Retirement Accounts

The New York Times published an article by Paul Sullivan entitled, "How to Plan for the Unforeseen" (Oc 08, 2017). Provided below is a brief summary of the article published at nytimes.

Financial-Planning.com published an article by Ed Slott entitled, "When you should establish an IRA as a trust" (May 31, 2017). Provided below is a brief summary of the article published at Financial-Planning.
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Wickedlocal.com published an article by Leanna Hamill entitled, "PLANNING MATTERS: Why you need an Estate Plan" (Feb 7, 2017). Provided below is a brief summary of the article published at Wickedlocal.
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Forbes.com published an article by Mark Eghrari entitled, "6 Reasons to Revise your Estate Plan as Soon as Possible" (Jan 2, 2017). Provided below is a brief summary of the article published at TheTimesHerald.

Kelley Long (Forbes.com) published an article entitled, "The Most Important Estate Planning Issue Boomers Need to Address" (May 08, 2016). Provided below is a brief summary of the article from Forbes.
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What are the best strategies to use for withdrawing money from retirement accounts?

In the present economic environment it is not uncommon for an employee to lose a job at age 55 or older or to be forced into early retirement. According to AARP, the most recent unemployment rate for workers 55 and older is approximately 4.7 percent. Even though this is somewhat lower than the unemployment rate for the general population (which is nearly 5 percent), the average length of unemployment for older workers is a bit over 51 weeks, about one-and-a-half times longer than for people under 55.

For those unemployed or starting early retirement, the question becomes: What is the best method to withdraw funds in order to fill in the gap left by loss of salary? On the plus side, many employees have substantial savings in their 401(k) plans or IRAs on which they may draw.

Kerry Hannon (NYTimes.com) has recently published an article entitled, An Aging Population Also Poses Opportunities for Retirement Careers (March 7, 2014). Provided below is the abstract to the article from NYTimes.com:

An Aging Population Also Poses Opportunities for Retirement Careers

As the population ages, jobs like massage therapist and others like senior fitness trainers, dietitians and nutritionists, personal assistants, handymen, drivers and caterers who prepare meals for shut-ins are on the upswing.

"It's no secret that retirement is a very diverse process for older Americans, with some combination of phased retirement and bridge jobs being the norm among older career workers," according to Kevin E. Cahill, an economist with the Sloan Center on Aging and Work at Boston College.

"About 60 percent of the career workers take on a part-time job after exiting their main career," Mr. Cahill said.

As a result, more and more jobs and businesses are being created to satisfy not just the growing number of people living healthier and longer lives, but this "Aging in place" market.

FINANCIAL PLANNER Not surprisingly, as retirees fear outliving their money, jobs for personal financial advisers are expected to be one of the faster-growing occupations over the next decade, with a projected growth rate of 27 percent by 2022, according to the Labor Department.

TRAVEL GUIDE When Judi Bonilla, 56, was laid off from her job as a logistics subcontractor for the military, she did some soul-searching and came to the conclusion that she enjoyed working with older adults.

What ties these jobs together? At a time of life when someone's world begins to narrow, these services all offer a kind of independence - whether it's a way for clients to stay active socially and physically, to not worry about finances, or to get relief from the aches and anxiety of aging with a human touch.

For more information on this topic, continue reading the article "An Aging Population Also Poses Opportunities for Retirement Careers" by Kerry Hannon (NYTimes.com). 

Preparing for the future is an uncertain business, but there are steps you can take during your lifetime to simplify matters for your loved ones after you pass, and to ensure your final wishes are carried out. Planning for what happens to your property, or who cares for your family members, upon your death can be a complicated process. To simplify things, we’ve created the following list to help you avoid some of the pitfalls you may encounter before, or even long after, you create your estate plan.

Don’t assume you can plan your estate by yourself. Get help from an estate planning attorney whose training and experience can ensure that you minimize tax implications and simplify the process of settling your estate.

Don’t put off your estate planning needs because of finances. To be sure, there are upfront costs for establishing the estate plan; however establishing your estate plan is an investment in the future well-being of your family, and one which will result in a far greater cash savings over the long term.

Don’t make changes to your estate plan without consulting your attorney. Changes in one area of your estate plan could impact other provisions you have made, triggering legal or tax implications you never intended.

Don’t assume your children will intuitively know your wishes, and handle the situation appropriately upon your death. Money and sentimental items can cause a rift between even the most agreeable siblings, and they will be especially vulnerable as they deal with the emotional impact of your passing.

Don’t assume that once you’ve prepared your estate plan it’s set in stone. Estate planning documents regularly need to be revised, often due to a change in marital status, birth or death of a family member, or a significant change in the value of your estate. Beneficiary designations should be periodically reviewed to ensure they are up to date.

Don’t forget to notify your family members, friends or other beneficiaries of your estate plan. Make sure your executor and successor trustee have access to your end-of-life documents.

Don’t assume your spouse will handle everything if something happens to you. It’s possible your spouse may be incapacitated at the same time, for example if you both are injured in the same accident. A proper estate plan appoints alternate representatives to handle your affairs if both you and your spouse are unable to do so.

Don’t use the same person as your agent under both the financial and healthcare powers of attorney. Using the same individual gives that person an incredible amount of influence over your future and it may be a good idea to split up the decision-making authority.

Don’t forget to name alternate agents, executors or successor trustees. You may name a family member to fill one of these roles, and forget to revise the document if that person dies or becomes incapacitated. By adding alternates, you ensure there is no question regarding who has the authority to act on your or the estate’s behalf.

Jessica Silver-Greenberg (NYTimes) has recently published an article entitled, “Winning Veterans’ Trust, and Profiting From It” (December 23, 2013). Provided below is the abstract to the article from NY Times:

Winning Veterans’ Trust, and Profiting From It 

As you reach a certain age, retirement planning is essential. For Henry Schaffer, a World War II veteran, there was no question that he no longer could live on his own. His daughter Kristi began searching for retirement homes and the money to pay for it.

At Aspen View, a senior living complex in Billings, Mont., a lawyer accredited by the Department of Veterans Affairs, told the family Mr. Schaffer could probably qualify for a V.A discount. The problem lies after Mr. Schaffer moved in and they learned he did not qualify for a V.A discount at all. His daughter Kristi now says he worries he will be evicted as he can only afford about half of his monthly bills.

As baby boomers head toward retirement — worrying not only about their financial futures, but also their parents’ — a cottage industry has sprung up around the pension program.

Lawyers, financial advisers and insurance brokers have formed a lucrative alliance with retirement communities and assisted living facilities to extract many billions of taxpayer dollars from the V.A., according to interviews with state and federal authorities, as well as a review by The New York Times of hundreds of legal documents and client contracts.

For more information on this topic, continue reading the article “Winning Veterans’ Trust, and Profiting From It” by Jessica Silver-Greenberg. 

So you have credit card debt, overdue mortgage payments, or suddenly need to buy a new car. We’ve all been there. You need money now, and your retirement accounts continue to climb. Fortunately, many employers allow you to take out loans on these accounts, but should you really begin spending that money before you retire?

On one hand, there are benefits to borrowing from your retirement accounts. You are essentially borrowing your own money, so the payments you make, plus interest, go back into your account. Since it’s your own money, these payments do not affect your credit score, and most 401(k) loans have relatively low interest rates.

However, there are many risks associated with taking money from accounts like your 401(k). It is recommended that you see a financial advisor before making this decision to address the cost and potential ramifications of the loan.

First consider the reason for taking out a loan, and the multiple options that you face. A dire emergency is the only recommended cause for borrowing from these accounts; some plans even require it. If you’re looking to spend the money on something more frivolous, like a family vacation or a new entertainment system, however, you should consider alternate financing options.

The downside to these loans comes in handling the repayment plan. Interest paid to your own account sounds easy enough, but these payments are subject to taxes. Furthermore, once money is borrowed from your retirement account, it is no longer eligible for tax-deferred growth. Payments you make on the loan come from after-tax assets, so the money you repay into your account can end up getting taxed for a second time once you withdraw after retirement.  

A standard 401(k) loan allows you to borrow up to half of your balance, with a maximum of $50,000. Normally, you have up to five years to repay the loan. Failure to do so within the five-year period means your loan will be deemed an early withdrawal, and will be subject to taxes as well as a 10% early withdrawal penalty.

If you are looking to borrow money from your retirement accounts, carefully consider your repayment plan in advance. It’s especially important to make certainthat you are secure in your employment; if you leave or lose your job, your loan payments will be due within 90 days. Consider borrowing only if interest on a loan from your retirement plan would be less than that of another loan alternative. A final tip: Continue contributing to your 401(k) while you pay off the loan to lessen the impact on your savings.