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Aggressive Moves You Can Make In Your Forties To Read Long-Term Financial Goals

Aggressive Moves You Can Make In Your Forties To Read Long-Term Financial Goals

An article in Kiplinger discussed an aggressive approach to financial planning in your forties. Let’s take a look at some of the highlights. Make saving for retirement a priority and beef up your investments. You’ll want to start by making the largest possible contributions to your employer’s retirement plan. At the very least, you should put enough into your company’s retirement plan to take full advantage of its contribution matching program. A word of caution—if you put all your retirement savings into tax-deferred accounts, you might get hit hard by taxes when you retire. That’s because withdrawals from 401 (k) plans and traditional IRAs are taxed at the retiree’s ordinary income tax rate. This makes contributing to a Roth IRA a good idea. Your contributions are after-tax, but your withdrawals are tax-free as long as you are over 59½ and have owned the Roth IRA for five years or more.

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Reverse Mortgages Seem To Be Winning New Respect

Reverse Mortgages Seem To Be Winning New Respect

Ten years ago, many financial advisors dismissed reverse mortgages out of hand. Their reasoning was that reverse mortgages, which give homeowners an advance on their home equity and allow them to delay repayment until the home is sold, were risky and only for people in desperate financial straits. However, several safeguards have led some advisers and researchers to reevaluate reverse mortgages and explore when and how they might be used in financial planning. For example, the Reverse Mortgage Stabilization Act of 2013 prevents homeowners (in most cases) from taking all of their equity at once, which could reduce the default rate on reverse mortgages by half. Instead, homeowners with reverse mortgages must wait at least one year to take a lump sum. Other regulations require homeowners to show that they are able and willing to pay their property taxes and home insurance. In 2014, almost 12% of reverse-mortgage borrowers in

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ATM Skimming – Yes, It Could Happen To You

ATM Skimming – Yes, It Could Happen To You

It’s all so convenient. You go to the gas station, insert your debit card into the reader at the pump, fill up your car, and you’re on your way. Or when you need some pocket money, you simply go to the nearest Automated Teller Machine (ATM), swipe your card, take your cash and go. Thanks to modern technology, there’s no longer any need to waste time waiting in long lines at gas stations or banks. Thieves also love the convenience of gas station card readers and ATMs. They’ve come up with some ingenious ways to use them to gain access to your bank account information, and therefore, your hard-earned money. It’s called ATM skimming, and the crime requires just two easily obtained components. The first is the skimmer itself. This is a counterfeit card reader, which is placed over the ATM’s actual card slot. When you swipe your card through

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Worried About Running Out of Money In Your So-Called “Golden” Years? Continued

Worried About Running Out of Money In Your So-Called “Golden” Years? Continued

In this post, we continue our discussion of protecting your nest egg in retirement. Tap retirement accounts in the proper order. Lacking a sound withdrawal strategy can be costly. According to Carrie Schwab-Pomerantz, Chief Strategist for Consumer Education at Charles Schwab, the most tax-efficient approach is to first draw down the principal from maturing bonds and certificates of deposit, since they are no longer bearing interest. After that, if you are 70½ or older, you should take your required minimum distributions (RMDs) from traditional tax-deferred accounts, like IRAs and 401(k) plans, with a focus on assets that are no longer appropriate for your portfolio or overweighted. This is because you will be subject to severe penalties from the Internal Revenue Service if you fail to take your RMDs on time. Next, you’ll want to sell from taxable accounts, since you only have to pay taxes on their capital gains. (It

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Taxes on Social Security Benefits and How to Avoid Them, Continued

Taxes on Social Security Benefits and How to Avoid Them, Continued

An article on kiplinger.com offers some strategies to avoid, or at least mitigate, taxes on Social Security benefits. Withdraw money from your tax-free Roth IRAs. Tax-free withdrawals from a Roth IRA or Roth 401(k) are not included in your adjusted gross income. Rolling over money from your traditional IRA or 401(k) to a Roth IRA years before you start receiving Social Security benefits is an excellent way to avoid taxes later in retirement. Of course, you will have to pay income taxes when you make the conversion, but you can tap the account tax-free after that. Purchase a Qualified Longevity Annuity Contract. You can invest up to $130,000 from your IRA or 401(k) in a deferred-income annuity called a Qualified Longevity Annuity Contract (QLAC). The money in your QLAC is ignored when figuring your required minimum distribution, so you can reduce the size of your distribution, lower your income and

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Worried About Running Out of Money In Your So-Called “Golden” Years? You Are Hardly Alone

Worried About Running Out of Money In Your So-Called “Golden” Years? You Are Hardly Alone

Americans are living longer than ever before. That’s great news, but it has a downside—the possibility of outliving our life savings. According to the Social Security Administration, a 65-year-old man can expect to live to age 84, on average, while a woman of the same age may make it closer to age 87. So if you retire at the age of 62, your nest egg may have to last for at least 20 years. Sure, Social Security will provide an income stream, but the amount is not enough for most retirees to live comfortably. Little wonder, then, that according to a survey by the Transamerica Center for Retirement Studies, the most frequently cited retirement concern among Americans is outliving their savings and investments. In the survey, 44% or respondents across all ages expressed this fear, as compared to 41% of retirees. In addition, 47% of retirees believed they had not

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Taxes on Social Security Benefits and How to Avoid Them

Taxes on Social Security Benefits and How to Avoid Them

Many people are surprised to learn that their Social Security benefits can be subject to federal taxation. Whether your benefits are taxed depends on what is known as your “provisional income.” This is your adjusted gross income (not counting Social Security benefits) plus nontaxable interest and half of your Social Security benefits. For people filing as individuals or heads of household with provisional incomes of less than $25,000, Social Security benefits are not taxed. For couples filing joint returns, the figure is $32,000. Unfortunately, individuals with provisional income of between $25,000 and $34,000, or couples filing jointly with provisional income of between $32,000 and $44,000, up to 50% of Social Security benefits may be taxable. In the case of individual filers with provisional incomes above $34,000 or joint filers whose provisional incomes exceed $44,000, up to 85% of Social Security benefits may be subject to taxation. The information above concerns

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How To Choose A Professional Home Care Provider, Continued

How To Choose A Professional Home Care Provider, Continued

When choosing a home care provider, it’s important to ask for references. Suitable references include doctors, discharge planners and other patients or their family members. Be sure to contact the references and ask questions such as: Do you refer clients to this provider often? Do you and the provider have a contractual relationship? If so, do you require that the provider meets special standards for quality care? What feedback have you received from patients under the care of this provider? Do you know if this provider has cared for people with conditions similar to those of my loved one? If so, can you provide me with contact information for these individuals? To learn more about finding and choosing the right professional home care provider, visit the National Association for Home Care & Hospice. The cost of care. Of course, one of the factors you must consider in obtaining professional care

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Five Trusts That Can Help You Accomplish Specific Planning Goals

Five Trusts That Can Help You Accomplish Specific Planning Goals

Trusts come in many “flavors.” Here are five trusts that can be used to achieve specific planning goals. Generation-Skipping Trust (GST) Let’s say your son has remarried and you’re worried that his second wife might not pass his inheritance to the children from your son’s first marriage—that is, your grandchildren. Or maybe one of your children is not responsible enough to handle an inheritance on his or her own and you want to make sure your grandchildren will receive a portion of your assets. With a Generation-Skipping Trust, the assets put into the trust will be transferred to your grandchildren when the GST goes into effect. A GST does not necessarily disinherit your children. The trust can be structured so that your children can draw on the income/earnings from the trust while your grandchildren stand to inherit the balance of the trust. Qualified Terminable Interest Property Trust (QTIP) A QTIP

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How To Choose A Professional Home Care Provider

How To Choose A Professional Home Care Provider

Perhaps you have realized that you simply can’t continue to provide adequate care to your loved one. Or maybe your loved one lives far away and your responsibilities at home won’t allow you to serve as caregiver. In either case, you may need to turn to a professional home care provider. The question is, how do you choose the right person for this important task? The National Association for Home Care & Hospice (NAHC) has created a valuable checklist with questions you should ask providers and others who may be familiar with the provider’s history. Here are some of the questions NAHC recommends. How long has the provider served the community? Does the provider have literature explaining its services, eligibility requirements, fees, and funding sources? Does the provider have what is known as a “Patient Bill of Rights” outlining the responsibilities and rights of the provider, caregiver and patient? How

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