This year, we are experiencing the most significant tax reform since 1986. What have we learned since then? Instead of speaking for ourselves, we’ve invited CPA Jonathan Sluis on the air to discuss the pros and cons of the new tax plan. After assessing his current clients’ situations, he anticipates that over 86% of them will benefit from the new plan.
How? He will tell you!
Tune in today to find out what you need to know when filing your 2018 taxes. Here’s a hint: It’s all about perspective, strategy and simplicity!
Fewer than half of the population has a written will, and even fewer business owners have a formal succession plan. Recently interviewed by The Ticker, Curtis Kuttnauer of Golden Circle Advisors said, “In the United States, there are over 70 million Baby Boomers, with 11,000 turning 65 years old every day. Of these … it is estimated there is one business owner turning 65 years old every 57 seconds. There are 12 million businesses that are expected to be sold in the next 10 to 15 years, representing $15 trillion worth of assets.”
Let that sink in.
Today, Shea will be interviewing two business owners – Dennis Prout himself and Casey Petz. Both are advisors for different reasons and both have worked with clients who are transitioning their businesses. They want you to consider creating a succession plan that will preserve your legacy and the families that depend on you.
Listen to this episode and hear Dennis Prout discuss the variety of retirement accounts available and even give some example situations for saving.
Of the 200 business owners surveyed by Wilmington Trust Corporation, 58% of them have not created a transition plan. When asked why, 78% of them said that they enjoy running their company. Even more shocking, 45% of these business owners are over the age of 65. From our observations, an entrepreneur may have an easier time facing death than their last day of work. Today’s special guest, Casey Petz, is a coach for entrepreneurs. When his father passed away unexpectedly, Casey was left with a family business to unravel … and it started at his father’s hospital bedside. Casey knows full well the fallout from failing to plan.
Election day is behind us, and the holidays are in front of us. Before the end-of-the year distractions and commotion begin, let’s get ahead of the New Year with a checklist from Ed Slott. We know that the last thing on your mind will be your retirement accounts, but understand that missing deadlines can be expensive. That being said, there are 19 ways to prepare for 2019!
So far, the S&P 500 is down 8.8% for the month of October (as of Sunday, October 28, 2018). If it finishes here, it will be the worst month since February of 2009, and the worst October since 2008. Remember those months?
Did you know that during the third quarter (the one that just ended), there was no daily move in the S&P 500 of more than 1%? The last time that happened was 1963. I (Shea) was not even born yet. However, in this month alone, we have seen six days of +/-1% … that’s about 33% of the month’s trading days.
The S&P 500 has lost ground on 14 days out of the 18 trading days so far this month. That’s more than any month since May 2012.
While this isn’t the most positive news, it’s best to accept reality and deal with it. The market moves and the best investors are the ones who can move with it.
The average couple retiring today at age 65 will need $280,000 to cover health care and medical costs in retirement, according to an annual estimate by Fidelity. Knowing how to navigate your health care is just as important as knowing how to manage your retirement accounts.
This past Monday, Open Enrollment began for Medicare Advantage Plans and prescription drug coverage, and you have until December 7, 2018, to make changes. Open Enrollment for individual health plans is November 1 through December 15, 2018, and you must be registered during this time in order to meet the January 1 effective date.
Join us and Laverna Witkop from Ford Insurance Agency this morning as we work through the health insurance deadlines.
Do you need another reason to look forward to turning 70½? How about the fantastic Qualified Charitable Distributions (QCD) option? What’s a QCD? The Wall Street Journal explains: “A Qualified Charitable Distribution is a withdrawal from an Individual Retirement Account that is sent directly to a charity. In other words, funds don’t pass through your hands. You instruct your IRA custodian to send the money straight to the group or groups you specify.” You must be 70½ to make the donation, and doing so allows you to give to a cause you care about AND reduce your taxes. And since a new tax law took effect this year, you’ll need to take advantage of the QCD before December of 2018.
There are many reasons to give, but giving now instead of later lets you witness the impact of your gift.
Tonya, the mother of four daughters, became a single mom overnight after her husband Michael passed away in her arms after a massive heart attack. He was only 36 years old. There are very few silver linings a person can find in such tragedy. In this case, Michael was an insurance agent and had planned on the worst should it happen. Today, you’ll hear a pre-recorded interview with Shea and Tonya as she recounts her story.
September is National Life Insurance month. There is no better time than now to consider the benefits of life insurance for those you love and will leave behind.
When I (Shea) was younger, my mom would leave a “to-do” chore list for us kids to complete after school and before she came home from work. As the eldest, I would “delegate” the chores in order to make the list fairer than my mother had. It took a few years for everyone to catch on. My brother was the first one to figure it out once his reading skills advanced, HA!
If only understanding your responsibilities as trustees were that easy after our loved ones pass. Well, actually, it can be! You can even delegate some tasks. Ed Slott, IRA expert, created a “to-do” list to help you understand what to do next. According to Forbes, there will be $30 trillion in assets transferred from Baby Boomers to their heirs. Will you know what to do when it’s your turn to inherit?
A few weeks back, Dennis casually mentioned the pros and cons of saving for college through either a 529 plan or a Roth IRA. Well, we didn’t realize what a hot topic this was until the calls started to come in. In fact, just yesterday, I (Shea) was talking to a parent who has enjoyed funding his son’s college experience with a Roth IRA. I myself started a 529 for my niece when she was born. It’s exciting to think that you can make a difference by funding an investment account on someone else’s behalf. But why did my friend choose a Roth IRA, and why did I choose a 529 plan? How are they the same and yet different? What makes sense for your situation?
For years you’ve imagined that the money you have, the retirement accounts you've accrued and your properties will go directly to your children and grandchildren. Then, by surprise, another cause captures your attention. It’s a non-profit that beats at the same rate as your own heart. Like your own children, its mission lights something up inside of you. Not only can you impact your family, you can impact your community for generations to come. There’s only one problem ... you haven’t figured out how to explain the change of plans. Ideally, you’d like to include your children in giving. Is it possible? One advisor thinks so. Charlie Jordan coined the concept, “Charitable Inheritance” where he sets up Donor-Advised Funds (DAFs) that are set aside for “inheritance dollars” – money earmarked for charity after a client’s death to be administered by the children.
Not only are we going to discuss what this can look like, we are interviewing Kate Pearson from the Grand Traverse Regional Land Conservancy to discuss what it means to impact generations to come with planned giving.
Admittedly, we’ve been a little excited about the Roth IRA and all of the fancy tricks it can do. At 20 years old, it’s still a young option full of possibilities. It even acts invisible at times. Did you know that since Congress first allowed all owners of Traditional IRAs to make full or partial conversions to Roth IRAs in 2010, savers have done more than one million conversions and switched more than $75 billion from Traditional IRAs to Roth accounts (Wall Street Journal)?
Today, we are going to talk about when the Roth IRAs don't work. It may seem shocking, but there are times when it just doesn’t make good financial sense. Tune in to hear more.
I (Shea) didn’t grow up dreaming of working in the world of finance. In fact, I had no aptitude for numbers at all. But here at Prout Financial Design, as the resident creative, I have thrown myself headfirst into understanding investments. It’s a world all its own, one that most prefer NOT to understand. We’d rather do what we’re good at, hire someone to set up our investment strategy and move on with our lives. That being said, a great article from MarketWatch called “The 10 commandments of retirement” was published a few days ago. This article is, hands down, one of the most clear-cut descriptions of not only how to save, but why we need to save. If I’ve said it once on the air, I’ve said it a thousand times, “If I can understand retirement planning, you can too!”
Dennis loves retirement planning for several reasons. Top of the list? The strategy of it all! Let’s say you want to wait until age 70 to collect your Social Security so that you can receive the full benefit (an 8% increase every year that you postpone collecting). At 66, you’ll have four more years until your benefits kick in. What do you do until then? Where can you draw income to cover the gap?
This is where the fun begins for us! Perhaps it makes sense for you or your spouse to work part-time. Or consider “rightsizing” your lifestyle to save on resources. Or even take a little more from your 401(k). What about the annuity you forgot about? So many options! Tune in to hear the different strategies as you “mind the income gap” while moving into your second chapter in life.
I (Shea) bought my first house at the age of 37. I felt like a late bloomer considering that most of my friends bought homes a decade ago. One year into home ownership, and I can honestly say that home IS where my heart (and Pomeranian “Poppy”) lives. Dennis rented for four years before finding the house of his dreams just a few years ago. Many of his friends said, “Why are you renting? Isn’t that a poor decision for a financial advisor?”
The idea of a home is subjective, isn’t it? Well, so is financial planning.
So, what does one do about that pesky mortgage? Do you pay it off quickly or take your time? With the new tax laws that took effect at the end of 2017, it’s time to rethink your mortgage and how it relates to your retirement planning. And no, winning the lottery shouldn’t be your first line of defense .
Money may talk, but taxes scream for attention. Case in point: If the owner of a retirement plan account neglects to name a beneficiary, the plan will use its default rules, which typically make the owner’s estate the beneficiary. This requires both appropriate federal AND state taxes be withheld before issuing the lump sum to the estate. Not only can this be a costly mistake, it could have been completely avoided.
But there’s hope! Last May, the IRS released a private letter ruling (PLR) that allows a surviving spouse to execute a 60-day rollover of assets inherited from a company retirement plan, even though they were first paid to the decedent’s estate. (ED Slott’s July Newsletter)
While we hope this affects only a small percentage of you, the spousal rollover rulings are extremely important to be aware of. Tune in today to find out what your options are.
The reason most folks set up a trust in their estate plan is simply because they want to keep control of their lifetime investments after they are gone. We are often asked whether or not a trust makes sense for someone. It can, but it’s not for everyone.
Today, we will discuss the benefits of a trust – who should create one, and how to protect it when you’re gone.
Knowing when to claim your Social Security is one of the most strategic decisions a person will make as they near retirement. And it’s also one of the hottest topics in retirement planning because it affects nearly everyone. Currently, there are about 10,000 Baby Boomers turning 65 every day.
What about you? Should you take Social Security at full retirement age, or delay receiving benefits? Were you married and considering taking your ex-spouse’s benefits? Are you considering getting remarried? What about your children? Can they receive your benefits?
Can you believe that we are halfway through June? I feel like we just finished taxes and winter! And now it’s time to start your IRA planning for the rest of the year. There are nine things you can do to pivot your planning and move in a good direction just in time to open Christmas presents. HA! Too soon?
You’ve finally reached the destination … your retirement! And now it’s GO TIME! After years and years of making contributions to your company plan, it’s time to roll it over. But how? And where? And when? You’ve been working a long time, and now it’s time to make your money work for you. At Prout FinancialDesign, we think this is one of the most exciting times in planning. Why? Because you have options!
We’ve all heard the horror stories from our neighbors and friends about their inheritance … or lack thereof. Oh sure, it was “understood” that so-and-so would receive “X” amount, but when it came time, it went to someone else. There is a tremendous amount of grief upon grief when this happens, because it feels like betrayal when we don’t get what was promised. Most of the time, it isn’t on purpose; it was a mistake on the part of the benefactor. And, most of the time, we believe that this will never happen to us.
Listen in to make certain that you have dotted the I’s and crossed the T’s on your beneficiary forms. If you’re the one on the receiving end, you’ll want to approach this topic gently, and we will teach you how.
Some of the most expensive money you can spend is the money from your company 401(k) before it matures.
A 2015 research study conducted by Boston Research Technologies in collaboration with Retirement Clearinghouse found that 34 percent of Millennials, 34 percent of Gen Xers and 24 percent of Baby Boomers have cashed out at least one retirement account during their careers, and that "a majority of retirement plan cash-outs are unnecessary – a product of convenience rather than need." (CNBC)
We understand that circumstances in life make it tempting to dip into your company plan, but there are many reasons why this is a bad idea. One must consider the tax penalties and loss of compound interest, among other things.
It’s impossible to name just one thing that makes the Mitten State magical. It starts with the Great Lakes, followed by great communities, places to adventure, and family, to name a few. And whether you’re from the area or not, your loyalty to Michigan can run as deep as Lake Superior. It seems like everyone finds their way up north.
What about you? Do you plan on retiring here? If so, it’s important to know that the tax rules aren’t the same in every state. In recent years, Michigan has become less tax friendly to people in retirement, and according to the U.S. Census Bureau, in 2016, 23% of Michigan residents were age 60 or older. So join us as we look at the tax laws, Social Security benefits, IRAs, and 401(k) rules.
“I’m embarrassed to say this,” one client said, “but I haven’t saved much at all. My friends are retiring and I am just getting started saving. I’ve always been a hard worker, but life was harder.”
Is it too late to save? Never!
Heidi Thompson, financial advisor at Prout Financial Design says, “The hardest part is starting, because you believe that you’re too far behind to catch up. So instead of making a plan, you avoid looking at options. That’s the biggest mistake you can make.”
Join us today if you’re late to saving. Bottom line … it can be done, but you’ve got to get your head in the game. We’ll show you how.