Are You Retiring Within the Next 5 Years? | Under 70

What to focus on as the transition approaches

You can prepare for the transition years in advance. In doing so, you may be better equipped to manage anything unexpected that may come your way.

How much monthly income will you need? Unfortunately, there is no “magic” number for everyone to strive for. Instead, examine your monthly expenses, considering any trips, adventures, or pursuits you have in mind for the near term. As a test, you can even try living on your projected monthly income for 2-3 months prior to retiring.

Should you downsize or relocate? Your home is not only a significant asset, it also represents a significant part of your lifestyle. After all, our homes are often a reflection of who we are. It follows that the decision of how much home we want—or need—may vary with each situation; it is not strictly a financial decision. However, if you are considering downsizing or relocating, the financial component of the decision should be considered thoughtfully.

How should your portfolio be constructed? For many retirees, the top priority is generating consistent income. With that in mind, your financial professional can adjust your portfolio with respect to your time horizon, risk tolerance, and goals. For example, some retirees prefer to maintain an amount of risk-averse investments that can provide income during retirement. However, even the most risk-averse investments aren’t immune to risk entirely.

How will you live? Whether you dream of endless Saturdays or dedicating your time to volunteering, remember that retirement is a beginning. Ask yourself what you would like to begin doing now. Think about how to structure your days to pursue that goal, and give it a shot! There’s no better way to prepare for what may come, than to practice in the present.

How will you take care of yourself? If you retire before age 65, Medicare may not be an option. If you’re considering early retirement, check if your group health plan extends certain benefits into retirement. 

Even if you retire at 65 or later, Medicare may not be your ideal solution. Consider items Medicare doesn’t traditionally cover, such as extended care or other specialized medical services.

Review your retirement strategy as the transition approaches. Give your financial professional a call today. An adjustment or two before retirement may be all you need for a successful next chapter.     










This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Investments seeking to achieve higher rate of return also involve a higher degree of risk.

Should You Prepare to Retire on 80% of Your Income? | Under 60

Examining a long-held retirement assumption.

A classic retirement preparation rule states that you should retire on 80% of the income you earned in your last year of work. Is this old axiom still true, or does it need reconsidering?

Some new research suggests that retirees may not need that much annual income to keep up their standard of living.

The 80% rule is really just a guideline. It refers to 80% of a retiree’s final yearly gross income, rather than his or her net pay. The difference between gross income and wages after withholdings and taxes is significant to say the least.1

The major financial challenge for the new retiree is how to replace his or her paycheck, not his or her gross income.

So concluded Texas Tech University professor Michael Finke, who analyzed the 80% rule and published his conclusions in Research, a magazine for financial services industry professionals. Finke noted four factors that the 80% rule does not recognize. One, retirees no longer need to direct part of their incomes into retirement accounts. Two, they no longer involuntarily contribute to Social Security and Medicare, as they did while working. Three, most retirees do not have a daily commute, nor the daily expenses that accompany it. Four, people often retire into a lower income tax bracket.1

Given all these factors, Finke concluded that the typical retiree could probably sustain their lifestyle with no more than 77% of an end salary, or 60% of his or her average annual lifetime income.1

Retirees need to determine the expenses that will diminish in retirement. That determination, rather than a simple rule of thumb, will help them realize the level of income they need.

Imagine two 60-year-old workers, both earning identical salaries at the same firm. One currently directs 25% of her pay into a workplace retirement strategy. The other directs just 5% of her pay into that strategy. The worker deferring 25% of her salary into retirement savings needs to replace a lower percentage of their pay in retirement than the worker deferring only 5% of hers. Relatively speaking, the more avid retirement saver is already used to living on less.

This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments.

New retirees may not necessarily find themselves living on less. The retirement experience differs for everyone, and so does retiree personal spending. A recent Employee Benefit Research Institute survey found that over a third of retirees report spending more than they had originally expected. Only 9% reported that they were spending less than they had expected.2

A timeline of typical retiree spending resembles a “smile.” A 2013 study from investment research firm Morningstar noted that a retiree household’s inflation-adjusted spending usually dips at the start of retirement, bottoms out in the middle of the retirement experience, and then increases toward the very end.3

A retirement budget is a very good idea. There will be some out-of-budget costs, of course, ranging from the pleasant to the unpleasant. Those financial exceptions aside, abiding by a monthly budget (with or without the use of free online tools) may help you to rein in any questionable spending.

Any retirement income strategy should be personalized. Your own strategy should be based on an accurate, detailed assessment of your income needs and your available income resources.That information will help you discern just how much income you will need when retired.










This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 - http://www.michaelfinke.com/research.html [2022]
2 - https://www.ebri.org/retirement/retirement-confidence-survey [2022] 
3 - https://www.thestreet.com/retirement/want-to-be-rich-in-retirement-plan-better-save-more [2/23/22]

2022 Contribution Limits | Under 50

Is it time to contribute more?

Preparing for retirement just got a little more financial wiggle room. This week, the Internal Revenue Service (IRS) announced new contribution limits for 2022.

Staying put for 2022 are traditional Individual Retirement Accounts (IRAs), with the limit remaining at $6,000. The catch-up contribution for traditional IRAs remains $1,000 as well.1

For workplace retirement accounts (i.e. 401(k), 403(b), amongst others), the contribution limit rises $1,000 to $20,500. Catch-up contributions remain at $6,500.1

Eligibility for Roth IRA contributions has increased, as well. These have bumped up to $129,000 to $144,000 for single filers and heads of households, and $204,000 to $214,000 for those filing jointly as married couples.1

Another increase was for SIMPLE IRA Plans (SIMPLE is an acronym for Savings Incentive Match Plan for Employees), which increases from $13,500 to $14,000.1

If these increases apply to your retirement strategy, a financial professional may be able to help make some adjustments to your contributions.








Once you reach age 72, you must begin taking required minimum distributions from a Traditional Individual Retirement Account (IRA) or Savings Incentive Match Plan for Employees IRA in most circumstances. Withdrawals from Traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.
Once you reach age 72, you must begin taking required minimum distributions from your 401(k), 403(b), or other defined-contribution plans in most circumstances. Withdrawals from your 401(k) or other defined-contribution plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.
To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawal can also be taken under certain other circumstances, such as the owner's death. The original Roth IRA owner is not required to take minimum annual withdrawals.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations
1. CNBC.com, November 5, 2021

Why Don’t All Affluent People Become Wealthy? | Under 40

Perception, hesitation, & poor decisions are factors.

Why do some people let their potential for lifetime wealth slip away? Some people are better off economically at 30 or 40 than they are at 50 or 60. In some cases, fate deals them a bad hand. In other cases, bad decisions and inaction are to blame.

Some buy depreciating assets instead of allowing assets to appreciate. They rack up debt and live beyond their means. What are they spending so much on? It isn’t just consumer staples. It’s not unusual for a family to “keep up with the Joneses.”

Contrary to the bumper sticker, the person who dies with the most toys does not necessarily win. In fact, that person may leave a pile of debt and little else behind. Today’s hottest cars, clothes, flat screens, phones, and tablets may be tomorrow’s junk and clutter.

Some never prioritize a retirement strategy. For many, there are opportunities to invest, whether it be through a traditional individual retirement account or a workplace retirement account. In the case of workplace retirement accounts, some companies offer matching contributions, which may be an opportunity to heighten your savings power. That being said, not everyone takes advantage of these opportunities.1

Once you reach age 72, you must begin taking required minimum distributions from your 401(k) plan and traditional IRA in most circumstances. Withdrawals are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.

Some never build up an emergency fund. Financial challenges will arise, and a rainy-day fund can help you meet them. Striving to save for that rainy day also helps to promote good, lifelong saving habits.

Some invest without a strategy. Chasing the recent hot trend is a behavior that may lead to frustration instead of financial freedom. Instant wealth seldom comes from an overnight winner. These ideas don’t stop people from hazardously assigning an excessive portion of their assets to one investment.  

Some accept a “forever middle class” mindset. Some people define themselves as middle class and accept that definition all their lives. The danger is that this can amount to a kind of psychological barrier, a sense that “this is it” and that “getting rich” is for others.

Behavior & belief may count as much as effort. It takes some initiative to create lifetime wealth from present-day affluence, but a person’s outlook on money (and view of its purpose) can influence that effort – for better or worse.










This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations
1. CNBC.com, March 4, 2022

Annual Financial To-Do List | Under 30

Things you can do for your future as the year unfolds.

What financial, business, or life priorities do you need to address for the coming year? Now is an excellent time to think about the investing, saving, or budgeting methods you could employ toward specific objectives, from building your retirement fund to managing your taxes. You have plenty of choices.

Remember that this article is for informational purposes only and not a replacement for real-life advice. The tax treatment of assets earmarked for retirement can change, and there is no guarantee that the tax landscape will remain the same in years ahead. A financial or tax professional can provide up-to-date guidance.

Here are a few ideas to consider:

Can you contribute more to your retirement plans this year? In 2023, the contribution limit for a Roth or traditional individual retirement account (IRA) remains at $6,000 ($7,000 for those making “catch-up” contributions). Your modified adjusted gross income (MAGI) may affect how much you can put into a Roth IRA. With a traditional IRA, you can contribute if you (or your spouse if filing jointly) have taxable compensation. Still, income limits are one factor in determining whether the contribution is tax-deductible.1

Once you reach age 72, you must take the required minimum distributions from a traditional IRA in most circumstances. The I.R.S. taxes withdrawals as ordinary income and, if taken before age 59½, they may be subject to a 10% federal income tax penalty.

Roth 401(k)s offer their investors a tax-free and penalty-free withdrawal of earnings. Qualifying distributions must meet a five-year holding requirement and occur after age 59½. Such a withdrawal also qualifies under certain other circumstances, such as the owner’s passing. Employer match is pretax and not distributed tax-free during retirement. The original Roth IRA owner is not required to take minimum annual withdrawals.

Make a charitable gift. You can claim the deduction on your tax return, provided you follow the Internal Review Service guidelines and itemize your deductions with Schedule A. The paper trail can be important here. If you give cash, you should consider documenting it. A bank record can demonstrate some contributions, payroll deduction records, credit card statements, or written communication from the charity with the date and amount. Incidentally, the IRS does not equate a pledge with a donation. If you pledge $2,000 to a charity this year but only end up gifting $500, you can only deduct $500.2

Consult your tax, legal, or accounting professional before modifying your record-keeping approach or your strategy for making charitable gifts.

See if you can take a home office deduction for your small business. You may want to investigate this if you are a small business owner. You might be able to write off expenses linked to the portion of your home used to conduct your business. Using your home office as a business expense involves complex tax rules and regulations. Before moving forward, consider working with a professional familiar with the tax rules related to home-based businesses.

Open an HSA. A Health Savings Account (HSA) works like your workplace retirement account. There are also some HSA rules and limitations to consider. You are limited to a $3,850 contribution for 2023 if you are single; $7,750 if you have a spouse or family. Those limits jump by a $1,000 “catch-up” limit for each person in the household over age 55.3

If you spend your HSA funds for non-medical expenses before age 65, you may need to pay ordinary income tax and a 20% penalty. After age 65, you may need to pay ordinary income taxes on HSA funds used for non-medical expenses. HSA contributions are exempt from federal income tax; however, they are not exempt from state taxes in certain states.

Pay attention to asset location. Tax-efficient asset location is one factor to consider when creating an investment strategy. Asset location is different from asset allocation, which is an approach to help manage investment risk. Asset allocation does not guarantee against investment loss.

Review your withholding status. Should it be adjusted due to any of the following factors?

* You tend to pay the federal or state government at the end of each year.

* You tend to get a federal tax refund each year.

* You recently married or divorced.

* You have a new job with adjusted earnings.

Consider consulting your tax, human resources, or accounting professional before modifying your withholding status.

Did you get married in 2022? If so, it may be time to review the beneficiaries of your retirement accounts and other assets. The same goes for your insurance coverage. If you are preparing to have a new last name in 2023, you may want to get a new Social Security card. Additionally, retirement accounts may need to be revised or adjusted.

Are you coming home from active duty? If so, go ahead and check on the status of your credit. Check on any tax and legal proceedings your orders might have preempted, too. 

Consider the tax impact of any upcoming transactions. Are you preparing to sell any real estate this year? Are you starting a business? Might any commissions or bonuses come your way in 2023? Do you anticipate selling an investment held outside of a tax-deferred account?

Vow to focus on your overall health and practice sound financial habits in 2023. And don’t be afraid to ask for help from professionals who understand your situation.









This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations
1. U.S. News and World Report, September 1, 2022
2. irs.gov, November 23, 2021
3. irs.gov, September 6, 2022

A Plan for All Seasons | Fall 2022

What’s New at AEGIS Financial? | AEGIScoop

What’s New with the Team!

Congratulations to Mr. & Mrs. Deitte!

We are pleased to announce that our Marketing Coordinator Courtney Deitte got married on August 13th at the Medina Wedding Chapel in Appleton. After the ceremony, the two celebrated with close family and friends followed by a big reception at a later date.

We look forward to seeing Jacob and Courtney begin their lives together. We pray for a blessed marriage and for a lifetime of happiness.

Events

Quarter 3 Professional Development Day – October 25, 2022

For this quarter’s professional development day, our team trained on our new contact management system as well as completed a course for CPR/AED Training. After that, the team went out for lunch and went to Escape Room Wisconsin – Appleton! There, we were able to grow our teamwork skills and have some fun along the way. See the pictures below!

Veterans Day – November 11, 2022

Join us for breakfast to honor our veterans, this veteran’s day, Friday, November 11th at the Oshkosh Veterans Museum! We will have a presentation of colors, the national anthem sung by Valley Christian Choir, and Vietnam Veteran and Driver of “Brutus” Roger Blink give a presentation. Spots are limited, so reserve your spot today. For more details check out the invite below or call (920) 233-4650 to RSVP today!  We hope you can join us in paying tribute to all those who have served and continue to serve.

We are Hiring!

Do you know of somebody who would like to join our growing team at AEGIS Financial? We are currently hiring a Relationship Manager and a Wealth Manager full time to join us!  Want to know more or apply? Click HERE.

Social Media:

Visit us on our Facebook page “AEGIS Financial” and find out what’s happening around the office! We will be posting frequently with birthdays, and important events for our team members as well as sharing some helpful articles that could help you with your finances!

Market Update Videos!

Bill Bowman, CPA and Brian Rogers, CFP frequently share the Investment Committee’s insights on the market and economy. These videos are emailed to you and available on our YouTube Channel “AEGIS Financial” as well as our Facebook and LinkedIn pages! Be sure to like and subscribe!

Financial Planning Educational Video Series!

Do you have questions about your accounts? Are you not sure what different types of investments are or how they work? Then this educational series is the perfect thing for you! We are continuing our educational series of short 1-2 minutes videos hitting on questions and topics that our clients frequently have. Follow us on Facebook, LinkedIn, or YouTube to stay up to date with the latest videos in the series! Click on the image below to watch our most recent video in the series!

Lunch & Learn Educational Series!

Will I have enough to retire? How will I replace my paycheck? Should I take Social Security early, or wait until full retirement age? How will I minimize taxes and protect my benefits? Will my money last? Do you know of anyone asking these questions? We can help!

We are now offering FREE Lunch & Learn Presentations! With a complimentary lunch, we will provide you with a presentation on any of the following categories or by special request!

  • Retirement Planning
  • Long-Term Care
  • Social Security
  • Charitable Giving Strategies
  • Roth conversions to Reduce Taxes Over Lifetime

Contact us at info@aegis4me.com to book a FREE Lunch & Learn Session today!  

What’s New at AEGIS Financial

Please Help Us Welcome Our Newest Team Members!

Connor Krohn – Client Service Associate

In 2021, Connor joined AEGIS Financial as a Client Service Associate. He performs a varying multitude of client services, provides internal office support, is an initial point of contact for the clients of AEGIS Financial, and acts a liaison with the team and our custodian, Raymond James.

Connor attended the University of Wisconsin – La Crosse to study finance. He is currently working on finishing his degree part time. Connor has previous experience in the financial services industry, tax preparation, and working as a financial assistant.

Connor currently lives in Waupun, WI where he was born and raised. He enjoys staying active, hunting, and spending time with friends and family including his four siblings. He is also an avid sports follower and plays in multiple leagues in his free time.

Kenji Callahan – Client Service Associate

In 2022, Kenji joined AEGIS Financial as a Client Service Associate. He performs a varying multitude of client services, provides internal office support, is an initial point of contact for the clients of AEGIS Financial, and acts a liaison with the team and our custodian, Raymond James.

Kenji will be graduating from Marian University in Spring of 2022, finishing his bachelor’s degree in Finance. In previous roles, Kenji has worked as a Resident Assistant for Marian University and also as an Office Manager.

Kenji lives in Fond du Lac and enjoys playing volleyball, cooking, art, and programming. At Marian University Kenji is a member of the Men’s Volleyball team and is an avid member of the community. 

Exciting News for the Madell Family! We Bid You Farewell

Elissa will be taking over the responsibilities of Relationship Manager, Mariah Madell. We are delighted to share that Mariah will have the opportunity in early 2022 (February/March) to step away from the firm to follow her values of raising their newborn baby. Mariah cherishes every relationship she has built through her years of working at our firm.

We are thankful for the 5+ years of her dedication and hard work to the firm and wish her all the best in this next chapter with her family.

Ascend

The Ascend platform provides investment management services through an electronic interface and leverages world-class simplified video conferencing and messaging services across most devices.

Ascend saw an issue in the wealth management industry. People were either turning to Robo advisors to handle their investments with no personal touch or they were turned away from some financial firms because they had not built enough wealth for a full comprehensive wealth management program. These people were left to manage their money on their own, even though they may not have had the expertise. Ascend is designed to change that. Ascend can be a perfect solution for those investors who desire professional management of their investments without the full suite of advanced tax and financial planning services traditionally provided to our comprehensive wealth management clients. Our clients’ have loved recommending their children or grandchildren to our Ascend program to get them started with investing at a young age. Our clients’ also love the streamlined options for young busy professionals, without sacrificing performance or professional insight. If you know a friend or family member that would fit well in the Ascend program, please keep us in mind.

Upcoming Events!

2022 Economic Forecast Dinner

You’re Invited to AEGIS Financial’s 2022 Economic Forecast Dinner! Come join us on Thursday, February 24th at 5:00 PM for dinner and a presentation by a panel of our very own Wealth Managers.

We will be discussing recent movements in the market and the economy and also addressing any questions that you have.

RSVP for you and your friends no later than February 10th by contacting Courtney at (920) 233-4650 or by email at courtney.krell@aegis4me.com.               

Spots are limited!

Appleton Open House

Have you been to our Appleton office? Have you met our staff in Appleton? If you haven’t, this is the perfect opportunity for you! We are hosting an Open House at our Appleton location on Thursday, March 31st from 12:00-6:00 PM. Come and mingle with our team members and enjoy a few snacks as well, we would love to see you there!

Oshkosh Open House

Our Oshkosh Office is finished! We’ve expanded the lobby, added a conference room, and a lot more workspace for our back office! Come and see the new renovated office, mingle with our team members, and enjoy a few snacks on Tuesday, May 10th from 12:00-6:00 PM. We hope to see you there!  

We are Hiring!

Do you know of somebody who would like to join our growing team at AEGIS Financial? We are currently hiring a Client Experience Concierge either part time or full time to join us! The Client Experience Concierge assists in reception tasks, taking phone calls, provides exceptional customer service, and helps with a range of projects and tasks in the office. Want to know more or apply? Click HERE.

Social Media:

Go like us on our Facebook page “AEGIS Financial” and find out what’s happening around the office! We will be posting frequently with birthdays, and important events for our team members as well as sharing some helpful articles that could help you with your finances!

Video Updates!

Bill Bowman, CPA and Brian Rogers, CFP frequently share the Investment Committee’s insights on the market and economy. These videos are emailed to you and available on our YouTube Channel “AEGIS Financial.” Be sure to like and subscribe!

A Plan for All Seasons | Winter 2022

Cash Alternatives for Charitable Giving | 70 + Older


Thinking about donating? Think of these choices.

The year is winding down, and you may be thinking of giving. In fact, you may want to explore the different ways in which you can donate to a charity or non-profit organization, apart from just making a cash gift. Consider some of the alternatives.  

Keep in mind this article is for informational purposes only. It’s not a replacement for real-life advice. Make sure to consult your tax and legal professionals before modifying your gift-giving strategy.

Donor-advised funds. DAFs are essentially charitable savings accounts. Some are created and run by 501(c)(3) non-profits. Others are offered by brokerages and banks.1,2 

You can direct assets into a DAF for future charitable gifts. The bank, brokerage, or non-profit takes legal control of these assets, and may offer you investment choices for the assets and a selection of charities to which you may donate some or all of the assets in a given year. As a donor, you are eligible for a tax deduction in the year of the gift(s). If you like the general idea of “giving to charity” rather than to a specific charity, a DAF may appeal to you.1,2

DAFs are sold only by prospectus. Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money. DAFs are subject to fluctuation in value and market risk. Shares, when redeemed, may be worth more or less than their original cost. 

Qualified charitable distributions (QCDs). Are you age 70 or older? Do you have a traditional Individual Retirement Arrangement (IRA)? While annual required minimum distributions (RMDs) from an IRA will bring you income, those RMDs could also mean extra income tax.

If you are looking for ways to potentially manage your tax bill, one choice is to donate your RMD to charity via a QCD. With the help of a financial professional, you arrange a direct payment of some or all of your RMD to charity (there is a $100,000 cap). All of the donated amount may be excluded from your gross income for the year of the donation. You can make a QCD starting in the year you turn 70½, though you do not have to take your first RMD until age 72.3  

Generally, distributions from traditional IRAs must begin once you reach age 72. The money distributed to you is taxed as ordinary income. When such distributions are taken before age 59½, they may be subject to a 10% federal income tax penalty.

Donations of highly appreciated stocks. Do you itemize your deductions, rather than simply taking the standard deduction each year? Many non-profits and charities may accept gifts of securities. 

There are potential advantages for both the donor and charity here, compared with a cash gift. For example, say you own stock and you are considering selling the share and giving the cash from the sale to your favorite charity. You can do that, but if you sell the shares, you might face a capital gain. If you donate the stock to the charity, the charity will take possession of the stock and as the donor, you may be able to deduct the gift.4 

Gift bunching. Taxpayers have the opportunity to “bunch” (i.e., time) charitable gifts if they want to itemize deductions in a certain year instead of taking the standard federal tax deduction.5 

You can still claim the charitable giving deduction rather than the standard deduction, but only if you itemize. If you do itemize, then your charitable deduction for cash gifts can potentially be as large as 60% of your adjusted gross income. Any amount exceeding that threshold can be carried forward for up to five years.5

As you consider all this, please remember that tax laws are subject to change without notice, and this article is not intended as tax or investment advice. Consult your financial professional before making any charitable gifting, tax, or investment decision. This information is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement.










This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
  • Citations
  • 1. Internal Revenue Service, September 7, 2021
  • 2. U.S. News, August 21, 2020
  • 3. Kiplinger, October 4, 2021
  • 4. Investopedia, September 21, 2021
  • 5. Drexel University, November 30, 2020

Updated Premiums and Deductibles for Medicare | Under 70

Higher than normal.

Medicare’s premiums and deductibles have seen a larger-than-expected rise this year. For example, Medicare Part B monthly premiums have risen to $170.10, a 14.5% increase. The deductible for Part B rose to $233. The Part A deductible increased to $1,556.1,2

If you didn’t take advantage of the recent open enrollment period, you aren’t alone. According to a recent survey from MedicareGuide.com, 67% of beneficiaries hadn’t looked at their choices by mid-November, while the Kaiser Family Foundation discovered that 71% don’t review their options at all during the open enrollment period.1

For many Americans, Medicare remains a vital program, keeping healthcare affordable. Open enrollment comes again from October 15 to December 7 of 2022, it is definitely worth your time to familiarize yourself with the changes and the options you might select for your coverage.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations
1. CNBC.com, November 29, 2021
2. CNBC.com, November 12, 2021

Major Risks to Family Wealth | Under 60

Protect your family assets for future generations.

All too often, family wealth fails to last. One generation builds a business—or even a fortune— lost in the ensuing decades. Why does it happen, again and again?

Often, families fall prey to serious money blunders, making classic mistakes, or not recognizing changing times.

This article is for informational purposes only and is not a replacement for real-life advice. Make sure to consult legal and tax professionals before modifying your overall estate strategy.

Procrastination. This is not just a matter of failing to create a strategy but also failing to respond to acknowledged financial weaknesses.  

As a hypothetical example, say there is a multimillionaire named Alan. The designated beneficiary of Alan’s six-figure savings account is no longer alive. He realizes he should name another beneficiary, but he never gets around to it. His schedule is busy, and updating that beneficiary form is inconvenient. Alan forgets about it and moves on with his life.

However, this can cause significant headaches for those left behind. If the account lacks a payable-on-death (POD) beneficiary, those assets may end up subject to probate. Using our example above, Alan’s heirs may discover other lingering financial matters that required attention regarding his retirement accounts, real estate holdings, and other investment accounts.1

Minimal or absent estate management. Every year, some multimillionaires die without leaving any instructions for distributing their wealth. These people are not just rock stars and actors but also small business owners and entrepreneurs. According to a recent Caring.com survey, 58% of Americans have no estate preparations in place, not even a will.2

Anyone reliant on a will alone may risk handing the destiny of their wealth over to a probate judge. The multimillionaire who has a child with special needs, a family history of Alzheimer’s or Parkinson’s, or a former spouse or estranged children may need a greater degree of estate management. If they want to endow charities or give grandkids an excellent start in life, the same idea applies. Business ownership calls for coordinated estate management with consideration for business succession.

A finely crafted estate strategy has the potential to perpetuate and enhance family wealth for decades, and perhaps, generations. Without it, heirs may have to deal with probate and a painful opportunity cost—the lost potential for tax-advantaged growth and compounding of those assets.

The lack of a “family office.” Decades ago, the wealthiest American households included offices: a staff of handpicked financial professionals who supervised a family’s entire financial life. While traditional “family offices” have disappeared, the concept is as relevant as ever. Today, select wealth management firms emulate this model: in an ongoing relationship distinguished by personal and responsive service, they consult families about investments, provide reports, and assist in decision-making. If your financial picture has become far too complex to address on your own, this could be a wise choice for your family.

Technological flaws. Hackers can hijack email and social media accounts and send phony messages to banks, brokerages, and financial professionals to authorize asset transfers. Social media can help you build your business, but it can also expose you to identity thieves seeking to steal both digital and tangible assets.

Sometimes a business or family installs a security system that proves problematic—so much so that it’s silenced half the time. Unscrupulous people have ways of learning about that, and they may be only one or two degrees separated from you.

No long-term strategy in place. When a family wants to sustain wealth for decades to come, heirs will want to understand the how and why, and be on the same page. If family communication about wealth tends to be more opaque than transparent, then that communication may adequately explain the mechanics and purpose of the strategy.

No decision-making process. In some high net worth families, financial decision-making is vertical and top-down. Parents or grandparents may make decisions in private, and it may be years before heirs learn about those decisions or fully understand them. When heirs do become decision-makers, it is usually upon the death of the elders.

Horizontal decision-making can help multiple generations commit to the guidance of family wealth. Financial professionals can help a family make these decisions with an awareness of different communication styles. In-depth conversations are essential; good estate managers recognize that silence does not necessarily mean agreement.

You may attempt to reduce these risks to family wealth (and others) in collaboration with financial and legal professionals. It is never too early to begin.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations
1. SmartCapitalMind.com, February 4, 2022
2. Yahoo.com, January 18, 2022