Which type of IRA is right for you?

roth_or_traditional_iraAsk a financial planner whether to save for retirement using a Traditional IRA or a Roth IRA and you may receive an unsatisfying answer: it depends. While the Roth IRA is a much-loved planning tool, whether it’s the best option for you will depend on several factors, but math is not one of them. Continue reading

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5 Painless Year-End Financial Fixes

checklistingThe end of the year is quickly approaching and it goes without saying that most of us are starved for time. December may be a hectic month, but it is also a great time to get your financial house in order before the New Year. Here are some quick and easy year-end financial fixes that will help you start 2017 off right.

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The Importance of Delegating Medical & Financial Decisions

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A thoughtful retirement income plan involves varying degrees of monitoring and oversight to ensure continued success. While this may be readily apparent at the onset of planning, many otherwise well-constructed plans fail to consider what happens if active participation is no longer possible. Planning for mental incompetency is an often overlooked component of planning that can have devastating emotional and financial consequences. Thankfully, it can be proactively addressed through proper planning.

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Avoiding The Middle Class Retirement Maelstrom

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As financial advisors we devote an enormous amount of time and energy crafting financial and estate planning strategies for our high net worth clients. While our wealthier clients provide us with interesting problems to solve, many of us take great enjoyment in helping clients with fewer resources and options to realize their retirement dreams. Unfortunately, most middle income clients are ill-prepared to retire and are not a target market for the majority of financial advisors.

Middle class clients face many of the same risks that our wealthier clients do: outliving their money, poor stock market performance and rising health or long-term care costs are near universal concerns. Others such as inflation and the death of a spouse may be particularly impactful for those with limited resources. So what are some simple tips that middle income clients might consider in planning for retirement? Continue reading

5 Key Things for Financial Stability

5 Key Things for Financial Stability

Happy New Year!  New Year = New Resolutions = New Opportunities.  So let’s kickoff the new year on the right foot and focus on getting our financial lives in order.

Here are 5 key things to put your financial house in order: Continue reading

Last Minute Tax & Financial Planning Moves to Save Money for 2013

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With November around the corner, we’re beginning to think about year-end tax & financial planning.

In fact, now is a great time to focus on last minute tax and financial planning moves to save money for 2013 (and possibly longer!).

Here are a few ways to save $ before New Year’s Day:

1. Make charitable gifts of appreciated stock.  If you have appreciated stock that you’ve held for more than a year and you plan to make a significant charitable contribution before the end of the year, you’re probably best off keeping your cash and donating the stock instead.  Why?  You’ll avoid paying tax on the appreciation and you’ll be able to deduct the entire charitable gift at its full fair market value.  It’s a win for you & for the recipient of your gift.

2.  If it looks like you will owe taxes for 2013, adjust your federal income tax withholding before the end of the year.  If you missed the mark on planning ahead, there is still time to make adjustments and avoid penalties.

3.  If you have a healthcare Flexible Spending Account (FSA), use it, don’t lose it!  Make sure to take advantage of spending the pre-tax money in the account before the end of the year for any remaining amounts over $500.  Anything under $500 can now be “rolled over” into the new year, a newly modified ruling by the IRS.

4.  If you pay quarterly estimated taxes (which are due on January 15, 2014), you can prepay the state estimated tax payment by the end of the year to receive a tax deduction (subject to certain limitations and the alternative minimum tax).

5.  If you are a senior over the age of 70.5:

  • Make charitable donations from your IRA account, which are set to expire this year.
  • Make sure you take your required minimum distribution (RMD) from your IRA.  Failure to take your RMD results in a penalty of 50% of the amount not withdrawn.

6.  If you work & have a 401K:

  • Make sure to maximize your 401K contributions – don’t miss out on money you can contribute on a pre-tax basis (not to mention employer matching opportunities).

7. If you’re self-employed:

  • If you are a sole proprietor, don’t miss the opportunity to minimize taxes by employing your children under the age of 18.  Paying wages to children under 18 shifts income to your child who is in a lower tax bracket; in fact, you may be able to avoid taxes entirely because of your child’s standard deduction (assuming the wages paid are less than or equal to the 2013 standard deduction of $6100).  Additionally, since your child is earning income, he/she is eligible to contribute to an IRA account, thereby getting an early start on saving for retirement.
  • If you are looking to reduce your tax bill while saving for retirement, you may wish to consider establishing a retirement plan before the end of the year (such as a defined contribution plan or a defined benefit pension plan).  These plans need to be established before the end of the year and contributing money now to these accounts starts the tax-deferred growth on your contributions.

Now is a great time to make year-end adjustments.  If you are interested in learning more about year-end financial planning, call us.

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3 Reasons Why You Need to Have a Will

3 Reasons Why You Need to Have a Will

This week is National Estate Planning Awareness Week, which begs the question: why do I need a will? 

In fact, more than 50% of Americans do not have a will, according to a 2012 Rocket Law survey, putting their families, assets, and legacies at risk.

Here are 3 reasons to be prepared:

1. Protect your assets.  When someone dies without a will, they die intestate.  If you die intestate, your estate is sent through probate court and determined by your state’s succession laws.

State imposed rules do not fulfill the wishes of the deceased. They are inflexible, impractical, and never include provisions for anyone not related to you.  So, if you want to hand down your grandmother’s china to your stepdaughter, to have your best friend look after your dog, or to leave any of your estate to someone outside your immediate family, it is imperative to have a legal will in place.

Most people spend their entire lives working to create their assets; having a will in place ensures that your possessions and other assets end up in the hands of the people you care about.

 

2. Protect your children.   One of the most important ways to provide for your children in the event that you are no longer around to do so is to designate a guardian and make a contingency plan that includes the logistics and financial aspects of caring for them.  Writing a will allows you to designate the person that you want to care for your children.  In the event of the death of both parents without a legal will, the state steps in and appoints the guardian of its choice for your children; there is no guarantee the state-appointed guardian will share your morals or values. 

This is especially important for parents of special needs children.  Parents with children who have special needs should create a supplemental needs trust, a special type of trust which ensures that the children do not lose access to needs-based government benefits due to inheritance of assets. 

3. Protect your legacy.  Adding the stress of fighting with lawyers (and possibly family disputes) is the last thing anyone wants while grieving for a loved one.  Writing a will allows you to choose fiduciaries, the person/people/institutions responsible for the administrative work after your death.  Appointing someone to manage your money, file paperwork such as tax returns, and protect your property ensures that your legacy is administered as you intended and protects your loved ones from unnecessary bureaucracy and stress.

  

It is important to plan ahead.  Contact us today at 212-221-7067 to learn more about what we can offer you from our Estate & Charitable Planning Services.

 


Estate Tax & Transfer Analysis • Tax Reduction Strategies • Gifting Strategies • Charitable Giving • Planning For Children with Special Needs • Survivor Planning & Services