There may come a time when you need to access your retirement accounts earlier than you intended. Be forewarned, it’s expensive – meaning, you’ll pay a 10% early withdrawal penalty plus income tax, which can erode half of the distribution. So, while the income tax cannot be avoided on early distributions, the 10% early withdrawal penalty can sometimes be avoided. Meaning, there are exceptions to the rules!
1. Exceptions that apply to distributions from both company plans and IRAs
2. Exceptions that apply only to distributions from IRAs
3. Exceptions that apply only to distributions from company plans
It’s important to know which exceptions apply to which plan, otherwise you could be in trouble!
Tune in to find out more.
Maybe it’s your child, your grandchild or even your sibling who needs extra help. Have you considered an ABLE Account? ABLE Accounts are meant to be used in addition to government benefits and are specifically designed not to jeopardize those benefits.
The ABLE (Achieving a Better Life Experience) Act of 2014 was enacted with the purpose of encouraging and assisting individuals and families in saving private funds for supporting individuals. These accounts are wonderful, but also wonderfully complicated. You must be careful when planning.
“It’s my retirement money, and I should be able to do with it as I please!” is the argument of a novice. Age comes with both wisdom and the knowledge that we will have to acquiesce to the government regulations on how retirement accounts are dispersed. For example, at age 70½, you’ll be required to start taking money from most accounts, and there will be more rules than exceptions. Dennis and Heidi attended the Ed Slott conference last week and will be sharing the four common RMD (required minimum distribution) mistakes.
1.Rolling over the entire plan balance to an IRA with the intent to “take the RMD later” from the IRA
2.Rolling over only part of the plan now to an IRA with the intent to “take the RMD later” from the plan
4. QCD (qualified charitable distribution) mistakes
If you’re nearing this magical age, this is a show you won’t want to miss!
If there were a 12-step program suitable for every human being, it would be for recovering control freaks. Yes, I’m talking about you – and me – and the guy across the street. The human condition is such that we feel like we have control even when we don’t. In fact, Psychology Today tells us that we will happily deceive ourselves just to achieve that feeling. How does that pair with retirement, a time in life when work routines, family time and income all change? What do we control? J.P. Morgan created the 2019 Guide to Retirement and it’s very insightful. They break the retirement equation into three parts: Total Control, Some Control and Out of Your Control.
For those of us who are self-proclaimed “planners,” we might need a little reality check as we face the future. Or as Dwight D. Eisenhower said, “Plans are nothing; planning is everything.”
Blood may be thicker than water, but it clots. Which is why hiring an estate planning attorney for your family is the second kindest thing you can do. What’s the first? The years of hard work and dedication you’ve already invested. The goal of estate planning is to preserve the decades of investments along with the relationships you’ll leave behind. Not only will your spouse need someone to turn to, your children’s relationships will more than likely require a mediator.
Join me (Shea) today as I interview estate planning attorney Cortney Danbrook about the intricacies of planning, whether you’re planning alone, for your family of origin or blended family.