The U.S. Department of Treasury and Internal Revenue Service have just established that several key income tax benefits previously only available to opposite-sex marriages are now available to those in a same-sex marriages as well.
Under the announcement (U.S. Treasury) and the rule (IRS), benefits now available include the ability to file a joint income tax return (which may cut your tax cost), but also increase the tax-free part of a couple’s estate for transfer to heirs (double an individual’s lifetime limit). Additionally, all the same income tax benefits that may come from filing a household income tax return are available, including deductions, exemptions and credits. Read the rest of this entry »
One of the most confusing and least understood terms for the investing public is annuitization. Unlike stocks, bonds, mutual funds and exchange traded funds (“ETF’s”), annuitization does not come up in cocktail party or water cooler conversation very often. What does it mean?
Many investors have money saved and invested in a fixed or variable annuity – two types of contracts issued by insurance companies. Annuitization is the process of converting annuity funds into a stream of income, usually paid on a monthly basis. Choosing whether to annuitize or not is very important because often you can’t change your mind once payouts begin.
This is a common question we receive. Over the years, a frequent method I’ve observed investors use to answer this question is a simple rate of return, generally known as a holding period return. But there are two other methods available, and for various reasons I’ll show below, they are usually more appropriate to use.
Holding Period Return (HPR)
Also referred to as your cumulative return, this value does not take into account the impact of time (did it take 1 year or 9 to earn the return?), and does not adjust for the impact of what dollars were invested, and when. It is generally reported as a single return percentage.
This is the fourth in a four part series designed to help you determine the best way to proceed with your previous employer’s company retirement plans, including 401(k)s, 403(b)s and more. Part 1 | 2 | 3 | 4
Whether or not you choose to keep your previous employer’s 401(k) where it’s at, roll it over to your current employer or move it to an IRA, you will still be responsible for its management and investment direction. As discussed in the previous post, that can be a challenge if investing is not your specialty. Don’t worry – we can help.
Our investment management service, Conflict Free Planning, ensures that a financial planner can help you identify the advantages and disadvantages to holding your investments in a employer retirement plan or an IRA. Read the rest of this entry »
This is the third in a four part series designed to help you determine the best way to proceed with your previous employer’s company retirement plans, including 401(k)s, 403(b)s and more. Part 1 | 2 | 3 | 4
Now that you understand at the pros and cons of leaving your 401(k), 403(b), or other employer sponsored retirement plan with a previous employer let’s take a look at another option, rolling over your retirement account(s) from your previous employer into an IRA.
The advantages of converting your retirement account(s) to an Individual Retirement Account (IRA) include:
Opening your IRA with a discount brokerage to receive much lower transaction costs.
More visibility of your current investments and more detailed record keeping.
The ability to invest in thousands of different securities instead of just selecting from a pre-selected list of 5-15 options. This allows you to create a specific portfolio designed to fit your unique needs, not just be lumped together with 100’s to millions of other investors.
In most cases much lower administration costs. In a self-directed IRA you may be able to greatly reduce your expenses by removing the extra administration fees present in your previous retirement account. Read the rest of this entry »