Roth IRA – Convert or Contribute?

Roth IRAs are funded with money that you’ve already paid tax on, and then they grow tax-free. This is different than traditional pre-tax funded retirement accounts.

Roth IRAs offer many advantages that other traditional retirement accounts don’t.

First, you can withdraw your money tax-free during retirement, which allows you to manage your taxable income. And second, with no annual distribution rules, you’re free to take your money out only when you want to.

There are two ways to put your funds into a Roth IRA; through contributions and conversions.

Contribution rules include contribution limits. For several years the annual limits have remained at five thousand five hundred dollars, or six thousand five hundred dollars if you’re over 50. And to contribute money to a Roth IRA, you must earn compensation, or income, but remain below IRS mandated income levels. High earners can’t contribute.

Conversions have very few limitations. Anyone can convert an account such as an IRA, 401(k) or SEP IRA into a Roth IRA. You don’t need to have income, but if you do, there’s no income limit and there are no restrictions on the size of the conversion.

You can convert one million dollars if you like! You will, however, owe income tax on any amount that you convert, so conversions should be scheduled when your tax rate is lowest.

To learn more about Roth conversions and contributions, give us a call today.

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Do You Fully Understand the Diversification in Your Portfolio?

Do you fully understand the implications and applications of diversification in your portfolio? How do you know if you’re diversified? How do you measure it? What’s your portfolio likely to do during various market cycles? What’s your worst-case scenario for your portfolio, and what’s the best? Historically, what’s your worst and best five-year performance? Diversification may help you avoid huge losses, and may lower your risk. Give your portfolio a diversification test from WealthAbundance. It may be time for a fresh start for your long-term financial plan.

Let’s work together to examine your goals and to make sure your portfolio can handle any market volatility or economic changes.

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What are Required Minimum Distributions and How are They Determined

If you’re nearing retirement, you may need to consider asset allocation in a different way. Be aware that asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. When you were younger, you may have invested in stocks and mutual funds for the growth and perhaps the diversification offered. You had time on your side. You invested for the long haul and could weather the ups and downs of the stock market.

But when you’re nearing or in retirement, the ground rules change. Losses are difficult to recover and your income stream could suffer just when you’re counting on it. Often, a balance between stocks and bonds is used because these investments usually move in opposite directions. This is where asset allocation comes into play. Because investments may go up and down, and your financial needs may vary, your planning must allow for contingencies. Various types of investments can help accomplish this.

By allocating investments for growth potential, guaranteed income, risk management, and taxes, we can develop a strategy to help you meet your financial goals. Please give us a call today to find out how you can allocate your assets for your retirement.

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Which Retirement Plan Should I Choose?

Choosing a retirement plan is a great step toward financial security.

There are several types available, but here are the most common:
401(k)s and 403(b)s are plans offered by employers. 401(k)s are offered by for-profit companies, and 403(b)s are offered by public schools and some non-profit organizations.

Contributions are deducted from your paycheck, and are often matched by employers. They’re deducted pre-tax, grow tax-deferred and are taxable on withdrawal.

Traditional IRAs, or Individual Retirement Accounts, are opened by individuals through an investment firm or bank. They may be tax deductible, grow tax-deferred and you pay tax when you take the money out.

A SIMPLE IRA plan is similar to a traditional IRA, but these accounts are set up by a small business owner, and usually permit larger contribution amounts.

And lastly, when you open a Roth IRA, you contribute after-tax dollars, the money grows tax-free, and you pay no tax on withdrawals.

All these types of accounts have their own set of rules on eligibility, contribution amounts and withdrawals.

For more information on retirement plans – give us a call today, or visit our website!

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Leveraging Legacies with No Out of Pocket Cost Life Insurance for High Net Worth Individuals

Looking for ways to leave a large lump sum legacy, or annuity to Charitable Gifting, Estate Tax or for a business buy Sale Solution?

One unique way is our special No Out of Pocket Cost Life Insurance program in conjunction with the Monolith Program,which allows a privatized Estate to issue AA rated registered obligations on the capital markets.

Similar to how a state or municipality gets funding to build a school or a bridge – we are able to provide funding for premiums for a 10 pay Indexed Universal life policy.

Premium payments are completely funded with the proceeds from the sale of the obligations.

The bank agrees to assign its credit rating to the bond in exchange for a nominal fee, and will hold the proceeds for ten years while distributing the annual premiums to the life insurance company.

Fewer then 50 200 advisers nationwide have access to this program, and it’s only available to individuals with a minimum net worth of $10 million.

To learn more – give us a call today.

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How Are Your Social Security Benefits Calculated

We all think we know the basics about Social Security, but do we really know how different the benefits can be? The standard retirement age is between 65 and 67, depending on your birthday. Your monthly income, also called your PIA, is determined by your highest 35 years of indexed earnings. You can start taking benefits as early as age 62, but your monthly income will be reduced by at least 25%. Say your full retirement age is exactly 66 years old, then you can delay until age 70 and your monthly income will be 32% higher.

Your strategy needs to be based upon a number of factors: how much retirement income you need, other sources of income, income taxes and your general health condition. Other factors also weigh in, like survivor needs, divorce, dependent children, and available liquid assets.

Proper planning requires attention to all these details. Give us a call today for help with planning your Social Security strategies.

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The 3 Stages of Your Financial Life

Video Transcript:

What are the three stages in your financial life? The first stage is preparing for life’s uncertainties. The second stage is managing your net worth and the third stage is managing retirement and your estate. The base of the pyramid is preparing for life’s uncertainties. Insurance is the most cost-effective way to deal with this.

Insurance can include life and health insurance, disability insurance, long-term care insurance, home and auto insurance and insurance against other perils. Adequate liquidity in your investments or in cash to cover emergencies along with a will is important.

The next level involves managing your money. Investment strategies should include diversification and risk management. The best option is to review you goals with a professional.

The top tier addresses retirement and estate planning. The ultimate goal is to ensure that you have income and assets for as long as you live. Your investments should be in line with your specific situation, goals and risk tolerance. An estate planning professional can provide you with documents necessary to ensure a planned distribution to beneficiaries. The three stages sound simple yet few people adequately prepare for any of them.

We can work with your tax and legal professionals to develop a plan to help you reach your financial goals. So please give us a call today.

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Four Basic 1031 Exchange Rules for Real Estate Investors

Video Transcript:

If you own investment property, you need to know how the IRS Section 1031, commonly referred to as a 1031 exchange, can work for you.

A 1031 exchange is a strategy that allows an investor to defer capital gain taxes by selling a property and then reinvesting the proceeds into a new, like-kind property.

Here are the basic rules of the 1031 exchange:

First, the taxpayer who sells must be the same taxpayer who buys;
Second, you must identify the new property within 45 calendar days after closing on the first property;

Third,you must purchase the replacement property within 180 calendar days after closing;

and fourth, the replacement property price must be equal to or greater than the old property

If the new property price is less than the old one, the difference may be taxed.

A 1031 exchange can be a powerful tax-deferment strategy offering many opportunities to investors. To learn more, give us a call today.

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When is the Best Time to Retire?

Video Transcript:

You might be asking yourself, “When should I retire? Should I retire early or defer it?” Deciding when to retire may not be just one decision, but a series of decisions and calculations.For example, you’ll need to estimate not only your anticipated expenses but also what sources of retirement income you’ll have and how long you’ll need your retirement savings to last.

You’ll need to take into account your life expectancy and health, as well as when you’ll want to start receiving Social Security or pension benefits.You’ll also want to consider when you’ll start to tap your retirement savings.Each of these factors may affect the others as part of an overall retirement income plan.

Contact us today to receive a free retirement plan that will help you determine the best time for you to retire.

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Is Estate Planning Only For The Rich?

What are the three stages in your financial life? The first stage is preparing for life’s uncertainties. The second stage is managing your net worth and the third stage is managing retirement and your estate. The base of the pyramid is preparing for life’s uncertainties. Insurance is the most cost-effective way to deal with this.

Insurance can include life and health insurance, disability insurance, long-term care insurance, home and auto insurance and insurance against other perils. Adequate liquidity in your investments or in cash to cover emergencies along with a will is important.

The next level involves managing your money. Investment strategies should include diversification and risk management. The best option is to review you goals with a professional.

The top tier addresses retirement and estate planning. The ultimate goal is to ensure that you have income and assets for as long as you live. Your investments should be in line with your specific situation, goals and risk tolerance. An estate planning professional can provide you with documents necessary to ensure a planned distribution to beneficiaries. The three stages sound simple yet few people adequately prepare for any of them.

We can work with your tax and legal professionals to develop a plan to help you reach your financial goals. So please give us a call today.

To find out more about how to use videos like this to attract your ideal client through digital marketing on the internet, click here

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JAMES STEWART, CFP®
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