Category Archives: Estate Planning

Who’s On Your Side?

Friday, June 9 quietly marked/will mark an historic day in the financial services world.  On that date, all financial advisors will be required to forego any sales agenda and give advice that would benefit their clients or customers—or, if they decide otherwise, to explain how and why they intend to give advice that instead primarily benefits themselves and their brokerage company.  This rule only pertains to rollovers from a qualified plan like a 401(k) into an IRA, and to the investment recommendations for that IRA account.  But it may be a first step toward something larger.

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My Family Record Book

My Family Record Book by Harris Rosen

A client of mine recently suggested that I recommend something like this book, here is the Amazon description:

 

 

 

 

 

 

 

 

One of the biggest problems people face when a family member passes is finding and acting on critical information such as final wishes and arrangements, financial accounts, wills, house maintenance records, etc.

My Family Record Book is a complete step-by-step guide that will help you keep tract of and organize: final wishes & arrangements, computer information and passwords, estate planning documents, employment records, insurance policies, tax records, retirement accounts, government benefits, real estate records, house maintenance and more!

Much more than a check list of information, this guide helps you convey how and why decisions were made so others can make informed choices about such items as:

• How to keep the household running smoothly
• Where to get cash and how to access financial accounts
• How to get into your computer and access passwords
• How and when to downsize
• Which ongoing services to stop and which to keep going

Whether you are planning for retirement, have aging parents, or are a caregiver or estate executor, this book will help you organize important information so everyone will feel in control and know what to do during a stressful time.

My Family Record Book is the easiest and best way to organize your records and instructions for you and your family. Most importantly, it provides you with peace of mind knowing that vital information is easily accessible and is a loving and important gift for those you care about most.

Order a copy of this book today and empower your loved ones with knowledge!

The good news is if you are a Kindle Unlimited subscriber the book is free, otherwise it’s only $3.95. If you want the physical copy it will set you back about $15.

I’ve not yet read the book, but after reading the glowing reviews, I suspect I won’t have much issue with it. Now if only there was a simple online system we could use to implement much of this!

Scott Dauenhauer, CFP, MPAS, AIF

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Protecting Your Parents — Financially

People reach their peak decision-making abilities sometime in their 50s, and then decline slowly until after age 70, when the decline starts to take off more dramatically.  This helps explain why sweepstakes frauds, Nigerian investment schemes and other scams target seniors and retirees.

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Preliminary Tax Forecast

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Many of President-Elect Donald Trump’s policy proposals are too vague to analyze, but one area where he has been clear is on reforming our tax system.  Here’s a quick primer on the changes that you can expect to be introduced to Congress in the coming year.

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Not-So-Powerful Powers of Attorney

power of attorney

Everybody should have a power of attorney—that is, a legal document that gives a designated individual the right to act on their behalf when making financial decisions. The power of attorney is most often used by adult children to make decisions on behalf of aging parents when they are no longer capable of making sound decisions on their own.

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New Guidelines, Better Advice?

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Most people think that the Securities and Exchange Commission (SEC) regulates the investment markets and providers of investment advice, and that the Financial Industry Regulatory Authority (FINRA) regulates the Wall Street sales agents.

But in fact, when it comes to your retirement plan, like a 401(k) account, the chief regulator is actually the United States Department of Labor.  Anybody who provides advice to these plans has to meet standards generally defined in the 1975 law known as ERISA (Employee Retirement Income Security Act), which is administered by the Department of Labor.

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MyRA May Not Be YOUR RA

Myra-buzz-words-300x300Suppose somebody offered you a choice between two cars.  The first car was identical to the second car, with one exception: it would only travel at a constant speed of 30 miles an hour.  In the other car, you could could choose to travel at any legal speed, and quite a number of illegal ones.  Meanwhile you can only buy the one-speed car if you make less than a certain threshold income, and eventually, if you drive enough miles in the one-speed car, you’d have to buy the car that can travel at any reasonable speed anyway.

Which car would you choose?

That’s the interesting choice posed by a new retirement account that was launched on Wednesday.  In his 2014 State of the Union address, President Obama announced that he was directing the U.S. Treasury Department to create a new retirement savings initiative: the myRA, officially named My Retirement Account.  This week, the first retirement savers will put the first dollars into the program.

The myRA is basically a government-sponsored Roth IRA with the same contribution limits ($5,500 a year, or $6,500 for those 50-and-older).  Like the Roth IRA, all myRA contributions will be made after-tax (in other words, no deductions for the contributions), but the money will come out tax-free when the taxpayer reaches age 59 1/2.  However, unlike the Roth, where the money can be invested in zillions of possible combinations of thousands of mutual funds, ETFs and individual stocks, the myRA participant has exactly one investment option: the government’s Securities Fund for federal employers, which earned 2.31% last year.

Moreover, there are limitations on who can participate in the myRA.  Only people with no 401(k) or 403(b) retirement plans at work can make myRA contributions, and even then, only those with an adjusted gross income less than $131,000 a year ($193,000 for couples).  Also: once you’ve accumulated the maximum myRA balance of $15,000, you have to move the money over to a private-sector Roth IRA.  The only benefit: the myRA doesn’t come with any custodial or account fees, but those are typically nominal when you open a private sector Roth IRA.

So why would people contribute to a retirement option that is identical to a Roth IRA, but with roughly a zillion fewer investment options?  It’s possible that unsophisticated investors will appreciate the simplicity of the myRA solution, where, instead of having to decide where to invest, they simply lend their money to the federal government and collect the (modest) interest.  The fact that the myRA account has no minimums could be attractive.  Most private sector Roths require at least $1,000 to be invested, but theoretically you could start your myRA with a penny.

It’s also possible that the U.S. Treasury Department is about to discover that there’s less demand for an inferior retirement plan than government economists had projected.

About the Author: Bob Veres has been a commentator, author and consultant in the financial services industry for more than 20 years.  Over his 20-year career in the financial services world, Mr. Veres has worked as editor of Financial Planning magazine; as a contributing editor to the Journal of Financial Planning; as a columnist and editor-at-large of Dow Jones Investment Advisor magazine; and as editor of Morningstar’s advisor web site: MorningstarAdvisor.com.

Mr. Veres has been named one of the most influential people in the financial planning profession by Investment Advisor magazine and Financial Planning magazine, was granted the NAPFA Special Achievement Award by the National Association of Personal Financial Advisors, and most recently the Heart of Financial Planning Distinguished Service Award from the Denver-based Financial Planning Association. 

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MyRA Starter Retirement Accounts Launch Nationwide

For beginning savers, a MyRA is a safe way to get started.

Government officially launches ‘myRA’ program for retirement savings

MyRA, the Obama administration’s free, guaranteed-return starter retirement account, launched nationwide on Wednesday. The government-backed plan is an option for the tens of millions of U.S. workers whose employers don’t offer a retirement savings plan. MyRA accounts are open to anyone earning an annual salary of less than $131,000, or $193,000 if they are married and file taxes jointly.

Expert: myRA is a misguided bureaucratic mess

The Treasury Department officially rolled out its new myRA retirement plan on Wednesday, deeming it a free, no-risk savings plan. The truth is that the newly launched retirement account will do very little to help the working poor and will quickly become another bloated bureaucratic system that wastes billions of taxpayer dollars.

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