Protect against risk of outliving nest egg
Few of us would go without auto, home, life or health insurance. But the kind of insurance that protects against the risk of running out of money in old age is still greatly underutilized. It’s called a deferred income annuity or a longevity annuity. I believe most people planning for retirement should strongly consider an income annuity, and a Brookings Institution report confirms... READ MORE
How to pay no tax on your capital gains
One opportunity that investors should never pass up is the ability to convert a taxable long-term capital gain into tax-free basis — without paying taxes to do so. This is known as harvesting long-term capital gains. It’s a process of intentionally selling an investment with a taxable long-term capital gain, in a year when — due to low income — that gain will not be taxed. Then,... READ MORE
When is a Roth conversion good for you?
One day a forward-thinking couple arrived in my office with a plan. They wanted to bequeath the bulk of the money in an IRA to their two children, and they also wanted the children to receive that money free of tax. Nice idea, so together we set about crafting a strategy that would help make it happen. Here’s how: Bit by bit, we are converting money from their traditional IRA into a ... READ MORE
Living together? Sign a legal agreement
If you are one of the growing number of Americans who are in a relationship and living with someone, a cohabitation agreement might not be top of mind — but it should be. You might ask, “Why should anyone go to the expense of paying an attorney to draft a cohabitation agreement when they are just living together?” The answer is simple: Even if you aren’t wealthy, you likely... READ MORE
2020 return tax changes and extensions
The Internal Revenue is now accepting individual tax returns for 2020. Here are some key numbers and changes to be aware of: —The new standard deduction for singles is $12,400; for married joint filers it is $24,800. For heads of household, it’s $18,650. —The contribution limits for IRAs, traditional or Roth, have not changed. The limit is $6,000, with an additional $1,000 for... READ MORE
Consumer rights when planning funerals
Few of us know our rights when making funeral arrangements. According to an online survey of 2,009 Americans commissioned in November by the Funeral Consumers Alliance (FCA) and Consumer Federation of America (CFA), only one-quarter of respondents know that funeral homes must provide a quote on the phone and an itemized price list in person. To better inform consumers about their funeral ... READ MORE
Put financial survivor’s guilt to good use
Financial therapist Lindsay Bryan-Podvin of Ann Arbor, Michigan, specializes in helping people deal with their anxieties about money. But since the pandemic started, Bryan-Podvin has been hearing more about guilt than fear. Several people who still have jobs and financial security feel guilty about having been spared while others suffered, said Bryan-Podvin, author of The Financial... READ MORE
Thinking of divorce? Take this step first
Thinking about divorce? You wouldn’t be alone in 2021 — the pandemic has caused divorces to spike — or any year, as many couples opt to start a new year fresh by splitting up. But maybe you’re not ready for your marriage to become another COVID-19 victim. There is an intermediate step you could take before you invest time, money and energy in getting divorced. Instead, you... READ MORE
Dividing your estate around black sheep
Every family faces a unique set of circumstances when it comes to wealth, financial planning and thinking about the future. But no matter the situation — whether you have many children or none, whether you’re married or divorced — it is essential to consider your specific beneficiaries’ circumstances when it comes to estate planning. Perhaps you are worried about substance... READ MORE
Uh-oh. You just got a letter from the IRS
You’re flipping through your mail, and the return address on one letter makes your heart rate quicken — and not in a good way. It’s from the Internal Revenue Service, and they want to audit your return. Don’t think it can’t happen to you. The IRS seems to have gotten back to work after a lull, and I’ve recently gotten several frantic calls from clients who have received... READ MORE
