Financial Planning

RMDs are distributions from qualified retirement accounts and IRAs that all taxpayers must begin taking once they reach 70 ½ years of age. The government allows taxpayers the ability to take a deduction and defer taxation of growth on their retirement plans; taxation does not occur until monies are withdrawn. Therefore, the only way to force the taxation is to force the withdrawal.
Albert Einstein is famously quoted as having said that compound interest is “the most powerful force in the universe” and that “the hardest thing in the world to understand is the income tax.” Whether he actually made these statements may be debatable but it does not detract from their accuracy.
Do you wish your cash could constantly earn the highest available return without having to shop around each month? Well, life just became a little easier for you.
From the outset of Social Security it was, and has been, designed as a safety-net program; a program to ensure that everyone has some income in their later years. Social Security, and the solvency thereof, has made many people anxious about what to expect when they reach that magic age. It is highly anticipated that the Social Security “trust fund” will be fully depleted around 2033...
“Never go into debt.” “Take 120 minus your age to determine how much should be in stocks, with the rest in bonds.” “You should have 10 times your annual income in term life insurance.” We are constantly bombarded with financial tips, rules of thumb, and seemingly thoroughly researched advice. Whether it comes from the radio, friends and family, the television, magazines, the internet, or straight from a financial company, it is wise to consider if this advice makes sense in your particular situation.
Way back in 2008, I wrote this piece and was surprised at the positive responses that I received from clients. Keeping with tradition, I have added a few new items for 2016 but have kept the fundamental framework the same because the basics really never change. So here we go again for our 9th straight year!
Congress has been hard at work on their budget to keep the government from shutting down. As a part of the legislation, the so-called “tax extenders” were up for renewal yet again.
Social security has been hammered with bad news of late. First we heard that there was going to be no cost of living adjustment (COLA) for social security benefits going into 2016 because “inflation” was zero.
As many people watch our leaders hammer out a budget deal, it is important to note that there are more changes to the current laws than simply raising the debt ceiling (again) and agreeing to spend more money.
Each year Social Security retirement benefits are adjusted for inflation and Medicare premiums are adjusted for cost increases in the program. The adjustments for Social Security are based on the CPI-W and, in the event the CPI-W is negative, will never be less than