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More Workers Are Concerned About Retirement Benefits Than Health Care Plans

June 19, 2018

Filed under: Retirement Planning — Tags: — Neel Shah @ 9:15 am

Anyone who is looking forward to their future will be cognitive of how their retirement plan connects in with their overall financial goals and their estate planning. Retirement plans are often a significant asset and one that can draw in employees. retirement-estate-planning-NJ

A new study finds that employees in the United States marketplace are more focused on retirement benefits than on healthcare benefits and there is good reason to be mindful of this. With the average person in the United States living longer than ever before, it is important for both men and women to be aware of how their retirement benefits accumulated over the course of a lifetime can influence their ability to be stable when they do retire.

A survey of 5,000 United States employees recently released this week found that two-thirds of respondents were willing to have more money taken out of their paychecks every month to support more generous retirement benefits, and only 38% of those same respondents were willing to pay more each month for better health care benefits.

Although employees may feel vulnerable about their longtime financial prospects, you can take you future into your own hands by gathering a team of experienced professionals such as an estate planner, a financial planner, and retirement planning specialist to help you accomplish your goals.

Supreme Court Decision: Inherited IRA NOT Protected

July 31, 2014

Filed under: Asset Protection,Beneficiaries,IRA,Retirement Planning — Tags: , , , — Neel Shah @ 3:32 pm

A recent decision from the Supreme Court means there’s no better time than now to review your estate plans and ensure that you have identified the best possible solution for passing down assets to another generation. This new ruling states that inherited IRA funds DO NOT QUALIFY under the category of “retirement funds” under bankruptcy exemption guidelines. Previously, these kinds of funds might have been considered “bulletproof” from creditors, but this new ruling means it could be time to re-evaluate how you’re transferring your assets down to children and other beneficiaries. Is a Standalone Retirement Trust or IRA Trust right for me?

Supreme Court Decision Inherited IRA NOT Protected
(Photo Credit: baltimoretimes-online.com)

According to the Supreme Court, the members of which conducted reviews of the Bankruptcy Code to get more specifics on the situation, inherited IRAs should not count as retirement funds because the individual inheriting the assets cannot contribute to the funds or invest more money into them. Since the IRA also requires that the accountholder draw money from the account, the Supreme Court argued that this would “undermine the purpose of the Bankruptcy Code”.

Each client wishing to establish plans for the future transfer of assets to beneficiaries has their own concerns and situations, which is why it’s so critical that you work with a team of experienced planning attorneys to meet your goals and increase the chances that those assets will be protected and meaningful for the beneficiary. To review trusts and other options for asset transfer, email info@lawesq.net or contact us via phone at 732-521-9455

Mid-Year Tax Planning Tips

June 20, 2014

Filed under: Income Tax Planning,Retirement Planning,Taxes — Tags: , , — Neel Shah @ 3:57 pm

While not much has come out in the first half of 2014 with regard to tax legislation, there are still some important tax planning opportunities to tap into. Mid-year is a great time to schedule in your financial and estate planning review to double-check that nothing has changed and to verify that you don’t need any additional components in your plan.

Mid-Year Tax Planning Tips
(Photo Credit: w2taxservices.com)

Income tax planning usually involves a mix of three separate strategies: earning income that is received with favorable tax rates, like that which comes from qualified dividends or long-term capital gains, delaying the payment of tax by deferring income receipt to another year, and avoiding income bubbles that bump you up to another tax rate.

One way to reduce your tax obligations and contribute to your future is to ensure that you’re putting money (and enough of it) into a tax-qualified retirement plan. Doing so means that you are deferring taxes on earnings until you actually take the distributions out.

Finally, a great mid-year step to take is to verify that you are keeping good records. While most people make this promise to themselves after a hectic tax season in April, they tend to forget about it until tax time rolls around again next year. Instead, make sure you’ve kept track of your charitable deductions to date, any extra income, and other tax-related details. It’s also a great time to set up a meeting with your planner to discuss more options, especially if you have other goals you’d like to meet. To schedule your mid-year review, call us at 732-521-9455 or send an email requesting an appointment to info@lawesq.net.

Charitable Choices: Gifting Retirement Funds at Death

June 19, 2014

Filed under: Charitable Giving,Retirement Planning,Taxes — Tags: , , — Neel Shah @ 3:41 pm

Are you thinking about making a gift to a charity on your death? It might be a better option to instead consider gifting your retirement account, and there are a few different reasons for this. This can help to maximize the tax benefits for your estate, but also for the individual heirs benefitting from your estate.

Charitable Choices Gifting Retirement Funds at Death
(Photo Credit: bloomberg.com)

As of now, assets above the value of $5,340,000 that are outright transferred from a taxable estate are hit with a 40% tax, even though the individuals who receive those assets don’t have income taxes also taken out of that amount. There is, however, an exception to this, and it’s for IRAs, 401ks, and qualified retirement plans. They are categorized as ordinary income as distributions since the government has not yet taxed this money.

Gifts to charity are not subjected to the estate tax and are at the same time excluded from the taxable estate. The amount gifted to the charity can be deducted from your federal estate tax return to reduce your overall estate beneath the $5,340,000 referenced above. When done properly, this could mean that little or no federal estate tax is due upon your death, therefore meeting your goals of gifting charitably and maximizing the value of your assets for your beneficiaries.

To learn more about charitable giving and other strategies to accomplish estate planning goals, send us a message at info@lawesq.net or contact us via phone at 732-521-9455 to get started.

Your IRA: Top Tips For Passing Down Your IRA To Children

May 22, 2014

Filed under: IRA — Tags: , , , , — Neel Shah @ 1:20 pm

Those who have spent a good amount of time contributing to their IRA might have questions when it’s time to decide beneficiaries. For example, is it best to stretch out the payouts over a lifetime to make the most of tax benefits or to withdraw the entire amount?

Your IRA Top Tips For Passing Down Your IRA To Children
(Photo Credit: beginnersinvest.about.com)

In many cases, an immediate emptying of the account is not in the best interest of the beneficiary, and it’s also something that parents may want to help their children avoid. Often, it’s difficult to suddenly manage a large sum of money, making Mom and Dad’s IRA benefits run out long before expected. Since many parents want to guard against this where possible, it’s important to note that two different strategies can help to stall an immediate withdrawal of all assets on the death of a parent.

One option is to name a trust as the IRA beneficiary, giving a trustee the power to distribute assets, but you must work with an experienced estate planner who knows how to craft a document that qualifies under IRS rules. Another option to consider is setting up the IRA as a trust account, giving trustee powers to the IRA provider, which is known as a “trusteed IRA”. This option, however, does have some downsides: higher fees and requirements for minimum balances are two of those disadvantages.

Options exist to help you plan for your future and to help beneficiaries receive assets in a somewhat-structured manner. To learn more about these planning tools, call us at 732-521-9455 to get started.

Wisely Select Your IRA Beneficiary

May 2, 2014

Filed under: IRA,Retirement Planning — Tags: , , , , — Neel Shah @ 3:36 am

If you have spent your working and pre-retirement years pouring into, rather than having to tap into, your retirement savings, congratulations! You’re on your way to being set up for success. Before kicking back and relaxing, though, it’s worth conducting a review to see how you’ve set up the beneficiary on your IRA. There are possible estate tax and income tax risks for you and your chosen beneficiary.

Wisely Select Your IRA Beneficiary
(Photo Credit: finance.zacks.com)

For non-Roth retirement accounts, you’ll want to factor in how long the beneficiary will push off distributions, the required minimum distributions, and the possible income tax bracket for that individual. All of these factors ca give you a window into the tax liability for the beneficiary. The majority of the time, RMDs will kick in pretty soon after a retirement plan is inherited. That depends on the oldest beneficiary, however, so the younger your beneficiaries are, the better off they’ll be. With smaller RMDs, there’s better opportunity for them to benefit from tax-deferred growth in the retirement account they are inheriting.

If you list your spouse as the beneficiary, which many people do, bear in mind that this could will increase their own taxable estate (although you’ll be able to transfer to your spouse estate tax free). Any beneficiaries outside your spouse will probably mean that your retirement account is included in your estate. Have you considered Stand Alone Retirement Trust? To learn more about the best planning strategies for your retirement account and asset protection needs, send us an email to info@lawesq.net or contact us via phone at 732-521-9455 to get started.

Planning for an Abroad Retirement? Keep These Tips in Mind

April 29, 2014

Filed under: Retirement Planning — Tags: , , — Neel Shah @ 8:35 am

A growing number of people are hoping to cash in on their retirement dreams by living abroad. Many retirees even keep their U.S. bank accounts and simply set up plans to live abroad, and retiring in another country and help to significantly reduce retirement expenses. In some cases, retirees may even be able to live abroad on just $25,000 a year.

Planning for an Abroad Retirement Keep These Tips in Mind
(Photo Credit: dailymail.co.uk)

You’ll need to be prepared to set up a new bank account abroad so that you can meet routine expenses. It’s also a very wise move to check out what link you’ll be using to transfer funds from U.S. accounts. Without doing your research, you might find that you’re hit with extremely high fees for transferring to another bank and especially into another currency. You must be prepared with a strategy to monitor currency risk, since whether it makes sense to convert assets over or keep them in your home currency largely depends on the market.

You also want to factor in taxes. You’ll have to keep filing a U.S. tax return and probably another one in your new country. The IRS will generally give you credit for taxes that you have paid abroad, but that is not true for all cases. You’ll want to set up a personalized meeting with an estate planning specialist before banking on paying foreign taxes only.

Finally, plan for healthcare. Many retirees look for a location that has access to quality and affordable healthcare. Locations far out from medical services can be a hassle for retirees, who are more likely to need routine care. Talk more about your plans to live abroad with an estate planning attorney so that you are prepared to go when it’s time. To get started fleshing out your overseas retirement dreams, contact us at 732-521-9455 or email us at info@lawesq.net