 

It was pretty obvious to me that whoever gave her the erroneous information was unfamiliar with the IRS rules, so I got on the phone with the custodian to get the situation sorted out and have a new check issued directly to the new custodian.

In a nutshell, heres what you should keep in mind. If someone other than your spouse leaves you money in a qualified plan and you intend to spread the tax burden over the longest possible time allowed by the IRS, your ONLY option is a direct-custodian-to-custodian rollover. And by the way, you should probably get yourself a pretty darn knowledgeable financial advisor, too!
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If you are ready to have a real conversation about how to start planning for your future  even if you haven't saved a penny yet  visit LaserFG.com or call 877.656.9111 right now to book your complimentary, confidential consultation. You'll be paired with an experienced financial professional who can help you plan for a secure future, regardless of your current financial situation. Retirement planning means planning for ALL aspects of your life after retirement. If you're ready, we're here to help. 

Monday, August 10, 2015

Are You in Denial About Your Retirement?

Are You in Denial About Your Retirement?

According to the 51-page Retirement Security Report released by the Government Accountability Office (GAO), as recently as June 2015, among households headed by someone age 55 or older, about 29 percent don't have a retirement savings of their own or any form of employer pension. Just to reiterate, these forks have absolutely no savings whatsoever, anywhere.

And the situation is not much better among those 55+ households who do have some form of savings. On average, those between 55 and 64 have about $104,000 in savings, while those between 65 and 74 have about $148,000 saved for retirement. These balances translate into a monthly annuity payment of $310 and $649, respectively.

No matter how you look at it, these are very grim scenarios.

Of course these folks knew all along that they weren't going to keep working forever, even if that was what they were somehow hoping to do. In fact, I’d even bet that every single one of these well-meaning folks never intended to enter their retirement years in total financial disarray.

So what happened?

Obviously, there could be a million and one reasons why these folks are in the bind they find themselves at the latter end of their lives. But what you must realize is that although they intended for the best and hoped it would play out just as they wished, hoping and intending weren’t enough because they didn’t back them up with the right amount of action.

So how much importance do you attach to your retirement planning? Is retirement even that crucial to you? Do you have a specific plan in place to measure your progress in this regard? Or you are simply saving a little here and there and hoping that things will just turn out OK?

While most of us would agree that retirement planning in one of the things that should be at the top of our to-do list, unfortunately the evidence in real life, as seen by the GAO report I referenced earlier, proves otherwise. A staggering number Americans are increasingly relegating retirement planning to the bottom of their to-do lists and are not taking it seriously enough. I’m hoping you hear this message loud and clear, because the last thing you want to be is a broke retiree.

Happy retirement.
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If you are ready to have a real conversation about how to start planning for your retirement  even if you haven't saved a penny yet  visit LaserFG.com or call 877.656.9111 right now to book your complimentary, confidential consultation. You'll be paired with an experienced financial professional who can help you plan for a secure retirement, regardless of your current financial situation. Retirement planning means planning for ALL aspects of your life after retirement. If you're ready, we're here to help. 

Monday, July 27, 2015

My Feedback on Ron Paul’s America Destruction Commercial

My Feedback on Ron Paul’s America Destruction Commercial

It’s all over the place, so you’ve probably already seen it. Former congressman Ron Paul appears in a commercial warning us about the coming "inevitable" total collapse of the American dollar – and with it, civil unrest and martial law. In fact, in his own words – or more appropriately, those of Stansberry Research, the outfit for which he is the spokesperson – this coming crisis will be “infinitely worse than the crisis of 2008”… and, of course “stocks and bonds will crash.”

To sum up both the short TV commercial and the entire 54-minute supposed warning, everything is basically going to grind to a halt and it’s going to be cataclysmic. But of course there’s a solution. Your family can survive this next crash if you buy Porter Stansberry’s America 2020: The Survival Blueprint publication for $49.50 or thereabouts.

Now here are my two cents on this.

All the commercials on TV and elsewhere seem to be suggesting that this apparent warning is coming from the former Congressman. However, when you visit the site to which the ad directs you, there’s a disclaimer – a.k.a fine print – at the bottom of the page notifying you that “Ron Paul is the spokesman for Stansberry Research, LLC.” I wonder why the commercial doesn’t make this connection up front, rather than burying it in the fine print. Could it have something to do with the fact that Porter Stansberry’s firm has a notorious reputation for making, quite frankly, outlandish claims about the destruction of our economic system and way of life that turned out to be full of hot air?

If my memory serves me, which I believe it does, this was the same outfit behind the claim that
America will totally collapse back in 2011. We are now more than halfway through 2015. The last time I checked, we are still here, in the United States of America. And we still have our economic livelihoods intact, for the most part. Now Stansberry’s firm want us to buy even more of their stuff?

As for former Congressman Ron Paul lending his credibility to this kind of message, this is a free nation, so he should go ahead and knock himself out. Personally, I will not be spending my 50 bucks or so on this so-called Survival Blueprint. I think that’ll get me couple weeks’ worth of my favorite vanilla chai latte. You draw your own conclusions.

All my best.
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Want an independent assessment to confirm that you are on the right track when it comes to saving for your retirement, including the money you will leave to your heirs? Come in so we can help you to  objectively evaluate your current approach. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session

Monday, July 13, 2015

Should You Get Out of the Stock Market Now?

Should You Get Out of the Stock Market Now?


Are we at the beginning of a stock market Armageddon that will grind everything to a halt? In the wake of the hoopla surrounding the situations in Greece, on the one hand, and China on the other hand, many investors are wondering whether now is the time to head for the exit. If that’s you, I don’t blame you at all. Heck, I would be scared too, just listening to some of these so-called “market experts” (notice the quotation marks) tell the rest of us without crystal balls what to expect.

So should you pull out of the stock market now, as some are suggesting? Obviously that is a crucial question – the answer to which, in my opinion, lies in one basic and indisputable fact about the stock market:

No one on the face of this planet – including your favorite media money guru, financial advisor, pastor, or member of Congress – can predict exactly where the stock market is headed. I'm sorry if you thought otherwise, but the stock market isn't a predictable thing. As an investor, you must understand this fundamental fact in order to maintain your sanity as you invest your hard-earned money. The only predictable thing about the stock market is that it will fluctuate – sometimes it goes up and sometimes it dips.

While it is true that certain events do impact the market, no one can actually predict the specifics of those events, let alone the extent to which they might impact global financial markets. Keep in mind that all these “experts” offering their interpretations of what is going on in Greece and China (or any other event in the past or future, I might add) come after the fact – as in, at the end of the trading day, week, month, quarter, year, decade, etc. Who couldn't come up with the perfect analysis of what happened after-the-fact? On Main Street, we call it Monday Morning Quarterbacking for a reason.

Take the past several days, for instance. One moment Greece and China are pulling the stock market into another crash. The very next moment,  the market is back in the green because Greece and China aren't that big of a deal. Seriously?

Don't get me wrong, though. I'm not implying that you should just throw your money into some stock portfolio and hope for the best. There is such thing as an efficient stock portfolio that is built based on sound principles, including recognizing that the market will indeed move up and down due to situations and circumstances beyond your control. I believe it behooves every investor to have a carefully crafted and properly diversified global portfolio, with true negatively and/or low correlated asset classes. And then to re-balance it when necessary.

Interestingly enough, there's overwhelming agreement in the financial planning community that this is precisely what a prudent investor should be doing. But in reality, most so-called financial advisors seem more focused on selling the next hot mutual fund or stock, rather than on keeping investors focused on the fundamental principles.

I don't know what the end game will be in Greece or China. However, this much I can tell you. When investors panic, they tend to make the wrong moves with their portfolios – and some pay for those mistakes for the rest of their lives. The fact is that whether Greece, China, or any other country goes down or not, if you don't have an efficient portfolio and a disciplined advisor, any significant hit could destroy your wealth.
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Want an independent assessment to confirm that you are on the right track when it comes to saving for your retirement, including the money you will leave to your heirs? Come in so we can help you to  objectively evaluate your current approach. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session

Monday, June 29, 2015

We Can Expect to Live Longer, But Our Money Must Last Longer, Too!

We can expect to live longer, but our money must last longer, too!

Good news! You more likely than not can expect to live a much longer lifespan than in previous
generations. That's the conclusion from the latest mortality tables released last October by the Retirement Plans Experience Committee of the Society of Actuaries. According to the updated tables, a 65-year-old male alive today has a life expectancy of 86.6 years, two years longer when compared to the 2000 mortality tables. It gets even better if you are female because a 65-year-old female today has a life expectancy of 88.8 years, an improvement of 4.2 years over the 2000 tables.

So we can expect to be around much longer, enjoying our golden years and spending time with our loved ones. On the other hand, that also means that now, more than ever, the need to make sure you have enough savings to last through your lifetime is crucial. How fun will it be when you have to face the ordeal of outliving your savings?

Just how much will you potentially need throughout your retirement years? Well, the answer to this question depends on each individual’s particular set of circumstances and could be best answered by a competent retirement adviser. But let me give you some generic insight.

Let's say you are the typical 65-year-old male and you live through age 86.6, as suggested by the latest mortality tables, and you require just $2,000 a month ($24,000 a year) to supplement your retirement income. Without accounting for any adjustment for cost of living increases, that comes to approximately $528,000. For the typical female spending 24 years in retirement, that amount will be $576,000. What if you needed $2,500 a month instead? You’d be looking at approximately $660,000 and $720,000 for the typical male and female respectively.


It is important to point out that these numbers are just averages. So in all likelihood, some folks will fall below them, but others will exceed them. My wish and prayer is for you to exceed them and live a long, healthy life. But keep in mind that it is up to you to make sure that you take the necessary steps to be ready financially. Hopefully I have given you the motivation to act and make sure that you are headed in the right direction.
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Want an independent assessment to confirm that you are on the right track when it comes to saving for your retirement, including the money you will leave to your heirs? Come in so we can help you to  objectively evaluate your current approach. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session

Monday, June 8, 2015

You Could Eliminate Taxes from Your Social Security Benefit Checks by Shuffling Your Other Income

You Could Eliminate Taxes from Your Social Security Benefit Checks by Shuffling Your Other Income

Yes, it’s possible to collect every last penny of your Social Security retirement checks, completely tax free. But that depends on “where” your other income is coming from.

As the principal of a retirement planning practice, I can confidently tell you – without the need to reference any formal study – that one of the major issues on the list of every single retiree who consults with us is finding ways to reduce the enormous tax bill they face, year after year.

You obviously understand why this is such a huge thing. Who wouldn’t want to keep as much of his or her money as possible, especially in retirement? Personally, I think there’s a much bigger issue at stake, because the overwhelming majority of the folks I’m referring to here don’t consider themselves to be in a higher income bracket, by any measure. So why in the world will paying too much taxes even become an issue? Let me answer it this way: it is one of those “mysteries” that most folks have to literally experience to believe.

The unfortunate truth here is that more and more unsuspecting folks are meeting a nasty surprise as they enter their retirement years. Many Americans seem to be under the mistaken impression that just because they expect to have less income in retirement, their tax bill will shrink, too. It would certainly be great if that were, in fact, the case. But it’s not, at least based on what I see happening in real life, to real people, every day.

One huge blind spot, for lack of a better word, surrounds the way Social Security retirement checks are taxed: in general, if one-half (50 percent) of your Social Security benefits, plus your other countable (note the keyword countable) sources of income amount to more than $25,000 (if you’re single) or $32,000 (if you file jointly with your spouse), up to 85 percent of your Social Security benefit checks may be subject to taxes, on top of and in addition to your other taxable income.

I certainly haven’t met everyone out there, but I’m fairly confident that single folks with the $25,000 base threshold or couples with the $32,000 base threshold wouldn’t consider themselves candidates for paying taxes on their Social Security retirement checks – until they literally experience it.

Here’s some great news! The IRS formula that is used to determine the taxable portion of Social Security benefits does not count income from certain specifically designated sources/accounts. So, in simpler terms, there’s the possibility that by simply reshuffling “where” or “from which account” your non-Social Security income is coming, you may be able to completely skip the tax on your Social Security benefit checks.

Really? Yes, really!

Our latest special report, Skip the Tax, breaks down the rules and also provides suggestions about how you can position yourself to reduce to the bare minimum – or wipe out altogether – any tax from your Social Security checks. You are welcome to grab your complimentary copy HERE.
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If you'd like to learn more about how to reduce your tax bill in retirement, visit LaserFG.com or call 877.656.9111 right now to book your complimentary session with a seasoned financial professional with a proven track record who can help you create the financial future you desire.

Tuesday, May 26, 2015

How to Keep Your Emotions from Interfering with Your Investment Decisions

How to keep your emotions from interfering with your investment decisions 

A lot has been said about the need to keep emotions out of your investment portfolio simply because, as we all know, emotion-based decisions almost always breaks all the rules of sound judgement. This, in turn, leads to poor choices/actions and ultimately disastrous results.

 I believe there is a lot of truth to that hypothesis and have, in fact, witnessed this first hand over the course of my almost two-decade career working with hundreds of folks: whenever emotions lead the way, bad choices usually follow.

What makes things even worse for us in todays technologically advanced age is that we have access to all sorts of information and can always find some article, TV show, blog post, or radio guru that supports our emotional leanings.

So how do we bridge the gap as investors? How can we avoid making investment decisions based solely on emotions?

Here’s the thing. I don't think it is humanly possible to keep one’s emotions entirely out of our investment decisions. We are always going to be human. I mean you turn on the TV or hear on the radio that a certain stock is raising the roof, and that is just the beginning. Your next move is likely to get your advisor on the phone to demand that you get in on that “hot action.”

But there’s a rather simple approach to getting around this issue. You must work with an experienced advisor who knows what he or she is doing to devise an investment strategy you can live with based on your specific individual objectives. This is crucial, because it is where you set the rules of engagement, so to speak. Prior to investing even a single penny, you should sit with your advisor for an objective, neutral assessment of your investment strategy. Ask as many questions as you need to so that you understand all the likely possibilities, as well as defining the variables that may cause things to change.

Going forward, it will be your advisor’s job to hold you to that operating strategy when your emotions come calling. Absent of such clearly defined “rules of engagement,” a news segment about today’s hottest stocks may mean it’s open season on your investments, making them subject to your emotions and vulnerable to some less-than-optimal decision-making.
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If you'd like to avoid falling into the trap of investing by emotion, visit LaserFG.com or call 877.656.9111 right now to book your complimentary session with a seasoned financial professional with a proven track record who can help you create the Rules of Engagement to see you through to the financial future you desire.