Is Retiring Early A Mistake?

October 26, 2020

Due to the pandemic, many people are faced with an early retirement decision this year.  This is either by choice because many people are getting used to being at home and enjoying it, or through companies cutting back and offering people incentives to retire early.  Again, this is happening this year more than ever, but it does happen every year.  So how do you know if retiring early is a mistake? 

The ultimate goal for everyone is to retire at some point in their lives.  For some people it may happen earlier than they originally thought, and obviously, that can be wonderful.  However, you have to make sure you have everything planned out and addressed for your retirement before you actually retire.  This is especially important if you are retiring at an early age because that puts much more strain on your retirement plan to last longer in retirement.  So it’s very important to have your ducks in a row when you make that ultimate decision because many times it is very difficult to get a job back or to go back into the workforce after you have retired. 

 

The first thing you need to make sure you have before you make that decision to retire is a coherent and organized plan.  Two years ago, Andrew Luck abruptly decided to retire from the NFL.  This was an absolute shocker to everyone.  But do you think he did that out of the blue?  Do you think he made that decision without any planning beforehand?  Probably not.  I am sure he thought that through and had a plan before he told the world. 

 

So before making a decision to retire, you have to make sure you have a coordinated plan that will cover all areas of retirement, such as health care, income planning, tax planning, legal documents, and proper wealth management as well as many more areas.  To learn of all the many factors that must be considered before making a decision to retire early, feel free to reach out to us at Heritage Solutions Group at 801-727-8780.

Question of the Month

October 19, 2020

 

“Hello, Todd.  I have several different types of retirement accounts (IRA, 401(k), and Roth,).  I also have an HSA account.  With the new inheritance rules requiring retirement accounts to be liquidated within 10 years by the beneficiary, do those rules apply to HSAs too?  Thank you.”  John

 

Hello, John.  Health Savings Accounts (HSAs) are a great type of savings account to use for health care expenses.  In fact, it may very well be the best tax-advantaged account for an account owner as it is the only type of account that provides a tax deduction on contributions, no taxes on earnings and tax-free access to funds at any age for qualified medical expenses.  However, a beneficiary does not get to keep all those tax advantages.

 

Unlike IRAs, Roth IRAs and other types of retirement savings accounts, HSAs do not give your beneficiaries the flexibility of 10 years to distribute the money left in an HSA.  An HSA has a distinct set of rules that apply when an owner passes away, which depend on who is listed as the designated beneficiary.

 

A spousal beneficiary of an HSA becomes the owner of the HSA.  They get to treat the account as you did and enjoy the same tax benefits.  However, your surviving spouse’s ability to make future contributions is determined by their eligibility.  

 

For all non-spouse beneficiaries, the account will be changed to a taxable account in the name of the specific beneficiary, and the account value becomes fully taxable to that beneficiary in the year of inheritance.  The taxable amount can be reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within one year after the date of death.  If the beneficiary of an HSA is a trust, the account will be changed to a taxable account in the name of the trust, and the full value becomes taxable income to the trust.  

 

So the bottom line is that an HSA is a wonderful tax-advantaged account for health care expenses during an owner and spouse beneficiary’s lifetime.  However, once it passes on to children or other heirs, it loses its tax advantages and can become more of a tax problem.  

 

To get answers to any of your retirement planning questions, feel free to reach out to us at Heritage Solutions Group at 801-727-8780.  

It’s Time For Your Retirement Test

 

October 12, 2020

 

Recently, we did our ‘Back To School For Your Retirement’ show.  Students across the country have been getting back to school over the last several weeks.  However, “back to school” is not just for students anymore.  You have to make sure to continue your retirement education each and every year due to all the many changes that take place in the financial arena.  

 

Over the last several years, there has been an explosion in technology.  These major advancements have created several advancements in automation.  There are even cars now that drive themselves!  Of course, these advancements in technology are designed to make life easier, which they do in many circumstances.

 

However, automation is not a good thing for everything.  Even though some advancements in technology have been good in the financial industry, it is not a good idea to put your retirement plan on autopilot.  There are so many changes each and every year in the financial arena such as tax law, interest rate and economic changes.  In addition, each year there are rule and law changes that you have to adapt to, and you may very well have goal and objective changes over your retirement lifetime.  To keep your retirement plan up to date, accurate and set up in the best way for your specific situation, you have to be educated and informed of these changes each and every year and make the necessary adjustments to your retirement plan.  A retirement plan on autopilot with no annual adjustments simply will not work.

 

So, how up to date do you think you are when it comes to the latest retirement rules and laws, especially after this year.  If you have any questions or would like to test your knowledge on retirement to see if you can do better than most of the Americans who failed a quiz based on several surveys done recently to test Americans' retirement knowledge, please feel free to contact us at Heritage Solutions Group at 801-727-8780.  

What Happens To Your Retirement Plan When A Spouse Passes Away?

 

October 5, 2020

 

It is always a hard time when a spouse passes away.  Obviously there are a lot of emotions to deal with, as well as concerns and figuring out how to live without your spouse.  But what happens to your retirement plan?  Well, unfortunately, there are a lot of changes that happen to a retirement plan when a spouse passes away.  

 

We have received a lot of questions regarding this topic over the last several months.  Even though it is not a fun topic to discuss, we decided it is time that we provide some answers and information on this subject.  The fact is this is a scenario that is going to come up because most people are married; in most cases, one of the spouses will pass away before the other.  When this occurs, there are many changes that happen to a retirement plan.  There are also some very important and critical decisions that must be made in order for the retirement plan to continue to succeed and take care of the surviving spouse for the rest of their life.  In addition, after the surviving spouse passes away, there are changes that will need to be made to transfer it in the most proper way to all the contingent beneficiaries, including children, grandchildren and any legacy desires.  So even though this is not a fun topic to discuss, it is critical information that can certainly help people plan, in an effort to make this eventual time as smooth and painless as possible.  


Incorrect planning or the lack of planning in these areas could cause many problems and cost your family tens of thousands or even hundreds of thousands of dollars if done incorrectly and could subject a surviving spouse and/or other heirs to a lot of pain, suffering and financial distress.  If you have any questions or would like to learn more about the many changes that can happen to your retirement plan, as well as about some critical decisions you will need to make if your spouse passes away, you can obtain this information by reaching out to us at Heritage Solutions Group at 801-727-8780.  In addition, we will share information with you about the biggest factor of all that can cost a surviving spouse a lot of money each year and that hardly anyone plans for simply from a lack of knowledge or proper advisement. 

Do You Know All The Different Factors That Affect Your Social Security Benefits?

 

September 28, 2020

 

Most people pay a lot of money into the Social Security system during their working years.  But do you know how much you will get out of the system?  A recent survey says that most people do not know exactly what affects their Social Security Benefits.  

 

Social Security will be or is a key component of many people’s retirement income.  Unfortunately, according to a recent survey done by American Advisors Group, most people have no idea what factors affect the payout amount of their Social Security benefits.  And according to the Nationwide Retirement Institute, only 9% of not-yet-retired workers over the age of 50 can correctly name these factors.  Among those who are already retired, the numbers are even more dismal.  Around 8% of those who have retired recently can name the factors that impact their benefit amount, and just 7% of those who have been retired for at least 10 years can do so.  This is not good because the goal is to get as much as you can out of the system. 

 

To maximize your Social Security benefits, you need to understand how your benefit is calculated and what affects the amount you receive.  So what factors influence your benefit amount?  Well, there are a lot of complex calculations that go into determining your exact benefit amount.  And while you don't need to understand exactly how all these calculations work, it is important to at least understand the basics of how your benefits are determined.  

 

There are five big factors that contribute to the amount you receive and keep in Social Security benefits.  If you do not understand these, then you may very well end up receiving less than you should or were expecting.  If you have any questions or would like to learn more about these five big factors, you can obtain this information by reaching out to us at Heritage Solutions Group at 801-727-8780. 

Question of the Month

September 21, 2020

“Hello, Todd.  My wife and I are 65 years old and still working.  We plan to retire in a few years.  Until then, we are saving money for retirement.  One way we save is by contributing to our Roth IRAs each year, maximizing them out at $7,000 apiece.  We are also trying to become more tax efficient because we believe tax rates will be much higher in the future.  We are considering doing a Roth conversion this year.  However, we are afraid that if we do a Roth conversion, then we will not be eligible to make our Roth contributions.  Will that happen? Thank you.”  Chris and Lori

 

This is a great question, especially for those who are trying to maximize their retirement savings while getting more tax efficient.  There are two ways to get money into your Roth IRA: Roth contributions and Roth conversions.  

 

Let’s start with Roth contributions.  To be eligible to contribute to a Roth IRA, you must have earned income and your modified adjusted gross income can’t exceed the annual phaseout threshold limits. The threshold limits vary depending on your filing status and the year because the Internal Revenue Service updates them each year for inflation. 

 

Now let’s look at conversions.  There are no qualifying rules for Roth conversions, so anyone is eligible to do them in any amount as often as they like.  Even though Roth conversions count as taxable income, they are not included in your modified adjusted gross income.  The IRS makes a special tweak in the Modified Adjusted Gross Income Formula that takes out any income from a Roth IRA conversion.  So, for example, let’s say you do a $100,000 Roth conversion this year, and your combined gross income from work is $150,000.  When you figure your modified adjusted gross income, you take out that $100,000, so your modified adjusted gross income stays at $150,000, and you are still eligible then to contribute to Roth IRAs.

 

So the good news is that if you are otherwise eligible to contribute to Roth IRAs, then any Roth conversions you do in the same year will not change that eligibility.  That of course is a big help for people who are trying to maximize their retirement savings while becoming much more tax efficient.  If you would like more information about this topic and answers to many more retirement planning-related questions, as well as details on all the updated rules, laws, and guidelines as they relate to planning your retirement, feel free to reach out to us at Heritage Solutions Group at 801-727-8780.

The Original ‘Inherited Stretch IRA’ Has Been Eliminated.  Now What Do You Do?

 

September 14, 2020

 

The SECURE Act (Setting Every Community Up for Retirement Enhancement Act) became law at the beginning of this year. This legislation was mainly intended to expand opportunities for people to increase their retirement savings, which is obviously a good thing.  However, the act also included one big tax law change that will cost most inheritors additional taxes, and that was the elimination of the ‘inherited stretch IRA’.  So, now what do you do?  

 

The majority of money that is saved for retirement and eventually passed on to heirs is saved on a pre-taxed basis.  Of course, this means that money inherited from a traditional IRA, SEP IRA, 401(k) or 403(b) is fully taxable at ordinary income tax rates to the inheritor.  Thus, many inheritors do proper estate planning to reduce the tax liability on inherited money.

 

One of the main estate planning moves previously used for this was to establish an inherited stretch IRA upon inheriting retirement account money.  This allowed the inheritor to keep the money in a tax-deferred account and prevented the taxation on that money all at once.  You could pay tax on a small required minimum distribution each year or on the money as you withdrew it.  Currently, due to the SECURE Act, for money inherited in 2019 or before, you are allowed to keep your inherited stretch IRA because it was grandfathered in.  For any money inherited on Jan 1, 2020 and later, the inherited stretch IRA is not available as it was before.

 

The new law says that all inherited money in retirement accounts, including Roth IRAs, has to be liquidated by the end of the tenth year after inheriting the money.  So that means the taxes owed on that money have to be paid within 10 years.  You get flexibility within that 10 years to pay taxes as you wish, so you could pay it all the first year, wait until the tenth year, or pay it in any combination within the 10 years.  

 

This new law will now require a lot of estate plans to be revised in order to come up with the proper payout strategy and to look at alternative ways to save as much tax as possible when inheriting money.  So the key question is: What do you do now?  To learn of some alternative strategies to the ‘inherited stretch IRA’ and ways to limit the tax owed on inherited money, feel free to reach out to us at Heritage Solutions Group at 801-727-8780.

Retirement Rules and Staples

That Don’t Apply Anymore

 

September 7, 2020

 

Retirement today is so much different than it used to be.  People who were working back in the 50s, 60s and 70s probably had the old-fashioned traditional retirement where they retired with a solid pension plan.  This coupled with Social Security took care of many people’s retirement lifestyle, and they did not have to worry about saving much more on their own.  Unfortunately, this is not the case anymore.  

 

Very few people working today will have the security of being able to rely on an employer and the government to take care of them in retirement.  Many companies have gotten rid of traditional pension plans and shifted to defined contribution plans, such as 401(k)s, where it is the employees’ responsibility to put their own money back for retirement.  

 

Furthermore, employees today cannot rely on the government as much as they used to, as the Social Security system is underfunded and will have to go through some major changes in order to save it for future generations.  In addition to this, a host of new forces are altering the traditional approach to retirement planning.  We have insanely high and rising healthcare costs, historically low interest rates, and a complex tax system and if you do not know what you are doing and how to save properly, you could end up having most of your sources of retirement income subject to taxes.  

 

These are just a few examples of the differences between retirement past and retirement today. To learn many of the common, understood retirement rules and staples of the past and why they don’t apply anymore, and to learn of the new updated rules, principles and realities that have to be followed, feel free to reach out to us.  We can be reached at Heritage Solutions Group at (801) 727-8780.

Key Dates and Ages Related to Your Retirement

 

August 31, 2020

 

When you think of certain important dates or ages, you generally think of birthdays, anniversaries, special moments, etc.  However, as you get older and get into your pre-retirement and retirement years, some other dates and ages become very important.  In fact, these dates may even become more important than birthdays and anniversaries because missing them or not understanding what happens at these times can have a severe impact on your retirement.  

 

Most people work extremely hard during their lifetime to build a nest egg that will take care of them in retirement.  Part of building your nest egg is the proper understanding and planning around some key dates and ages.  The key dates and ages related to retirement that we are talking about here are age 21, age 50, age 55, age 59½, age 62, ages 65 to 67, age 70 and ages 70½ and 72.

 

All of the dates around or at these ages represent a very important time related to some type of retirement issue, like contributions, Social Security, Medicare, required minimum distributions, etc.  Most of these ages require some type of action that needs to be taken which will affect your retirement in some way.  For example, are you sure you understand when you can access money out of a retirement plan without penalty or when you can make as much money as you want without losing Social Security benefits?

 

To make the most of your retirement benefits, you need to understand what all of these key dates and ages mean and all the issues and options that each age entails.  If you have any questions or would like to learn more about these important retirement dates and ages, you can obtain this information by reaching out to us at Heritage Solutions Group at 801-727-8780.

Question of the Month

August 24, 2020

“Hi, Todd.  My husband and I are retiring at the end of this year.  We have always had some money in an emergency fund throughout our working years.  Is it necessary to have this emergency fund in retirement since most of our money is now liquid, in IRAs and such?  Thank you.”  Teresa

 

Hello, Teresa.  An emergency fund is exactly what it sounds like – a fund that you keep liquid in cash in case money is needed for an emergency.  And of course, an emergency can come up at any time, even in retirement.

 

Financial emergencies in retirement can be different from those that occur during your working years.  This is mainly due to the fact an emergency fund is generally established, during your working years, to protect you if you lose your job.  Standard advice is that an emergency fund during your working years should be large enough to cover six months of expenses if you lost your job.

 

Of course, in retirement you don’t have that worry anymore.  However, different types of emergencies can arise in retirement where money can be needed in a hurry.  You still might need a new roof, need to help a family member, or deal with a medical issue.  So you need an emergency fund in retirement to account for things like these. 

 

Now, I certainly understand your point that you can access most of your retirement savings now, and you could withdraw that money if an emergency arises.  However, many times the majority of retirement money is positioned in different types of investments, such as fixed and variable.  This means that depending on market conditions, it may not be a good time to withdraw that money in a split second.  So it is still wise to have a portion of your retirement savings in a cash position for emergencies or other potential needs that could come up at any time. 

 

So, bottom line, you still need a financial reserve in a cash position to serve as a buffer for whatever life throws your way.  If you would like to discuss this topic further or have any other questions, feel free to reach out to us at Heritage Solutions Group at 801-727-8780. 

Which Type of IRA Is Best For You?

August 17, 2020

 

There are many different tools available when it comes to planning and saving for retirement. One of the most popular and widely-used tools is the IRA. However, many people don’t use the right type of IRA, and that can be a major problem.

With so many options to use when saving for retirement, picking the right tools for your specific situation can be a daunting task and can be hard to figure out. This is especially true of the IRA. IRA stands for Individual Retirement Account. IRAs are accounts that you can use to save for retirement for yourself, with emphasis on the word individual.

Fortunately, there are many different types of IRAs for people to use to help save for retirement. Each type of IRA is designed for a specific circumstance, and all have their advantages and disadvantages. Thus, you want to make sure you are using the proper IRAs for your specific situation. Unfortunately, many people do not realize there are many different IRA options, and therefore do not use the proper ones suited for their needs.

The key to maximizing your retirement is utilizing the proper and correct tools for your specific situation. If you have any questions or would like to learn more about all the different types of IRAS and about how and when to use each one, feel free to contact us at Heritage Solutions Group at 801-727-8780.

It Is Back-To-School Time For Your Retirement

 

August 10, 2020

It is August, and that means it is back-to-school time.  But back-to-school time is not just for kids in school anymore.  With so many changes in the financial and economic arena each and every year, in order to keep your retirement plan updated and accurate at all times, you simply have to make sure you go ‘back to school’ to stay educated and informed.  So it is back-to-school time for your retirement plan.  

 

Summertime is usually considered break time for most students.  Obviously, due to the pandemic, this year has been different, with kids getting out of school early and many people being off work or working from home.  But this has given people and families the opportunity to spend more time together to do some activities and take some road trips.  During this time period, it is very easy to get behind and forget about your retirement plan for a while.  However, as you know, time does not stop and changes in the financial and economic arena happen all the time.  

 

Every year there are tax law changes, interest rate changes, changes in the economy, and changes in the financial markets.  With that being said, retirement planning never ends.  In fact, there have been many changes this year in rules, laws, taxes and regulations.  You need to be knowledgeable about all these changes, so you can make the proper, strategic adjustments to your retirement plan every year to keep your planning up to date, accurate and in line with your specific goals, objectives, and desires. 

 

So, back to school is not just for kids anymore because it is back-to-school time for your retirement plan, especially this year.  If you have any questions or would like to find out more about the many changes so far for 2020 and how to adapt to them, as well learn about some of the fast-approaching retirement-planning deadlines for this year, you can obtain this information by contacting us at Heritage Solutions Group at 801-727-8780.

You Cannot Retire Until You

Consider These Factors

August 3, 2020

 

Many people are considering early retirement or being offered early retirement packages from companies cutting back during this pandemic.  However, you cannot make this decision based solely on the amount of money you have accumulated and saved.  In fact, you absolutely cannot retire until you consider many often-overlooked factors.   

 

Retirement is the ultimate goal of all workers.  People work very hard most of their lives to get to the point of eventually being able to retire comfortably.  Now, this may not mean quitting work all together, but it at least means moving into a part-time position or some type of position that you enjoy doing and/or have always wanted to do.  

 

Most people make the transition out of their main occupation to either full retirement or into some other type of part-time employment based on the main factor of the amount of money they feel they will need to carry them throughout their retirement years.  In other words, it is strictly a financial decision.  Now, while that is extremely important, it is not the only factor you need to consider.  In fact, it may not even be the most important one.  

 

Based on my 25 years of experience in the retirement-planning profession, I have witnessed many people retire and talked to thousands of retirees.  I learned some very valuable things from these people, specifically the many often over-looked factors they wished they would have thought of and considered before they made the decision to retire.  These factors are so very important because, even with enough money to retire, many of these can still ruin a retirement or make it a lot more stressful and less enjoyable.  

 

If you have any questions or would like more information about the many critical factors that most people never consider before making their decision to retire, feel free to reach out to us at Heritage Solutions Group at 801-727-8780.

Don’t Make These Roth IRA Mistakes

 

July 27, 2020

The Roth IRA is one of the most popular and effective tools you can use in becoming tax efficient during your retirement years.  However, it is not bulletproof.  There are several mistakes that could be made with a Roth IRA that could really hurt your retirement plan.  

 

The tax-free benefits that Roth IRAs offer are attractive to people who believe taxes will be higher in the future and/or for those who want to be as tax efficient as possible.  These benefits include passing money on to heirs tax-free.  With the massive national debt continuing to increase at a rapid pace, along with all the stimulus packages that have recently been introduced, it is likely that tax rates will have to be increased in the future.  Couple that with the fact that our current tax code is set to expire at the end of 2025, and tax rates are set to revert up to higher rates.  Thus, many people are seeing the writing on the wall about future tax increases and are making moves now to protect themselves and their heirs.

 

So, a tax-free Roth IRA could be a very beneficial and effective tool to use to protect yourself, your spouse, and your heirs from higher taxes now and in the future.  But you must make sure you use this tool properly and avoid making many common mistakes in order for it to be effective.  

 

Making these common mistakes with Roth IRAs could end up costing you money and causing you to miss out on opportunities to save tax dollars.  If you have any questions or would like to learn more about the common mistakes made with Roth IRAs and how to avoid them, you can obtain this information by reaching out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

 

July 20, 2020

“Hello, Todd.  I have been reading your articles and listening to your radio show for years; now, I need your help.  Unfortunately, I lost my husband back in 2017.  He was 12 years older than me and handled all the financial affairs, which is now my responsibility.  I thought I was doing the right thing by just continuing to collect the same checks and income we had while he was alive.  However, I was recently notified that my Medicare premiums are going to more than double in cost.  After doing some research and asking questions as to why this is happening, the answer I am getting is that my income is now over the thresholds, which causes my Medicare premiums to rise.  So not only have I been paying more in taxes the last few years, which I don’t understand, but now my Medicare premiums are rising by more than double.  What is happening here, and why?  Can you please provide some answers for me?  I am so confused and upset.  Thank you.” Rita

 

Hello, Rita.  Thank you for being a long time reader and listener and for sending in your question.  I am so sorry for the loss of your husband and for the stress that loss has placed upon you regarding your financial matters.  Let me at least provide you with some clarity about what is going on here.

 

Unfortunately, the tax code is set up to tax retirees heavily in retirement if they don’t have the proper information, planning and expertise.  It is a tax code domino effect so to speak when it comes to Social Security, retirement account savings distributions, and yes, Medicare premiums.  Unfortunately, no one has ever explained this situation to you so that you could properly plan and prepare.

 

What is happening here is that you are simply taking the same income as you were when your spouse was alive.  However, what most people don’t ever plan for or realize is that when you lose a spouse, you now have to file your taxes as ‘single’.  And filing as single puts you in a much higher tax situation than you were in when you were married filing jointly.  When you have to file single with the same income levels, it throws you into higher brackets, which then triggers much more tax and, as you have just been informed, higher Medicare premiums.  

 

Again, this is something that most people never plan for because they do not receive the proper retirement-planning education and advice.  As a result, for most people, the proper planning has not been done to prevent this situation.  However, there may be planning moves you can make to fix this for the future.  If you would like to look into your options here to reduce your taxes and Medicare premiums, feel free to reach out to us at Heritage Solutions Group at 801-727-8780. 

2020 Mid-Year Review – Six Months of Craziness

 

July 13, 2020

 

The year 2020 is half over, and what a year it has been so far!  I think it is safe to say that it has been six months of craziness with the changing economic conditions and all of the retirement rule and law changes that have occurred.  So what has happened so far this year, and how do you adapt properly and take advantage to improve your retirement plan for the rest of the year? 

 

2020 has been one of the craziest times periods I have ever seen.  Obviously, it has been a historic year so far regarding the pandemic and all that has happened in our country and all over the world.  These events have caused a complete disruption of everyone’s professional and personal lives.  And of course, these events have caused many financial changes, which can and will have major effects on most pre-retirees and retirees.   

 

So since we are at the midpoint of 2020, we thought it would be a great time to review all of the financial and retirement planning changes that have occurred so far this year, get you ready, and help you adapt properly for the rest of the year.  Many of these changes will have major effects on almost all pre-retirees and retirees.  These rule and law changes will require you to make some changes and adjustments.  But they also can provide you with some very unique and timely planning opportunities for the future.

 

If you have any questions or would like to learn more about all of the major rule and law changes that you need to know about, as well as obtain more information about some planning opportunities that could possibly improve your retirement plan going forward, please contact us at Heritage Solutions Group by calling 801-727-8780.

Will You Achieve Financial

Independence in Retirement?

 

July 6, 2020

Last week people celebrated Independence Day.  Independence Day honors the birthday of the United States of America and the adoption of the Declaration of Independence on July 4, 1776.  The Declaration of Independence is the nation's most cherished symbol of liberty, and this is a special time for many Americans.  To me, the 4th of July represents not only the birth of our nation and the sacrifices that millions of military members and their families have made throughout our nation’s history, it is also a symbol of freedom and hope.  It is not a stretch to take this a step further and relate freedom and hope to financial independence in retirement.

 

There is no absolute definition for financial independence in retirement.  The most common sense of the term is someone having enough wealth to do anything at any time.  Obviously, most Americans will never achieve this goal.  A much better definition of financial independence in retirement would be the ability to have the lifestyle that you desire, the freedom to do some things you want to do, and a financial sense of security.  

 

To achieve this, you will obviously need to do proper planning and make the right strategic moves at the proper time, as well as keep up with all the tax law changes and legal changes each and every year.  If you do not adjust and keep your retirement plan up to date based on all these changes, then your financial independence in retirement might never be achieved and could be lost.

 

As the Fourth of July should remind us all, independence is something worth fighting for.  If you have any questions or would like to learn more about how to fight for your financial independence, please feel free to contact us at Heritage Solutions Group at (801) 727-8780.

Does Father Always Know Best?

 

June 29, 2020

 

Last Sunday was Father’s Day.  Hopefully, you were able to spend some quality time with your father and thank him for all the good advice and wisdom that you may have received from him over your lifetime.  Advice from your father and all his experiences can be very valuable, especially with his experiences on money matters.  However, does father always know best? 

 

One of the main duties and responsibilities of a father is to teach and offer advice to their children, no matter what their age.  However, how do you know if “father knows best” when it comes to giving financial advice or if the financial tips that your father gave you are valuable and should still be followed in today’s financial world?

 

All of us have heard about, and even lived with, the “generation gap”.  We have experienced it through music, clothing, and entertainment.  But an area that we don’t often hear about is the “generation gap” that exists in financial planning.  In essence, some planning strategies and financial products that worked in past generations may not necessarily meet the needs of today. Yet, there are other tools and concepts that continue to stand the test of time, though are not in practice as much today as they should be. 

 

For the most part, parents who talk about money and display good financial habits like budgeting and paying bills on time can improve their children’s financial future.  Fortunately, I was a recipient of this from my father, and I greatly appreciate that.  However, today’s financial world is much different from the past, and to have a successful retirement plan you have to adapt to updated strategies and concepts.  

 

Dads across this great nation gave us a great foundation to build on.  Using those principals along with updated and customized financial advice from a professional financial advisor can ensure that your retirement will be just as good as or even better than your father’s.  If you have any questions or would like to obtain more information about successful retirement strategies, both past and current, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

The New World of Retirement Planning

 

June 22, 2020

 

Today’s retirement world is vastly different from the past.  In today’s world, you cannot rely on an employer and the government to take care of you.  It’s on you to save for your retirement and have the proper plan in place to provide you with an increasing income for what potentially may be a very long time.  So are you using old outdated tools and strategies to build your retirement plan, or have you adapted to the times?  

 

There have been a lot of changes in the retirement-planning world over the last several years.  For one, longevity is increasing, meaning people are living longer.  This puts much more pressure on a retirement nest egg to provide income for a long time, potentially 20 to 30 years or longer.  In addition, pension income is no longer common.  In the past, a pension income was a staple for many people’s retirement income plan; this is not the case anymore.  This again, puts more pressure on your retirement nest egg to provide an income to you for a long period of time. So, much more pressure is on you to save and build up a nest egg that is able to provide that income.  

 

Unfortunately, some old retirement strategies and concepts don’t work as well as they used to, while others are just plain wrong.  To plan and save properly, you must have education and knowledge about today’s updated strategies.  These updated strategies need to be utilized in order for you to have a successful retirement plan and bring it into the 21st century. 

 

If you would like to obtain more details about these updated strategies, as well as learn more about the differences between the retirement world of yesterday and today, please contact us at Heritage Solutions Group at (801) 727-8780.

Do You Have a True Retirement Plan?

 

June 15, 2020

 

Everyone knows that in order to have a successful retirement in today’s world, you will have to save enough money and save it properly.  However, even the best-laid retirement plans can run into trouble in retirement.  Why is that?  It is because of many potential threats to your plan.

 

The goal of retirement planning is to save enough money based on your specific goals, objectives, and desires, to have a comfortable and secure retirement.  Of course, the amount of money needed is different for everyone.  In order to reach that specific number or level of assets, you have to have a very solid and adaptable retirement plan.  So, when that number or level of assets is reached, is your retirement plan in the clear?  Maybe not.  

 

There are several retirement threats that could come into play during your retirement years which could severely affect or even destroy your hard-earned retirement plan and budget very quickly.   The reason for this is that many times these threats are not properly planned for or even considered during retirement planning.  Thus, a retirement plan is not a true retirement plan until these issues and threats are considered and made part of your retirement planning.

 

To get more information about these threats and about how you can specifically plan for them so they will not destroy your retirement budget, feel free to reach out to us.  We can be reached at Heritage Solutions Group at (801) 727-8780.

Question of the Month

June 8, 2020

 

“Hi, Todd.  I am 65 years old, and I retired two years ago after turning on our Social Security benefits.  However, after the volatility spike in the market this year, my wife and I are concerned about how much we have saved for retirement and are worried it now may not be enough.  Thus, I am considering going back to work to try and add more money to our nest egg.  How will this affect our Social Security benefits, and what options do we have here?  Thank you.” 

Russell and Barb

 

You certainly are not the only ones in this boat.  In May 2017, the Bureau of Labor Statistics predicted that by 2024, there will be 13 million people in the workforce ages 65 and older.  A year earlier, the Federal Reserve Board found that more than 33% of retired men later returned to work.  Given that Americans were generally underfunded for retirement before this year's bout of stock market turbulence and lacked proper retirement plans, more people will need to extend or revive their careers to ensure they don’t run out of money in retirement.  

 

Now, there are a lot of things to consider regarding going back into the workforce.  One of the main things that must be addressed is how a career restart impacts your Social Security benefits.  Essentially, you have three options.

 

The first option is you may be able to withdraw your application and stop your Social Security income.  If you don’t need this income anymore, this will allow your benefits to grow for the future, and you can avoid having to pay tax on this income.  You can do this within 12 months of your initial filing.  However, you will have to repay all your previous benefits back in order to go this route.

 

Your next option, again, if you don’t need the Social Security income, is to suspend your benefits.  This can be done once you reach your full retirement age (FRA) but not after age 70.  This option will also allow your benefits to earn delayed retirement credits and increase in value for the future.  

 

Finally, your last option is to just simply leave your Social Security benefits turned on.  Obviously, you will choose this option if you cannot afford to stop your benefits.  However, if you leave your benefits on and you have not reached your FRA yet, your wages will be subject to the earnings test, and your benefits may be reduced if you make too much money.  In addition, this option may increase your tax bill depending on how much you make in your new job.  

 

Returning to the workforce, if your health and the economy allow it, can be a good solution to add more security to your retirement plan.  But there are some things to consider here, and you could incur reduced benefits or increased taxes.  So make sure you work with a retirement planning professional to help you determine the proper way to go in this situation.

 

If you would like to learn more about the effects of returning to the workforce and how to do it properly after turning on Social Security benefits or have other questions, please contact us, Heritage Solutions Group, at (801) 727-8780. 

Are You Making These

Critical Beneficiary Mistakes?

June 1, 2020

 

When it comes to passing money on to their heirs, most people think it goes through their will and/or trust.  However, many times the majority of assets are passed on through beneficiary designations.  And unfortunately, many people make some critical mistakes when it comes to naming beneficiaries on their assets.  Are you aware of these critical mistakes or potentially making them?

 

A beneficiary designation is a line on a document from certain assets that you fill out to specify who you want to receive that money or asset when you pass away.  You can name one person or multiple people and designate percentages to each.  You also need to name contingent beneficiaries in case something happens to your primary beneficiaries.

 

The assets that pass on via beneficiary designations are life insurance, annuities, and retirement accounts like 401(k)s, IRAs, 403(b)s and similar accounts.  And the reason it is so important to have the proper people named as beneficiaries is that beneficiary designations in these assets pass outside of your will and trust.  So, for these assets, it does not matter what your will and trust says.  That is why beneficiary planning is a very important part of your retirement and estate plan. 


Now, while naming a beneficiary can be an easy way to ensure your loved ones will receive assets directly, beneficiary designations can also cause many problems.  And since it is your responsibility to make sure your beneficiary designations are properly filled out and given to the financial company, you need to be aware of the many mistakes that are often made.  If you have any questions or would like to learn more about the critical mistakes that are often made when it comes to beneficiary planning, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

The Greatest Thing Since Sliced Bread?

 

May 25, 2020

 

The idiom ‘the greatest thing since sliced bread’ means that something is the best and most useful innovation or development invented for a long time.  In the financial and retirement planning world, many people feel the Roth IRA is meeting this definition.  Why is that?  Well, look at its characteristics: tax-free growth, tax-free withdrawals and it passes on to heirs tax free.  This sounds pretty good.  So, is it the greatest thing since sliced bread?

 

The Roth IRA has been around since 1997.  It was born as part of the Taxpayer Relief Act of 1997.  It took awhile for it to gain a lot of traction, but it is now quickly becoming a staple in retirement planning and is one of the most popular and most used retirement tools.  This is not from a popularity standpoint as many people still don’t know what a Roth IRA is and/or how to use it effectively.  But it has become popular from a numbers standpoint as a lot of money from wealthy people has transitioned from pre-taxed IRAs into Roth IRAs over the last several years.  Why is this happening?

 

The tax-free benefits that Roth IRAs offer are attractive to people who believe taxes will be higher in the future.  With the massive national debt continuing to increase at a rapid pace, along with all the stimulus packages that have recently been introduced, in all likelihood tax rates will have to be increased in the future.  Coupled with the fact that our current tax code is set to expire at the end of 2025 and tax rates are set to revert back up to higher rates.  Thus, many people are seeing the writing on the wall about future tax increases and are making moves now to protect themselves.

 

So a tax-free Roth IRA could be a very effective and beneficial tool to protect yourself, your spouse, and your heirs from higher taxes now and in the future.  But you have to make sure you use this tool properly in order to reap the benefits.  The key to doing that is avoiding mistakes.  

To learn of the many mistakes people make with Roth IRAs as well as the most proper and effective ways to use this tool to really enhance your retirement plan and become as tax efficient as possible, feel free to reach out to us at Heritage SolutionsGroup at (801) 727-8780.

Are You Going To Be Forced Into

Early Retirement?

 

May 18, 2020

 

The Coronavirus pandemic has certainly caused financial stress for many Americans.  This financial stress should be temporary for many people.  However, for pre-retirees, it is much more serious as not only are they dealing with the same financial stress, but they also have worries about their jobs being around in the future.  Are you going to be forced into early retirement?  

 

Every year, many people are forced into an early retirement.  In fact, according to a data analysis conducted by ProPublica and the Urban Institute, 56% of workers over age 50 have been fired from a job, been pushed out of a job at least once, or have been forced to retire because of an injury, illness or a family obligation.  Now because of the virus pandemic and economic shutdown, these stats are expected to rise substantially.  

 

More than 30 million Americans have filed for unemployment since mid-March, and millions more are expected to do so over the coming weeks.  And according to data from AARP, one-third of the U.S. labor force are 50 or older and over 6 million people in that demographic work in retail and food services, which are industries that were hit very hard by lockdown measures.  It is unclear how many of these jobs will return once the economy starts to recover.  So, for some older Americans, that means they may be forced out of the labor force years earlier than they had anticipated.

 

So what should you do if you think you may be forced into early retirement?  Well, you very well may need to rethink your retirement plan for both the short and long term.  There are several factors that you will need to consider and address and some actions you will need to take.  If you would like more information about what you need to consider when dealing with early retirement or have any other questions, please feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Mothers and Women Face Many Challenges

May 11, 2020

 

Yesterday was Mother’s Day.  In fact, let’s just say this whole week is Mother’s week as they deserve a whole week of recognition and attention.   To honor Mother’s Day, we are going to help them by giving some information and advice for a secure future.  

 

In the past, men dominated financial affairs.  Today, however, things are much different because of the growing presence of women in the workplace and as head of households.  Women are taking increased responsibility for their long term goals and financial health, but they face many challenges when building wealth and securing their financial future.  This makes financial literacy and advanced planning especially important.  

According to Investment News, women control more than $18 trillion in consumer spending, hold approximately 30% of global wealth, and 32% are the sole head of U.S. households.  Plus, more women are inheriting wealth because of longevity and demographic patterns.  Many women will outlive their husbands and at some point in their lives will have sole responsibility for their finances.  And, many times they are also left with the responsibilities of legacy planning as well, making sure the assets get passed on properly to their heirs.  Thus, women have substantial financial planning, investment, and wealth management needs.  

You can obtain this information and learn more about the specific financial challenges women are facing by reaching out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

May 4, 2020

 

“Hello, Todd.  My wife and I have done many Roth conversions over the last several years to get our taxable retirement account money moved over to tax-free accounts as our goal is to leave this money to our children and grandchildren.  Our children are in a much higher tax bracket than we are, and we firmly believe tax rates will be much higher in the future.  We want this money to pass on to them in the most tax-efficient way.  However, now we are hearing that all of our hard and strategic work may not pay off as the Secure Act has changed the rules for designated non-spouse beneficiaries of Roth IRAs.  Is this true, and if so, what should we do now?  Thank you so much.”  Michael

 

Great question, Michael!  Just like you, millions of Americans see the writing on the wall and anticipate higher tax rates in the future.  To protect their retirement plans from this, many have made some strategic estate planning moves just like you have over the last several years to get money moved into tax-free Roth IRA accounts.  This allowed non-spouse beneficiaries to set up an inherited Roth account and enjoy the benefits of tax-free growth and withdrawals for the rest of their lives, subject to a small required minimum distribution each year.  

 

Unfortunately though, the Secure Act, which was passed at the beginning of this year, eliminated the Inherited Stretch IRA provision, wreaking havoc on many people’s retirement and estate planning.  Now non-spousal beneficiaries who inherit IRAs and/or retirement savings account money after December 31, 2019 are required to empty inherited retirement accounts, including tax-free Roth accounts, within a ten-year period.  

 

This law change certainly puts a crimp in the strategic planning strategy of millions of Americans and forces them to make changes to their estate planning.  However, if you want to pass money on to your children and grandchildren in a tax-free way, there may be some alternative solutions.  To learn of the solutions to this problem and get answers to your other retirement and estate planning questions, feel free to reach out to us at Heritage Solutions Group at 801-727-8780.

Be On The Lookout

 

April 27, 2020

 

As companies across the economy look to cut back and trim costs amid the Coronavirus crisis, some employers are offering voluntary buyouts and early retirement packages. So how do you know whether to accept this offer or not? Well, there are many factors that you must consider before you make this very important and critical one-time decision. 

 

Obviously, the Coronavirus pandemic is having major and devastating consequences on the economy and businesses. When times like this occur, companies start doing everything they can to survive. In most cases, this involves reducing costs in a variety of ways. 

 

One of those ways is to offer incentive packages to certain employees to take a voluntary buyout or early retirement. One very big company in the news lately doing this is Boeing. Boeing has been offering salary and health benefits for employees with a certain amount of employment years to retire early and offering lump sum payments in exchange for giving up a monthly lifetime pension benefit. 

 

Now, of course, when an offer like this comes, it can be very tempting to take the money, especially right now when many people are hurting financially. However, you really must be careful not to jump at this option right away without considering some very important factors to determine if this is really in your best interest or not. Again, this is a one-time decision that will affect you and your retirement plan for the rest of your lives.

 

If you have any questions or would like to obtain more information about the many factors that must be considered and evaluated before deciding to accept any type of incentive package or buyout, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Has Your Market Temperature Changed?

 

The overall financial markets lost roughly 30% in just 23 trading days from mid-February to mid-March.  This was the fastest 30% drop in the history of our country. An event like this certainly rattles many investors and causes them to reconsider their investing prowess.  So, has your market temperature changed? 

 

February and March of 2020 will go down in history as one of the most chaotic short time periods in modern national history.  After an optimistic start to the year, the COVID-19 virus, an oil price war, and an old-fashioned Wall Street panic took their toll on global markets.  Liquidity problems caused distortions in prices which lead to panic-level prices and panic selling. When this happens, it causes prices and values to disconnect.  The good news is that these are temporary conditions. The bad news is that it can cause confusion and anxiety, especially for the average investor.  

 

So, during times like these, many questions need to be answered and evaluated, like:

  • How did we get here?

  • Have the markets hit the bottom yet?

  • How fast will the recovery be?

  • Should you sell out now and wait on the sidelines until the market becomes more stable?

  • Does the current volatility change my long-term expected return?

  • What other options are there to earn a decent rate of return with less or no market risk?

  • Are there any options or ways to take advantage of the current volatility and market environment?

 

Times like these create confusion, concern and worry.  The bottom line is people are wondering if they need to weather the current storm and make minimal changes or make some substantial changes to their current investment and retirement portfolio.  To get information and answers to the above questions in order to try and help you make some proper decisions, feel free to reach out to us Heritage Solutions Group at (801) 727-8780.

Question of the Month

April 13, 2020

 

The Coronavirus has wreaked havoc on the whole world from a health, lifestyle and financial standpoint.  In response to the financial standpoint to try to keep the economy alive, the government has been throwing out stimulus packages.  This has caused people to have a lot of questions as to what they will get and how to take advantage of it properly.  

 

The harsh economic consequences of the COVID-19 pandemic and the widespread shutdowns needed to contain it are starting to set in.  Millions have filed for unemployment and millions more will.  In an effort to keep financially distressed Americans afloat, Congress has responded with stimulus packages.  And there has been a flurry of activity surrounding the COVID-19 stimulus packages with changes in tax filing deadlines, paid sick leave, tax credits, stimulus payments and all kinds of other items.  This information is being released hard and fast, and adjustments are happening constantly. We have attempted, to the best of our abilities during this challenging time, to put all of this together and provide you with answers on the stimulus packages in basic easy-to-understand terms.  

 

To get the latest up-to-date information about the various stimulus packages, all of the specific rule and law changes, and how you can take advantage of these changes the most proper way for you specific situation, please feel free to contact me at Heritage Solutions Group at 801-727-8780.

Help For Your Retirement Plan Is On The Way

 

April 6, 2020

 

In addition to the catastrophic health situation caused by the Coronavirus, many people are also getting hurt financially, especially in their retirement accounts.  However, some help is on the way as Congress just approved The Coronavirus Aid, Relief, and Economic Security Act, also known as the ‘CARES Act’. This act changes many retirement rules and regulations and is designed to provide immediate funding and tax relief.  

 

There are many parts of this act, including help for small businesses, corporations, hospitals and health care clinics as well as help for individuals.  This bill is brand new and many of the finer details are still being finalized. But today, let’s get into the main areas of the CARES Act we know about for sure now, as they relate to retirement planning.  

 

The bill provides financial help and assistance for pre-retirees and retirees in many areas, such as:

  • Tax filing deadline extended to July 15, 2020 for the 2019 tax year

  • Deadline also extended to July 15th for contributing to a traditional and/or Roth IRA for the 2019 tax year

  • Allowance for partial above-the-line tax deduction for charitable contributions without having to itemize

  • 10% early distribution penalty waived on up to $100,000 of distributions from IRAs and company plans for ‘Coronavirus-affected individuals’

  • Required minimum distributions (RMDs) waived for 2020

 

In addition to these law changes, there are also several strategic moves many people can make financially to take advantage of the current market environment and improve their retirement plan.  

 

As the Coronavirus outbreak continues to wreak havoc on the global economy and financial markets, people are facing significant and unique challenges with their financial and retirement plans.  Successful navigation of these challenges will require thoughtful and comprehensive planning. You will need to learn about these new rules and laws in order to take advantage of them and to benefit your planning in the best way possible. 

 

To learn more about the CARES Act in greater detail and about how to specifically take advantage of these new rules and options, call us at Heritage Solutions Group at (801) 727-8780. We would be happy to assist you and answer any questions you might have regarding your retirement planning.

Protect Your Retirement Plan From Coronavirus Scams

 

March 30, 2020

 

The Coronavirus pandemic continues to wreak havoc on the economy and financial markets.  Unfortunately, this produces extreme fear and causes many people to become vulnerable to scams from fraudsters and criminals who are trying to take advantage of the current situation to steal money.  You cannot let this happen to you!  

 

Unfortunately, when times like this occur, where a situation causes fear and uncertainty for Americans, fraudsters and criminals come out in groves to take advantage.  The current situation with the Coronavirus is no exception. In fact, many scams are out in full force already. This has caused some federal and state law enforcement agencies to take notice and to take action.  Government agencies, such as the Federal Trade Commission and the Federal Deposit Insurance Corporation, issued warnings this week for Americans instructing them to be vigilant regarding con artists attempting to steal from consumers spooked by an onslaught of bad news related to COVID-19.  And federal and Virginia state law enforcement agencies have teamed up to create the Virginia Coronavirus Fraud Task Force to identify, investigate, and prosecute fraud related to the ongoing Coronavirus pandemic. 

 

But, no matter how much assistance is out there to help prevent these crimes, we all must be on the lookout as well to protect our finances.  We have to know what to look out for and how to identify these scams. To learn about the several current Coronavirus and Covid-19 scams that have been identified by the new task force, the Better Business Bureau and by the Federal Trade Commission, and some things you can do to prevent falling for any of these scams, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

You Have to Survive and Advance

March 23, 2020

 

March Madness is usually known for basketball tournament time, and the theme for this time of the year is ‘survive and advance’.  Unfortunately, this year the Coronavirus has stolen the show and taken over March Madness. However, the theme remains the same for your retirement plan – you have to survive and advance during these difficult times.  

 

Your first objective is to survive.  Your retirement plan has to be able to survive the volatility and severe downturns in the market.  It also has to survive congressional law changes, tax law changes, economic changes and many other threats to your nest egg that can have major impacts on your overall plan.   

 

Unfortunately though, you cannot stop at just surviving.  You also have to continue to advance your retirement plan as well.  You need to continue to grow your money to battle longevity, inflation and the increasing costs to live.  You also need to become more tax efficient to protect yourself from increasing tax rates in the future.  

 

There is no tournament in basketball this year, but there is definitely one for your retirement plan.  To learn some very important things that you need to be doing now to help your retirement plan survive this current economic situation, as well as how to actually improve and advance your retirement plan, feel free to reach out to us.  We will also inform you how this current economic environment has created some very unique and timely opportunities that you can actually take advantage of to make your retirement plan much better and stronger going forward.  We can be reached at Heritage Solutions Group at (801) 727-8780.

Should You Be Worried About The Stock Market?

 

March 16, 2020

The stock market has been all over the place the past several weeks as volatility has spiked.  This has caused many people to become scared and worried about their investment accounts and retirement plans and to wonder if the long bull run is coming to an end.  So is the party over? Is this the beginning of the next major bear market or market crash? 

 

Well, that is a great question, and I certainly understand why many people are wondering about this.  The stock market has certainly been an interesting place lately. The swings so far have been some of the wildest ever seen.  When markets get this volatile and turbulent, many people start fearing the worst and wondering if this is the beginning of the end for this long bull market run.  

Obviously, no one can predict exactly what the market is going to do.  In fact, the market has an uncanny ability to do exactly the opposite of what most people think.  I mean nobody out there expected this sudden spike in volatility and these extreme days in the market, essentially all at once, after the market has been on a low-volatility, low-risk, very bullish run since 2010.  

 

So, what will happen from here?  Is the punch being put away? Are the decorations being taken down and people being told to go home because this bull run is now over?  Or is this bull run still in mid form but just taking a break while people are out buying more food and drinks for the party?  

 

To get the answers to these questions and find out what to realistically expect from this point, and what should do now to help protect and grow your retirement nest egg, contact us at Heritage Solutions Group at (801) 727-8780. 

What You Don’t Know About Your IRA Can Hurt You

 

March 9, 2020

 

The IRA is one of the main staples of retirement planning.  In fact, millions of people use IRAs to save for and provide an income in retirement.  However, many people are not getting as much out of these plans as possible as they don’t know as much as they should about IRAs.  

 

IRA stands for individual retirement account.  It is a very flexible account as you can invest an IRA any way you want to, and you can customize your deposits and take withdrawals any way you choose.  You can even control what happens to your IRAs when you leave them to your spouse, your children, your grandchildren or any of your heirs after you pass away.   

 

According to research from the Investment Company Institute, 43.9 million U.S. households own at least one type of IRA. Traditional IRAs are the most popular and are owned by 27 percent of all U.S. households.  Roth IRAs are the second most popular and are owned by 19 percent of all U.S. households. These statistics do not include ownership of 401(k) accounts, which are employer-sponsored plans that are offered by some employers.  These statistics demonstrate that millions of people are taking steps to plan for their retirements by saving money in individual accounts whether or not they also participate in employer-sponsored plans at their jobs.

 

So with all these factors and benefits, it is important to know as much as you can about IRAs and know how to get all the possible benefits you can out of them.  But, unfortunately, many people don’t know everything they should, and this costs them money. To learn more about all the factors and benefits about IRAs that many people do not know about, including what could be a golden opportunity and one of the absolute best moves you can make right now with an IRA to help maximize your retirement plan, reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

March 2, 2020

“Hi, Todd – I have heard a lot about the benefits of doing Roth conversions to get more tax efficient.  However, someone told me that it is not a good idea because of the lost opportunity cost. What does that specifically mean, and is this a reason not to do Roth conversions?  Thank you.” Rhonda

Every retirement tool and strategy has its advantages and disadvantages and times where it should and shouldn’t be used; Roth conversions are no different.  But there is no ‘lost opportunity cost’ to a Roth conversion. This is a myth and not a factor against doing a Roth conversion.  

The point argued here is that using funds now to pay the tax upfront on a Roth conversion means losing the future earnings that those funds could have produced, i.e. an opportunity cost. This is simply not true. The main factor here is taxes, meaning the difference between the tax rates paid upfront, now at the time of conversion, versus the projected tax rates, either later in retirement or for beneficiaries.  It’s all about the tax rates: not inflation, not earnings and certainly not the opportunity cost. If the tax rates are the same both at conversion and later in retirement, the end financial result will be exactly the same, and this is true regardless of how long the funds are invested before being withdrawn in retirement.

To illustrate, let’s take a $100,000 IRA and assume a lifetime earnings rate of 200% and a tax rate of 30%.  With no Roth conversion, that $100,000 would grow to $300,000, but after the 30% tax rate, the IRA would be worth $210,000.  With a Roth conversion of the $100,000 today, that $100,000 would go down to $70,000. And with the 200% lifetime earnings, it would grow to $210,000.  The result is exactly the same.  

The decision whether or not to do a Roth conversion is all about taxes.  When can you pay the least amount of tax, now by doing a conversion or later by not?  That is the question you need to answer to determine if you or your heirs will benefit by doing a Roth conversion.  To learn more about this and get answers to many more questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780. 

Now What Are You Going To Do?

February 24, 2020

Americans have just started to figure out, adjust and adapt to changes brought on by the sweeping tax overhaul that went into effect at the beginning of 2018.  Now Americans are going to have to do it again! The passing of Secure Act law that went into effect January 1st of 2020 makes major law changes on retirement account money, including how that money is inherited and how that money is taxed.   

One law change that is viewed as a benefit by many people is the increased age change to age 72 for required minimum distributions (RMDs). This law change may seem on face to reduce the tax burden as withdrawals from IRA accounts could be deferred an extra year or two over the old rules, depending on your birthday. However, in many cases, this will actually increase taxes.  The reason is that an additional year or two of tax deferral will allow the balances in these accounts to continue to increase, which causes the RMD at age 72 to be larger than it would have been at 70 ½. An increased RMD could put you in a higher tax bracket, or cause you to have to pay the tax at a higher rate in the future if tax rates head higher.  

So, not only could that change increase your taxes, but the next change from the Secure Act law could also increase taxes on your heirs.  Prior to the Secure Act, IRA distributions from inherited accounts could be spread over the beneficiary’s lifetime, known at the ‘stretch IRA’.  The tax savings of a stretch IRA could be substantial, as only a small portion of the IRA was required to be distributed each year, allowing additional compounding and the ability to minimize withdrawals during the beneficiaries’ highest earnings years. Unfortunately, that option is now gone.  

The Secure Act replaced the stretch IRA with a 10-year distribution rule for inherited IRA and Roth accounts. This means that most beneficiaries will have to liquidate the accounts within a ten year period.  Beneficiaries get flexibility within the 10 years, but the account has to be completely distributed out by the end of the 10th year in most cases.  That will cause inherited IRA money to be taxed at much higher rates for many people.

Obviously, this new law change will require many people to update their estate plans.  New strategies will have to be implemented for taking distributions during your lifetime, as well as how to properly pass money on to their heirs with the least amount of tax consequences.  To learn of the possible adjustments and fixes for your estate plan to help you adapt to this new law the most effective way, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780. 

Have You Forgotten About This in Your Retirement Plan?

February 17, 2020

When people think of estate planning, it is generally thought of as only being needed by the ultra wealthy.  Actually though, this isn’t the case. Whether people realize it or not, estate planning is a big part of retirement planning.  Because of legislation and demographic changes, as well as tax, inheritance and privacy laws, proper estate planning is greatly needed in almost all retirement plans.  So make it a point not to forget about estate planning.  

 

The ultimate goal of estate planning is to pass your unused assets to your heirs in the most effective way, with the least amount of taxes, expenses, and fees and to do it as privately as possible.  In other words, to protect and preserve your legacy for your family, loved ones, and your charitable causes and interests. And you do not have to be extremely wealthy to have this desire.

 

This is why you cannot forget about proper estate planning and the many areas and factors that it entails.  A few of these areas and factors are common, for example, proper estate-planning documents such as a will or a trust. But most people don’t think of the additional areas and factors regarding estate planning.  So make it a point to learn about everything that must be addressed in order to maximize, protect and preserve your legacy the absolute best way.  

 

To learn more about these many areas and factors, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780. 

Are You Ready or Able to Retire?

February 10, 2020

 

Let me ask you a question.  Would you retire if you could?  Most people would say, “that is a silly question, of course I would” as retirement is the ultimate goal for most workers, and most people want to retire at an early age or as soon as possible.  But before you make the decision to retire, you need to consider many critical factors. 

 

We are in the beginning stages of a new year, and this is the time of year that many people really think about retiring.  We are fresh off the holiday season where many people had time off from work. Many people enjoy and get used to that time off work, and when it comes time to go back to work in January, it does become more and more difficult each year.  So again, at this time of the year, the thought of retirement is a popular one with many pre-retirees as they really start wondering if they could possibly retire. 

 

In my career in the retirement and estate planning services arena, I have been asked many times by several people if they are able to retire.  Now, I have had the pleasure of saying “yes” to this question many times, which is always nice to be able to do. However, I have also had the displeasure of saying “no” to this question to people several times.  The definitive answer to this often-asked retirement question is based on several factors, many of which will be specific to your own unique and personal situation.  

 

When to retire is an important decision at any age.  To learn of the many factors that you must consider before you make the decision to retire, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Your Retirement Reality Check

February 3, 2020

The retirement landscape has changed dramatically over the last several years.  Today there are many new retirement realities that pre-retirees and retirees must face.  And in order to have a successful retirement plan, pre-retirees and retirees today will have to adapt and do things much differently than in the past.  

 

Now, as complex and cumbersome planning for a successful retirement is, the end game is pretty simple for most people and remains as clear as ever.  The object is to protect and preserve your hard-earned nest egg, but also to continue to grow it in the most tax efficient way in order to receive as much income as possible throughout your lifetime.  Unfortunately though, as we have said before, everything about achieving these main principles and how to accomplish them is changing and will continue to change. Thus, accomplishing this is much harder than ever.

 

While planning for retirement, you need to address many areas, and you have to make some very tough and critical decisions.  You will have to make proper decisions about medical insurance, how to properly invest, about taxes and tax planning, Social Security, estate planning, how to draw income properly and many more areas.  And what makes getting these decisions right even more critical is that many of these decisions are irreversible. If you make the wrong choice or decisions, it could have a trickle-down effect on your whole retirement plan.  

 

No matter if you are 40 or 80 years old, you will have to rethink your retirement plan and adjust and adapt based on today’s new retirement realities.  To learn of these new retirement realities and get your plan updated properly, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

 

January 27, 2020

 

“I will turn 71 in February of this year and am still working.  I have an IRA and a 401(k) plan through my current employer. Since I am still working, I don’t need the money from required minimum distributions.  With the Secure Act changing the age limit to 72 for required minimum distributions, do I not need to take my RMD for this year now? Also, with the change in the law, am I able to contribute to my IRA now for both last year and this year? Thank you.” Ronald

 

Hi, Ronald.  The Secure Act law, which went into effect January 1st of this year, changed many retirement planning rules.  These changes will affect almost all pre-retirees and retirees at some point.  So adjusting and adapting your retirement plan is a must to maximize benefits and minimize the costs of the changes.  

 

Let’s start with your first question relating to your required minimum distribution (RMD).  The new age limit of 72 for RMDs is for those people who turn age 70½ on or after January 1, 2020.  If you reach the age of 70½ in the year 2019 or before, then you are still under the previous RMD rules.  So in your case, you turned age 70½ in August of 2019, thus you do still have an RMD to meet for this year since you are still under the previous laws.  Sorry, but you do not get to take this year off from the RMD requirement.  

 

Now, for your second question.  The Secure Act eliminates the age restriction rule for being able to contribute to a traditional IRA.  So for this year and going forward, if you have earned income and are below the phase-out thresholds, then you are able to contribute to a traditional IRA and deduct that amount off your tax return.  If you are married, then you can do this for your spouse’s account as well, assuming you meet the income parameters.  

 

However, this is only for contributions for the 2020 tax year and going forward.  Since the new law did not go into effect until January 1st of this year, you are not allowed to make a traditional IRA contribution for last year.  

 

To get answers to your retirement-related questions, including on all the recent rule and law changes, including the Secure Act law, feel free to reach out to us at Heritage Solutions Group at (801) 727-87870.

How Will the New Secure Act Law Affect Your Retirement Plan?

 

January 20, 2020

 

One of the key elements of a successful retirement plan is adjusting and adapting your plan each year to keep up with changes.  Every year there are changes to retirement-related rules and laws, plan guideline updates and market changes. There are also tax law changes, and many people are still trying to figure out how to adjust and adapt properly to the major tax law code that went into effect two years ago.  Now, most pre-retirees and retirees will have to make some additional major adjustments because one of the biggest retirement planning law changes ever just went into effect at the beginning of this year.

 

The Secure Act, which stands for Setting Every Community Up for Retirement Enhancement, was passed by the House of Representatives on December 17, 2019 and by the Senate on December 19, 2019.  This new law includes reforms to our current laws surrounding saving and preparing for retirement, distribution rules during retirement, as well as rules on inheriting money. 

 

The Secure Act has made changes that will benefit many pre-retirees and retirees, such as: providing more part-time workers with the opportunity to participate in an employer-sponsored 401(k) plan; removing the age restriction on contributing to traditional IRAs; and increasing access to tax-advantaged retirement savings accounts.  The new law also delays the date when you must begin taking required minimum distributions (RMDs). All of these changes can benefit many pre-retirees and retirees.

 

However, the Secure Act also made changes that could cost retirees and their beneficiaries a lot of money.  Specifically, the Secure Act has eliminated the Stretch IRA to anyone who inherits money after 12/31/19. Now, beneficiaries will be required to liquidate inherited retirement accounts within a 10-year period.  This will force many retirees to make changes to their current estate plans, hoping to curtail the potentially large tax increases this may cause. 

 

The bottom line is that all pre-retirees and retirees will simply have to learn about all the provisions of this new law and then adjust and adapt their retirement plans accordingly.  To learn more about the details of these law changes and explain how to make the proper changes to your plan, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780. 

New Year Brings New Rules and Laws

 

January 13, 2020

 

We are into a new year, and as always a new year brings new rules, laws, retirement contribution guidelines, etc.  This year is no exception, especially with the passing of the Secure Act on January 1st.  To keep your retirement and estate planning up to date, accurate and finely tuned, you have to get yourself informed and educated on all these changes.

 

Several of these new tax laws, rules, legislation and retirement plan guidelines are now in effect, and many more proposed changes could certainly come into play sometime this year. Below are some specifics.

 

A New Tax System – Congress recently approved the most sweeping overhaul of the U.S. tax code in three decades.  Unfortunately, it is not a permanent change. You need to find out how to take advantage and save tax dollars while you can.

Retirement Plan Contribution Limits - Contribution limits and some law changes for some types of retirement savings plans have changed for 2020. 

 

Entitlement Program Changes – There have been some changes to Social Security and other entitlement programs for 2020, with more expected.

Secure Act – This is one of the biggest law changes ever to retirement plans, which will affect most pre-retirees and retirees.  

 

Keeping up with the changes each year and making the proper adjustments to your specific plan is a must for those who want to have and maintain a successful retirement plan.  For more detailed information on the many changes for 2020 and how to update your plan properly, contact us at Heritage Solutions Group at (801) 727-8780.

New Year’s Resolutions for Your Retirement Plan

January 6, 2020

 

At the beginning of every year, people tend to evaluate their lives and determine what needs to be improved in the upcoming year.  This is a good idea, and it needs to be done with your retirement plan as well. Simply put, our financial world has severely changed over the last decade and continues to change.  There are a lot of issues, concerns and changes going into 2020. With all these issues, and more on the forefront of people’s minds this year, it is no surprise there will be a lot of New Year’s resolutions in 2020 that are financially related. 

 

It is extremely important to evaluate your current retirement plan and look for areas that need to be updated and improved, no matter if you are still working or already retired.  Think about your planning for a moment and ask yourself these two questions: 1) “Have I made the proper adjustments to my retirement plan lately?” and 2) “Am I 100% sure that my/our retirement situation is set up the absolute best way for my/our unique and specific situation?”  If your answer is “no” to either of these questions, then you should make it a New Year’s resolution this year to get some valuable help. Find a qualified, competent, educated and experienced retirement specialist to help make sure you are aware of, and understand, all of your options.  Your retirement specialist should help make sure your planning is set up the absolute best way for your unique and specific situation and helps keep your retirement nest egg safe and sound. 

For more detailed information and financial updates for 2020, and some specific New Year’s financial resolutions to consider, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Heritage Solutions Group Wishes You A Merry Christmas and Happy New Year

 

December 23, 2019

 

Dear Clients and Friends:

 

Each year during the holiday season, we take great pleasure in setting aside our regular work and sending a heartfelt message to all of you.  

 

How joyful we are that the time has come again to extend to you our sincere gratitude because it is good friends and clients like you that make our business possible.

 

There is no more appropriate time for us to say, “Thank You”, and to extend our best wishes for every happiness this holiday season and throughout the coming year.  May your Christmas be filled with joy and the coming year be overflowing with all the good things in life.

 

From all of us at Heritage Solutions Group, we wish you and your loved ones a blessed and peaceful holiday season and the happiest of New Years.  

If you have any questions, or if we can be of any assistance to you in the upcoming New Year, please don’t hesitate to contact us. You can obtain more information by reaching out to us at Heritage Solutions Group at (801) 727-8780.

Do You Have the RMDs?  

 

December 16, 2019

 

Part of getting older in life means dealing with ailments, sicknesses and injuries.  Fortunately, some of these are treatable and curable. The same can be said for your pre-taxed retirement account.  If you own one of these accounts, you will be getting the RMDs at some point. So, can you get rid of them?

 

RMDs (required minimum distributions) are the government’s way of collecting tax revenue on your retirement plan dollars.  They gave you a tax deduction for all those years while you were contributing, and now they want their money back. And not only do they want tax revenue on the amount that you contributed, but they collect tax on the entire amount of the account, including all the interest that you have earned.  They do this by forcing you to start drawing money out of the account every year once you reach the age of 70½ and by increasing the percentage you have to take each year. If you fail to do this, there are very, very steep penalties.  

 

Now, some people don’t mind the RMDs as they need the income for retirement.  Others, however, do not need the income and view RMDs as a severe ailment that causes them excessive taxation.  So is there any way around this? Is there a cure or anything you can do to treat or get rid of taxable RMDs? To the surprise of many, the answer is yes.

 

Fortunately, because of some recent favorable tax rulings, there are now actually a few treatments available that can get rid of the RMDs.  To get the information about RMDs that you need to know, as well as details on potential treatments to get rid of them, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Are Your Gifts Valuable?

December 9, 2019

It is December, and with all the holiday decorations out at the stores and Christmas music on the radio, we are now in the holiday gift giving season.  Over the next several weeks many gifts will be given and received. The problem with this, however, is that each year many gifts are given, received and forgotten about soon after with no real meaning or lifetime value.  This is truly a shame.  

As everyone knows, most gifts cost money.  Unfortunately, the money spent on many of these gifts end up being of no real value in the future. I can’t tell you how much money my wife and I have spent on gifts to our children over the years that have went to things like clothes, toys, electronics, books, and many other things that are not used anymore.  Not that these gifts were not meaningful and valuable at the time, they certainly were, but they did not do much or provide value for a long period of time. I am sure many people can relate to this and it is frustrating when you look around and see all the stuff that you have accumulated over the years that just does not do anything for you anymore. 

 

Fortunately though, it does not have to be this way.  There are ways of giving that not only can be meaningful and really make a difference in someone’s life, but that can continue to be of value and provide benefits for a long period of time.  In addition, sometimes the gift may provide benefits to the giver as well. To learn more about the many ways, tools and strategies available (including examples) of how you can make your gifts this year be valuable and beneficial to everyone, including yourself, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

December 2, 2019

“Hello, Todd.  I just turned 60, and my full Social Security retirement age is 66 and 8 months.  I want to retire when I turn 64, but I do not plan on turning my Social Security on until at least my full retirement age.  How will it affect my Social Security payment if I do not work between my retirement age and the age I elect to turn on my benefits?  Will it increase or decrease what I am projected to receive as of now? Thank you.”  Randall.  

 

Most people pay a lot of money into the Social Security system over their lifetime.  And of course, you want to get as much out of the system as possible when you retire.  This takes knowledge and strategy as there are a lot of factors that go into determining the answer to that.  

The first place to start to understand your situation and get an idea of what your benefits will be is to look at your Social Security statement.  On page two of your Social Security statement, you will see three lines. One line will tell you what you are expected to receive at age 62, one line will tell you what you are expected to receive at your specific full retirement age, and the last line will tell you what you are expected to receive if you wait until age 70.  

As you will see on your statement, it says “If you continue working until”.  In doing these calculations, Social Security assumes that you will continue to earn the same amount in the future as you are earning today.  If you stop working at age 64, then your benefits may be lower than the estimates in your statement.

Social Security benefits are based on your highest 35 years of earnings.  If you stop working before full retirement age, Social Security will enter zeros for the years between your retirement and full retirement age when calculating your actual benefits.  So the relationship between the estimated and actual benefits will depend on your earning history. If you have 35 years of high earnings before you reach age 64, this might not affect your benefits at all. But if your present earnings are much higher relative to your previous 35 years of earnings, your actual benefits would be less than what is shown on your statement because those zeroes are going to factor in and lower your average payment.

Now, you can find your earnings history on the next page of your statement.  This page will show you how many years of substantial earnings you have. This will give you a clue as to how the Social Security benefits you receive can differ from the forecasted benefits estimated in your statement.

I hope this information helps.  To learn more about this question and get the answers to many more retirement-related questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

The Number One Rated Retirement Threat

 

November 25, 2019

 

Your accumulated assets are subject to a lot of different risks during your retirement years.  So you have to protect those assets. Some people do a good job of protecting against market downturns, increasing tax rates and many other risks.  Unfortunately though, many people fail to protect their assets against one of the biggest risks, which is a long-term care illness.

 

This can be a major problem, especially after looking at these common statistics from various sources, including www.longtermcare.org:

  • Today, someone turning age 65 has almost a 70% chance of needing some type of long-term care service and support in their remaining years.

  • The average nursing home stay is 2.44 years or 892 days.

  • The median annual rate of a semi-private room in a nursing home is now $77,380.  Costs for in-home care can be much higher.

  • On average, long-term care costs are increasing by more than 10% each year.

 

When you add all that up, it is not surprising that a long-term care illness, which is not covered by Medicare or private health insurance, could very well severely hurt or wipe out many people’s assets very quickly.  Additionally, with older Americans entering assisted living facilities at an unprecedented pace, it is clear they will incur more long-term care costs throughout their lifetimes. This is why a long-term care illness is the number one retirement threat to a retirement nest egg.

 

So what can you do?  Fortunately, there are several options and ways to protect your assets from this risk.  To learn more about the many different ways to protect your assets from a likely long-term care illness, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Retirement Traps to Avoid

November 18, 2019

There is no denying that retirement planning is sophisticated, complicated, and an on-going process.  Thus, you simply have to keep up to date and educated on the ever-changing tax laws, rule changes, plan provisions, and constant market fluctuations in order to make adjustments and changes to your plan on a regular basis.  Now, due to all of the complexities of retirement planning, everyone is going to make some mistakes. The good news is that small mistakes won’t destroy a retirement plan, however, some major traps might. Here are some major retirement traps to avoid:

 

The absence of a financial plan - As you can imagine, this is a no brainer.  However, as obvious as it is, many people do not have a proper plan in place.  Absent a properly designed plan, a successful retirement is nearly impossible.  

Not staying abreast on changes – Unfortunately, a successful and rewarding retirement does not automatically happen with just a retirement plan.  A retirement plan will not work if it is not constantly monitored and updated based on changes that occur each and every year.

Not becoming tax efficient – Revenues will have to be increased at some point in the future to pay for the nation’s debt and spending issues.  Many people feel this will come in the form of higher taxes. The more tax efficient your retirement plan is, the better off you will be.

Failing to plan for health-related expenses – Is there anything out there more expensive than health care right now?  This is the number one cause of financial ruin in retirement.

Having the wrong investment approach – How the markets work and the volatility in the markets is much different and more severe than in decades past.  If you don’t have the proper investment approach to help you achieve growth and protection, it could severely hurt your retirement plan. 

 

Getting to (and surviving) retirement can be like navigating your way through a minefield.  In order to survive, you have to be equipped with the right tools, information, knowledge and education.  To learn more about these and other traps to avoid in retirement, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

How Do You Find the Right One

 

November 11, 2019

 

As most people know, the financial, economic and investment world has changed dramatically over the last several years.  Of course, that is expected to continue into the future. All of these changes have caused questions, concerns and uncertainties for many people.  And when you add to that the complexities of retirement planning these days, things can get very difficult, confusing and overwhelming. So more and more people today are desperately looking for the proper professional help in order to protect, grow and save their retirement.  However, when you are looking for help or a possible change in your current help, how do you find the right advisor for your specific situation?   

 

Well, this is a very important question.  Choosing a financial advisor may be one of the most important financial decisions that you will ever make. The person you decide to work with will be in a position to influence and give you advice about critical investment, tax and planning decisions.  And the quality of his or her advice could weigh heavily on your long-term financial success. So having the proper advisor relationship in place is vital. 

There are several areas to consider when evaluating financial professionals, and there are some vital and critical questions that you should ask all potential advisors during your interview process.  For detailed information about these areas and the vital and critical questions you should ask, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

It Is Crunch Time

November 4, 2019

Can you believe it is November already?  This of course means there are only a few weeks left in the year.  Obviously, it is one of the busiest times of the year and people everywhere will be scrambling trying to get things done.  You probably do not need anything else added to your plate right now, but unfortunately, the clock is ticking on a few retirement planning moves that you have to make and/or may need to make before time expires at the end of the year.  So, it is crunch time.

If you miss these deadlines, the consequences can be very costly as there is no way to back up the clock and correct the miscue.  So, as a courtesy, let us inform you of a few areas of retirement planning that have year-end deadlines. 

 

Required Minimum Distributions (RMDs) – If you are age 70½ or older in 2019, you have a RMD to meet from your retirement savings plans.  Failure to withdraw the required amount on time will result in stiff penalties.  

 

Roth Conversions – This popular tax-savings move is different than Roth contributions given the fact that it must be done by the end of the year to count for 2019. 

 

Retirement Plan Contributions – In most company-sponsored retirement savings plans, you only have until the end of the year to contribute and max out your contributions for 2019.  

 

Gifts and Charitable Contributions – These must be done by the end of the year in order to get a deduction or tax credit for the year 2019.   

 

Remember, it is crunch time for these and several other planning moves that you must make or may very well need to make before the end of the year.  If not, your retirement plan could be severely hurt. For detailed information on these and other year-end planning moves and strategies, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

Is it a Trick or a Treat?

October 28, 2019

It is Halloween week, and the main theme of Halloween is ‘trick or treat’.  ‘Trick or treat’ is also a main theme right now in the financial world as there are a lot of financial tools, moves, options, and strategies available that could either be a trick or a treat to your retirement plan.  So, how do you know which one it is?

 

In your pre-retirement and retirement years, there are literally thousands of different planning moves, options, and strategies that are available.  And, many of these moves and strategies could either provide you with financial success or cause you financial hardship, depending on when and how you implement them.  For example, one very popular move people make when they need money from their retirement plan before the age of 59½ is a 72(T). This move will allow you to access money in certain ways from your retirement plan without getting hit with a penalty.  Now, obviously, that sounds good and in some circumstances this can be a very good thing. However, there are also circumstances where making this move could really cost you a lot of money and hurt your retirement plan.

 

The bottom line is every financial tool, option, and strategy has its proper fit for where it will work successfully and a time when it could possibly do tremendous harm to your plan.  Determining each of these is the difference between having a trick or a treat in your retirement plan. To learn more about several retirement planning moves that people make, and when and where they can be a very good or a very bad thing, feel free to contact us at Heritage Solutions Group at (801) 727-8780. 

Question of the Month

 

October 21, 2019

“Hello Todd.  My father recently passed away and left his estate to my brother and me.  The estate included an annuity. What will the tax situation be for us on this annuity money?  Do we have to pay taxes on it, and if so, how much? Thanks, Julia”

 

Hi, Julia, very good question!  Inheriting money can be a complicated thing, especially when it comes to taxes.  This is because some types of money are inherited completely tax free; some inherited money will be partially taxable and some inherited money will be fully taxable to the person inheriting the money.  So, determining whether it will be taxable or not really depends on the type of asset that you are inheriting.  

 

If the annuity you are inheriting is considered to be an IRA annuity, in other words, it was funded with retirement savings dollars, then it will be fully taxable to you at ordinary income tax rates.  However, if you act in the right amount of time and do the proper paperwork, then you can set up what is called a stretch IRA for the money. This will enable you to pay taxes on it over time as you draw the money out of the account.  An inherited IRA puts you in control of when you pay taxes on the money and prevents it from all being taxed in one year.  

 

If the annuity is a non-qualified annuity, then it could be partially taxable to you.  With a non-qualified annuity, there is what is called a “tax basis” inside of the annuity.  The tax basis is what your father purchased the annuity for, in other words, the amount of money he contributed to the annuity.  The tax basis portion is non-taxable to you. However, anything above the tax basis is taxable to you at ordinary income tax rates.  

 

So, again, determining whether it will be taxable or not will depend on the type of annuity you inherit, which is why it is helpful to work with a retirement professional who has a lot of expertise in retirement and estate planning.  If you need help in determining this, please feel free to reach out to us. We can inform you about the specifics of your annuity and the best way possible to minimize the taxes, if it is taxable to you. We can be reached at Heritage Solutions Group at (801) 727-8780.

Are You Scared?  

October 13, 2019

It is October, and that means it is Halloween season.  This is the time of year for scary stories, costumes, haunts, etc.  Of course, all of these things are just make-believe for just a short period of time each year.  Unfortunately though, there are many scary issues going on in the financial, economic, tax and political world right now, and they are not make-believe.  Many people are fearing the worst, and they are downright worried. Are you scared?

These scary issues can have an effect on your retirement and estate planning.  And, if you are not addressing these issues or do not have a plan in place for them, then you are probably scared to death.  So, what are these issues? Well, there are several issues and fears, such as the fear of rising taxes in the future, the fear of an imploding stock market, and the fear of a reduction in entitlement benefits such as Social Security and Medicare.  There is also the fear of rising healthcare costs, the fear of a long-term care illness wiping out your retirement nest egg and the fear of continued low interest rates which could cause you to run out of money in retirement.     

 

Now, as we said before, Halloween is a made-up theme, but unfortunately these issues are not.  They are very real and can cause great fear for your retirement plan. The good news is, however, with proper planning you can calm these fears and prevent them from having a severe impact on your retirement plan.  

 

Do some of these issues scare you?  If you would like to receive more information about each of these issues in greater detail, and to learn about how you can gain peace of mind and how to avoid spending your retirement being scared, please feel free to reach out to us at Heritage Solutions Group at (801) 727-8780. 

It’s Time For Your Retirement Test

 

October 7, 2019

 

Recently we did our ‘Back to School for Your Retirement Show’.  Students across the country have been getting back to school over the last several weeks.  However, “back to school” is not just for students anymore.  You have to make sure to continue your retirement education each and every year due to all the many changes that take place in the financial arena.  

 

Over the last several years, there has been an explosion in technology.  These major advancements have created several advancements in automation.  There are even cars now that drive themselves!  Of course, these advancements in technology are designed to make life easier, which it does in many circumstances.

 

However, automation is not a good thing for everything.  Even though some advancements in technology have been good in the financial industry, it is not a good idea to put your retirement plan on autopilot.  There are so many changes each and every year in the financial arena, such as tax law, interest rate and economic changes.  In addition, each year there are rule and law changes that you have to adapt to, and you very well may have goal and objective changes over your retirement lifetime.  To keep your retirement plan up to date, accurate and set up the best way for your specific situation, you have to be educated and informed of these changes each and every year, and make the necessary adjustments to your retirement plan.  A retirement plan on auto pilot with no annual adjustments will simply not work.

 

So, how up to date do you think you are when it comes to the latest retirement rules and laws?  Feel free to reach out to us for a review of your retirement plan and to make sure it has been properly updated based on all the changes that have occurred recently.  You can obtain this assistance by reaching out to us at Heritage Solutions Group at (801) 727-8780.

What Happens to Your Retirement Plan When Your Spouse Passes Away?

 

September 30, 2019

 

It is always a hard time when a spouse passes away.  Obviously, there are a lot of emotions to deal with as well as concerns and figuring out how to live without your spouse.  But, what happens to your retirement plan? Well, unfortunately, there are a lot of changes that happen to a retirement plan when a spouse passes away.  

 

We have received a lot of questions regarding this topic over the last several months, and even though it is not a fun topic to discuss, we decided it was time we provided some answers and information on this subject.  The fact is, this is a scenario that is going to come up as most people are married, and one of the spouses will pass away before the other in most cases. When a spouse passes away, there are many changes that happen to a retirement plan as well as some very important and critical decisions that must be made in order to make the retirement plan continue to succeed and take care of the surviving spouse for the rest of their life.  In addition, there are changes that will need to be made to transfer it the most proper way possible to all the contingent beneficiaries, including children, grandchildren and to any legacy desires after the surviving spouse passes away. So, this is critical information that certainly can help people with their planning in order to make this eventual time as smooth and painless as possible.  


Incorrect planning or the lack of planning in these areas could cause many problems and cost your family tens of thousands or even hundreds of thousands of dollars and could subject a surviving spouse and/or other heirs to a lot of pain, suffering and financial distress.  To learn about the many changes that happen to your retirement plan when your spouse passes away, and the critical decisions that will need to be made, contact us at Heritage Solutions Group. In addition, we will inform you about the biggest factor of all that hardly anyone plans for, simply due to a lack of knowledge or proper advisement, that most likely will cost a surviving spouse a lot of money each year. We can be reached at (801) 727-8780.

Question of the Month

 

September 23, 2019

“I was at one of your seminars a few weeks ago when you were giving examples of how to give money to charity the most effective way.  Each year, my husband and I give to our church and some other charities out of our income.  We do have some highly-appreciated stocks and land that we would not mind selling, but do not want to pay the huge tax bill.  You mentioned in your presentation about a similar case where you showed some people how to restructure their “planned-giving” so it would be more effective.  Would this work in our case? Thank you.” Christine.

 

Hi Christine - great questions. The increased standard deduction under the sweeping tax overhaul passed back in late 2017 has created new challenges for taxpayers who give to charity.  Prior to the change of the tax law, the standard deduction was significantly lower which created an opportunity for many people to itemize their charitable contributions, mortgage interest, and other things to allow them a greater deduction than the standard deduction and thus be able to save tax dollars on charitable contributions.  However, with the combination of the large increase in the standard deduction and the elimination of personal exemptions, most people are not expected to itemize any more.  Thus, most contributions to charity now are not getting any tax savings.  

 

However, there are still some ways you can get a financial benefit for charitable contributions.  Per you question regarding your highly appreciated stocks and land, you could restructure your charitable giving planned giving by creating what is called a donor-advised fund.  Here is how it works. You would first create and open up a donor-advised fund. Then, you will fund the donor-advised fund with the appreciated stocks and/or land that you would like to sell.  The foundation or place that hosts your donor-advised fund will be able to sell those assets without paying any capital gains tax. You will get a tax deduction from the donation of the assets. You would then use this fund to do your planned giving from each and every year from now on.  So, instead of writing checks out of your personal account with income or savings money, you will have the money directed to the churches or charities of your choice from your donor-advised fund. At the end of the day, you are still giving and donating to your church and charities the same amounts as always, but now you are doing it in a way that is a lot more effective and valuable for you.  Plus if you want, you can now use the money that you were taking out of income to give to your church and charities each year to buy more stock or land to start replacing the asset that you gave away, but now you will have a higher cost basis for that asset.  

 

This is just one way that you can use the planned-giving tools and strategies available to greatly enhance your overall retirement and estate planning and save you some tax dollars.  To learn more about this question and get answers to your other retirement planning questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Action Items You Must Complete Before You Retire

 

September 16, 2019

It is the goal, for almost everyone who works, to be able to retire at some point in their lives.  And when you start seriously thinking about retiring and get close to that point, it is easy to just jump right into retirement.  However, there are many things that need to be done before you actually retire.  

 

A successful retirement depends on completing a list of critical action items before you actually retire.  These action times need to be done at least a year or two before you retire. Failure to address each and every one of the following items could cause your retirement plan to fail.  

  • Creation of a retirement budget

  • Creation of an income distribution plan

  • Specific plan as to how and when to elect Social Security

  • Creation of a tax management plan

  • Health care plan to cover all the gaps

  • Creation of a debt management plan

  • Creation of a social and activity plan as to how you will spend your time

 

Again, having a plan in place for all of these action items is critically important.  To learn the specific details of each of these items and how to accomplish these items, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Key Dates and Ages Related to Your Retirement

September 9, 2019

 

When you think of certain important dates or ages, you generally think of birthdays, anniversaries, special moments, etc. However, as you get older and get into your pre-retirement and retirement years, some other dates and ages become very important. In fact, these dates may even become more important than birthdays and anniversaries as missing them or not understanding what happens at these times can have a severe impact on your retirement.  

 

Most people work extremely hard during their lifetime to build a nest egg that will take care of them in retirement. Part of building your nest egg is the proper understanding and planning around some key dates and ages.  The key dates and ages related to retirement that we are talking about here are age 21, age 50, age 55, age 59 ½ , age 62, ages 62 to 65, ages 65 to 67, age 70 and age 70 ½ . 

 

All of the dates around or on these ages represent a very important time related to some type of retirement issue, like contributions, Social Security, Medicare, required minimum distributions, etc. Most of these ages require some type of action that needs to be taken which will affect your retirement in some way. For example, are you sure you understand when you can access money out of a retirement plan without penalty, or when you can make as much money as you want without losing Social Security benefits?

 

To make the most of your retirement benefits, you need to understand what all of these key dates and ages mean and all the issues and options that each age entails. To learn more about the specifics to these key dates and ages and the importance behind each one in great detail, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Is Retiring Early a Mistake?

 

September 2, 2019

Andrew Luck, one of the top rated quarterbacks in his prime in the NFL, abruptly retired from the league last week at an early age.  Even though this was shocking, it is not out of the ordinary in the real working world. Every year many people choose to retire sooner than they had originally planned.  So, how do you know if retiring early is a mistake or not?  

 

Everyone’s ultimate goal is to retire at some point in their life.  For some people it may come at an earlier time than they had originally thought, and that obviously can be wonderful.  However, you have to make sure you have planned and addressed many factors before you actually retire. This is especially important if you are retiring at a younger age as it can put much more strain on your retirement plan to last longer in retirement.  So, it’s very important to have your ducks in a row, so to say, before you make that ultimate decision because many times it is very difficult to get a job back or to return to the workforce after you have decided to retire.  

 

Now, Andrew Luck is a smart guy so I am sure he has done proper planning.  If he hasn’t, well the millions that he has made over his career will certainly help.  However, most people do not have multi-millions of dollars to rely on in retirement. So, if and when you are faced with an early retirement decision, you certainly need to address many very important factors and issues before making that decision because you don’t want your decision to retire early turning out to be a mistake.

 

Andrew’s decision to retire early was based primarily on his health.  He is secure financially so if he ever regrets retiring early it will probably be from a legacy standpoint on what he may have been able to accomplish on the football field during his prime.  However, for most people, there are many factors to consider in addition to one’s health and financial aspects. To learn of all the many factors that must be considered before making a decision to retire early, feel free to reach out to us for all this important information.  We can be reached at Heritage Solutions Group at (801) 727-8780.

Question of the Month

August 26, 2019

“Hi, Todd.  I thought I planned very well for retirement and finally made the decision to retire last year.  Now, however, I seem to be hearing about all the scary things that could sabotage my retirement. I think I thought of everything before I retired, but maybe I didn’t.  Are there any hidden costs or risks for retirement that many people do not think about? Thank you.”  Carol

Well, Carol, I certainly understand your concern.  Many times after people retire they start hearing things from different sources, like friends, media outlets, social media and news programs.  This can start causing concern or worry, even if they have planned properly and securely.  

 

There are, of course, many risks and costs out there that could come up and hurt your retirement plan if they were not considered and planned for in your retirement plan.  In my experience, there are three main costs and/or risks that are often overlooked. They are long-term care costs, other health care costs and taxes. Let me address these three.  

 

Long-Term Care:  The reason this can be a problem is that many people think this is covered by Medicare, or they simply do not plan for this expense.  

 

Other Health Care Costs:   Most people are covered by Medicare in retirement, but Medicare does not cover everything.  There are still premiums to pay, deductibles to meet, co-insurance amounts, and other uncovered medical expenses.  All these additional costs can add up to a lot of money, and many people don’t realize this or do not plan properly for this.  

 

Taxes:  Many people think taxes go away in retirement.  They don’t, and sometimes, they even go up in retirement. 


There are many risks that can sabotage a retirement plan, but these are the main three that sneak up on people from a lack of knowing about them or planning for them. To get a more detailed answer to this question or to get answers to your other retirement questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780. 

Do You Know Which Type of IRA is Best for Your Retirement Plan?

 

August 19, 2019

 

There are many different tools available when it comes to planning and saving for retirement.  One of the most popular and used tool is the IRA. However, many people don’t use the right type of IRA, and that can be a major problem.  

 

With so many options on how to save for retirement, picking the right tools for your specific situation can be a daunting task and hard to figure out.  This is especially true of the IRA. IRA stands for Individual Retirement Account. These are accounts that you can use to save for retirement for yourself; emphasis on the word individual.  

 

Fortunately, there are many different types of IRAs for people to use to help save for retirement.  Each type of IRA is designed for a specific circumstance, and all have their advantages and disadvantages.  Thus, you want to make sure you are using the proper IRAs for your specific situation. Unfortunately, many people do not realize the many different IRA options, and therefore do not use the proper ones suited for their needs.

 

The key to maximizing your retirement is utilizing the proper and correct tools for your specific situation.  To learn more about all the different types of IRAS, and most importantly how and when to use each one in order to maximize your retirement plan, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780. 

Back to School for Your Retirement

 

August 12, 2019

It is the beginning of August, and that means it is back to school time.  But back to school time is not just for kids in school anymore.  With so many changes each and every year in the financial and economic arena, you simply have to make sure you go ‘back to school’ to stay educated and informed in order to keep your retirement plan updated and accurate at all times.  So, it is back to school time for your retirement plan.  

Summer time is considered break time for most students.  And this is the time of the year that many parents take some time off work from their normal routines to do some activities with their kids, take family vacations, etc.  During this time period, it is very easy to get behind and forget about your retirement plan for a while. However, as you know, time does not stop and changes in the financial and economic arena happen all the time.  Every year there are tax law changes, interest rate changes and changes in the economy and financial markets, With that being said, retirement planning never ends. In fact, there have been many changes this year in rules, laws, taxes and regulations.  So, you need to keep up your knowledge of all these changes so you can make the proper and strategic adjustments to your retirement plan every year to keep your planning up-to-date, accurate and in-line with your specific goals, objectives, and desires. 

So, back to school is not just for kids anymore as it’s back to school time for your retirement plan.  To get educated on the many changes for 2019 and to learn of the retirement planning deadlines that are fast approaching for this year, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

The Survey Says Most People Do Not Understand What Affects Their Social Security Benefits.  Do You?

 

August 5, 2019

 

Most people pay a lot of money into the Social Security system during their working years.  But, do you know how much you will get out of the system?  A recent survey says that most people do not know exactly what affects their Social Security benefits.  

 

Social Security is or will be a key component of many people’s retirement income.  Unfortunately, according to a recent survey done by American Advisors Group, most people have no idea what factors affect the payout amount of their Social Security benefits.  And, according to the National Retirement Institute, only 9% of not-yet-retired workers over the age of 50 can correctly name these factors. Among those who are already retired, the numbers are even more dismal. Around 8% of those who have retired recently can name the factors that impact their benefit amount, and just 7% of those who have been retired for at least 10 years can do so.  This is not good as the goal is to get as much as you can out of the system. 

 

To maximize your Social Security benefits, you need to understand how your benefit is calculated and what affects the amount you receive.  So, what factors influence your benefit amount?  Well, there are a lot of complex calculations that go into determining your exact benefit amount.  And, while you don't need to understand exactly how all these calculations work, it is important to at least understand the basics of how your benefits are determined.  

 

There are five big factors that contribute to the amount you receive and keep in Social Security benefits.  If you do not understand these, then you may very well end up receiving less than you were expecting or than you should get.  So, to learn about these factors and how to maximize your Social Security benefits, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

July 29, 2019

 

“I have been hearing a lot lately about how much trouble the Social Security system is in and that benefits will have to be cut to save the program.  Will benefits be cut to current recipients of Social Security? Thank you.”

 

Social Security is one of our nation’s most used social programs, and it has been successful. Unfortunately, it is starting to run into some issues. According to the April-released Social Security Board of Trustees report, the program won't bring in enough revenue over the long term (the next 75 years) to cover outlays to beneficiaries, inclusive of cost-of-living adjustments.

Again, according to the report, the good news is that the program is in no danger of disappearing or going bankrupt. The revenue coming into the program from payroll taxes and the taxation of benefits will ensure that there will always be money to pay out to qualifying recipients.  But, the bad news is that Social Security is facing an estimated funding shortfall of $13.9 trillion between 2035 and 2093. If this shortfall isn't dealt with by adding revenue, cutting expenditures, or some combination of the two, retired-worker benefits could fall by as much as 23% within the next two decades. 

 

Now, your question asks about cutting benefits, which means that current Social Security checks or future checks would be going down and be less in the future. But, that is not what is primarily being discussed or what would be done to help fix the system.  Most talk today revolves around Social Security reform. Reform is not necessarily cutting benefits. Reform is trying to fix the system for sustainability going forward. And, while actually cutting benefits may be one possible solution, most reform talk these days is of other avenues. 

 

For more details on this question, including all the different reform options being considered, feel free to reach out to us.  We can be reached at Heritage Solutions Group at (801) 727-8780.

To Roll Over or Not?

 

July 22, 2019

 

The popularity of company-sponsored retirement savings plans, like 401(k)s and 403(b)s, brings many questions. One common question that we get on a regular basis is the rollover question - what should one do with the plan once they change employers, separate from service or retire?  In other words, should you roll over or not?

 

When one separates from service for any reason, the option to take the money out of the retirement savings plan and do something else with it comes available.  Participants generally have five options, and there are advantages and disadvantages to each of these options. The decision you make here is very important and can have many consequences.  

 

Deciding what to do is not easy as many factors must be considered for your unique and specific situation. Plus, the decision is made even more difficult when the very people from whom one might seek counsel provide misleading, inaccurate or conflicting advice.  Given the amount of money that comes into play for these options each year, and all that could go wrong, the nation’s top regulators and watchdogs including the SEC and FINRA are putting financial firms and advisors on notice: Do right by retirement savers with their IRA rollovers. 

 

What is for certain is that proper education is vital when dealing with retirement plan choices. To learn more about all of these options, including the advantages and disadvantages of each, more on the crackdown on this issue by the regulators, case examples, and what specifically you can do to make sure you get the proper advice, please feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Do Not Retire Until You Consider These Many Often Over-looked Factors

July 15, 2019

Everyone wants to retire at some point in their lives.  And most people make the decision to retire mainly based on the amount of money they have accumulated and saved.  But you cannot make the decision to retire based on that factor alone. In fact, you absolutely cannot retire until you consider many often-overlooked factors.  

Retirement is the ultimate goal of all workers.  People work very hard most of their lives to get to the point of eventually being able to retire comfortably.  Now, this may not mean not working at all, but it at least means moving into some type of position that you enjoy doing and/or have always wanted to do.  

 

Most people make the transition out of their main occupation to either full retirement or into some other type of part time employment based on the main factor of the amount of money they feel they need to carry them throughout their retirement years.  In other words, it is strictly a financial decision. Now while that is extremely important, it is not the only factor you need to consider. In fact, it may not even be the most important.  

 

Based on my several years of experience in the retirement planning profession, I have witnessed many people retire and talked to thousands of retirees.  And I have learned some very valuable things from these people, specifically the many often over-looked factors they wished they would have thought of and considered before they made the decision to retire.  These factors are so very important, because even with enough money to retire, many of these can still ruin a retirement or make it a lot more stressful and less enjoyable.  

 

To learn of the many critical factors that most people never consider before making the decision to retire, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780. 

Do You Have Financial Independence?

July 8, 2019

Last week the country celebrated Independence Day.  Independence Day honors the birthday of the United States of America and the adoption of the Declaration of Independence on July 4, 1776.  The Declaration of Independence is the nation's most cherished symbol of liberty, and this is a special time for many Americans. To me, the 4th of July represents not only the birth of our nation and the sacrifices that millions of military members and their families have made throughout our nation’s history, but it also represents the symbol of freedom and hope.  It is not a stretch to take this a step further and relate freedom and hope to financial independence in retirement.

 

There is no absolute definition for financial independence in retirement.  The most common sense of the term is someone having enough wealth to do anything at any time.  Obviously, most Americans will never achieve this goal. A much better definition of financial independence in retirement should mean the ability to have the lifestyle that you desire, the freedom to do some things you want to do and a financial sense of security.  

 

To achieve this you will obviously need to do proper planning and make the right strategic moves at the proper time, as well as keep up with all the tax law changes and rule and law changes each and every year.  If you do not adjust and keep your retirement plan up-to-date based on all these changes, then your financial independence in retirement could be lost.

 

As the Fourth of July should remind us all, independence is something worth fighting for.  To learn more about all the latest changes that could impact your retirement plan and to get the proper information and education that you need to become or remain financially independent in retirement, call us at (801) 727-8780.
 

It’s Time for Your Retirement Checkup

July 1, 2019

2019 is half over, and this is the time of the year that many people have a medical checkup with their doctor to make sure everything is ok and to make health improvements. This is also a good time of year to visit with your ‘retirement doctor’ to evaluate your retirement plan and make sure it is up-to-date and accurate as well.  In other words, it’s time for your retirement checkup.

When you are meeting with your doctor, you know you will be asked some questions.  Doctors have to ask important questions during exams and evaluations to determine the state of your health and make improvements. And sometimes, the doctor has to ask you some tough and personal questions.  Your honesty when answering these questions can be vital to your health in the future.  

The same can be said when you are dealing with your retirement plan.  Sometimes you are faced with some very tough questions that need to be answered completely and honestly in order to protect and save your retirement plan. So, when you make your way into the retirement “doctor’s” office preparing for your retirement plan evaluation and review, what should you expect from the meeting, and what burning questions should you be ready to have answers to?

Good health requires periodic checkups.  The same is true for your retirement plan.  To learn more about the vital and key midyear retirement review questions that need to be answered in order to keep your retirement plan up-to-date and healthy, feel free to reach out to us at Heritage Solutions Group at (801) 727-870. 

Is Your Retirement Budget at Risk?

June 24, 2019

 

Everyone knows that in order to have a successful retirement in today’s world you will have to save enough money and save properly.  However, even the best-laid retirement plans can run into trouble in your retirement years. Why is that? It’s because of the many potential threats to your plan.

 

The goal of retirement planning is to save enough money, based on your specific goals, objectives and desires, for a comfortable and secure retirement.  Of course, the amount of money needed is different for everyone. In order to reach that specific number or level of assets you must have a very solid and adaptable retirement plan.  So, when that number or level of assets is reached, is your retirement plan in the clear? Maybe not.

 

There are several retirement threats that could come into play during your retirement years.  These retirement threats could severely affect or even destroy your hard-earned retirement plan and budget very quickly.   The reason for this is that many times these threats are not properly planned for or even considered during retirement planning.  Thus, a retirement plan is not a true retirement plan until these issues and threats are considered, and then made part of your retirement-planning process.  It is important to know about and understand these potential threats and how to specifically plan for them so they will not destroy your retirement budget. If you have any questions or would like further information on this subject, you can reach out to us at Heritage Solutions Group at (801) 727-870.

Question of the Month

June 17, 2019

 

“Hi Todd.  My wife and I are in our mid 60s and will be retiring very soon.  We will both have Social Security and a small pension. We have saved money in 401ks as well as IRAs, Roth IRAs and some brokerage and savings accounts.  Unfortunately, we have no idea at all on how to draw from all of these sources properly to meet our income objectives, and we cannot find any solid answers or expertise in this area.  Our current advisor, who mainly offers investment advice, always dances around our income questions and will simply not give any advice or answers on taxation issues. I did not realize there was such a lack of help available when it comes to actually how to use your retirement plan.  Please offer any advice you can. Thank you.” Sam

 

Well Sam, this is an absolutely wonderful question and you are right on here.  When it comes to advice for income and tax planning for a retirement plan, there is a large lack of professional advice and understanding out there of how to do this properly.  As you said, most advisors help people with saving and accumulating money. Unfortunately though, very few financial professionals have income and tax expertise and understand how to draw from a nest egg in retirement properly to be able to generate the income you need for a lifetime in the most tax efficient way.  So, the answer to your question is needed not only by you, but by a lot of people out there.

 

Now, the answer to this question is complicated and complex with many different levels.  The first thing that you need is education on the different types of money that you will have in retirement.  Essentially, you will have three different types of income in retirement that will be treated differently tax wise.  You then need to know how to draw from each of these three different sources strategically in order to get you the income you desire the most tax efficient way.  Most general advice out there says to draw from your after tax accounts first and delay drawing from your pre-tax accounts as long as you can. That advice can cause you some major tax problems in the future, especially if tax rates rise as expected.

 

Again, there is strategy here in how to draw from your different sources properly to minimize or eliminate taxes both now and in the future.  Obviously, everyone wants as much income as possible with the least amount of taxes.  However, in order to achieve that goal, you need expert advice during your working years in how you save for retirement, and then strategic planning on how to draw income from those different sources.  To get detailed information on this, feel free to reach out to us and we will give you the education that you need to know on how income planning works in retirement.  We can be reached at Heritage Solutions Group at (801) 727-8780.

Are You Making These Critical Beneficiary Mistakes?

 

June 10, 2019

 

When it comes to passing money on to your heirs, most people think that it passes via your will and/or trust.  However, many times the majority of assets are passed on through beneficiary designations. And unfortunately, many people make some critical mistakes when it comes to naming beneficiaries on their assets.  Are you aware of these critical mistakes, or are you making them?

 

A beneficiary designation is a line on a document which is associated with certain assets, and you will specify on that line who you want to receive the money or asset when you pass away.  You can name one person or multiple people, and designate percentages to each. You also need to name contingent beneficiaries in case something happens to your primary beneficiaries.

 

The assets that pass on via beneficiary designations are life insurance, annuities and retirement accounts such as 401(k)s, IRAs, 403bs and similar accounts. And the reason it is so important to have the proper people named as beneficiaries is that beneficiary designations in these assets pass outside of your will and trust. So, for these assets it does not matter what your will and trust says.  They will be passed on to whomever you have named on that beneficiary designation line. That is why beneficiary planning is a very important part of your retirement and estate plan.

 

Now, while naming a beneficiary can be an easy way to ensure your loved ones will receive assets directly, beneficiary designations can also cause many problems.  Since it is your responsibility to make sure your beneficiary designations are properly filled out and given to the financial company, you need to be aware of the many mistakes that are often made.  To learn of the critical mistakes that are often made when it comes to beneficiary planning and how to properly fill out beneficiary information, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Leave Memories, Not Problems

June 3, 2019

 

In a recent American Association of Retired Persons (AARP) survey, 75 percent of individuals responded that not being able to communicate their wishes would be worse than death. Despite this, less than half of these people have taken steps to ensure that their wishes would be carried out. Although death is not an easy topic to discuss, end-of-life planning can mean the difference between leaving loving memories or major problems.  Which would you prefer?

 

A person’s estate consists of all personal belongings, assets, business holdings and financial resources an individual owns.  Estate planning is the process of accounting for these items and arranging for the distribution of those assets in order to achieve the wishes of an estate owner.  Good estate planning will determine what happens to your property, who will get it, where it will go and how it will happen. Such planning allows you to have control over your assets when you die and can also assign a guardian or custodian to a minor or disabled person. In addition to all of this, a good estate plan could considerably reduce the possible taxes and fees associated with probate and the distribution of assets.

 

So, the benefits of estate planning can be invaluable, but unfortunately, doing all of this is not real easy.  There are a lot of specific types of legal documents that come into play, such as wills, trusts, power of attorney, and beneficiary forms.  In addition, you have to evaluate and consider tax issues and financial responsibility for heirs as well.

 

To learn more about the many factors that you need to consider for your estate plan in order to leave loving memories for your family instead of major problems, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Are You Saving Properly for Retirement?

 

May 27, 2019

 

Despite many variables including market performance, in the end one of the biggest predictors of whether or not you will have enough for retirement is how much you save and if you are saving properly in the right types of accounts. It’s that simple.  In fact, the ‘Am I Saving Properly for Retirement?’ question is probably the most common and popular one that I get asked from pre-retirees. So, are you wondering the same thing?

 

Fueled by an extreme bull market run with surging stock prices the last several years, some 401(k) and retirement account balances have come back from the beating they took in the latest financial crisis in 2008 and 2009.  But, it is not time to celebrate. As most people understand, it is ‘not about what you make but what you keep’ as this bull run will not last forever.

 

According to Yahoo finance, the S&P 500’s average annualized gains over the last 9 years is above 10%.  Obviously, this clearly isn't sustainable for the long term. Given today's low interest rates and high stock prices relative to earnings and valuations, average annual stock returns over the next decade or so could come in at well below half the pace of recent years. In addition, with the new tax code in place for the next few years, many people should be saving differently before in order to be as tax efficient in retirement.  This all means that if you want to accumulate enough savings in the right types of accounts during your career to provide you with a comfortable retirement, you will have to do it the old-fashioned way: by saving diligently and properly.

 

So, are you saving enough and the proper way?  That is a critical question to find out. To get help with this, contact a retirement planning professional with expertise in income and tax planning, or feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

 

May 20, 2019

 

Hello Todd.  My wife and I will be retiring in the next couple of years and want to start making some tax moves to get more tax efficient.  We want to start doing some Roth Conversions, but how do we determine how much we should do each year? Thank you.” Ken

 

Hello Ken.  Your question has been a very popular one ever since the Tax Cuts and Jobs Act was put into law on January 1st, 2018.  Essentially this tax bill reduced individual tax brackets and tax rates to one of the lowest points in the history of the tax code.  And since these current rates and brackets are not permanent, many people are wanting to take advantage of it while they can and start getting taxes paid on pre-taxed retirement savings accounts, like traditional IRAs and 401ks.  The key question though, like you asked, is how to do this properly and effectively.

 

One of the most popular ways of getting more tax efficient is by doing Roth IRA Conversions.  There are three main strategies in doing Roth Conversions and determining how much to do each year.  The first is to convert just enough to stay in your current tax bracket. For example, if you are in the 22% tax bracket, and expect to be there for the rest of your life, then you want to take advantage of the room in that bracket each year by converting just enough to max out that bracket.  

 

The next strategy is to convert just the amount that you can afford to pay the tax owed on the conversion.   Generally, you want to pay the tax owed on the conversion from an outside fund, not out of the conversion. The third Roth Conversion strategy is to convert enough each year to get you to a point where you will have a completely tax free retirement.  In other words, convert just enough to get to a point where your IRA withdrawals and other income sources, like Social Security, will be lower than the standard deduction so you will not owe any federal tax.

 

Whatever strategy you use to become more tax efficient will require some expert planning and professional help.  Preliminary tax returns have to be completed each year to come up with the specific amounts that you should do each year.  To learn more about these strategies and how to accomplish the moves to become more tax efficient, reach out to us at Heritage Solutions Group at (801) 727-8780.

Mothers and Women and Their Retirement

 

May 5, 2019

 

Yesterday was Mother’s Day.  In fact, let’s just say this whole week is Mother’s week as they deserve a whole week of recognition and attention.   To honor Mother’s Day, we are going to help them by giving some information and advice for a secure future.

 

In the past, men dominated financial affairs.  Today, however, things are much different because of the growing presence of women in the workplace and as head of households.  Women are taking increased responsibility for their long term goals and financial health, but they face many challenges when building wealth and securing their financial future.  This makes financial literacy and advanced planning especially important.

 

According to Investment News, women control more than $18 trillion in consumer spending, hold approximately 30% of global wealth, and 32% are the sole head of U.S. households.  Plus, more women are inheriting wealth because of longevity and demographic patterns. Many women will outlive their husbands and at some point in their lives will have sole responsibility for their finances.  And, many times they are also left with the responsibilities of legacy planning as well, making sure the assets get passed on properly to their heirs. Thus, women have substantial financial planning, investment, and wealth management needs.  

 

You can obtain this information and learn more about the specific financial challenges women are facing by reaching out to us at Heritage Solutions Group at (801) 727-8780.

The New World of Retirement Planning

 

May 6, 2019

 

In today’s retirement world, you cannot rely on an employer and the government to take care of you. It’s on you to save for your retirement and have the proper plan to provide you an increasing income for a potentially very long period of time.  So, are you using old outdated tools and strategies to build your retirement plan, or have you adapted to the times?

 

Today’s retirement world is vastly different than it used to be.  For one, longevity is increasing meaning people are living longer.  This puts much more pressure on a retirement nest egg to provide income for a long time, potentially 20 to 30 years or longer. In addition, pension income is not common anymore.  In the past, a pension income was a staple to many people’s retirement income plan. This is not the case anymore. Also, Social Security will need changes in the near future to help save this system.  

There are many other new retirement realities, but just these three alone puts more pressure on your retirement nest egg to provide you an income to you for a long period of time. Unfortunately, some old retirement planning strategies and concepts don’t work as well as they used to while others are just plain wrong.  To plan and save properly, you have to have the education and knowledge on today’s updated strategies that need to be utilized in order for you to have a successful retirement plan and bring it to the 21st century.

To obtain this information and get the details on the differences between yesterday’s and today’s retirement world, contact us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

April 29, 2019

“I am recently retired and was going to roll my 401k over to an IRA, but my friend told me that I need to leave my 401k with my current employer so I can have bankruptcy and creditor protection on that money.  Is this true? Is there any protection if I roll it to an IRA? Thank you.” Robert

 

Hello Robert.  This is a great question that we get a lot.  If you are like many Americans your IRA may be one of your biggest assets, and many people become concerned near retirement about the vulnerability of that large asset. Even at retirement, major life changes can occur which could affect your assets and put your retirement savings money at risk. So, here is what you need to know about protection of your retirement savings account money.

 

Let’s start with bankruptcy protection.  Qualified ERISA plans which include most 401k plans have 100% Federal bankruptcy protection.  Traditional and Roth IRAs offer Federal bankruptcy protection as well, but there is a cap on this amount.  Since April 1, 2016, the cap has been $1,283,025, and it applies to contributions and earnings to Traditional and Roth IRA accounts.  However, this cap does not apply to money that you roll over. All rollovers from employer plans are 100% protected and do not count towards the capped limit.  So, if you roll over your 401k to an IRA you will have 100% Federal bankruptcy protection on that money.

 

Now let’s look at creditor protection.  Again, all qualified ERISA plans which include most 401k plans have 100% Federal creditor protection as well. For IRAs and Roth IRAs, there is not any creditor protection at the Federal level.  Creditor protection for IRAs and Roth IRAs is determined at the state level and can vary considerably from one state to the next. So, you will need to check with your state of residence to find out what creditor protection there is available for IRA money.  

 

For Inherited IRAs, the rules are much different for money coming from anyone besides a spouse.  There is not any Federal bankruptcy and creditor protection for Inherited IRAs, and limited State protection in a few states.  However, there are some trust documents that can be implemented to protect all types of IRA accounts. To learn more and get additional details on this question, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

It’s Not How You Look; Just That You Win

 

April 22, 2019

 

In today’s day and age, many people are more about style and looking good than winning and being successful. Unfortunately, that objective can really hurt you.  This is especially true when it comes to investing, as it can really make a big difference in the ultimate value of your retirement plan.

 

We just got through one of the most competitive time periods of the year in sports over the last couple of weeks, consisting of the college basketball championship tournament and the Master golf tournament.  If you watched both of these tournaments, you would know that the teams and players who won did not always look real good doing it. In fact, sometimes those champions did some things that looked pretty ugly.  However, they won.

 

The same thing applies to investing in your pre-retirement and retirement years.  The markets are a very popular topic right now, especially with the very long bull run continuing since 2009.  Obviously, in this type of market you can do real well. And for many investors, it becomes about hitting home runs and maximizing your returns.  However, after volatility spiked in December of last year, this type of strategy can hurt you pretty quickly.

 

During your pre-retirement and retirement years, your investment strategy needs to be about winning and not necessarily about looking good.  To learn the specifics of this topic and how to make sure your retirement plan is set up properly to win and be successful, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Are You Trustworthy?

April 15, 2019

There are many different types of effective trusts available for accomplishing specific things for retirement and estate planning.  Unfortunately, many people don’t ever consider using a trust because of the perception that they are only for the ultra wealthy. Actually, trusts are used by millions of people who just simply care about what happens to their wealth both during and after their lifetime. So, are you trustworthy?

Because of all the rule and distribution changes made to IRAs and other types of retirement accounts over the last several years, one specific trust has become a lot more popular and effective.  This is the Inherited IRA Trust. It is a special trust that is designed to hold your IRA accounts for the benefit of your loved ones following your death. The two major benefits of the IRA Trust are protection and control.

Many times, an IRA is one of the largest assets passed on to beneficiaries.  Unfortunately, the inheritance of such large sums of money by children, or other heirs, can cause many problems. Recently, the Supreme Court ruled that Inherited IRAs are not protected from bankruptcy.  There is also concern by many people about losing an Inherited IRA to creditors, divorce, taxes, or reckless spending. So, many IRA owners look for ways to safeguard this money for their heirs.

An IRA Trust offers protection against these issues as well as the ability for the owner to maintain some control of the account and the payout, even after they pass away.  Thus, the IRA Trust can be a very valuable tool in certain circumstances. To learn more about the functionality and benefits of the Inherited IRA Trust, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

The Top Myths and Mistakes

Regarding Social Security

 

April 8, 2019

 

Social Security is a key part to most people’s retirement income plan.  You pay a lot of money into the Social Security system during your working years, and you deserve to get as much as possible from the system in retirement.  Unfortunately, many people do not collect as much as they should.

 

Many people do not maximize their Social Security income due to the belief in many myths.  This is from the lack of proper knowledge and education, and in turn leads to many bad choices and mistakes regarding how and when to claim your Social Security benefits.  Then those bad choices and mistakes often cause people to collect a lot less money from Social Security over their lifetime.  This is unfortunate, but it does not have to be this way.

 

Maximizing your Social Security benefits comes down to three key things:  Having factual and proper information; Knowing how the system works and all of the available options; and Knowing how and when to collect properly based on your specific situation.  

To help you separate the myths from the facts, and give you the proper information needed to help prevent making some critical Social Security planning mistakes, contact us at Heritage Solutions Group at (801) 727-8780. We will also share with you some valuable strategies on how to maximize and boost your benefits over your lifetime.  

Question of the Month

April 1, 2019

 

“I am 78 years old.  Both my wife and I are retired, but I still make some money each year doing part-time work at a golf course.  Even though I have to meet my required minimum distribution each year, I was hoping to continue saving some money and contributing to my retirement plan.  However, my long-time advisor says that I cannot contribute to any type of retirement savings plan since I am past the age of 70½.  Is this true?  Just want to confirm.  Thank you.” Stewart.

 

Hello Stewart, thanks for sending in your question.  Your question is basically asking if you can still contribute to a retirement plan if you are still working.  The answer to that question is yes, you can. If you are still working for a company that offers a 401(k) plan, you are still able to contribute to that plan even if you are over the age of 70½.  In addition, you do not have to take an RMD out of that 401(k) plan as long as you are not a 5% or more owner in the company.  

 

However, it sounds like in your case you are not working for a major company any longer.  You are just doing some part-time work at a golf course, which probably doesn’t offer you a 401(k).  If that is the case, you are still able to contribute to a retirement plan; specifically an individual Roth IRA.  You can’t contribute to a traditional IRA any longer, which is what your advisor is probably referring to, but you are able to contribute to a Roth IRA.  Contributory Roth IRAs have no age limit. So, as long as you have earned income, you are allowed to contribute and save in that plan. In fact, you may be able to contribute for your spouse as well.  

 

You can contribute up to $7000 for 2019 or $6500 for 2018 as long as you have that much in earned income.  But since you are married, you can also contribute to her plan as well. If you have enough earned income, then you can max out both of your plans.  If you make less than the contribution limits, you can contribute in any combination that you want, up to the maximum per person.

 

So, there are still ways to save money in a retirement plan even after you reach age 70½ if you have earned income.  It is just contingent on the type of plan you are able to use. I hope that helps. Please feel free to reach out to us if you need some additional information on this or help in being able to get this done.  Remember, if you want to do this for 2018, the deadline is fast approaching.

 

For a more detailed answer to this question and get answers to your retirement related questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

You Have to Survive and Advance

March 25, 2019

The month of March is basketball tournament time, and the theme during this time of the season is “Survive and Advance.”  In order to continue playing and prevent the season from being over, you have to win in order to move on to the next round.  In today’s ever-changing and volatile financial world, your retirement plan has to be set up to survive and advance, as well.  

  

Your working years are very similar to the regular season in basketball.  While saving for retirement you usually can afford some up and down years in the market because you have time to recover and continue building your nest egg.  However, in your pre-retirement and retirement years, the theme is the same as the tournament.

Your first objective is to survive.  Your retirement plan needs to be able to survive the volatility and severe downturns in the market.  It also has to survive congressional law changes, tax law changes, economic changes, and many other threats to your nest egg that can have major impacts on your overall plan.   

Unfortunately, you cannot just stop at surviving, you also have to continue to advance your retirement plan.  You need to continue growing your money to battle longevity, inflation, and the increasing costs to live.  You also need to become more tax efficient to help protect yourself from the possibility of increasing tax rates in the future.  

Just as it is during tournament time in basketball; it is tournament time for your retirement plan.  To learn more on how to set up and maintain your retirement plan in order to survive and advance, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Critical Decisions You Have to Make for Your Retirement Plan

 

March 18, 2019

Decisions. Decisions. Decisions.  Each day you make thousands of decisions.  Some of them have few, if any, long-lasting consequences; others however, can have a huge impact on your life.  This is especially true when it comes to financial decisions regarding your retirement plan. So, will you make the right decisions?

Various internet sources estimate that an adult makes about 35,000 conscious decisions each day.  This may sound very high, but according to researchers at Cornell University we make over 200 decisions each day on just food alone.  Now, there are not that many decisions to make when it comes to your retirement plan, but the decisions you do make carry more weight and consequences than most other decisions.  Ultimately, the success of your retirement plan comes down to a few vital and key decisions that you will have to make, such as:

  • How and when to elect your Social Security for maximizing your benefits over your lifetime.

  • In addition to Medicare, what options will you select to protect your assets from health care expenses?

  • What types of retirement accounts will you use to maximize your retirement nest egg the most tax effective way?

  • What legal documents do you need to set up your estate properly?

  • What planning moves will you choose to minimize the effect of taxes in retirement?

  • How will you draw from your retirement nest egg for income?

 

All of these thoughts and questions will require a decision by you at some point during your pre-retirement and/or retirement years.  The decisions you make will have a huge difference in the ultimate value and success of your retirement plan. To learn about these and other critical decisions that you will be faced with regarding your retirement plan, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.  

How to Save Tax Dollars with New Tax System in Place

 

March 11, 2019

 

Tax season time is upon us once again, and people everywhere are in the process of filing their taxes for the first time with the new tax code in place.  Of course, everyone wants to do everything possible to reduce or eliminate taxes, especially in retirement.  Fortunately, there are ways to accomplish this. 

 

Taxes are everywhere, and unfortunately they don’t stop in retirement. There are many different types of taxes in retirement which can severely hurt your retirement plan if you do not plan properly.  I personally feel that tax efficiency is key in retirement planning. It can literally make a huge difference in the ultimate value of your retirement plan.  

 

In summary, because of our nation’s debt issue, continued excessive spending, and the continued ‘kicking the can down the road approach,’ many people, including myself, expect tax rates to rise in the near future.  I mean they have to.  The current national debt is over 22 trillion dollars and rising every day.  This is a problem that cannot continue on forever.  At some point, something will have to be done about it, and many people and economists expect that higher tax rates will have to be part of that solution. 

 

So, many smart people have started making moves and utilizing these tools that are available now, especially with the new tax code.  They are starting to prepare for a world of higher tax rates by putting themselves in a position where it will affect them the least.  This is effective tax planning. The more money you have in tax-free vehicles and the more tax efficient you are, the better off and more protected you will be. 

 

Fortunately, there are some valuable tools and moves you can use to help minimize your tax burden legally in retirement, and become tax free or as tax efficient as possible.  You just have to be aware of these tools and moves, then take action to implement them.  So, let me ask you, “Are you aware of these tools and moves?”  You probably have heard of a few of them, but in all probability there are some that many people may not be aware of, and/or do not fully understand how to use and implement them correctly.  

 

To get information on the many tools and strategies that are currently available which can be implemented to help save you taxes in retirement and get you as tax efficient as possible, maybe even tax free, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Are You Making These 401(k) Mistakes?

March 4, 2019

 

Saving money for retirement is very important, and people do this in a variety of ways.  Currently, a company sponsored retirement savings plan is the most common used plan, mainly the 401(k) or 403(b).   However, the ultimate value of your specific retirement savings comes down to avoiding some very big 401k plan mistakes.  How many of these mistakes are you making?

 

The company sponsored retirement savings plan is very popular.  In fact, there are currently trillions of dollars in these plans.  Unfortunately though, there could be much more money in these plans if people would stop making some major mistakes when it comes to saving and understanding the many rules, regulations, and factors in these plans.  These mistakes ultimately affect the total value you are going to have when you retire. And for those who don’t save via a company sponsored retirement savings plan but save in other accounts, like a traditional IRA, some of these mistakes apply to those accounts as well.  

 

So, it is critically important for you to be aware of these common mistakes in order for you to not make them.  Feel free to reach out to us to learn about these mistakes, including the two that are made the most often now with the new tax system in place.  In addition, we will inform you of why the most important part of your 401(k) plan is not about how much money you accumulate in that plan.  We can be reached at Heritage Solutions Group at (801) 727-8780.

Will You Get Penalized By the IRS?

 

February 25, 2019

 

There is a very popular financial vehicle that has been a staple in the savings arena for very long time.  It is perceived as a very safe and sound investment, which it certainly is. Unfortunately though, and shocking to many, this financial vehicle has caused many people to get hit with IRS penalties.  

 

The vehicle we are talking about is U.S. Savings Bonds. U.S. Savings Bonds are a safe, low interest bearing investment issued directly by the United States Treasury Department. They have been purchased and saved by millions of people since World War II. In fact, a lot of people have amassed a bunch of savings bonds in safe-deposit boxes, and even shoeboxes, over the years.

But how in the world can a U.S. Savings Bond, which has produced reliable tax advantaged interest for you over many years, suddenly hit you with an IRS tax penalty?  Well, there is a provision inside of a U.S. Savings Bond that many people are unaware of, or do not properly understand.

 

Interest earned on U.S. Savings Bonds is exempt from state and local taxes, but not from federal income taxes.  The interest accumulates tax-deferred until the bonds are sold or they reach final maturity. However, something else happens too at maturity; the taxes become due on the interest. Per the fine print, taxes on savings bond interest may be deferred until the bond is cashed, or the bond reaches final maturity.

 

This is where the penalty comes into play and gets many people into trouble.  Most people think that you can avoid paying taxes on savings bond interest until the bond is cashed.  That is not the case, as taxes are due on the interest at maturity even if the bond is not cashed.

 

Failing to claim the interest upon maturity is considered unreported income, which is grounds for a penalty.  This happens to a lot of people each year. So, the bottom line is, you do not have to cash your savings bonds when they mature, but you do have to file and claim the interest earned on your tax return.  Failure to do this can, and will, get you into hot water with the IRS.

 

To learn more about this topic and get answers to many other retirement related questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Have You Forgot About This in Your Retirement Plan?

 

February 18, 2019

 

When people think of estate planning, it is generally thought of only being needed by the ultra wealthy.  Actually though, this isn’t the case. Whether people realize it or not, estate planning is a big part of retirement planning.  Because of legislation and demographic changes, as well as tax, inheritance and privacy laws, proper estate planning is greatly needed in almost all retirement plans.  So, make it a point to not forget about estate planning.

The ultimate goal of estate planning is to pass your unused assets to your heirs the most effective way, with the least amount of taxes, expenses, fees and do it as privately as possible.  In other words, to protect and preserve your legacy for your family, loved ones and your charitable causes and interests. And you do not have to be extremely wealthy to have this desire.

That is why you cannot forget about proper estate planning and the many areas and factors that it entails.  A few of these areas and factors are common, like proper estate planning documents such as a will or a trust. But most people don’t think of the additional areas and factors regarding estate planning.  So, make it a point to learn of everything that must be addressed in order to maximize, protect and preserve your legacy the absolute best way.

To learn of these many areas and factors and find out how to make sure your estate plan is set up properly, reach out to us at Heritage Solutions Group at (801) 727-8780.

Are You Ready and Able to Retire?

February 11, 2019

 

In my career in the financial services business, and as a specialist in the retirement and estate planning arena, I have been asked many times by people if they are ready and able to retire. The answer to this question of course is unique to each specific case. However, there are a few common factors to look at when you are considering the option of being able to retire.

Emotional and Stress Factors: There is a tremendous amount of stress in many people’s jobs.  This stress can have major impacts on people’s emotions and overall health.  The most important thing in life is your health, and no job is worth jeopardizing your health.  

Financially Sound and Stable: Obviously, if you are going to consider retiring you have to be able to afford it.  This comes down to being financially sound, stable, secure and financially ready.

Do a Trial Run: Before making the decision to retire, you first need to see if you can make it work.  Essentially you want to try and live off your proposed retirement budget for at least 6 months or a year to see how it goes and if you can do it.  

Revise Your Portfolio Investment Strategy: Simply put, you cannot take any big hits in your pre-retirement or retirement years.  You have to shift from being in a prime accumulation mode to being in a prime preservation, protection and distribution mode.  
Consider Health Care Coverage: One of the biggest expenses for pre-retirees and retirees can be health care related expenses.  You absolutely must consider this factor before deciding to retire, especially if you are going to retire before Medicare kicks in.
What Will You Do With Your Time: Another important factor to consider before retiring is the ‘time’ factor.  Moving from a common routine schedule to suddenly having much free time is very difficult for some people.

Obviously, most people would like to retire as early as possible in life.  However, there are many factors to consider to determine if you are ready and able to do this.  To learn more about these and many more factors to consider as to how they relate to your specific situation, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

The New Retirement Realities

 

February 4, 2019

 

The retirement landscape has changed dramatically over the last several years.  Today there are many new retirement realities that pre-retirees and retirees must face.  And in order to have a successful retirement plan, pre-retirees and retirees today will have to adapt and do things much differently than the past.  

 

Now, as complexed and cumbersome planning for a successful retirement is, the end game is pretty simple for most people and remains as clear as ever.  The object is to protect and preserve your hard-earned nest egg, but also continue to grow it the most tax efficient way to receive as much income as possible from that nest egg throughout your lifetime. Unfortunately though, like we said before, everything about achieving these main principles and how to accomplish them is changing, and will continue to change.  Thus, accomplishing this is much harder than ever.

 

While planning for retirement, you need to address many areas and you have to make some very tough and critical decisions.  You will have to make proper decisions about medical insurance, how to properly invest, about taxes and tax planning, Social Security, estate planning, how to draw income properly and many more areas. And what makes it even more critical in getting these decisions right is that many of these decisions are irreversible.  If you make the wrong choices or decisions, it could have a trickle-down effect on your whole retirement plan.

 

No matter if you are 40 or 80 years old, you will have to re-think your retirement plan, and adjust and adapt based on today’s new retirement realities.  To learn of these new retirement realities and how to adjust and adapt for them to protect and maximize your retirement plan, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.
 

Question of the Month

 

January 28, 2019

“Hey Todd, I have heard you say a few times that many people should change the way they save for retirement based on the new tax code that is now in place.  Can you explain in more detail what you meant and why? Thank you.” Arnie

 

Great question, Arnie!  The ultimate goal in saving for retirement is to save and accumulate as much as possible in the most tax efficient way.  Unfortunately, many people focus primarily on the growth part of this and forget about the tax issues. And now with this new tax code, the tax part of saving for retirement is much more important.

 

Based on the new tax code that went into effect on January 1 of 2018, many people should now be saving differently for retirement.  In the past, most people saved for retirement in pre-taxed accounts, such as a 401(k), 403(b), or a traditional IRA. These are the types of accounts where you get a tax deduction up front, which saves you tax dollars today.  The taxes owed on those dollars, plus all the interest it makes, comes due when you withdraw those dollars in the future. Again, this is how the majority of people save for retirement. The thinking behind this way of saving is that you take the tax deduction when you are working and supposedly in a higher tax bracket, and pay taxes later in retirement when you are in a lower tax bracket.  

 

However, based on the new tax code which puts tax rates at near historical lows, many people will probably not be in a lower tax bracket in retirement.  In fact, many people could find themselves in a much higher bracket in retirement, either because their incomes are just as high or higher, and/or because tax rates will be higher in the future.

 

So, if you find yourself today in a low tax bracket, and your projected retirement income will have you in the same bracket or a higher bracket if tax rates rise, then you don’t want to take a tax savings on your contribution today by saving in a pre-taxed account.  You need to switch to a tax-free Roth type of account where you don’t get a tax deduction today, but you get to withdraw all the money tax-free when you retire. In addition, along with it being completely tax free, Roth money also doesn’t count in the provisional income tax formula that could cause your Social Security income to be taxed.  

 

Again, based on the new temporary tax code in place, you very well could find yourself in all probability the lowest tax bracket you will ever see. By taking a tax deduction today on contributions, you could very well put yourself in harm’s way by likely having to pay taxes on that money at a higher rate, upon withdrawal. Simply put, you don’t want to do that!

 

So Arnie, get with your retirement and tax professional soon to evaluate your current tax situation and future retirement situation to see if you are currently saving in the proper types of accounts for your retirement.  For a more detailed answer to this question and answers to your other retirement questions, reach out to us at Heritage Solutions Group at (801) 727-8780.

 

 Year’s Resolutions for Your Retirement Plan

 

January 21, 2019

 

At the beginning of every year, people tend to evaluate their lives and determine what needs to be improved in the upcoming year.  This is a good idea, and it needs to be done with your retirement plan as well. Simply put, our financial world has severely changed over the last decade and continues to change.  There are a lot of issues, concerns and changes going into 2019, including a new tax system in place, rising interest rates, continued national spending and budget concerns and market volatility. With all these issues and more on the forefront of people’s minds this year, it is no surprise that there will be a lot of New Year’s resolutions in 2019 that are financially related.

 

It is extremely important to evaluate your current retirement plan and look for areas that need to be updated and improved, no matter if you are still working or already retired.  Think about your planning for a moment and ask yourself these two questions. 1) “Have I made the proper adjustments to my retirement plan lately?” 2) “Am I 100% sure that my/our retirement situation is set up the absolute best way for my/our unique and specific situation?”  If your answer is “no” to either of these questions, then you should make it a New Year’s resolution this year to get some valuable help. Find a qualified, competent, educated and experienced retirement specialist to help make sure you are aware of, and understand, all of your options.  Your retirement specialist should help make sure your planning is setup the absolute best way for your unique and specific situation, and to help keep your retirement nest egg safe and sound.

 

For more detailed information and financial updates for 2019, and some specific New Year’s financial resolutions to consider, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

New Year Brings New Rules and Laws

 

January 14, 2018

We are into a new year, and as always a new year brings new rules, laws, retirement contribution guidelines, etc. This year is no exception, and we are also dealing with a brand new tax code.  To keep your retirement and estate planning up-to-date, accurate and finely tuned, you have to get yourself informed and educated on all these changes.

 

Several of these new tax laws, rules, legislation and retirement plan guidelines are now in effect, and many more proposed changes could certainly come into play sometime this year. Below are some specifics.

 

A New Tax System – Congress recently approved the most sweeping overhaul of the U.S. tax code in three decades.  Unfortunately, it is not a permanent change. You need to find out how to take advantage and save tax dollars while you can.

 

Retirement Plan Contribution Limits - Contribution limits for some types of retirement savings plans have changed for 2019.

 

Entitlement Program Changes – There have been some changes to Social Security and other entitlement programs for 2019, with more expected.

 

Interest Rates – More rate hikes are projected for this year and this very well could have effects on your retirement plan.  


Keeping up with the changes each year and making the proper adjustments to your specific plan is a must for those who want to have and maintain a successful retirement plan.  For more detailed information on the many changes for 2019 and how to update your plan properly, feel free to reach out to us as Heritage Solutions Group at (801) 727-8780.

Should You Be Worried About The Stock Market?

 

January 7, 2018

 

The stock market was all over the place last year, especially late in the year.  And if volatility remains this high, it very well could be the same for 2019. This has caused many people to become scared and worried about their investment accounts and retirement plans, and wondering if the long Bull Run is coming to an end. So is the party over? Is this the beginning of the next major bear market or market crash?

 

Well, that is a great question and I certainly understand why many people are wondering about this. The stock market has certainly been an interesting place lately.  The swings so far have been some of the wildest ever seen. With all the volatility and turbulence, many people are wondering if this is the beginning of the end for this long bull market run.  

 

Obviously, no one can predict what exactly the market is going to do.  In fact, the market has an uncanny ability to do exactly the opposite of what most people think.  I mean nobody out there expected this sudden spike in volatility and these extreme days in the market, essentially all at once, after the market has been on low volatile, low risk very bullish run since 2010.  

So, what will happen from here?  Is the punch being put away, the decorations taken down and people being told to go home because this bull run is now over?  Or, is this bull run still in mid form but just taking a break while people are out buying more food and drinks for the party?  

If this concerns you, we encourage you to reach out to your retirement professional to discuss the recent market activity, address many relevant factors and dial in on what to realistically expect from here in an effort to help protect and grow your retirement nest egg.  If you would like our assistance with this, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

We Wish You A Merry Christmas

December 24, 2018
 

Dear Clients and Friends:

 

Each year during the holiday season, we take great pleasure in setting aside our regular work and sending a heartfelt message to all of you.  

 

How joyful we are that this time has come again to extend to you our sincere gratitude because it is good friends and clients like you that make our business possible.

 

There is no more appropriate time for us to say “Thank You”, and to extend our best wishes for every happiness this holiday season and throughout the coming year.  May your Christmas be filled with joy and the coming year be overflowing with all the good things in life.

 

From all of us at Heritage Solutions Group, we wish you and your loved ones a blessed and peaceful holiday season and the happiest of New Years.  

 

If you have any questions or need help with meeting any retirement planning year end deadlines feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

December 17, 2018

“I am 72 years old and own several different types of retirement savings plans, including a traditional IRA, Roth IRA, SEP IRA and an old 401k plan.  I still make some money via my small business that I own.  Can I continue to contribute to one of my retirement savings plans?  Do I have to take money out of these plans since I am still working?  I cannot find a straight answer to this question.  Thank you.”  Sam

Hello Sam and thanks for sending in this very good question.  I believe the reason you are having difficulty finding the proper answer is because the answer is complex and different for each type of plan.  It even becomes more complexed now that you are past the age of 70 ½.

After the age of 70 ½, some types of retirement savings plans prohibit future contributions, while others allow them.  In addition, required minimum distributions come into play for most plans at this age, but not all. And of course, you have to get this right because penalties are very steep if you don’t.

You can no longer make contributions to a traditional IRA once you reach the calendar year you turn age 70 ½.  So since you are 72, you cannot contribute to your traditional IRA. However, since you have earned income, you can contribute to your Roth IRA and your SEP IRA.  Of course, you cannot contribute to your old 401k plan since you are no longer employed there, but if you were, then you could contribute past the age of 70 1/2.

As far as required minimum distributions (RMDs), this again varies by plan.  You have to meet your RMD from your traditional IRA. You also have to take money out of your SEP IRA to meet that RMD, even though you are still allowed to contribute to that plan since you have earned income.  You also have to take a RMD from your 401k plan since you are not working there anymore. The only plan that does not have a RMD requirement is your Roth IRA, so no money is required to come out of that plan.

So with your specific situation, as odd as it may sound, you can have both money going in and money coming out of your retirement savings plans.  And to make it even more confusing, there are different deadlines for contributions and withdrawals from these plans. To learn more about the specific answer to this question and your other retirement related questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Retirement Traps to Avoid

December 9, 2018

There is no denying that retirement planning is sophisticated, complicated, and an on-going process.  You simply have to keep up-to-date and educated on the ever changing tax laws, rule changes, plan provisions, and constant market fluctuations in order to make adjustments and changes to your plan on a regular basis.  Due to all of the complexities of retirement planning, everyone is going to make some mistakes. Small mistakes won’t destroy a retirement plan, but some major traps might. Here are some major retirement traps to avoid.

The absence of a financial plan - As you can imagine, this is a no brainer.  However, as obvious as it is, many people do not have a proper plan in place.  Absent a properly designed plan, a successful retirement is nearly impossible.

Not staying abreast on changes – Unfortunately, a successful and rewarding retirement does not automatically happen with just a retirement plan.  A retirement plan will not work if it is not constantly monitored and updated based on changes that occur each and every year.

 

Not becoming tax efficient – Revenues will have to be increased at some point in the future to pay for the nation’s debt and spending issues.  Many people feel this will come in the form of higher taxes. The more tax efficient your retirement plan is, the better off you will be.

Failing to plan for health related expenses – Is there anything out there more expensive than health care right now?  This is the number one cause of financial ruin in retirement.

 

Having the wrong investment approach – Are you prepared for another market correction? It is coming.  

Getting to (and surviving) retirement can be like navigating your way through a minefield.  In order to survive, you have to be equipped with the right tools, knowledge and education. To learn more about these and some other specific traps to avoid, and to make sure you have the proper information to avoid these traps, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

To Give and Receive

December 3, 2018

The gift giving season is officially here, and over the next several weeks many gifts will be given and received.  Unfortunately, many of these gifts are given, received and soon after forgotten about every year with no real meaning or lifetime value.  This is truly a shame. However, there are ways to make your gifts very meaningful and very helpful, while at the same time receiving benefits for yourself in return.

One very popular and effective way of doing this is through charitable giving.  Of course, the main benefits of charitable giving are the psychological, spiritual and emotional benefits that it brings for helping out a cause or organization that is dear to your heart. Making a difference in people’s lives for a long period of time can truly be satisfying and beneficial.  Fortunately, in many cases, you can also gain some financial benefits for yourself as well.

 

One of the financial benefits of charitable giving is the tax deduction you receive for your gift.  In addition, some charitable planning tools can provide you additional financial benefits as well. For example, some financial gifts can give you a large tax deduction as well as a very good income stream for the rest of your life.    

Unfortunately though, many people have no idea about how and where to do charitable giving, and of the many benefits that it can provide.  Charitable planning can be done by working with a non-profit organization, an independent charitable organization, and/or your financial advisor.  You can also work with your local community foundation which can help facilitate gifts the proper way. To learn more on the many ways, tools and strategies available (including examples) of how you can utilize charitable planning to benefit yourself, as well as the charities of your choice, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Do You Have the RMDs?  

November 26, 2018

Part of getting older in life means dealing with ailments, sicknesses and injuries.  Fortunately, some of these are treatable and curable. The same can be said for your pre-taxed retirement account.  If you own one of these accounts, you will be getting the RMDs at some point. So, can you get rid of them?

RMDs (Required Minimum Distributions) is the government’s way of collecting tax revenue on your retirement plan dollars.  They gave you a tax deduction for all those years while you were contributing, and now they want their money back. And not only do they want tax revenue on the amount that you contributed, but they collect tax on the entire amount of the account, including all the interest that you have earned.  They do this by forcing you to start drawing money out of the account every year once you reach the age 70 ½ , and increasing the percentage you have to take each year. If you fail to do this, there are very, very steep penalties.

Now, some people don’t mind the RMDs as they need the income for retirement.  Others, however, do not need the income and view RMDs as a severe ailment that causes them excessive taxation.  So, is there any way around this? Is there a cure or anything you can do to treat or get rid of taxable RMDs? To the surprise of many, the answer is yes.

Fortunately, because of some recent favorable tax rulings, there are now actually a few treatments available that can get rid of the RMDs. For information about RMDs that you need to know, as well as details on treatments to get rid of them, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

You Have a Partner in Your Retirement Plan

November 19, 2018

One of the most common and well known phrases in life is the one by Benjamin Franklin, who said “In this world nothing can be said to be certain, except death and taxes.”  Many people, though, feel that the tax part of this does not apply during the retirement years.  Unfortunately, this is not the case in most situations. In fact, most people have a partner in their retirement plan, and his name is Uncle Sam.

Most people work and save very hard to build a sufficient retirement plan.  Unfortunately, in most cases not everything saved for retirement is yours to keep.  Uncle Sam owns a portion and your nest egg may be curtailed by 10%, 20% or 30% or more via taxes in retirement.  The failure to realize or understand this can cause many people’s retirement plans to not work or fail.

 

Fortunately though, there are ways to limit or eliminate some of these taxes if you know what to do.  This starts by properly understanding how all types of retirement assets and incomes are treated tax wise. For example, Pensions, Social Security, Retirement Savings Plans, Annuities, Savings Bonds, and even Inheritances all have specific tax rules. You absolutely have to know and understand the tax rules of all of these retirement assets and incomes in order to try minimizing your tax consequences.   

 

The fact of the matter is that taxes are everywhere in retirement, and can take a big bite out of your retirement nest egg if you are not careful.  The key to a successful retirement is properly knowing and understanding how each type is taxed, and then strategically setting up a plan to minimize your taxes owed.  To learn more on this topic and the different strategies available, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

November 12, 2018

 

“Dear Todd, I am reviewing my choices for election of benefits through my employer.  I have a 401(k) and currently contributing 3% from each check. My employer will match 50% of all contributions up to 6%.  I would like to take advantage of the full employer match but I am concerned that if I need that extra money for income purposes, I won’t be able to change my contribution percentage until next year’s election of benefits. Is this something that can be changed at any time depending on my financial circumstances?  Thank you.” Susan

Good question Susan.  Actually, your employer determines how often you can change your 401(k) contribution.  This is set up inside the plan document with the provider of that employer’s 401(k) plan.  Some employers may let you change it only once per year, while others may let you change it as often as you like. Your company’s 401(k) plan provider can let you know how often you can change your contribution amount. If you aren’t sure of who your plan provider is, contact your company’s human resources department to obtain their contact information. Once you find this out, then you may be able to change your contribution percentage through your plan provider’s website.

Now, when you’re deciding how much to contribute to your 401(k), one important consideration is whether your company matches your contribution. Some companies will match the amount you put into your 401(k) up to a certain percentage, like your company does per your question.  If your company matches up to 5 percent, for example, and you contribute 10 percent of your salary, your company adds a full 5 percent. However, if you only contribute 3 percent and your company matches up to 5 percent, they will only match the 3 percent you contribute. They will not put more into your 401(k) than you do. So, based on your question, like you said I would recommend contributing a little more money from your paycheck if at all possible to get the rest of the free match money that your employer is offering.  

Hope that helps Susan.  To learn more about this question and get the answers to your other retirement planning questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Time Is Running Out

 

November 5, 2018

Can you believe it is November already! This of course means there are only a few weeks left in the year.  Obviously it is one of the busiest times of the year and people everywhere will be scrambling trying to get things done.  You probably do not need anything else added to your plate right now, but unfortunately the clock is also ticking on a few retirement planning moves that you have to and/or may need to make before time expires at the end of the year.

If you miss these deadlines, the consequences can be very costly and there is no way to back up the clock and correct the miscue.  So as a courtesy, let us inform you of a few areas of retirement planning that have year-end deadlines.

Required Minimum Distributions (RMDs) – If you are age 70 ½ or older in 2018, you have an RMD to meet from your retirement savings plans.  Failure to withdrawal the required amount on time will result in stiff penalties.

Roth Conversions – This popular tax savings move is different than Roth Contributions given that it has to be done by the end of the year to count for 2018.

Retirement Plan Contributions – In most company sponsored retirement savings plans, you only have until the end of the year to contribute and max out your contributions for 2018.  

 

Gifts and Charitable Contributions – These have to be done by the end of the year in order to get a deduction or tax credit for the year 2018.   

Remember, time is running out on these and several other planning moves that you have to do, or very well may need to do, before the end of the year.  If not, your retirement plan could be severely hurt. For detailed information on these and other year-end planning moves and strategies, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Is It a Trick or a Treat?

October 28, 2018

 

It is Halloween week, and the main theme of Halloween is ‘trick or treat’.  It is also a main theme right now in the financial world as there are a lot of financial tools, moves, options, and strategies available that could be either a trick or a treat to your retirement plan.  So, how do you know which one it is?

 

In your pre-retirement and retirement years there are literally thousands of different planning moves, options, and strategies that are available.  And many of these moves and strategies could either cause you financial success or financial hardship, depending on when and how you implement them.  For example, one very popular move people make when they need money from their retirement plan before the age of 59 ½ is a 72(T). This move will allow you to access money in certain ways from your retirement plan without getting hit with a penalty.  Now, obviously that sounds good and in some circumstances this can be a very good thing. However, there are also circumstances where making this move could really cost you a lot of money and hurt your retirement plan.

The bottom line is, every financial tool, option, and strategy has its proper fit for where it will work successfully, and a time where it could possibly do tremendous harm to your plan.  Determining each is the difference between having a trick, or a treat in your retirement plan. To learn the specifics of where specific retirement planning tools and moves can be a very good, or a very bad thing, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Do You Know How Important This Is?

 

October 22, 2018

When most people think about which documents are needed to pass on money to heirs, they usually think of a Will and/or Trust.  However, a Will or Living Trust has no effect on retirement accounts, such as an IRA. Only the beneficiary designation form for each specific IRA matters.  Do you know how important this is?

Unfortunately, most people do not know that beneficiary designations override a Will and/or Trust.  Let me repeat that again, as this is VERY important.  Beneficiary designation assets are passed to the heir who is listed on the beneficiary line, not by what it states in a Will and/or Trust.  

The misunderstanding or simply the lack of knowledge about this has caused serious problems for many people over the years.  I can’t tell you how many times this has happened to people, and it is just because many people do not completely understand the rules about beneficiary documents.  Using the wrong forms, forgetting to fill them out, filling them out incorrectly, or just simply forgetting to update them when major life events occur that cause changes can affect how assets are distributed to heirs, and can spell an inheritance disaster.

 

There are simply no ifs, ands or buts about it, the fact is beneficiary planning is absolutely critical if you want to limit the amount of taxes, expenses, fees and mistakes when you pass money to the beneficiaries of your choice. To learn more about this topic and the specifics as to why it is so important, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Retirement Misconceptions Can Be Costly

October 15, 2018

There is an old saying that is thought to be by Mark Twain that really makes you think.  It says – “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”  This quote relates well to retirement planning as there are many misconceptions in the retirement planning world which can cost you a lot of money.

One of the most common misconceptions is in regards to the IRA.  The IRA is one of the most popular and utilized financial tools used in America. However, even with the popularity and common use of this tool, there are many misconceptions and misunderstandings about IRAs, such as:

 

An IRA is an investment - This is not true.  An IRA is an account registration, not an investment.     

 

There is only one type of IRA – This is not true.  There are many different types of IRAs.

 

You can only contribute to an IRA for yourself – This is not true.  In some circumstances, you can contribute for both you, a spouse, and your children.  

 

A rollover to an IRA is always in your best interest – This is not true.  An IRA rollover from a company sponsored retirement plan can be a good move in many circumstances, but not always.   

 

These are just a few of the misconceptions about IRAs.  Again, if you fall for these, it could cost you a lot of money.  For a complete list and thorough analysis on many IRA misconceptions, including the one that costs people a ton of money every year, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Retirement Rules That Don’t Apply Anymore

 

October 8, 2018

 

Retirement today is so much different than it used to be.  I mean think about it; people who were working back in the 50s, 60s and 70s probably planned on and maybe even have the old fashioned traditional retirement where they retired with a solid pension plan.  This coupled with Social Security takes care of many people’s retirement lifestyle, and they did not have to worry about saving much more on their own. Unfortunately, this is not the case anymore.

 

Very few people working today will have the security of being able to rely on an employer and the government to take care of them in retirement.  Companies have gotten rid of traditional pension plans and has put that responsibility on the workers by offering defined contribution plans, such as 401(k)s, where it is the employee’s responsibility to put their own money back for retirement.  

 

Furthermore employees today cannot rely on the government as much as they used to, as the Social Security system is underfunded and will have to go through some major changes in order to save it for future generations.  In addition to this, a host of new forces are altering the traditional approach to retirement planning. We have insanely high and rising healthcare costs, historically low interest rates and a complex tax system that if you do not know what you are doing and how to save properly, you could end up having all your sources of retirement income subject to taxes.  

 

These are just a few examples of the differences between retirement past and retirement today. To learn more about the common and understood rules of the past, and why they don’t apply anymore, contact me at Heritage Solutions Group at (801) 727-8780.

Question of the Month

 

October 1, 2018

 

“I have a question regarding how to avoid taking a required minimum distribution next year.  I have a Roth 401(k) plan at work. Can I rollover my Roth 401(k) to a Roth IRA this year to avoid the RMD that must be taken next year? Thank you.”  Cindy

Hello Cindy.  You have asked a very good and smart question. Before I answer your question, let me give a quick review of RMDs. Required Minimum Distributions (or RMDs for short) come from the IRS rule that says you have to begin drawing money out of most retirement accounts once you reach the age 70½, and every year thereafter.  The reason for this is, most of the money in retirement savings accounts is pre-taxed and Uncle Sam wants paid the tax on this money that you owe him.

Now, most people do not know that there are important differences between a Roth 401(k) and a Roth IRA when it comes to RMDs.  One of the biggest benefits of an Individual Roth IRA is it does not have RMD requirements. This is a huge benefit as you can let that money grow tax-free for your lifetime, and then pass on that money tax-free to your beneficiaries.  However, a Roth 401(k) is different. It still grows the money tax-free, but it has RMD requirements. You must take RMDs from your Roth 401(k) during your lifetime which prevents it from continuing to build tax free. So, many people do exactly what you are asking and rollover their Roth 401(k) to their Roth IRA in the year before their first RMD is due. By doing this they avoid RMDs from the Roth 401(k) during their lifetime.

So, if you have money in a Roth 401(k) and you are getting ready to turn 70½, and you don’t want to be forced to take money out of that account, then you can rollover any amount you want to your own Roth IRA with no tax consequences and no penalties.  This way your money will not be subject to a RMD, and your Roth 401(k) still remains open so you can continue to make contributions to the Roth 401(k) if you choose. Obviously, if you contribute to your Roth 401(k) going forward, you will have to take a RMD out of that money each year, but it should be a small amount since you have moved the majority of the money to your Roth IRA.  So, it can be a good strategy for maximizing your tax-free growth.

To get more information on this topic, or to get your other retirement planning related questions answered, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

How to Maximize Your Retirement Accounts

 

September 24, 2018

Every year there are rule, guideline, and tax law changes to deal with when it comes to saving for and managing your retirement plan. This year is obviously no exception with a new and historic tax code in place. So, you have to keep on top of things in order to maximize your retirement.  

 

In order to do this the most proper way, most people will need some professional guidance.  Things can change so fast, and so often. For example, last year the Treasury Department announced that it was ending the myRA program.  And this year, the contribution limit for company sponsored retirement plans has been increased. If you did not know about these changes, then it could hurt your plan.  In order for you to maximize and get the most of out of your retirement accounts, you have to have the most up to date and proper information and education.  In addition, you have to understand several key factors, such as:

Where to Contribute – Saving is important, but how you save is more important.  You have to know what types of accounts are best for your unique and personal situation.

Understand the Tax Issues – Understanding how and what type of account to contribute to the most tax efficient way for your specific situation can make a huge difference in the ultimate value of your account.

Understanding Costs and Fees – Contributing to retirement accounts is not free.  However, there are strategies to minimize the effects of fees and expenses.

Invest Smartly – The investment world is much different than it used to be.  Today you need more of an adaptive approach that adjusts to changing market environments.

There are several strategic ways to maximize your retirement accounts.  To learn more on how to do this and get some answers to some key retirement savings questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

How Much of Your Retirement will Uncle Sam Get?

 

September 17, 2018

 

You work hard and save as much as you can to be able to retire someday.  And once you are retired, it’s time to kick back and enjoy your life and all the activities that you want to do.  But are you prepared for your retirement to be invaded by Uncle Sam? Are you prepared for a 10%, 15%, 25% or more in reductions from your retirement plan?  

This could be the effect that taxes have on your retirement, as most forms of retirement income — including Social Security benefits as well as withdrawals from your 401(k) and traditional IRAs — are taxed by Uncle Sam. And unless you live in one of seven states with no income taxes at all, you can expect your home state to ding you as well.  How can this be?  

Well, one of the biggest myths about retirement is the one that most people feel they will be in a lower tax bracket in retirement, or will not owe any taxes at all.  Unfortunately, in many cases this is simply not true and believing in this myth can get a lot of people into trouble. Most retirement assets and incomes are subject to taxes in retirement.  Because of the way the tax code is set up this can have a ripple effect and cause you to possibly be in a higher tax bracket in retirement. Thus, in order for your retirement plan to be all that it can be, you have to understand how taxes work and know the proper ways for reducing or eliminating them.

 

To learn more and the details of how all the different sources of retirement assets and incomes are subject to taxation, as well as the ways to set up your retirement plan properly to reduce and/or eliminate taxes in retirement, feel free to reach out to us or get with a retirement and tax planning specialist.  We can be contacted at Heritage Solutions Group at (801) 727-8780.

Are You Concerned About the

Future of Social Security?

 

September 10, 2018

 

Social security is a main staple in most people’s retirement plan. Unfortunately, that staple may be in trouble in the future.  According to many reports, Social Security is underfunded and will run out of money if something is not done. So, what is going on here? What are the facts and the truth, and should you be worried?  

 

This is a big topic and one of major concern lately as Social Security benefits are a main source of retirement income for the majority of retired Americans. These people have paid a lot of money into the system over their working years through Social Security taxes, and of course they deserve to get that money back as retirement income as the system is designed.  They are concerned whether their Social Security payments are safe, especially in light of numerous reports predicting an imminent financial crisis for the program within the next 15 years or so. So, these people’s concerns about the validity of Social Security in the future are understandable.  

Again, these concerns are valid.  Although current participants in the program have nothing to worry about in terms of receiving their immediate benefits, the long-term challenges facing the system could result in changes that could force you to change your expectations for what Social Security will provide you in the decades to come.  So what is the truth here, and what specifically may be happening to Social Security in the future?

 

To get the vital facts and answers that you need to know so you can have a better idea of what to expect, feel free to reach out to us.  We can share with you some valuable information as to how to maximize your Social Security benefits. We can be reached at Heritage Solutions Group at (801) 727-8780.

Key Dates Related to Your Retirement

 

September 3, 2018

 

When you think of certain important dates or ages, you generally think of birthdays, anniversaries, special moments, etc. However, as you get older and get into your pre-retirement and retirement years, some other dates and ages become very important. In fact, these dates may even become more important than birthdays and anniversaries as missing them or not understanding what happens at these times can have a severe impact on your retirement.  

 

Most people work extremely hard during their lifetime to build a nest egg that will take care of them in retirement. Part of building your nest egg is the proper understanding and planning around some key dates.  The key dates and ages related to retirement that we are talking about here are age 21, age 50, age 55, age 59 ½ , age 62, ages 62 to 65, ages 65 to 67, age 70 and age 70 ½ .

 

All of these ages represent a very important time related to some type of retirement issue, like contributions, Social Security, Medicare, required minimum distributions, etc. Most of these ages require some type of action that needs to be taken which will affect your retirement in some way. For example, are you sure you understand when you can access money out of a retirement plan without penalty, or when you can make as much money as you want without losing Social Security benefits?

 

To make the most of your retirement benefits, you need to understand what all of these key ages mean and all the issues and options that each age entails. Feel free to reach out to us to learn more about  these key ages and the importance behind each one in great detail. We can be reach at Heritage Solutions Group at (801) 727-8780. 

How Fake News and Assumptions Affect Financial Markets

 

August 27, 2018

 

As everyone knows, there is a lot of ‘fake information, assumptions and news’ in all the various media outlets today.  The question is, “Does this affect financial markets?”  Yes, it does, and if you don’t understand how it affects the markets then you will be in a world of trouble come the next correction or recession.

   

When meeting with the families we serve, sometime the conversation turns to, “How did my investment returns compare to the overall market?”  In many cases, the comparison is to the S&P 500 index.  The S&P 500 is a group of stocks that is believed to represent a well-diversified, large company portfolio. For many people, it seems reasonable to compare the returns of the S&P 500 to your equity portfolio. But it isn't, and here is why.

 

It's called capitalization-weighting. Without getting too technical - it means the larger the company, the more it counts in the weighting of the index return. In today’s world, the reality is that Amazon, Microsoft, Apple, Netflix, Facebook and Google represent almost all the investment returns for the S & P 500 year-to-date. So, what about the other 494 stocks? Well, those returns have not done so well at all.  

 

Portfolio returns are driven by the types of investments within the portfolio. If you are invested solely in the total market or the S & P 500, then your performance will likely be driven by a handful of stocks. This is simply the way market cap weighting works. This is why passive investing does well in up markets, but no so good in down markets.

   

So, the moral of this story is...beware of fake news and overall market assumptions. Many times relying on that information can make you think that passive or index investing is all you need.  Of course, that can get you into trouble in your pre-retirement and retirement years. To learn more details about this and get answers to your other retirement questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Thinking About Retiring?  Consider These Factors First.

 

August 20, 2018

For most people, the ultimate goal that comes from working many years is to retire comfortably someday.  Now, millions of Baby Boomers are reaching the typical retirement age every year. Unfortunately, because of the current economic environment, the question of retirement is less about the normal retirement age, and more about whether you can afford to retire.  To determine this, there are several factors to consider.

 

The number one question that almost everyone asks themselves when preparing for retirement is a rather simple one, “Will my income in retirement be greater than my expenses?”   But, of course, there’s more to it than that.  To make your retirement as good as it can be, you'll want to know about and consider several key financial matters, such as:

  • When and how to claim Social Security to maximize benefits over a lifetime

  • How to set up the proper income and distribution plan from your nest egg

  • Understanding tax issues on all your assets and how to minimize taxes

  • Securing health insurance and how to pay for it

  • How to protect your assets and nest egg

  • Making sure your estate and beneficiary documents are accurate

  • Selecting the right pension and retirement distribution options

  • Having a plan in place for a long term care illness

  • Having the right investment plan in place for growth and protection

  • Having a plan in place to fill your available time

 

Considering and preparing for these and many more factors before you elect to retire can make your retirement years more financially secure, and leave you feeling very good about your transition into the golden years. So, if you are considering retirement, or are already retired but unsure if you have considered everything you need to, feel free to reach out to us to learn more about these and many other key factors. We can be reached at Heritage Solutions Group at (801) 727-8780.

Can You Pass the Retirement Test?

 

August 13, 2018

 

Last week was our ‘Back to School for Your Retirement Show’.  As we said, it is August and that means “back to school time” for students.  However, “back to school” is not just for students anymore.  You have to make sure to continue your retirement education each and every year due to all the many changes that take place in the financial arena.  

 

Over the last several years, there has been an explosion in technology.  These major advancements have created several advancements in automation.  There are even cars now that drive themselves!  Of course, these advancements in technology are designed to make life easier, which it does in many circumstances.

 

However, automation is not a good thing for everything.  Even though some advancements in technology have been good in the financial industry, it is not a good idea to put your retirement plan on autopilot.  There are so many changes each and every year in the financial arena, such as tax law, interest rate and economic changes.  In addition, each year there are rule and law changes that you have to adapt to, and you very well may have goal and objective changes over your retirement lifetime.  To keep your retirement plan up to date, accurate and set up the best way for your specific situation, you have to be educated and informed of these changes each and every year, and make the necessary adjustments to your retirement plan.  A retirement on autopilot with no annual adjustments will simply not work.

 

So, how up to date do you think you are when it comes to the latest retirement rules and laws?  If you are not sure and feel the need to be updated on all the recent changes and the retirement planning deadlines approaching for 2018, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Back to School for Your Retirement

August 6, 2018

It is the beginning of August, and that means it is back to school time.  But back to school time is not just for kids in school anymore.  With so many changes each and every year in the financial and economic arena, you simply have to make sure you go ‘back to school’ to stay educated and informed in order to keep your retirement plan updated and accurate at all times.  So, it is back to school time for your retirement plan.

 

Summer time is considered break time for most students.  And this is the time of the year that many parents take some time off work from their normal routines to do some activities with their kids, take family vacations, etc.  During this time period, it is very easy to get behind and forget about your retirement plan for a while. However, as you know, time does not stop and changes in the financial and economic arena happen all the time.  Every year there are tax law changes, interest rate changes and changes in the economy and financial markets, With that being said, retirement planning never ends. In fact, there have been many changes this year in rules, laws, taxes and regulations.  So, you need to keep up your knowledge of all these changes so you can make the proper and strategic adjustments to your retirement plan every year to keep your planning up-to-date, accurate and in-line with your specific goals, objectives, and desires.

So, back to school is not just for kids anymore as it’s back to school time for your retirement plan.  To get educated on the many changes for 2018 and to learn of the retirement planning deadlines that are fast approaching for this year, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

 

July 30, 2018

“Hi Todd. While flipping through the channels the other night, I came across a program about retirement.  They discussed something called the 4% Rule. The host of the program said that as long as you withdraw no more than 4% from your retirement accounts each year, the money should last you 30 years.  How sound is that advice? Are there exceptions to this rule and is there a minimum amount of money that has to be saved for this rule to apply? Thanks! Ryan”

 

Hi Ryan, thank you for your question.  One of the biggest questions and decisions a retiree will ask themselves and make in their retirement years is “What percentage of my nest egg can I safely and comfortably draw each year?”  Obviously, the decision made here could very well have major impacts on your entire retirement lives. With it being such a huge decision, many people will look for advice in a lot of different places.  

 

Unfortunately, a lot of the information and advice found online and other media outlets will be very general in nature and not based on your specific situation.  And following a certain withdraw percentage that you got from a general source can be very dangerous.  So, the answer to your question is “no,” it is not very sound advice.  You have to be careful with what you hear on television and read on the internet, especially advice that comes across as being “good for everyone.” The key to retirement planning is to use the financial tools that are best suited for you based on your own specific goals, objectives and desires.

 

So, there is no right or wrong standard percentage for everyone.  It all depends on your individual situation and the other types of retirement assets and incomes you have coming in, your health situation, tax situation, etc.  There are a lot of other variables that come into play when we are putting together income plans for clients. These variables may need to be adjusted accordingly based on different changing events in your life.  So, don’t ever take a standard rule of thumb as being the right thing for you. Always work with a retirement professional to determine the best situation for your individual, specific, unique situation based on your own unique goals, objectives and desires.

To learn more about this question and get the answers to your other specific retirement questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Retirement Advice from The Supreme Court

July 23, 2018

There are a lot of sources available to get retirement advice.  Unfortunately, many of those sources do not provide accurate information or dependable advice.  However, one source that you can definitely rely on is The Supreme Court. The Supreme Court does not often give retirement advice, but when they do, you should listen.

 

There was a recent case that involved proper beneficiary titling.  In 2002, Minnesota adopted a state law that removes an ex-spouse from a beneficiary designation upon divorce. This law is different as in most cases, proceeds are paid to whomever is listed as primary beneficiary as long as that person is living.

 

In this specific case, Mark Sveen and Kaye Melin got married back in 1997. The next year, Mark purchased a life insurance policy. He named Kaye as the primary beneficiary and his two children from a prior marriage as the contingent beneficiaries. Mark and Kaye got divorced in 2007. Mark never took any action to update or change the beneficiary on the life insurance policy. He died in 2011.

After Mark’s death, his children from his prior marriage made a claim for his life insurance proceeds, because the proceeds were going to be paid to his ex-wife as she was still listed as primary beneficiary.  They argued that the Minnesota statute revoked the designation of Kaye as the life insurance beneficiary when she and Mark divorced and that the proceeds should instead be paid to them as contingent beneficiaries.

 

The battle over life insurance proceeds between Kaye and her former step children began in the District Court, went to the 8th Circuit Court of Appeals, and ended up in the Supreme Court. The Supreme Court held that the Minnesota statute revoking the ex-spouse as the beneficiary of the life insurance upon divorce was constitutional and that therefore the insurance proceeds should be paid to the contingent beneficiaries, the children.
 

Minnesota is not alone in enacting a statute which revokes beneficiary designations upon divorce for all sorts of assets, including retirement plans.  Feel free to contact us to learn more about the details of this case and the effects it could have on your retirement plan, as well as how to make sure your retirement plan is set up properly.  We can be reached at Heritage Solutions Group at (801) 727-8780.

I Completely Disagree

 

July 16, 2018

 

Last week in our article entitled ‘Do You Have Financial Independence?’ one of the factors that was discussed for becoming financially independent, and maintaining financial independence in retirement, was keeping up with the tax law changes and ‘becoming tax efficient’.  In fact, I have written several times about how important it is to make sure you are saving the most proper way for retirement to maximize your retirement nest egg the most tax efficient way. Based on the new temporary tax code that is now in effect which puts tax rates and brackets near historic lows, it very well may make sense for many people to start saving for retirement on an after-tax basis now in Roth accounts instead of a pre-tax basis.  However, there was a financial article published last week from a major financial planning outlet that states almost the opposite, which was ‘Why more people should probably use Pre-Tax retirement accounts instead of Roths’.  I do not agree with this article.  

 

Obviously, you are always going to find several different views when it comes to financial and retirement advice.  And in many cases that is good, as people need to hear the different views and options available to determine for themselves which is the most proper way to save for their own unique and specific situation.  However, in this case, I don’t feel the article considers several different factors that come into play regarding taxation in retirement.

 

As we have said before, saving for retirement is very important.  But, how you save is more important. Each person has to figure out the most proper way to save for their own retirement based on their own unique and specific situation.  Based on our new tax code, I feel more people will benefit by saving on an after tax basis now. To learn more about the details of this article and why I disagree with it, including all the factors that I feel you need to consider in order to properly determine how to save for retirement, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Do You Have Financial Independence?

 

July 9, 2018

Last week the country celebrated Independence Day.  Independence Day honors the birthday of the United States of America and the adoption of the Declaration of Independence on July 4, 1776.  The Declaration of Independence is the nation's most cherished symbol of liberty, and this is a special time for many Americans. To me, the 4th of July represents not only the birth of our nation and the sacrifices that millions of military members and their families have made throughout our nation’s history, but it also represents the symbol of freedom and hope.  It is not a stretch to take this a step further and relate freedom and hope to financial independence in retirement.

There is no absolute definition for financial independence in retirement.  The most common sense of the term is someone having enough wealth to do anything at any time.  Obviously, most Americans will never achieve this goal. A much better definition of financial independence in retirement should mean the ability to have the lifestyle that you desire, the freedom to do some things you want to do and a financial sense of security.  

To achieve this you will obviously need to do proper planning and make the right strategic moves at the proper time, as well as keep up with all the tax law changes and rule and law changes each and every year.  If you do not adjust and keep your retirement plan up-to-date based on all these changes, then your financial independence in retirement could be lost.

As the Fourth of July should remind us all, independence is something worth fighting for.  To learn more about all the latest changes that could impact your retirement plan and to get the proper information and education that you need to become or remain financially independent in retirement, visit The www.heritagesolutionsgroup.com and find an upcoming education retirement course in your area.   

Is a 401(k) Better Than a Pension?

July 2, 2018

Most companies offer either a defined-benefit plan, commonly known as a pension plan, or a defined-contribution plan, which is a retirement savings plan known as a 401(k) or 403(b).  Although both are retirement plans through employers, they are very different from one another. A pension plan is funded with company money which pays you a monthly income after retirement for the rest of your life or for the rest of your life AND your spouse’s life, whichever option is elected. Whereas with a 401(k) or 403(b), these plans are funded with your money.  You are in control of this money and can withdrawal any amount once you retire, but there is no guarantee that it will last for your lifetime.

 

Today, most people will not retire with a pension plan.  They have become very expensive for employers to operate and maintain, and they also put much more responsibility on employers.  As a result, most employers have either eliminated or frozen pension plans, and shifted the cost and responsibility of retirement savings back to employees with defined-contribution plans, such as a 401(k) or 403(b).  In fact, only about 4% of workers have a pension plan, compared to about 60% back in the early 1980s.

 

Even though a pension plan may sound better, as it provides a lifetime income for either the employee or the employee and their spouse, believe it or not the defined-contribution retirement savings plans like the 401(k) may be a better fit in many circumstances. To learn more about the many advantages that 401(k) plans have over pension plans and why they could very well be a better source of retirement funds, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

 

June 25, 2018

“Hello Todd.  With the recent tax cuts, is saving money for retirement on a tax deferred basis still the best way to go? Thank you.” Katie.  

 

Great question Katie.  As most people now know, we have a new tax system in place for the next several years, starting with 2018.  This new tax code essentially puts individual tax rates and tax brackets at historical low levels. So, you very well may need to save for retirement differently than you have always done in the past.  

 

With the combination of lower tax brackets, lower tax rates and higher standard deduction amounts, many people will find themselves paying less tax for the next several years.  Of course, no one is going to complain about that. However, this could cause you to make a very big mistake.

 

Many economists and financial professionals feel that these tax reductions will add to the current national debt.  In addition to that, we also face deficits to entitlement programs like Social Security and Medicare. And when you factor in rising interest rates in the future and the effect that will have on the national debt, in all probability, tax rates very well may go much higher in the future.  So, for those that have always saved for retirement on a tax deferred basis, meaning they take a tax deduction on the money going in to plan with the understanding of paying taxes on the money later on in retirement, then you could find yourself actually owing Uncle Sam more money than it saved you earlier.  

 

So, with the new tax laws now in effect, you really have to analyze and re asses how you save for retirement.  If your tax cost now will be less than your tax cost later, then you need to switch how you are saving for retirement.  In this circumstance, consider saving for retirement via the Roth account, in a Roth IRA or Roth 401k. With a Roth account, you forgo the tax deduction now to reap tax free withdrawals later.  

 

To learn more about this question and get the proper help in determining the best way for you to be saving for retirement, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Does Father Always Know Best?

June 18, 2018

Yesterday was Father’s Day.  Hopefully you were able to spend some quality time with your father and thank him for all the good advice and wisdom that you may have received from him over your lifetime.  Advice from your father and all his experiences can be very valuable, especially with his experiences on money matters. However, does father always know best?

One of the main duties and responsibilities of a father is to teach and offer advice to their children, no matter what their age.  However, how do you know if father knows best when it comes to giving financial advice, or if the financial tips that your father gave you are valuable or still should be followed in today’s financial world?

 

All of us have heard about – and even lived with - the “generation gap.” We have experienced it through music, clothing, and entertainment. But an area that we don’t often hear about is the “generation gap” that exists in financial planning. In essence, some planning strategies and financial products that worked in past generations may not necessarily meet the needs of today. Yet there are other tools and concepts that continue to stand the test of time, though are not in practice as much today as they should be.

For the most part, parents who talk about money and display good financial habits like budgeting and paying bills on time can improve their children’s financial future. Fortunately, I was a recipient of this from my father, and I greatly appreciate that. However, today’s financial world is much different from the past, and to have a successful retirement plan, you have to adapt to updated strategies and concepts.  

 

Dads across this great nation gave us a great foundation to build on. Using those principals along with updated and customized financial advice from a professional financial advisor can ensure that your retirement will be just as good as or better than your father’s retirement. To get information about successful retirement strategies from both the past and current, feel free to reach out to us at Heritage Solutions Group at (8010 727-8780.

A Valuable Inheritance

June 11, 2018

Many people will likely receive an inheritance at some point in their life.   While inheriting money is nice, unfortunately it usually is not as simple as you may think and many problems could arise.  This money could suddenly become subject to bankruptcy, creditors or a divorce proceeding. It also could become subject to excessive taxation and, of course, just plain old reckless spending if heirs are not smart with the inherited money.  Obviously, many people want to protect and safeguard the money they leave to their heirs. So, will you leave a valuable inheritance?

The ultimate value of an inheritance often comes down to many factors.  These factors must be considered and addressed properly in order to maximize an inheritance, while minimizing the tax consequences and problems. First, you need to consider the type of account that will be inherited, as different types of accounts have different rules and guidelines.  You then need to consider the tax issues, as some inheritances are tax free, some are partially taxable and some are completely taxable. You also need to make sure that accounts with beneficiary designations are correct and up-to-date, as beneficiary contracts override wills and trusts.  

 

There are many more factors to consider as some types of inheritance’s have specific requirements that must be met by a certain time.  And as an inheritor you have to pay strict attention to these deadlines in order to preserve some benefits and minimize taxes.

 

The difference between just an inheritance and a valuable inheritance often comes down to proper knowledge and planning.  To learn more on this topic and find out how to make sure you leave a valuable inheritance, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Don’t Forget About This

June 4, 2018

 

When people think of estate planning, it is generally thought of only being needed by the ultra-wealthy.  Actually though, this isn’t the case. Whether people realize it or not, estate planning is a big part of retirement planning.  Because of legislation and demographic changes, as well as tax, inheritance and privacy laws, proper estate planning is greatly needed in almost all retirement plans.  So, make it a point not to forget about estate planning.

 

The ultimate goal of estate planning is to pass on as much of your unused assets with the least amount of taxes, expenses, fees and time, and do it as privately as possible.  In other words, to protect and preserve your legacy for your family, loved ones and your charitable causes and interests. And you do not have to be extremely wealthy to have this desire.

 

That is why you cannot forget about proper estate planning, and the many areas and factors that it entails.  A few of these areas and factors are common like proper estate planning documents, but most are just not thought about by most people.  So, make it a point to learn about these factors and areas that must be addressed in order to maximize, protect and preserve your legacy the absolute best way.  

 

To learn more on the above factors and many more as well as how to incorporate proper estate planning into your retirement plan, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Painful Facts About Retirement

May 28, 2018

 

The financial and economic world today is so complex, cumbersome and ever-changing.  In addition to this, volatility has picked up substantially in the stock market over the last two decades.  This makes planning for your retirement much more difficult than ever, and what makes it even harder is that many Americans are clueless to some very painful facts about retirement.

The end game to a hard working career is having a comfortable retirement.  And everyone dreams about this time and how it’s going to be. To some people this means golfing or just relaxing every day. For others it might include traveling, more time with grandchildren, volunteering, or taking on some projects that you have always wanted to do.  Unfortunately though, there are some daunting facts about retirement that could derail your dreams and plans from actually becoming a reality.  And not being aware of these facts before hand could turn your retirement into something much less than you envisioned.

For example, consider the fact that average retirement savings will generate less than $500 per month income, or that tax deferred savings while you are working will cost you more in taxes in retirement than you saved by deferring.  Obviously nobody likes to be the bearer of bad news, but sometimes it is necessary in order to protect or prevent people from hurting their retirement.

To learn more on the daunting facts that could plague your retirement and the ways to prevent your retirement plan from becoming part of these facts and statistics, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

May 21, 2018

“I just put money into my IRA for 2017 before the deadline.  How can I invest this money now, and are there any mistakes for me to avoid?”

 

Many people made a contribution to their personal IRA or Roth IRA in April to meet the deadline for a 2017 contribution.  Once that money is contributed to one of those plans, your next decision is how to invest that money. With personal retirement accounts like IRAs or Roth IRAs, there are many options to invest in, but also a few mistakes to avoid.  

Basically, there are unlimited investment options to choose from.   out there and you can invest it any way you want. You can invest in something very safe and secure, like a bank savings account or a CD, or you can invest the money into a managed account, equities, bonds or whatever you want. You just have to make sure to avoid investing in illegal investments, which consist of life insurance and most collectibles.

 

In addition, be very careful with prohibited transactions.  There are many improper uses of your IRA that are prohibited.  The trap is that many investments that are legal to own in an IRA can readily lead to making prohibited transactions. For example, it is legal for an IRA to own real estate, such as a condo. But a prohibited transaction occurs if you or members of your family use the condo, advance money to the condo to pay for repairs, taxes or other expenses or you or a family member personally guarantees the condo's mortgage or financial obligations.

Saving money is important for retirement, but you have to do it the proper way.  To get this question answered in more detail, or the answers to your other retirement questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Mothers and Women Face Many Challenges

 

May 14, 2018

 

Yesterday was Mother’s Day.  In fact, let’s just say last week was Mother’s week as they deserve a whole week of recognition and attention.   To honor Mother’s Day, we are going to help them by giving some information and advice for a secure future.

In the past, men dominated financial affairs.  Today, however, things are much different because of the growing presence of women in the workplace and as head of households.  Women are taking an increased responsibility for their long term goals and financial health, but they face many challenges with building wealth and securing their financial future which makes financial literacy and advanced planning especially important.  

 

According to Investment News, women control more than $18 trillion in consumer spending, hold approximately 30% of global wealth, and are the sole head of 32% of U.S. households.  Plus, more women are inheriting wealth because of longevity and demographic patterns. In addition, many women outlive their husbands and at some point in their lives will have sole responsibility for their finances.  And many times they are also left with the legacy planning responsibilities as well as making sure the assets get passed on properly to their heirs. Thus, women have substantial financial planning, investment and wealth management needs.  

 

To learn more about and the solutions pertaining to the specific financial challenges women are facing, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Are You On Track?

May 7, 2018

Americans may be optimistic in general, but when it comes to retirement security many people have their doubts. When I sit down with someone for a meeting for the first time, one of the most common questions that I get asked is, “Are we on track for our retirement?”, or, “Is my retirement plan secure?” This is for both pre-retirees who are nearing retirement and for retirees who want to make sure their plan is going to work. So, what about you? Are you on track and confident for a successful retirement?

In the most recent Retirement Confidence Survey from the Employee Benefit Research Institute, the majority of respondents were not at all confident of having enough money for a comfortable or were only somewhat confident.  That is a problem. So, some education is definitely needed here.

Proper retirement planning comes down to many factors.  The first and main factor that must be addressed is your goals.  You have to know what a successful retirement means to you. Once you know your goals or what type of retirement lifestyle you want or need, then it is a matter of finding out how to meet those goals and lifestyle.  This comes down to your assets and incomes being able to support and fund your expenses and desired lifestyle. To figure this out and see if you are on track, several factors have to be addressed and considered.

To learn of these many factors and the critical areas of retirement planning, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

 

April 30, 2018

“Hello Todd - I have a few questions about inherited IRAs. A friend has designated me and three others as beneficiaries of her IRA. First, is this to be considered community property with my husband? How can I inherit this as "sole and separate property”?  Next, must taxes be paid on inherited IRAs? Also, may I give gifts of cash to relatives beforehand rather than naming them as recipients of my IRA and burdening them with taxes? Finally, if I do not name survivors to this inherited IRA, what happens to this money after I die?” Liz.

 

Hello Liz.  These are very good and common questions of many people who have received inherited IRAs.  First, inheritances are considered separate property in every state, including community property states.  Now, if you commingle the funds, maybe by depositing a withdrawal in a joint checking account, for example — then that money potentially becomes community property.  

 

For your next question regarding paying taxes on this money; if this inherited money is from a traditional IRA, which most likely it is, then yes – you will pay income taxes on withdrawals from that inherited IRA at whatever tax bracket you are in at the time.  The only way you would not have to pay income taxes on this money is if it came from a Roth IRA account.

 

Next regarding giving this money away during your lifetime; for 2018 you can give away up to $15,000 to as many people you want, and they won't have to pay taxes on the gift.  If you gift more than this amount, you have to file a gift tax return, but you won't actually pay gift taxes until the amounts you gave away exceed your lifetime limit, which is currently $11.2 million.

 

Finally, you should name human beneficiaries to this account or an IRA Trust.  You do not want to just leave it blank. If your estate is the beneficiary, the money typically would have to be paid out to your estate's heirs — and taxed — faster than if specific people were named. Naming people, on the other hand, may allow the option of continuing to stretch the IRA, which means taking distributions over your beneficiaries’ lifetimes so a good portion of the money remains in the account and can continue to grow.

To get a more detailed answer to this question as well as answers to your retirement questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

It’s Time to Focus on 2018

April 23, 2018

Most people have finished completing their 2017 tax returns.  The key question now becomes how will the new tax bill passed in January affect your taxes going forward?  To find out and take advantage of the new tax bill, you now have to focus on 2018.

Now that the grueling tax filing season has ended for most people, thinking about your 2018 taxes may be the furthest thing from your mind. However, you may very well want to put it on the front burner, especially this year.  Congress has approved the most sweeping overhaul of the U.S. tax code in three decades, cutting individual income and corporate tax rates and removing several breaks and deductions. The plan became law in January of this year.  

Originally, the proposed tax plan was supposed to be much simpler. There was talk of reducing the tax brackets from seven down to four.   There was even talk of being able to do your tax return on a postcard-sized sheet. Unfortunately, that did not happen. The new tax bill is still very complex.  We still have seven different tax brackets, and you still can have many forms to fill out complete your tax return.

 

But, there very well may be some ways that you can save tax dollars with this new tax bill.  In order to do this however, before this tax bill expires in 2025, you have to know the facts and details of this tax plan.  To learn what you need to start doing right away to take advantage of the new tax bill, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

You Can Still Protect Your Assets

April 16, 2018

Your accumulated assets are subject to a lot of different risks during your retirement years.  So, you have to protect those assets. Some people do a good job of protecting against market downturns, increasing tax rates and many other risks.  Unfortunately though, many people don’t believe they can and fail to protect their assets against one of the biggest risks, which is a long-term care illness.

This can be a major problem, especially after looking at these common statistics from various sources including longtermcare.org:

  • Today, someone turning age 65 has almost a 70% chance of needing some type of long-term care service and support in their remaining years.

  • The average nursing home stay is 2.44 years or 892 days.

  • The median annual rate of a semi-private room in a nursing home is now $77,380.  Costs for in-home care can be much higher.

  • On average, long-term care costs are increasing by more than 10% each year.

 

When you add all that up, it is not surprising that a long term care illness, which is not covered by Medicare or private health insurance, very well could severely hurt or wipe out many people’s assets very quickly.  Additionally, with older Americans entering assisted living facilities at an unprecedented pace, it is clear that they will incur more long-term care costs throughout their lifetimes.

So what can you do?  Fortunately, there are several options.  There are still ways to protect your assets.  To learn more about the different ways to protect your assets from a likely long-term care illness, reach out to us at Heritage Solutions Group at (801) 727-8780.

Are You Shaking In Your Boots?

April 9, 2018

The overall markets have been on an extremely rare, very low volatile bull run since early 2009.  However, over the last several weeks, volatility has increased substantially, causing the markets to drop in value and become very erratic.  Are you shaking in your boots, worrying that this is the beginning of the next major market correction?

 

Everyone knows that bull-runs don’t last forever.  Even so, many Americans are not ready or prepared. Their accounts have been swinging wildly, just like the major market indexes for the last several weeks, and they have taken a hit.  So, do you have to just sit back and take whatever happens to the markets? The good news is no, you do not.

 

A market correction does not have to be feared, but it does require a properly structured investment plan. A total portfolio management solution requires a scientific process, based on logical and testable rules, to monitor and react to the dynamic and ever changing market environments. If you hope to be a successful investor over the long run then you will need to make timely and appropriate adjustments to match new market realities. Only then can you potentially benefit from any environment - bullish or bearish.  

 

To learn more about the issues that the markets are facing right now, and some potential solutions to calm your fears and invest properly for growth and protection, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

April 2, 2018

“Hello Todd.  My wife and I are in our mid 50’s and want to retire within 10 years.  We are trying to save as much as possible each year for retirement. Can I contribute and max out both my employer 401(k) plan and a personal IRA account each year?  Also, can I contribute for my wife as well since she is not currently employed? Finally, can I still do anything for the 2017 tax year or is it too late?

Thank you very much.”  Terry.

Thank you Terry for sending in your questions.  Congratulations to you for wanting to save as much as you can for your retirement.  Your questions are very good ones that are often misunderstood.

Contrary to popular belief, most people are indeed able to contribute to both a company sponsored retirement plan and a personal retirement account (Traditional and/or Roth) in the same year.  The only determining factor is the IRS income phaseout guidelines. As long as your income is below the phaseout limits, you are indeed allowed to max out both types of plans in the same year.  

In addition, as long as one spouse has enough earned income, you can contribute to a retirement savings account for a non-earning spouse.  So, in your specific case, you should be able to contribute for your wife as well.

Now, if you have not done this for the 2017 tax year, then there is still time.  However, you will have to act fast. You have until April 17th of this year to contribute to a personal retirement savings plan for the 2017 tax year.  So, make sure you take advantage of this if you have not done so already as you don’t want to miss the opportunity.

To learn more on the rules and options pertaining to this question in more detail, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

To Roll Over or Not?

March 26, 2018

The popularity of company sponsored retirement savings plans, like 401(k)s and 403(b)s, bring many questions. One common question that we get on a regular basis is the rollover question; what should one do with the plan once they change employers, separate from service or retire. In other words, should you roll over or not?

When one separates from service for any reason, the option to take the money out of the retirement savings plan and do something else with it comes available.  Participants generally have five options, and there are advantages and disadvantages to each of these options. The decision you make here is very important and can have many consequences.  

Deciding what to do is not easy as many factors must be considered for your unique and specific situation. Plus, the decision is made even more difficult when the very people from whom one might seek counsel provide misleading, inaccurate or conflicting advice.  Given the amount of money that comes into play for these options each year, and all that could go wrong, the nation’s top regulators and watchdogs including the SEC and FINRA are putting financial firms and advisors on notice: Do right by retirement savers with their IRA rollovers.

What is for certain is that proper education is vital when dealing with retirement plan choices. To learn more on all of these options, including the advantages and disadvantages of each, more on the crackdown on this issue by the regulators, and what specifically you can do to make sure you get the proper advice, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

You Have To Survive and Advance

March 19, 2018

The month of March is basketball tournament time, and the theme during this time of the season is “Survive and Advance.” In order to continue playing and prevent the season from being over, you have to win to move on to the next round.  In today’s ever changing and volatile financial world, your retirement plan has to be set up to survive and advance as well.

Your working years are very similar to the regular season in basketball.  While saving for retirement, you may be able to afford some up and down years in the market as you have time to recover and to continue to build your nest egg.  But in your pre-retirement and retirement years the theme is the same as the tournament.

Your first objective is to survive.  Your retirement plan has to be able to survive the volatility and severe downturns in the market.  It also has to survive congressional law changes, tax law changes, economic changes and many other threats to your nest egg that can have major impacts on your overall plan.   

 

Unfortunately, you cannot stop at just surviving.  You also have to continue to advance your retirement plan as well.  You need to continue to grow your money to battle longevity, inflation and the increasing costs to live.  You also need to become more tax efficient to protect yourself from increasing tax rates in the future.

 

If you are in your pre-retirement or retirement years, then it is tournament time for your retirement plan.  For more information on how to set up and maintain your retirement plan to survive and advance, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Are You 401(k) Smart?

March 12, 2018

 

The company sponsored retirement savings plan is one of the most popular retirement savings vehicles.  The common plans are the 401(k) and 403(b). Most Americans contribute to one of these plans, or at least have access to these plans.  With the high popularity and use of these vehicles, you would think most people understand these plans pretty well. Unfortunately, that is not the case.  So, are you 401(k) smart?

According to the American Benefits Council there are over 638,000 defined contribution retirement savings plans in the U.S., covering more than 88 million total participants.  And according to The Slott Report there is close to 7 trillion dollars in employer sponsored retirement plans. So again, it is safe to say that the 401(k) and other similar plans are one of the most popular and used types of vehicles for saving for retirement.  This is why it is so important to understand all the features of these plans.

Employer sponsored retirement plans are filled with options, features, rules, fees, factors, tax issues and common misconceptions.  Some of these areas include: special company stock provisions, loan provisions, multiple cash out and rollover options, special required minimum distribution (RMD) rules, special age rules for withdrawals and creditor protection provisions.  In order to get the most out of employer sponsored retirement savings plans, you have to fully understand all of these areas, and be smart in how you use them.

To get your questions answered regarding these plans, and make sure you know of and understand the  many options and features of these plans, including the new rules for 2018, feel free to reach out to us.  We can be reached at Heritage Solutions group at (801) 727-8780.

Threats That Could Destroy Your Retirement Budget

March 5, 2018

Everyone knows that in order to have a successful retirement in today’s world you will have to save enough money, and save properly.  However, even the best-laid retirement plans can run into trouble in retirement.

The goal of retirement planning is to save enough money based on your specific goals, objectives and desires so you may achieve a comfortable and secure retirement.  Of course, the amount of money needed is different for everybody. In order to reach that specific number or level of assets, you need to have a very solid and adaptable retirement plan.  So, when that number or level of assets is reached, will your retirement plan be in the clear? Maybe not.

There are several retirement threats that could come into play during your retirement years and they could severely affect or even destroy your hard earned retirement plan and budget very quickly.   The reason for this is that many times these threats are not properly planned for or even considered during retirement planning. Thus, a retirement plan is not a true retirement plan until these issues and threats are considered and made part of your retirement planning.

To get the information you need about these threats and how you can specifically plan for them so they will not destroy your retirement budget, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Do You Hate Taxes?  Consider These Moves.

 

February 26, 2018

 

Taxes seem like they are everywhere and unfortunately, as we said last week, they don’t stop in retirement. There are many different types of taxes in retirement which can severely hurt your retirement plan if you don’t plan properly.  The bottom line is most people hate paying taxes and want to do everything possible to minimize or eliminate them by law. Fortunately, there are ways to accomplish this.

I personally feel that tax efficiency is key in retirement and estate planning. It can literally make a huge difference in the ultimate value of your retirement plan.  Why do I feel strongly about this?  Well, because of our nation’s debt issue and continued excessive spending, and the continued “kicking the can down the road approach.” Many people including me expect tax rates to rise in the near future.  And when this happens, then the more money you have in tax free vehicles and the more tax efficient you are, the better off and more protected you will be.  

Fortunately, there are some valuable tools and moves you can use and make to minimize your tax burden legally, and become tax free or as tax efficient as possible.  You just have to be aware of these tools and moves, then take the necessary action to implement them. For those people who are aware of these tools and strategies, they are starting to make moves and utilizing tools available now, especially with the new tax code, to start preparing for a world of higher tax rates by putting themselves in a position where it will affect them the least.  
 

So, do whatever you can to become tax educated.  Find out about these tools, moves and strategies in detail to help you save tax dollars.  To get more information and help, contact us at Heritage Solutions Group at (801) 727-8780.

“How Will The New Tax Law Affect Me?

Will I Save Taxes?”

 

February 19, 2018

Congress recently passed the most sweeping overhaul of the U.S. tax code in three decades. And now that this is law, people and businesses everywhere are starting to see the effects of this and wanting to know if it will save them money.

To answer this question, the first thing you must understand is that this new tax law is for years 2018 and forward.  So the tax return that you are getting ready to file is for last year, which will not be affected by this new tax bill.  

However, your 2017 tax return will be very valuable in determining how the new tax law will affect you and whether or not you will save tax dollars.  Once our clients complete their 2017 taxes, we will use those 2017 tax figures to do a 2018 preliminary tax return with the new tax rates and brackets.  

Doing this as soon as possible is very valuable for two main reasons.  One is that it will tell you right away how the new law will affect you personally. The other, and more importantly, is that it will give you some time (the rest of 2018) to do some valuable planning.  This will allow you to take advantage of the new tax laws to save as much tax as possible, or to possibly limit any tax increase if the new law will increase your taxes.  

In our practice, tax planning is a key part of retirement planning.  If you understand how the tax code works and know how to properly and strategically use the legal tools that are available, in most cases you can save taxes which increases the ultimate value of your retirement nest egg.  To learn more about this and get help with your planning, contact us at Heritage Solutions Group at (801) 727-8780.

Are You Saving Enough?

February 12, 2018

Despite many variables including market performance, in the end one of the biggest predictors of whether or not you will have enough for retirement is how much you save. It’s that simple.  In fact, the ‘Am I Saving Enough?’ question is probably the most common and popular one that I get asked from pre-retirees.  So, are you wondering the same thing?

Fueled by an extreme bull market run with surging stock prices the last several years, some 401(k) and retirement account balances have come back from the beating they took in the latest financial crisis in 2008 and 2009.  But, it is not time to celebrate.  As most people understand, it is ‘not about what you make but what you keep’ as this bull run will not last forever.

According to Yahoo finance, the S&P 500’s average annualized gains over the last 9 years is above 10%.  Obviously, this clearly isn't sustainable for the long term. Given today's low interest rates and high stock prices relative to earnings and valuations, average annual stock returns over the next decade or so could come in at well below half the pace of recent years. This means that if you want to accumulate enough savings during your career to provide you with a comfortable retirement, you will have to do it the old-fashioned way: by saving diligently and properly.  

So, are you saving enough and the proper way?  That is a critical question to find out.  To get help with this, contact a retirement planning professional with expertise in income planning, or feel free to reach out to us at (801) 727-8780.

The New World of Retirement Planning

 

February 5, 2018

Last week, I addressed the retirement decisions and risks that you face in today’s financial and economic world.  In order to have a successful retirement, you simply must make the proper decisions at the proper times, and know how to minimize and/or avoid many risks.  So, how do you do this and what are the specific solutions?

As you already know, today’s financial and economic world is much different than the past. And to have a successful retirement in today’s world, you are going to have to follow some new principles and new rules, and learn updated strategies in order to have a successful retirement plan, such as:

  • Diffuse the ticking tax bomb inside your retirement plan – You very well may not realize that your retirement plan could be destroyed by taxes in retirement.

 

  • Understand how taxes work in retirement – Taxes are everywhere in retirement, and you have to understand how the tax code works in order to reduce or eliminate them.

 

  • Include estate planning inside your retirement plan.

 

  • Understand how markets work in today’s investment world, and how to invest properly grow and protect your nest egg.

 

  • Create an income plan – Drawing income from your retirement nest egg takes a strategic plan in order to maximize income for life with minimal taxes.

 

The financial world is changing, and will continue to change.  Proper knowledge, education and updated information has never been more important.  To learn more on the above solutions and many more, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

The Retirement Decisions and Risks You Face

January 29, 2018

As people retire and/or prepare for retirement, the two main staples or retirement are still as real as ever.  Those are to protect and preserve my hard-earned nest egg and receive as much income as possible from that nest egg throughout my lifetime.  Unfortunately though, everything about achieving these two main principles and how to accomplish them are changing, and will continue to change.  And you are going to face several risks along the way.  

While planning for retirement, you have to address many areas.  You have to make some tough decisions about how to save for retirement, medical insurance, how to properly invest, taxes, Social Security, estate planning, and many more.  To make it even more critical, many of those decisions are irreversible.  And if you make the wrong choice, it could have a trickle-down effect on your whole retirement plan.  

On top of all that, you can’t rely on what worked in the past. Following outdated “rules of thumb” and traditional cookie-cutter approaches is the road to never retiring.  You also can’t travel the road of getting your retirement advice online, in books and magazines, and other places.  A lot of that information is outdated or just plain wrong. Don’t travel those roads.

You need to use strategies and tools that are different from those that worked for past generations of retirees. Retirement has changed and will continue to change.  Most importantly, you need to know how to deal with today’s main threats to retirement security.  To learn more about today’s main threats to retirement security and get updated retirement planning information you need to know in order to have a successful retirement in today’s world, feel free to reach out to us.  We can be reached at Heritage Solutions Group at (801) 727-8780.

Question of the Month

January 22, 2018

“Hello Todd.  With all the changes to our tax system, one thing I heard is that we still have a progressive tax system.  What exactly does this mean?  Thank you.”  Bernard.  

Good question Bernard as this can be confusing to people when they figure their tax bill.  The progressive tax system means that as your income increases, then more of it is subject to more tax.  Or, to put it in another way, people with higher taxable incomes are subject to higher tax rates, and people with lower taxable incomes are subject to lower tax rates.

The government decides how much tax you owe by dividing your taxable income into different brackets, and a specific amount of income that falls into each bracket gets taxed at the corresponding rate for that bracket.  So, no matter which bracket you’re in, you won’t pay that rate on your entire income, unless of course you are in the lowest bracket.

 

Let’s take a look at an example case.  Say you are a single filer with $100,000 in taxable income.  That puts you in the 24% tax bracket in 2018, but not all your income is taxed at 24%.  The first $9,525 is taxed at the lowest bracket of 10%.  The next $29,175 is taxed at the 12% bracket.  The next $43,800 is taxed at the 22% bracket and the remaining $17,500 is taxed at your top rate of 24%.   That is what a progressive tax system means.  Again, the more money you make, the different portions are taxed at different rates.  I hope that makes sense Bernard.  

 

To get more information on this question, or to get other retirement planning questions answered, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

New Year Means New Rules

 

January 15, 2018

 

We are into a new year, and as always, a new year brings new rules, new laws, new guidelines, etc. This year is no exception as we are dealing with massive changes to the tax code. To keep your retirement and estate planning up to date, accurate and finely tuned, you have to get yourself informed and educated on all these changes.

 

Several new tax law, legislation and retirement plan guidelines are now in effect, and many more proposed changes could certainly come into play sometime this year. Below are some specifics.

 

A New Tax System – Congress just approved the most sweeping overhaul of the U.S. tax code in three decades.  Unfortunately, it is not a permanent change.  You need to find out how to save tax dollars while you can.

 

Retirement Plan Contribution Limits - Contribution limits for some types of plans have changed for 2018.

 

Entitlement Program Changes – There have been some law changes to Social Security and other entitlement programs for 2018, with more expected.

Interest Rates – More rate hikes are projected for this year and this very well could have effects on your retirement plan.  

 

Keeping up with the changes each year and making the proper adjustments is a must for those who want to maintain a successful retirement plan.  For more detailed information on the many changes for 2018 and how those can and will affect your retirement plan, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

New Year’s Resolutions for Your Planning

January 8, 2018

At the beginning of every year, people tend to evaluate their lives and determine what needs to be improved in the upcoming year.  Your retirement plan needs evaluated as well.  Simply put, our financial world has severely changed over the last decade and continues to change.  In fact, there are a lot of concerns going into 2018 with a massive tax overhaul set to take effect, markets near all-time highs, pension and entitlement program changes occurring and continued national spending and budget issues.  With all these issues and more on the forefront of people’s minds this year, it is no surprise that there will be a lot of New Year’s resolutions that are financially related in 2018.

 

It is extremely important to evaluate your current retirement situation and look for areas that can be improved, no matter if you are still working or already retired.  Think about your planning for a moment and ask yourself a couple questions. 1) “Have I made any proper adjustments in my planning lately?”  2) “Am I 100% sure that my/our retirement situation is set up the absolute best way for my/our unique and specific situation?”  If your answer is “no” to either of these questions, then make it a New Year’s resolution this year to get some valuable help.  Find a qualified, competent, educated and experienced retirement specialist to make sure you are aware of and understand all of your options, to make sure your planning is setup the absolute best way for your unique and specific situation, and to keep your retirement nest egg safe and sound.

 

For more detailed information on what to be concerned about for 2018, and for some specific New Year’s financial resolutions to consider, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

December 26, 2017

“Hi Todd. Why do people need a financial advisor these days?  Thank you.”  Marcy

 

Hello Marcy. Actually, there are a lot of answers for this question.  Basically, what it comes down to is the financial, economic, tax and investment world has changed a lot over the last several years, and continues to change. Technology continues to advance, markets are global and financial products continue to evolve. Yes, there still are some historic principles that need to be followed, but these new times require much more education, and better strategies.  

 

I heard recently that we are now officially in a YOYO economy, which stands for You’re On Your Own.  Gone are the days of being able to rely on the government and an employer to take care of you.  Very few companies offer traditional pension plans anymore, and many government entitlement programs are severely underfunded which will have to be treated somehow.  Social Security already made some recent changes recently by taking away some claiming strategies.  With less government help and less employer help, that means more responsibility is on you for a successful retirement.  And with longevity increasing, you very well could live a very long time in retirement which puts more pressure on your nest egg to last longer.  

 

In addition to all of this, we are dealing with an unpredictable stock market that is at all-time highs; historic low interest rates; tax law changes and possible tax increases in the future.  Thus, people need help in dealing with all of this and managing their wealth, protecting their assets, reducing their taxes and setting up an income plan so they will not run out of money.  In my 18 years in the retirement and estate planning business, I don’t feel there was ever a more important time to have professional help from a qualified and experienced retirement and estate planning specialist for creating and maintaining a plan to maximize, protect and save your retirement.  

 

I hope this answers your question Marcy.  To learn more about this and other reasons that having a professional retirement advisor can be of great assistance, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Moves To Make Now Regarding the New Tax Bill

 

December 18, 2017

We have received many questions regarding the GOP tax bill.  Now that it has passed the House and Senate, it will become law effective for 2018 in all probability.  That means there are some very important tax moves that many people should make now in order to save tax dollars from this new tax bill.   

The new tax bill’s main principles are to reduce the number of personal tax brackets, lower the corporate tax rate and personal tax rates, raise the standard deduction, and eliminate personal exemptions and many current deductions.  All of these changes will affect people differently, depending on their personal situation.  Here are some strategic moves that you very well may need to make now to take advantage of our current 2017 tax system and/or the new 2018 tax system.

  • Business owners may want to wait until January to send invoices they typically receive in December in order to delay taxable income to next year’s lower tax rates.

  • If you itemize, pay your January mortgage payment now to get the interest deduction for this year since most people will not be able to itemize anymore.  Also, prepay your real estate taxes if you can so you can deduct them.

  • For people who make estimated quarterly state tax payments, pay your fourth quarter state tax payment now since these will not be allowed to be deducted next year.

  • Make your 2018 donations to charity now as it will be tougher to itemize and get a benefit for those next year.

 

The goal of effective tax planning is to make strategic legal moves to save yourself tax dollars.  To learn more about these moves and others that could benefit you by doing them now or delaying to next year, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Do You Have the RMDs?  

December 11, 2017

Part of getting older in life means dealing with ailments, sicknesses and injuries.  Fortunately, some of these are treatable and curable.  The same can be said for your pre-taxed retirement account.  If you own one of these accounts, you will be getting the RMDs at some point.  So, can you get rid of them?

RMDs (Required Minimum Distributions) are the government’s way of collecting tax revenue on your retirement plan dollars.  They gave you a tax deduction for all those years while you were contributing, and now they want their money back.  And not only do they want tax revenue on the amount that you contributed, but they collect tax on the entire amount of the account, including all the interest that you have earned.  They do this by forcing you to start drawing money out of the account every year once you reach the age 70 ½ , and increasing the percentage you have to take each year. If you fail to do this, there are very, very steep penalties.  

Now, some people don’t mind the RMDs as they need the income for retirement.  Others, however, do not need the income and view RMDs as a severe ailment that causes them excessive taxation.  So, are there ways around this?  Is there a cure or anything you can do to treat or get rid of taxable RMDs? To the surprise of many, the answer is yes.

Fortunately, because of some recent favorable tax rulings, there are now actually a couple of treatments available that can get rid of the RMDs. To learn all the information about RMDs that you need to know as well as details on treatments to get rid of them, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

To Give and Receive

 

December 4, 2017

 

The gift giving season is officially here, and over the next several weeks many gifts will be given and received.  Unfortunately, many of these gifts are given, received and soon after forgotten about every year with no real meaning or lifetime value.  This is truly a shame.  However, there are ways to make your gifts very meaningful and very helpful, while at the same time receiving benefits for yourself in return.

One very popular and effective way of doing this is through charitable giving.  Of course, the main benefits of charitable giving are the psychological, spiritual and emotional benefits that it brings for helping out a cause or organization that is dear to your heart. Making a difference in people’s lives for a long period of time can truly be satisfying and beneficial.  Fortunately, in many cases, you can also gain some financial benefits for yourself as well.  

One of the financial benefits of charitable giving is the tax deduction you receive for your gift.  In addition, some charitable planning tools can provide you additional financial benefits as well.  For example, some financial gifts can give you a large tax deduction as well as a very good income stream for the rest of your life.    

Unfortunately though, many people have no idea about how and where to do charitable giving, and of the many benefits that it can provide.  Charitable planning can be done by working with a non-profit organization, an independent charitable organization, and/or your financial advisor.  You can also work with your local community foundation which can help facilitate gifts the proper way.  To learn more on the many ways, tools and strategies available (including examples) of how you can utilize charitable planning to benefit yourself, as well as the charities of your choice, feel free to reach out to at Heritage Solutions Group at (801) 727-8780.

Time Is Running Out

November 27, 2017

 

Can you believe it is almost Thanksgiving! This of course means there are only a few weeks left in the year.  Obviously it is one of the busiest times of the year and people everywhere will be scrambling trying to get things done.  You probably do not need anything else added to your plate right now, but unfortunately the clock is also ticking on a few financial planning moves that you have to and/or may need to make before time expires.  

 

If you miss these deadlines, the consequences can be very costly and there is no way to back up the clock and correct the miscue.  So as a courtesy, let us inform you of a few areas of planning that have year-end deadlines.

 

Required Minimum Distributions (RMDs) – If you are age 70 ½ or older in 2017, you have an RMD to meet from your retirement savings plans.  Failure to withdrawal the required amount on time will result in stiff penalties.  

 

Roth Conversions – This popular tax savings move is different than Roth Contributions given that it has to be done by the end of the year.  

Retirement Plan Contributions – In most company sponsored retirement savings plans, you only have 'til the end of the year to contribute and max out your contributions for 2017.  

 

Gifts and Charitable Contributions – These have to be done by the end of the year in order to get a deduction or tax credit for the year 2017.   

 

Remember, time is running out on these and several other planning moves that you have to do, or very well may need to do, before the end of the year.  If not, your retirement plan could be severely hurt. For detailed information on these and other year-end planning moves and strategies, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

The Tax Bite in Retirement

 

November 20, 2017

 

One of the most common and well known phrases in life is one by Benjamin Franklin, who said “In this world nothing can be said to be certain, except death and taxes.”  Many people, though, feel that the tax part of this does not apply to them during their retirement years. Unfortunately, this is not the case in most situations.  The fact of the matter is, taxes are everywhere in retirement and they can take a big bite out of your retirement nest egg if you are not careful.

 

Fortunately though, there are ways to limit or eliminate some of these taxes if you know what you are doing.  There are several different types of possible income sources in retirement, such as pensions, Social Security, and retirement savings plans.  There are also personal savings sources such as savings bonds, annuities and maybe even inheritance money.  Each one of these sources are treated differently tax wise; some fully taxable, some partially taxable, and some tax free. 

 

They key to a successful retirement is properly knowing and understanding how each type is taxed, and then strategically setting up an income plan to withdrawal from each source strategically to minimize taxes owed.  To learn more on this topic and the different strategies available, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month – Trump Tax Plan

 

November 13, 2017

 

“Hi Todd.  I am getting close to retirement. My wife is already retired and we are both in our 60s.  How will President Trump’s proposed tax plan affect people in our situation?  Will it help us, or hurt us?  Please let me know.  Thank you.”  Al

Hello Al and thank you for sending in your question.  As you can probably imagine we received a swarm of questions after this tax reform plan was released, all basically asking a similar question.  Everyone is curious about what this tax proposal means and wants to know how it will affect them personally.  

The proposed plan has some very attractive features as well as some parts that will negatively affect many Americans.  Specifically, here are some of the most popular questions we have received:

  • “Who benefits the most from this proposed plan?”

  • “What deductions will be eliminated?”

  • “What deductions or credits will be increased?”

  • “How could my tax bracket change?”

 

These are all very good questions.  But the most popular question we have received so far is, “If this proposed plan becomes law, how will it affect me personally, and should I do something now to take advantage or protect myself from these changes?”  That is a great question.

 

This proposed plan has several features.  Some benefit pre-retirees and retirees greatly, but some other provisions of the plan will hurt people.  To get the answers to these questions above and learn more on this plan and the effects of it may have on you and your retirement plan, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Retirement Traps to Avoid

November 6, 2017

There is no denying that retirement planning is sophisticated, complicated, and an on-going process.  You simply have to keep up-to-date and educated on the ever changing tax laws, rule changes, plan provisions, and constant market fluctuations in order to make adjustments and changes to your plan on a regular basis.  Due to all of the complexities of retirement planning, everyone is going to make some mistakes.  Small mistakes won’t destroy a retirement plan, but some major traps might.  Here are some major retirement traps to avoid.

The absence of a financial plan - As you can imagine, this is a no brainer.  But as obvious as it is, many people do not have a proper plan in place.  Absent a properly designed plan, a successful retirement is nearly impossible.  

Not staying abreast on changes – Unfortunately, a successful and rewarding retirement does not automatically happen with just a retirement plan.  A retirement plan will not work if it is not constantly monitored and updated based on changes that occur each and every year.

Not becoming tax efficient – Revenues will have to be increased at some point in the future to pay for the nation’s debt and spending issues.  Many people feel this will come in the form of higher taxes.  The more tax efficient your retirement plan is, the better off you will be.

Failing to plan for health related expenses – Is there anything out there more expensive than health care right now?  This is the number one cause of financial ruin in retirement.

Having the wrong investment approach – Are you prepared for another market correction? It is coming.  

Getting to (and surviving) retirement can be like navigating your way through a minefield.  In order to survive, you have to be equipped with the right tools, knowledge and education.  To learn of some specific traps to avoid and to make sure you have the proper information to avoid these traps, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Big Changes Coming to Social Security

 

October 30, 2017

 

For years Americans have heard all sorts of different stories about the Social Security system.  Is Social Security going to run out of money and end?  Will it be around in the future?  If so, what changes are coming, and what changes could be coming? For all Americans who are or have paid money into this system, you want and deserve answers.

Because of demographic shifts, it is obvious that changes have to be made to the system to save it for the future. According to U.S. News Money, in 2030 more than 20% of the U.S. population will be 65 or older. That is close to double the percentage in 2010. And since 62% of all elderly recipients get at least half of their monthly income from Social Security according to the SSA, it is projected that the poverty rate would be over 40% if Social Security were not there on a guaranteed basis each and every month.  So, again, changes will have to be made to save the system and keep it going.

Some of these changes are set to happen.  For 2018, the Social Security program will be tweaked in several important ways that affect how much you pay in and will receive in retirement. Some of this is good news, such as a 2% cost of living increase in payments.  Other changes are not so good.  One of those changes is a cap increase which determines how much of your money is subject to Social Security taxes.  The Social Security Administration expects about 12 million people to pay higher taxes as a result of this change. Another change is an increase in the age for when you can claim your full retirement age benefit.  

In addition to these changes, several more are being considered. Plus, many people will not get the cost of living increase. To find out why and to get more information on these set changes and changes likely to be coming, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

A Trick or a Treat?

October 23, 2017

Halloween is near, and the main theme of this season is trick or treat.  It is also a main theme right now in the financial planning world as there are a lot of financial moves out there that could be either a trick or a treat.  So, how do you know which one it is?

In your pre-retirement and retirement years, there are literally thousands of different planning moves, options and strategies that are available.  And many of these moves and strategies could either cause you financial success or financial hardship; depending on when and how you implement them.  For example, one very popular move people make when they need money from their retirement plan before the age of 59 ½ is a 72(T).  This move allows you to access money in certain ways from your retirement plan early without getting hit with a penalty.  Now, obviously that sounds good and in some circumstances this can be a very good thing.  However, there are also circumstances where making this move could really cost you a lot of money and hurt your retirement plan.

The bottom line is that every financial tool, option and strategy has its proper fit for where it will work successfully, and a time where it could possibly do tremendous harm to your plan.  Determining each is the difference between having a trick or a treat in your retirement plan.  To learn more about several popular retirement planning tools and moves that people make and the circumstances where they can be a very good thing, and where it can be a very bad thing, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

October 16, 2017

“Hello Todd.  I converted part of my Traditional IRA to a Roth IRA early in 2017.  Then, I invested that Roth IRA in General Electric Stock.  Unfortunately, that stock is down over20% since the conversion.  I have heard about a Roth Recharacterization that will allow me to erase that conversion and put the money back into a Traditional IRA.  I would like to do this so I don’t have to pay taxes on the lost money.  Can I still do this or is it too late?  Thank you so much for your help.”  Ted

Hello Ted.  I certainly understand your desire to do this and sympathize with your situation. In fact this happens often as there are a few reasons why people try and undue a Roth IRA conversion or an IRA contribution.  For example, maybe they contributed to a Roth IRA before realizing they were not eligible.  Maybe they did a Roth conversion and it put them into a higher tax bracket.  Then of course, there is your situation.  

 

The good news is the IRS tax laws allows you to erase these moves through what is called a Recharacterization.  This could be one of the greatest benefits in the IRS tax code as it is essentially a free do over, and as most people know you don’t’ get many free do overs in life.   

 

In your specific case, a Roth Recharacterization will allow you to put the money back into your traditional IRA and erase the tax bill you owe on your conversion.  Plus, if you feel the stock will rebound, you can reconvert it back to a Roth IRA so all future appreciation will be tax free growth.  

 

However, there is a deadline to make this move.  The deadline is October 15th of the year following the year of the conversion.  So, you still have plenty of time to do this.  But, there are many more details and factors you must know before you do this. To learn of these details and factors, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Leave Memories, Not Problems

October 9, 2017

In a recent survey by American Association of Retired Persons (AARP), 75 percent of individuals responded that not being able to communicate their wishes would be worse than death. Despite this, less than half of these people have taken steps to ensure their wishes would be carried out. Although death is not an easy topic to discuss, end-of-life planning can mean the difference between leaving loving memories or major problems.  Which would you prefer?

Estate planning is the process of accounting for assets and arranging for the distribution of those assets in order to achieve the wishes of an estate owner.  Good estate planning will determine what happens to your property, who will get it, where it will go and how it will happen.  Such planning allows you to have control over your assets when you pass away and also assign a guardian or custodian to a minor or disabled person. An estate plan could considerably reduce the possible taxes and fees associated with probate and the distribution of assets.

Unfortunately, doing all of this is not very easy.  There are a lot of specific types of legal documents that come into play, such as Wills, Trusts, Power of Attorney, and Beneficiary Forms.  In addition, you need to evaluate and consider tax issues and financial responsibility for heirs as well.  However, the benefits of estate planning can be invaluable.  

To learn more about the factors you need to consider for your estate plan in order to leave loving memories for your family instead of major problems, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

The Equifax Data Breach and Your Retirement

October 2, 2017

 

The Equifax data breach is one of the largest security breaches of all time with millions of Americans being affected.  Unfortunately, pre-retirees and retirees may be in most danger and subject to the most risks from this breach.

 

This data breach has put millions of people’s information at risk, exposing names, addresses, birth dates, and Social Security numbers.  So, what specific risks do pre-retirees and retirees face?  Well, unfortunately, in addition to all the risks everyone faces, pre-retirees and retirees have to pay close attention to avoid fraud to their Social Security, Medicare and health insurance, and tax refunds.

 

So, what can you do to protect yourself and limit the damages?  Should you sign up for the free year of credit monitoring Equifax is offering? (Don’t do it!)  Set up fraud alerts on your accounts? Activate something called a security freeze? Would any of these things really help?

To learn more of the specific risks pre-retirees and retirees face from this breach, including the risks regarding Social Security benefits and the fraudulent scams that experts believe will become prevalent in the aftermath of the Equifax data breach, feel free to reach out to us.  We can be reached at Heritage Solutions Group at (801) 727-8780.

Are You Aware?

September 18, 2017

September is life insurance awareness month.  This industry-wide campaign is aimed at educating Americans about the importance and many aspects of life insurance.  Now, most people understand how important life insurance protection is, especially if you have a family.  What most people don’t understand, however, is the other many uses of life insurance, including the living benefits.  Are you aware?

Life insurance is one of the oldest financial tools in the shed.  Obviously, its main use is to insure your life by passing on much needed money to family members and loved ones if you should pass away prematurely.  In today’s very complex and ever changing financial world, life insurance has adapted to have many uses and provide many benefits.  For example, were you aware that life insurance has some very valuable advantages and tax savings benefits?  Were you aware that life insurance can provide benefits to you while you are living?  Were you aware that certain types of life insurance, if properly set up and funded correctly, can provide a tax free income in retirement as well as college funding and long term care funding?

The fact is, many very smart and wealthy people utilize life insurance in many different ways for maximizing and protecting their nest egg.  To learn more of the many uses and benefits of life insurance that could very well enhance your retirement plan, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

September 11, 2017

“My wife and I are getting ready to send our son to college.  Unfortunately, we have not saved enough in our college 529 plan.  Can we take out money from our retirement plans without penalty, and if so, should we do this? Thank you.”  Joe

It’s back to school time and parents across the country are trying to figure out how to pay for the cost of college education for their kids.  Costs for education continues to go up, and many parents do not have enough saved in their specific college funds to pay for all of it.  So, where is the best place to get the money?  In a lot of cases, the only other place people have money saved is retirement accounts.  So, as Joe asks, can you use this money for college, and if so, is it a smart move to do so?

The answer to both questions is maybe.  There is an exception to the 10% early distribution penalty for higher education expenses out of some types of retirement accounts, but not for others. Even for those plans that do allow it, there are some strict rules and guidelines that must be followed in order to qualify for the penalty exception.

So, should you do this?  Well, again, the answer is maybe as it depends on a lot of factors.  Taking money out of retirement plan funds to pay for college will obviously hurt your retirement plan.  The key question is “Will it hurt less than the cost of a loan?”  As a smart man once said, “You can borrow to finance college; you cannot borrow to finance your retirement.” This statement is so true.  So, if you are going to use your retirement funds to finance an education, you have to make sure you do it properly.

To learn of the strict rules that you must know, and some of the major factors that you must consider, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Will You Make the Right Decisions?

 

September 4, 2017

Decisions. Decisions. Decisions.  Each day you make thousands of decisions.  Some of them have few, if any, long-lasting consequences; others however, can have a huge impact on your life.  This is especially true when it comes to financial decisions regarding your retirement plan.  So, will you make the right decisions?

Various internet sources estimate that an adult makes about 35,000 remotely conscious decisions each day.  This may sound very high, but according to researchers at Cornell University we make over 200 decisions each day on just food alone.  Now, there are not that many decisions to make when it comes to your retirement plan, but the decisions you do make carry more weight and consequences than most other decisions.  In fact, the success of your retirement plan ultimately comes down to a few vital and key decisions that you will have to make, such as:

  • How and when to elect your Social Security for maximizing your benefits over your lifetime?

  • In addition to Medicare, what options will you select to protect your assets from health care expenses?

  • What types of retirement accounts will you use to save for retirement the most tax effective way?

  • What legal documents do you need to set up your estate properly?

  • What planning moves will you choose to minimize the effect of taxes in retirement?

All of these questions will require a decision by you at some point during your pre-retirement and/or retirement years.  The decisions you make will make a huge difference in the ultimate value and success of your retirement plan.  To learn about these and other critical decisions that you will be faced with regarding your retirement plan, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

How to Maximize Your Retirement Accounts

August 28, 2017

Every year there are rule, guideline and tax law changes to deal with when it comes to saving for and managing your retirement plan.  This year is obviously no exception with a new Presidential administration, and many changes are expected in the near future.  So, you have to keep on top of things in order to maximize your retirement.  

In order to do this the most proper way, most people will need some professional guidance.  Things can change so fast, and so often.  For example, just a couple of weeks ago the Treasury Department announced that it was ending the myRA program.  Fortunately though, there are still several ways to save and maximize your retirement plan.  In order for you to get the most of out of these options and maximize your accounts, you have to understand several key factors, such as:

Where to Contribute – Saving is important, but you have to know what types of accounts are best for your unique and personal situation.

Understand the Tax Issues – Understanding how and what type of account to contribute to the most tax efficient way for your specific situation can make a huge difference in the ultimate value of your account.

Understanding Costs and Fees – Contributing to retirement accounts is not free.  However, there are strategies ways to minimize the effects of fees and expenses.

Invest Smartly – The investment world is much different than it used to be.  Today you need an adaptive approach that adjusts to changing market environments.

There are several strategic ways to maximize your retirement accounts.  To learn more on how to do this, and get some answers to some key retirement savings questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Retirement Rules That Don’t Apply Anymore

 

August 21, 2017

Retirement today is so much different than it used to be.  I mean think about it; people who were working back in the 50s, 60s and 70s probably planned on and maybe even have the old fashioned traditional retirement where they retired with a solid pension plan.  This coupled with Social Security takes care of many people’s retirement lifestyle, and they did not have to worry about saving much more on their own.   Unfortunately, that is not the case anymore.  

Very few people working today will have the security of being able to rely on an employer and the government to take care of them in retirement.  Companies have gotten rid traditional pension plans and put that responsibility on the workers by offering defined contribution plans, such as 401(k)s, where it is the employee’s responsibility to put their own money back for retirement.  

And employees today cannot rely on the government as much as they used to, as the Social Security system is underfunded and will have to go through some major changes in order to save it for future generations.  In addition to this, a host of new forces are altering the traditional approach to retirement planning. We have insanely high and rising healthcare costs, historically low interest rates and a complex tax system that if you do not know what you are doing and how to save properly, you could end up having all your sources of retirement income subject to taxes.  

These are just a few examples of the differences between retirement past and retirement today. To learn more about many of the common and understood rules of the past and why they just don’t apply anymore, reach out to us at Heritage Solutions Group at (801) 727-8780.

This Is Unchartered Territory

August 14, 2017

We are in the midst of witnessing a tremendous nine month rally on Wall Street.  The S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average are all repeatedly settling at all-time peaks.  In fact, the Dow crossed 22,000 last week, a place it has never been before.  This is unchartered territory for all investors, including your 401(k)s and other investment accounts.

This is certainly quite a shock to many, especially after the election when a Trump win was supposed to cause the markets to turn sharply south.  In fact, many market experts and news outlets predicted an absolute crash if Trump won the presidency.  Instead, the Dow is on a 4000 point jump since the election. That is extraordinary.  Decades can go by without seeing a move like this.  Even though there is a lot going on in the world right now besides the markets, this is a really difficult thing to ignore.  

This kind of rally, however, causes many questions and concerns.  First, what is causing this rally, and why?  Next, why isn’t everyone happy about it and why is there so much concern out there?  Finally and maybe most importantly, this market run cannot last forever.  So, how do you participate without the fear of taking a big hit when the overdue market correction finally comes?

When it comes to your money, these are all very important questions that need answers.  To learn about the details of this rally, the answers to these questions and some insight about what to expect from here for growing and protecting your money, feel free to reach out to us at (801) 727-8780.

Question of the Month

 

August 7, 2017

“Hello Todd.  Thanks for the great information on IRA Trusts a couple of weeks ago.  I have not heard of this option before, but it sounds like a great way to protect and control money for my heirs.  Here is my question.  I will be passing on a pretty substantial amount of money to my four children and I want it to be divided equally among them.  Two of my children I have no worries about inheriting a lump sum, but the other two I do.  Unfortunately, two of my children just are not responsible enough.  Is there a way that I can do the IRA Trust, and set up different rules and stipulations for each child?  Thanks for your help.”  Robert

 

Hi Robert.  Great question.  Yes, you can.  In fact, it is very easy to this and done a lot.  Many families have situations where they need different rules or stipulations for each child.  

 

The way the IRA Trust works is that once the IRA Trust receives the money, then it will be split up into however many IRA sub-trusts that you need for your heirs.  In your case that would be 4.  Each IRA sub-trust will have its own trustee that will manage and control the trust based on your specific instructions.  In the case for your two children for whom you do not want any restrictions on, then you would just name them as the trustee of their own trust.  That way they are in control as to how and when they can use the money out of the trust.  For the two children that you do want restrictions on, then you would name someone other than themselves to be the trustee.  This trustee would follow your instructions as to how and when to pay out the money to them. So again, you can set up an IRA Trust to handle your objectives.  

 

For more information on this or to get any other retirement related questions answered, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

It’s Time for Your Checkup

 

July 31, 2017

 

Independence Day has come and gone, meaning the year is half over.  Many people have a medical checkup with their doctor this time of year to make sure everything is ok and to make health improvements. This is also a good time of year to visit with your ‘retirement doctor’ to evaluate your retirement plan and make sure it is up-to-date and accurate as well.  In other words, it’s time for your retirement checkup.

 

When you are meeting with your doctor, you know you will be asked some questions.  Doctors have to ask questions during exams and evaluations to determine the state of your health and make improvements. And sometimes, the doctor has to ask you some tough and very personal questions.  Your honesty when answering these questions can be vital to your health in the future.  

The same can be said when you are dealing with your retirement plan.  Sometimes you are faced with some very tough questions that need to be answered completely and honestly in order to protect and save your retirement plan. So, when you make your way into the retirement “doctor’s” office preparing for your retirement plan evaluation and review, what should you expect from the meeting, and what burning questions should you be ready to have answers to?

Good health requires periodic checkups.  The same is true for your retirement plan.  Make sure you address all the vital and key midyear retirement review questions that need to be answered in order to keep your retirement plan up-to-date and healthy. For a list of these questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Are You Trustworthy?

July 24, 2017

There are many different types of effective trusts for accomplishing specific things in retirement and estate planning.  Unfortunately, many people don’t ever consider using a trust because of the perception that they are only for the ultra wealthy.  Actually, trusts are used by millions of people who just simply care about what happens to their wealth both during and after their lifetime. So, are you trustworthy?

Because of all the rule and distribution changes made to IRAs and other types of retirement accounts over the last several years, one specific trust has become a lot more popular and effective.  This is the Inherited IRA Trust.  It is a special trust that is designed to hold your IRA accounts for the benefit of your loved ones following your death.  The two major benefits of the IRA Trust is protection and control.

Many times, an IRA is one of the largest assets passed on to beneficiaries.  Unfortunately, the inheritance of such large sums of money by children or other heirs can cause many problems. There was a Supreme Court ruling recently that ruled Inherited IRAs are not protected from bankruptcy.  There is also concern by many people over losing an Inherited IRA to creditors, divorce, taxes, or reckless spending.  So, many IRA owners look for ways to safeguard this money for their heirs.  

An IRA Trust offers protection against these issues as well as the ability for the owner to maintain some control of the account and the payout, even after they pass away.  Thus, the IRA Trust can be a very valuable tool in certain circumstances. To learn more about the functionality and benefits of the Inherited IRA Trust, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

The Financial Road Less Traveled

 

July 17, 2017

Most people have heard the common phrase “The Road Less Traveled.” The general consensus of the meaning is to do the less obvious, to be different from the rest or to follow a path that is perhaps not as easy because not many people have done it. Sometimes; however, if you take ‘the road less traveled’ you find something of tremendous value. The same very well could be found on ‘the financial road less traveled.’

When it comes to retirement planning most people do things the way they understand, are most familiar with and maybe the way their parents did it.  For example, many people use a Traditional IRA or company sponsored 401(k) or 403(b) plan to save money for retirement.  According to the Investment Company Institute these plans have trillions of dollars in them.  However, just because these plans are so popular it does not mean they are the best option for you.  There are other retirement savings plans options available, which are not as well known about or commonly used, that could be a better place for you to save money for retirement.

Today’s financial world is constantly and ever changing.  Sometimes, this means you may benefit more by utilizing planning tools and strategies that are not as well known or used as frequently.  By taking the unconventional route, i.e. ‘the financial road less traveled’, you very well could make your retirement plan much more valuable.  

For more information on valuable financial strategies and tools that are on ‘The Financial Road Less Traveled, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

July 10, 2017

“Hello Todd. I am 55 years old. A few weeks ago, I had to withdraw some money from my IRA to help out a family member.  However, they ended up not needing the money.  Can I put this money back into my IRA without penalty or tax consequences?  Thank you.”  Bev

Hello Bev.  What you are referring to here is called a 60-day rollover.  A 60-day rollover allows an individual to withdrawal money from an IRA at any age, without taxes or a penalty, and use it for any reason.  This is essentially a 60-day free loan.  However, the money has to be put back into an IRA within 60 calendar days of the date you received the money.  If it is not put back within this time frame, then it becomes taxable income and can be subject to a penalty if you are not over the age of 59 and a half.  

Now, sometimes this rule can get tricky.  For example, let’s say that you had taxes withheld from the withdrawal up front.  If you want to avoid income tax and a possible penalty, you will have to rollover an amount equal to the check you received, plus the amount withheld for taxes.  So, in this case, you would have to come up with the extra money that was withheld for taxes.

Also, a recent IRS ruling says that you can only do one 60-day rollover per year.  In the past the ruling allowed one 60-day rollover, per each IRA, every year.  So, if an individual had multiple IRAs, they could do multiple 60-day rollovers.  The IRS cracked down on this and made the rule stricter by only allowing one 60-day rollover, per person, per 365 days.

There are many other important and critical details to 60-day rollovers.  To learn of these and get the answers to any other retirement related questions you may have, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Do You Have Financial Independence?

 

July 3, 2017

Our nation just celebrated Independence Day.  Independence Day honors the birthday of the United States of America and the adoption of the Declaration of Independence on July 4, 1776.  The Declaration of Independence is our nation's most cherished symbol of liberty, and this is a special time for many Americans.  To me, the 4th of July represents not only the birth of our nation and the sacrifices that millions of military members and their families have made throughout our nation’s history, but it also represents the symbol of freedom and hope.  It is not a stretch to take this a step further to relate freedom and hope to financial independence in retirement.

There is no absolute definition for financial independence in retirement.  The most common sense of the term is someone having enough wealth to do anything at any time.  Most Americans will never achieve this goal.  A much better definition of financial independence in retirement should mean the ability to have the lifestyle that you desire, the freedom to do the different things you want to do and a financial sense of security.  

To achieve this you will need to do proper planning and make the right strategic moves at the proper time, as well as keep up with all the tax law and legal changes each and every year.  If you do not adjust and keep your retirement plan up-to-date based on all the changes, then your financial independence in retirement could be lost.

As the Fourth of July should remind us all, independence is something worth fighting for.  Fight for your financial independence by getting the proper information and help in building and maintaining your retirement plan.  To learn more, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

Are You On Track?

June 26, 2017

Americans may be optimistic in general, but when it comes to retirement security many people have their doubts. When I sit down with someone for a meeting for the first time, one of the most common questions that I get asked is, “Are we on track for our retirement?”, or, “Is my retirement plan secure?”  This is for both pre-retirees who are nearing retirement and for retirees who want to make sure their plan is going to work.  So, what about you?  Are you on track and confident for a successful retirement?

In a recent Retirement Confidence Survey from the Employee Benefit Research Institute, 24% of respondents said they were not at all confident of having enough money for a comfortable retirement.  Another 36% were only somewhat confident.  Add that up and around 60%, or the majority of Americans, are not sure they are on track for a successful retirement.  So, some education is definitely needed here.

Proper retirement planning comes down to many factors.  The first and main factor that must be addressed is your goals.  You have to know what a successful retirement means to you. Once you know your goals or what type of retirement lifestyle you want or need, then it is a matter of finding out how to meet those goals and lifestyle.  This comes down to your assets and incomes being able to support and fund your expenses and desired lifestyle.  To figure this out and see if you are on track, several factors have to be addressed and considered.

To learn of these many factors and the critical areas of retirement planning, and to help make sure your retirement plan is on track, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Considering Retirement?  Avoid These Big Mistakes

 

June 19, 2017

It is now close to summer time and each year many pre-retirees start giving serious thought about retirement at this time of the year.  Obviously retiring after working all of your life is a great thing, especially if you can have a successful retirement.  Many times, that comes down to avoiding some big mistakes.

Even though retirement is perceived as a happy time that you worked towards achieving, there are a lot of potential mistakes that could make retirement not very happy.  In addition, there are a lot of emotions and stress factors involved as well.  Plus, there can be anxiety issues from wondering if you are making the right decision and have thought of everything.  

 

Whether you are newly retired or retiring soon, proper planning is vital to help avoid making some big mistakes.  Unfortunately, I know people who have made some of these mistakes, and they had to pay for it by to delaying retirement or even exiting retirement, only to return back to work.  This is certainly not something that you want happening to you. For more information on the key mistakes many pre-retirees and retirees make and how to avoid them, feel free to reach out to us at Heritage Solutions Group at  (801) 727-8780.

What In The World Happened?

June12, 2017

I received a call late last year from a gentleman in a panic.  He and his wife were both in their early 70s and in the early stages of a comfortable retirement with Social Security, a pension, IRAs, and other savings.  Plus, their health care costs were fair with both of them being on Medicare and in good health. So, they were doing ok.  Then, suddenly, the amount of their federal taxes increased substantially and they received the dreaded notice in the mail telling them that their Medicare Part B and Part D premiums are increasing.  He called, wanting to know what in the world happened.  

This is a common theme that happens to many retirees once they reach the age in their life when they are forced to start drawing money out of their retirement savings plans.  These forced withdrawals are called Required Minimum Distributions (RMDs).  Unbeknownst to most people, these distributions can have a ripple effect on many facets of your retirement plan.  

A RMD is included as taxable income for the year it is taken.  This additional taxable income can negatively affect the availability of deductions and other tax saving items.  In addition, RMDs are counted in the formula which determines how much of your Social Security is taxed.  Obviously, this is not good news. But, it gets worse.  Another significant negative impact of RMDs can be increased Medicare costs. This area is often overlooked or not even considered when saving for retirement.

Unfortunately, this one event caused a chain reaction of higher taxes and higher costs, which is now putting their once comfortable retirement plan at risk.  Fortunately, though, there are some ways to prevent this from happening.  To learn more about this situation and how to prevent it from happening to you, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

June 5, 2017

“Hi Todd, I have withdrawn money from a few of my IRAs this year, but put the money back within 60 days. Unfortunately, I was not aware of the recent rule change that does not allow a person to do this anymore.  Are there any exceptions to this rule that I may qualify for?  Thank you, Ronald.”  

You are correct Ronald as there was a major rule change recently pertaining to 60-day Indirect IRA rollovers.  Over the past several years, many people were taking advantage of the 60-day Indirect IRA Rollover rule by opening up several IRA accounts and then doing the once per year 60-day Indirect Rollover from each one.  This essentially gave them the ability to take several tax and penalty free loans from their IRAs each year.  The IRS did not intend for this rule to be used this way, so they have clamped down on it.  

 

So, the IRS has changed the rule to only one 60-day Indirect IRA rollover per person, per year, no matter how many IRAs you have.  Plus, the ‘year’ rule is a 12-month period, not a calendar year.  However, there are some exceptions.  The new rule does not apply to:

 

  • Direct rollovers or transfers where you do not take receipt of the money

  • Conversions to a Roth IRA or employer plan Roth

  • Checks issued to the account owner that are payable to the new custodian

 

Unfortunately, from your question it does not sound like what you did qualifies under one of these exceptions.  However, if you would like to discuss it further and give me some additional information, I can tell you for sure.  For more information on this or to get any other retirement related questions answered, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

It’s Not How You Look; Just That You Win

 

May 29, 2017

Let’s start with the facts: 

• Many market indexes are essentially at all-time highs, including the Dow, the S&P 500 and the NASDAQ.

• We are in the second longest bull market run in history.

• There has been at least one recession every decade since 1850.  

When you add up all these facts, most people firmly believe that a market correction is overdue.  So, why are most investors not preparing for it?

 

I believe a big part of the answer to that question is fear. People are afraid to buck the trend and go against the grain. This can be related to a basketball analogy very well. NBA basketball hall of famer Rick Barry was one of the best free throw shooters of all time.  He shot underhanded or “granny style” as he insisted this way produced a softer shot which increased the probability of the ball going through the hoop. 

 

Even though most players agreed with him, they would not be caught dead shooting this way. It makes shooters feel silly and look like a sissy.  Unfortunately, many investors do the same thing with their investment strategy.  They follow the trend and let their egos get in the way of making the proper adjustments, even though they know better. 

 

So, what about you?  With markets at all-time highs and way overdue for a correction, are you going to follow the trend and take the big hit when it comes?  Or will you buck the trend and make the unpopular but proper moves before it's too late?  The answer to that question is vital as limiting losses and controlling drawdowns is paramount to successful wealth accumulation and a successful retirement plan.  To get more information on this topic and learn how to win with your investment approach, contact us at Heritage Solutions Group at (801) 727-8780.

Can You Retire Early?

May 22, 2017

In my career in the financial services business and as a specialist in the retirement and estate planning arena, I have been asked many times by several people if they can retire early.  The answer to this question is based on several factors, many of which will be specific to your unique and personal situation.  However, there are a few common factors to look at when you are considering the option of being able to retire early.

Emotional and Stress Factors

There is a tremendous amount of stress in many people’s jobs.  This stress can have major impacts on people’s emotions and overall health.  The most important thing in life is your health and no job is worth that.  

Financially Sound and Stable

Obviously, if you are going to consider retiring early you are going to have to be able to afford it.  This comes down to being financially sound, stable, secure and financially ready.  

Do a Trial Run

Before making the decision to retire early, you need to see if you can make it work first.  Essentially you want to try and live off of your proposed retirement budget for at least 6 months or a year to see how it goes and if you can do it.  

Revise Your Portfolio Investment Strategy
Simply put, you cannot take any big hits in your pre-retirement or retirement years.  You have to shift from being in a prime accumulation mode to being in a prime preservation, protection and distribution mode.  

Obviously, most people would like to retire early if at all possible. To learn more about these factors and many more, including the absolute biggest factor, to determine if you can retire early, work with a retirement professional.  You can contact us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

May 15, 2017

“Hello Todd.  My wife and I are approaching 65 years of age.  We know this is the age that you are supposed to sign up for Medicare, but when should we do it?  We have been informed of different dates, and possible penalties if we do not do it correctly.  Can you explain the rules and options?  Thank you.”  Jim

Hello Jim.  Thank you for sending in your question. Essentially, there are three different enrollment periods for Medicare.  If you do not currently have health insurance, then you should enroll during the ‘Initial Enrollment Period’ which begins 3 months before you turn 65 and lasts for 7 months.  You can sign up for Medicare at any point during this time without incurring a penalty. However, try to sign up during the first three months so coverage will begin on the first day of the month that you turn 65 to prevent gaps in coverage.

If you or your spouse are still working and have health coverage through an employer group plan, you can keep your group coverage until you or your spouse retires.  At that time, you will need to enroll in Medicare during the ‘Special Enrollment Period’ which is after certain events happen in your life.

If you miss either one of these periods, then you will have to sign up during the ‘General Enrollment Period’ which runs annually from January 1 through March 31 with an effective date of July 1 of that year.  Try to avoid this, as chances are you will have significant gaps in coverage and possible penalties that can last your lifetime.  I hope this helps Jim.  If you have follow up questions on this or any other retirement planning topic, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

President Trump’s Tax Plan Unveiled

May 8, 2017

Obviously, most people hate paying taxes, but there is new hope in the air this year as President Trump has vowed to revamp the tax code and reduce taxes across the board.  On April 26th, he unveiled his latest proposed tax plan to the country.  

This announcement from President Trump was much anticipated.  He campaigned on restructuring the tax code and reducing taxes for both individuals and businesses.  He has insisted that by doing this, it will save tax payers money, stimulate the economy and create new jobs.  Now, we finally can get a much better idea of what he has in mind.

 

Under Trump’s proposed plan, the tax code would be simplified and many taxes would be eliminated.  In addition, the standard deduction would be increased substantially for both those filing single and married jointly.  However, some deductions would also be removed.  

 

In addition, President-elect Trump wants to reduce corporate tax rates as well.  His plan would be extremely beneficial to business owners as the business tax rate would go down from 35% to 15% for all businesses regardless of size.  However, many experts are concerned that this will increase the national deficit.


It has been over 30 years since the last major tax reform. So, the key questions are:  one, will all of this work to stimulate the economy create jobs?  Two, what will the affect be on you and your retirement plan personally? To learn more about this tax reform plan and how it may effect your personal situation, feel free to reach out to us at Heritage Solutions Group at (801 )727-8780.

IRA Inheritance Disasters to Avoid

May 1, 2017

 

IRAs and other types of retirement accounts are perceived by many people as pretty simple plans but, as we have discussed in the past, there are many complexities to IRAs that can cause big problems.  When it comes to inheriting an IRA, the rules and guidelines are more complicated than most people realize.  Without the proper understanding, an IRA inheritance could spell disaster.  

It is not unusual for IRA heirs to not know about or misunderstand some key rules and guidelines.  Unfortunately, the IRS does not give much mercy when things are not done properly, even from ignorance of the rules.  A wrong move can often cause much of the inherited IRA to end up with the IRS in the form of taxes.  Here are some key inherited IRA mistakes that can be disastrous.

Inaccurate Or Wrong Documents – Your will or living trust has no effect on an IRA. IRA owners often make the mistake of having the wrong beneficiaries named or not designating  beneficiaries all together.  

Unprepared beneficiaries – A lot of money that is passed on is wasted or blown by unprepared or irresponsible beneficiaries.

Not Knowing About Special Spousal Options – Spousal beneficiaries have special options that are not available to others.  

Not Realizing Tax Issues – Most inherited IRA accounts are fully taxable to the beneficiaries.  Fortunately, there are ways to minimize these taxes if you make the right moves by the right time.

Inheriting money, specifically IRAs, is a complex process filled with many rules and guidelines.  If not understood or followed properly, an inheritance can turn into a disaster.  To learn more about these and other mistakes to avoid, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

It’s Not as Simple as You Think

April 24, 2017

Employer sponsored retirement savings plans, such as a 401(k), are one of the most popular and commonly used vehicles that people use to save for retirement.  This coupled with the ease of use with automatic payroll deduction causes many people to view employer sponsored retirement savings plans as very simple plans.  Unfortunately though, employer sponsored retirement plans are anything but simple.  In fact, they are filled with many complexities.  

Employer sponsored retirement plans are filled with options, features, rules, fees, factors, tax issues and common misconceptions.  Some of these areas include:  Special company stock provisions, internal expenses, loan provisions, investment choices, multiple cash out and rollover options, special required minimum distribution (RMD) rules, special age rules for withdrawals, creditor protection provisions and consolidation options.  In order to get the most out of employer sponsored retirement savings plans, you have to fully understand all of these key areas, and/or have to proper professional help in place.  If not, you could be exposed to many common and expensive mistakes.  

To learn more of all of these many features, including how to avoid critical mistakes that cannot be corrected as well as some powerful information that could potentially save you thousands in taxes and fees, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Misconceptions Can Be Costly

April 17, 2017

 

There is an old saying that is thought to be by Mark Twain that really makes you think.  It says –“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” This quote relates well to retirement planning as there are many misconceptions in the retirement planning world which can cost you a lot of money.

One of the most common misconceptions is in regards to the IRA.  The IRA is one of the most popular and utilized financial tools used in America. However, even with the popularity and common use of this tool, there are many misconceptions and misunderstandings about IRAs, such as:

  • An IRA is an investment  -  This is not true.  An IRA is an account registration, not an investment.     

  • There is only one type of IRA  -  There are many different types of IRAs.

  • You can only contribute to an IRA for yourself – In some circumstances, you can contribute for both you, a spouse and your children.  

  • A rollover to an IRA is always in your best interest – An IRA rollover from a company sponsored retirement plan can be a good move in many circumstances, but not always.   

These are just a few of the misconceptions about IRAs.  Make sure what you think you know is correct as the improper understanding of retirement tools and strategies can cost you a lot of money.  For a complete list and thorough analysis on all of the IRA misconceptions, including the one that costs people a ton of money every year, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

April 10, 2017

“I have been retired for several years and I am receiving a monthly pension from my employer.  However, I just recently received a letter in the mail offering me an opportunity to exchange my monthly pension check for an immediate lump sum.  Should I accept this lump sum pension cashout?”  Thank you. Fred

 

Thank you for your question.  It is a fairly common question that I get a lot. The answer, as to whether you should take this lump sum offer or keep your current pension, really depends on many factors that must be considered very carefully.  The end game of evaluating all of these factors is to find out which option fits your situation best, and / or has the highest percentage of paying you the most money over your lifetime.  

 

I cannot make a formal recommendation to you without more information, but, generally speaking, the lump sum option may be better if:  you (and a spouse if applicable) don't expect to live very long; you're certain that you can successfully invest and manage a lump sum to generate retirement income for the rest of your life; you're worried about the financial security of your pension plan; you don’t need the income and would like to use the money for other things.

 

Again, generally speaking, you should consider turning down the lump sum option and keeping the regular pension if: you can’t find an alternative plan to provide as much lifetime income; you're concerned about the ability to successfully invest and manage the lump sum amount over your lifetime.

 

One thing for sure is that this is a major and very important decision. So, I would definitely advise obtaining professional help when making this decision.  save properly in the right types of accounts for your unique and specific situation.  To learn more on this and and to get answers to many more of your questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Time For You To Do Something About It

April 3, 2017

 

It is tax season and people all across America are in the process of completing their tax returns.  Many people get very upset and depressed during this time each year as they feel they pay too much in taxes, and they vow to do everything possible to find ways of reducing their tax bill for next year.  Unfortunately, this generally doesn’t happen.  Well, it is time that you do something about it.  

Fortunately, there are ways to reduce taxes.  However, to do this you have to follow three key principles.  First, you need to have the proper understanding of how the tax code works.  Next, you have to know of all the current strategies and tools that are available that will allow you to save taxes.  Finally, you have to know how to implement these strategies and tools, and be proactive in doing it.  

Unfortunately, most people do not have this information and knowledge.  That is why having the proper professional help is vital.  Reducing your tax burden and saving taxes any way that you are able to can really make a big difference in the ultimate value of your retirement.  

So, do whatever you can to reduce your tax bill.  You can learn more on how to do this as well as learn some key questions to ask and vital information to share with your tax preparer before you file your return that could save you substantial tax dollars by contacting us at Heritage Solutions Group at (801) 727-8780.

Be On the Lookout

March 27, 2017                     

 

A defined benefit pension plan, where a company promises to pay a retiree a set amount each month during retirement, has been a staple in many people’s retirement plan for a long time.  However, things have changed a lot lately for pension plans.  Do you now, or have you ever participated in a defined benefit pension plan?  Are you retired and receiving a monthly pension check?  If you are one of the estimated 40 million Americans who can answer yes to either question, be on the lookout for a notification announcing important changes to your benefits.

Many companies have been freezing or terminating their defined benefit pension plans as they move to 401(k) plans that not only cost them much less, but also transfers all the investment risk to the worker.  When a company makes a move to freeze or terminate their pension plans, they have to notify all their current and past employees who will be affected, including those who have a vested contractual benefit owed to them from the plan.  There are three types of changes you might be confronted with:  a company freeze of the pension plan, a termination of the plan or a combination of both including lump sum buy out options.

When receiving a notification and options regarding this (and chances are you will), you have to take it very seriously and give it much thought.  There are many factors to consider before making this very important decision.  To learn more about these options and the many factors to consider to ensure you make the most proper decision, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

You Have To Survive and Advance

March 20, 2017                      

 

The month of March is basketball tournament time, and the theme during this time in the season is ‘Survive and Advance.’  In order to continue playing and prevent the season from being over, you have to win to move on to the next round.  In today’s ever changing and volatile financial world, your retirement plan has to be set up to survive and advance as well.    

During the regular season of basketball, most teams go through high and low periods, getting some wins and taking some losses.  Losses during the season can hurt, but they are not the end of the season.  However, once tournament time starts, a loss is devastating as your season has ended.  

Your working years are very similar to the regular season in basketball.  While saving for retirement, you may be able to afford some up and down years in the market as you have time to recover and to continue building your nest egg.  However, in your pre-retirement and retirement years, the theme is the same as the tournament.  

Your first objective is to survive.  Your retirement plan has to be able to survive the volatility and severe downturns in the market.  It also has to survive congressional law changes, tax law changes, economic changes and many other threats to your nest egg that can have major impacts on your overall plan.   

Unfortunately, you cannot stop at just surviving.  You also have to continue to advance your retirement plan as well.  You need to continue growing your money to battle longevity, inflation and the increasing costs to live.  You also need to become more tax efficient to protect yourself from increasing tax rates in the future.  

It is tournament time for your retirement plan.  To get more information on how to set up and maintain your retirement plan to survive and advance, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

March 13, 2017                      

 

“Hi Todd.  I am 55 years old and trying to save as much as possible for my retirement.   Can I max out my employer 401(k) and a personal IRA plan in the same year?  Also, my wife is not employed currently so can I also contribute for her?  Please let me know.  Thank you.”  Mike

Hello Mike and thanks for sending in your question; it is a very good one.  The answer is yes, depending on what type of personal plan you are wanting to contribute to and your income level for the year. Your 401(k) limit and Traditional and/or Roth IRA limits are separate limits.  So as long as you qualify, you can contribute to both a 401(k) and an IRA.

What this means is that as long as your income is below the threshold phase out limits, you can contribute for yourself to a Traditional IRA or Roth IRA account, or a combination of both up to $6,500.  However, if your income is above the threshold phase out limits, you will not be able to contribute to a Roth IRA, or be able to deduct the contribution to a Traditional IRA.  

You also can make a contribution to either a Traditional IRA or Roth IRA to your wife’s account as long as you have enough earned income to meet the amount you want to contribute.  For example, as long as you have income of at least $13,000, then you can contribute $6,500 to both of your accounts.  

The key to saving for retirement is to figure out how to save properly in the right types of accounts for your unique and specific situation.  To learn more on this and and to get answers to many more of your questions, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Key Dates Related to Your Retirement

March 6, 2017                              

 

When you think of certain important dates or ages, you generally think of birthdays, anniversaries, special moments, etc. However, as you get older and get into your pre-retirement and retirement years, some other dates and ages become very important. In fact, these certain dates may even become more important than birthdays and anniversaries as missing them or not understanding what happens at these times can have a severe impact on your retirement.  

 

Most people work extremely hard during their lifetime to build a nest egg that will take care of them in retirement. Part of building your nest egg is the proper understanding and planning around some key dates, which can make your job for planning for retirement much easier.  The key dates and ages related to retirement that we are talking about here are ages 21, 50, 55, 59.5, 62, ages 65 to 67, 70 and 70.5.

 

All of these ages represent a very important time related to some type of retirement issue, like contributions, Social Security, Medicare, required minimum distributions, etc. Most of these ages require some type of action that needs to be taken which will affect your retirement in some way.


To make the most of your retirement benefits, you need to understand what all of these key ages mean, and all the issues and options that each age entails. To learn more on all of these key ages and the importance behind each one in great detail, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.


Are You Getting a False Sense of Security?

February 27, 2017               

 

Over the last several years, the overall markets including the S&P 500 index have been on one heck of a run. In fact, according to Yahoo finance, the S&P 500’s average annualized gains over the last 8 years is above 10%.  Plus, it has done this with very little volatility.  This combination has fooled many investors into thinking that markets are secure and they can now just rely on passive index funds to grow their money for their lifetime.  Are you getting this false sense of security?

 

Eight years is a long time, but it should not be long enough to make you forget that the markets can lose money, and lose it quickly.  Remember, most market indexes including the S&P 500 lost nearly half its value between August of 2000 and September of 2002, and over half its value between October of 2007 and February of 2009.  Some people are still trying to get those losses back even though most indexes have fully recovered.

 

Obviously, 10% plus annualized passive index returns clearly isn't sustainable for the long term. The current Bull Run is extremely aged as it is currently the second longest cyclical Bull Run in history.  And as everyone knows, markets don’t simply go up every year.  A major market correction is overdue and a possible major decline is possible.


So, what should you do?  Should you take the passive approach and invest in the general market indexes? Should you go conservative at this point to protect your money?  Should you take an active approach that will adapt when market conditions change?  Can you do all of these?  Implementing the investment and risk management strategy is vital at this stage of the game.  To learn more about this, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Are You Saving Enough?

February 20, 2017           

 

Despite many variables including market performance, in the end one of the biggest predictors of whether or not you will have enough for retirement is how much you save. It’s that simple.  In fact, the ‘Am I Saving Enough?’ question is probably the most common and popular one that I get asked from pre-retirees.  So, are you wondering the same thing?

Fueled by an extreme bull market run with surging stock prices the last several years, some 401(k) and retirement account balances have come back from the beating they took in the latest financial crisis in 2008 and 2009.  But, it is not time to celebrate.  As most people understand, it is ‘not about what you make but what you keep’ as this Bull Run will not last forever.

According to Yahoo finance, the S&P 500’s average annualized gains over the last 8 years is above 10%.  Obviously, this clearly isn't sustainable for the long term. Given today's low interest rates and high stock prices relative to earnings and valuations, average annual stock returns over the next decade or so could come in at well below half the pace of recent years.

This means that if you want to accumulate enough savings during your career to provide you with a comfortable retirement, you will have to do it the old-fashioned way: by saving diligently and properly.  So, are you saving enough and the proper way?  That is a critical question to find out.  To get help with this, contact a retirement planning professional with expertise in income planning, or feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

How Retirement Smart Are You?

February 13, 2017

In my career, I have been very fortunate to have met and developed valuable relationships with some very smart people.  In fact, I am extremely fortunate to have many intelligent people as clients.  To my surprise though, at some point most of these people have made some very silly retirement planning mistakes.  When researching why, it came down to three main reasons: complexity, constant change and bad information.

Retirement planning today is so complex and cumbersome.  In addition to that, there is constant change as rule and law changes happen every year.  And when you combine both of those with the tremendous amount of bad information out there on the internet, social media and from uneducated people, then you can really get into trouble.  

The key to avoiding mistakes and having a successful retirement plan in today’s world is having the proper knowledge as well as timely information.  To get updated on the latest key changes in the retirement arena and informed of some of the common retirement planning mistakes made by even the smartest people, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

How to Ruin Your Retirement Plan

February 6, 2017

Ralph Waldo Emerson once said “It requires a great deal of boldness and a great deal of caution to make a great fortune, and when you have it, it requires ten times as much wit to keep it.” This quote relates to retirement and estate planning so well.  As hard as it is and the time it takes to build a retirement nest egg to be able to retire comfortably, it can be ruined so easily and very quickly.  

Simply put, gone are the days of being able to rely on the Government and corporations to take care of you.  Many pension funds and company 401(k) contribution match programs are disappearing, and many entitlement programs like Social Security and Medicare are extremely underfunded causing possible reductions in benefits in the future.  Thus, in today’s world, the responsibility of a successful retirement falls on your own shoulders.  With that responsibility and control, a retirement plan can easily be ruined in several different ways.

It does not matter whether you are still building your nest egg for retirement or are already retired and trying to protect and preserve that nest egg; thousands of pre-retirees and retirees ruin their nest egg each and every year. To learn of these popular mistakes in order to help prevent you from making them, feel free to reach out to us at Heritage Solutions Group @ (801) 727-8780.

Question of the Month

January 30, 2017

“Hello Todd.  President Trump has vowed many changes that will affect people’s retirement plan like health care and taxes.  What changes do you think will be made and how quickly?  Thank you.”  Martin

Hello Martin and thanks for your question.  Back in October when President Trump was the then GOP nominee, he released his plans for his first 100 days in office. Since then, there has been a lot of press about what he will be able to get accomplished in those first 100 days.

The initial biggest challenge Trump will face is following through on the ambitious agenda he has spelled out, including repealing and replacing Obamacare, cutting business and personal tax rates, reworking trade deals, creating jobs, etc. Logistically, it is nearly impossible for Trump to accomplish all these objectives in his first three months in office as it will take some time for the new administration to learn the ropes of governing and develop relationships with Congress.

He will score some quick wins with some executive orders and nominating a Supreme Court Justice that will resonate with many voters.  But the outcome and timing for his biggest promises will depend heavily on how the Trump administration and Congress resolve spending issues.  Congress must raise the federal debt ceiling by March or risk default, and lawmakers must pass legislation to fund the government for the rest of the fiscal year.  

These things will get done and President Trump will get to work quickly on many things which will have effects on your retirement plan. To get some help with preparing and adjusting your retirement plan properly, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

What Does Trump Presidency Mean for Your Wallet?

 

January 23, 2017

The beginning of the year is here and that means it is officially tax season.  Obviously most people hate paying taxes, but this year there is new hope in the air as new President Trump has vowed major tax reform for both individuals and businesses. The key question on everyone’s mind is, “What kind of tax savings will he bring?”

 

President Trump recently released his detailed tax plan. Although it’s not guaranteed that every bit of this proposal will make it into the final legislation or become law, Trump has a lot of room to accomplish his goals with Republicans holding the majority in both houses of Congress.

 

Under Trump’s proposed plan, most Americans would see a reduction in income taxes. This would be done by simplifying our current individual tax system by reducing the number of income tax brackets from seven to three.  In addition, several taxes would be removed, including the 3.8% Obamacare tax.

 

In addition, President-elect Trump wants to reduce corporate tax rates as well.  His plan would be extremely beneficial for business owners as the business tax rate would go down from 35% to 15% for all businesses regardless of size.  Plus, he aims to eliminate the corporate alternative minimum tax.

 

All in all, his plan has a lot of tax reduction proposals.  So, how will it affect you?  To learn all of the details on President Trump’s proposed tax plan and how it may affect your wallet, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Be On the Lookout

April 11, 2016

A defined benefit pension plan, where a company promises to pay a retiree a set amount each month during retirement, has been a staple in many people’s retirement plan for a long time.  However, things have changed a lot lately for pension plans.  Do you now, or have you ever participated in a defined benefit pension plan?  Are you retired and receiving a monthly pension check?  If you are one of the estimated 40 million Americans who can answer yes to either question, be on the lookout for a notification announcing important changes to your benefits.

 

Many companies have been freezing or terminating their defined benefit pension plans as they move to 401(k) plans that not only cost them much less, but also transfers all the investment risk to the worker.  In fact, many companies started doing this over the last several years, including General Motors, American Airlines, Bank of America, Sysco and NBC Universal to name a few. When a company makes a move to freeze or terminate their pension plans, they have to notify all their current and past employees who will be affected, including those who have a vested contractual benefit owed to them from the plan.  There are three types of changes you might be confronted with:  a company freeze of the pension plan, a termination of the plan or a combination of both including lump sum buy out options.  When receiving a notification and options regarding this (and chances are you will), you have to take it very seriously and give it much thought.  There are many factors to consider before making this very important decision.

 

Question of the Month

April 4, 2016

“Hello Todd.  My husband and I are in the process of finishing our taxes for 2015.  I have heard that we still have time to contribute to our retirement plans for last year.  Is this true, and if so, what is the deadline?  Thank you.  Kim” Hello Kim.  Thank you for sending in your question; it is a very timely one at this time of the year.  The answer to your question is both yes and no.  You can still contribute to some types of retirement plans for last year, but you cannot for others.  Here are the specifics that you need to know.  If you qualify, you can still contribute to a Traditional IRA or Roth IRA for 2015.  The deadline to do this is April 18th.  For 2015, the maximum contribution amount in aggregate total for both of these accounts is $5,500 ($6,500 if you were age 50 or older in 2015).  If you have a Keogh or SEP plan and you get a filing extension to October 17, 2016, you can wait until then to put 2015 contributions into those accounts.  The maximum annual addition to SEPs and Keoghs for 2015 is $53,000.  However, for most employer sponsored retirement plans, you are not able to contribute for 2015 anymore.  The contribution deadline for 2015 for 401(k)s, 403(b)s and most other qualified plans was December 31st of 2015.  

 

Now, if you still want to contribute to those plans that are still open for 2015, then you also need to determine ‘how’ to contribute.  This means whether to contribute on a pre-taxed, tax-deferred basis where you will pay taxes upon withdrawal, or post-tax where your money will be tax free upon withdrawal.  The ‘how’ to contribute decision can be very important.  To learn more about this decision in detail as well as the answers to many other questions from our readers and listeners,  You can also obtain this information by contacting me at Heritage Solutions Group at (801) 727-8780 

 

New Year Means New Rules

January 16, 2017

We are into a new year and as always a new year brings new rules, new laws, new guidelines, etc. To keep your retirement and estate planning up-to-date, accurate and finely tuned, you have to get yourself informed and educated on all these changes and new rules.

 

Several new tax law, legislation and retirement plan guidelines are now in effect, and many more proposed changes could certainly come into play sometime this year. Below are some specifics.

 

A New Presidential Administration – President-elect Trump has vowed many changes with taxes, health care, trade, and of course the economy and security. Many of these will have effects on your retirement plan.

 

Tax Brackets - Income brackets were widened a tad for inflation.

 

Retirement Plan Contribution Limits - Contribution limits for most types of plans remain the same for 2017, but the income limits for phase-outs have gone up slightly.

 

Interest Rates – In December, the Federal Reserve raised interest rates for the first time in a very long time.  More rate hikes are projected for this year and this very well could have effects on your retirement plan.  


Keeping up with the changes each year and making the proper adjustments is a must for those who want to maintain a successful retirement plan.  For more detailed information on the many changes for 2017 and how those can and will affect your retirement plan, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

New Year’s Resolutions for Your Planning

January 9, 2017

At the beginning of every year, people tend to evaluate their lives and determine what needs to be improved in the upcoming year.  Your retirement plan needs evaluated as well.  Simply put, our financial world has severely changed over the last decade and continues to change.  In fact, there are a lot of concerns going into 2017 with a new presidential administration set to take over, markets near all-time highs, pension and entitlement program changes occurring and continued national spending and budget issues.  With all these issues and more on the forefront of people’s minds this year, it is no surprise that there will be a lot of New Year’s resolutions that are financially related in 2017.

 

It is extremely important to evaluate your current retirement situation and look for areas that can be improved, no matter if you are still working or already retired.  Think about your planning for a moment and ask yourself a couple questions. 1) “Have I made any proper adjustments in my planning lately?”  2) “Am I 100% sure that my/our retirement situation is set up the absolute best way for my/our unique and specific situation?”  If your answer is “no” to either of these questions, then make it a New Year’s resolution this year to get some valuable help.  Find a qualified, competent, educated and experienced retirement specialist to make sure you are aware of and understand all of your options, to make sure your planning is setup the absolute best way for your unique and specific situation, and to keep your retirement nest egg safe and sound.


For more detailed information on what to be concerned about for 2017, and for some specific New Year’s financial resolutions to consider contact me at Heritage Solutions Group at (801) 727-8780.

Are Your Gifts Valuable?

December 26, 2016

It is December and that means the gift giving season is now officially here.  Over the next several weeks many gifts will be given and received. The problem with this, however, is that each year many gifts are given, received and forgotten about soon after with no real meaning or lifetime value.  This is truly a shame.  Fortunately though, it does not have to be this way. There are ways of giving that not only can be meaningful and really make a difference in someone’s life, but can continue to be of value and provide benefits for a long period of time.  In addition, sometimes the gift may provide benefits to the giver as well.  Here are a few ways:

Gift of Savings Bonds – They are tax-advantaged and earn interest, thereby giving the recipients a gift that keeps on giving.

 

Gift of Cash – In 2016, you can give up to a $14,000 gift ($28,000 if married) to anyone you want to free of gift taxes.  

 

Gift of Shares of Stock - By giving shares of stock, you avoid paying the capital gains taxes by not selling the stock yourself; therefore this benefits you.

 

Gift of One Share of Stock - This is a great way for kids to learn about investing with corporations that they recognize, such as Disney.

 

As you can see, there are ways to ensure that your gifts can provide meaning and value, and positively impact someone’s life for a long period of time.  In addition, did you realize that some types of gifts allow you to gain financially as well by giving you a tax deduction and possibly a very good income stream for the rest of your life?  To learn more about the many ways, tools and strategies available (including examples) of how you can make your gifts this year be valuable and beneficial to everyone, including yourself, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Question of the Month

December 19, 2016

“Hi Todd.  I have heard that there are some circumstances when a RMD is not required to be taken from a retirement account.  Is this correct, and if so what circumstances are those?  Thank you.” Allen

Hello Allen.  Thank you for your question.   As we said last week, required minimum distributions (RMDs) are a major requirement for those people who are age 70 ½ or older and own pre taxed retirement accounts.  The deadline for meeting this requirement for 2016 is fast approaching as the requirement has to be met by the end of the year.  However, there are a few circumstances where an exception applies and you can get around taking an RMD by the December 31st deadline.

The first exception is if you reached the age of 70 ½ in 2016.  Your very first RMD can be delayed up until April 1st of the year following the year you turn age 70 ½.  

 

The next exception is if you are still working.  Some plan allows you to avoid taking an RMD from that specific retirement plan. However, you are still required to meet your RMD from your other plans.

 

The next exception is if you have ‘old money’.  Some old 403b plans prior to 1987 will allow you to delay RMDs on that money until the age of 75.

 

The next exception is if you have put money into a QLAC.  Money put into a QLAC is excluded from RMDs up until the age of 85.

Finally, you are excluded from taking RMDs from Roth IRAs.  Roth IRAs do not have RMD requirements.  

 

Unless you qualify for one of these above exceptions, you want to be sure that you do not miss your 2016 RMD. For more details on this question and/or to get help in figuring or meeting your RMD for the year, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Time Is Running Out

December 12, 2016

Can you believe that Thanksgiving is over? This of course means there are only a few weeks left in the year.  Obviously it is one of the busiest times of the year and people everywhere will be scrambling trying to get things done.  You probably do not need anything else added to your plate right now, but unfortunately the clock is also ticking on a few financial planning moves that you have to and/or may need to make before time expires.  If you miss these deadlines, the consequences can be very costly and there is no way to back up the clock and correct the miscue.  So as a courtesy, let us inform you of a few areas of planning that have year-end deadlines.

Required Minimum Distributions (RMDs) – If you are age 70 ½ or older in 2016, you have an RMD to meet by the end of the year.  If you fail to take the required amount, there will be stiff penalties.  

Roth Conversions – This popular tax savings move is different from Roth contributions because conversions have to be done by the end of the year.  

Retirement Plan Contributions – In most company sponsored retirement savings plans, you only have to the end of the year to contribute and max out your contributions.  

 

Gifts and Charitable Contributions – These have to be done by the end of the year in order to get a deduction or tax credit for the year 2016.   

Remember, time is running out on these and several other planning moves that you may need to do before the end of the year.  For detailed information on these and other year-end planning moves and strategies, and to help you make sure you do not lose money to penalties, taxes and lost opportunity costs, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

“What impact will the Presidential election have on the markets and my retirement plan?  Thank you.”  Jim

December 5, 2016

2016 is going to be remembered as the year of many shocks, upsets and surprises.  Brexit started things off when the UK unexpectedly voted to leave the European Union. Then the Chicago Cubs broke the curse of the Billy Goat and ended a 108-year World Series championship drought by winning the World Series. Then of course Donald Trump shocked most everyone in the world and pulled off one of the greatest upsets of all time by winning the United States Presidency last week.  After this was announced in the wee hours of early Wednesday morning on November 9th, almost everybody was asking themselves your question Jim. 

There are a lot of specific questions on people’s minds relating to the Trump Presidency.  Of course the main one is what will happen to the markets and the economy.  In the late hours of Tuesday night after Mr. Trump starting winning some states, the Dow Jones futures plummeted down 800 points while the S&P 500 futures were down over 5%.  However, by the opening bell Wed morning, stock futures actually opened in the green.  And in a total shocker, by the end of Wednesday trading, it was a record setting Day for the Dow and the S&P 500 was up big.

So, what happened and is this an indication of how the markets will handle the Trump Presidency in the future?  What will happen with interest rates and bond prices?   What about the job market and health care?  What about entitlement benefits like Social Security? These are all very good questions on many people’s minds. To get the answers to these questions as well as what to expect in the future as it relates to your retirement plan, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Key Changes to Social Security in 2017

 

November 28, 2016

Social Security is one of the staples of the American retirement system.  Currently, the statistics show an average of $1,335 paid out to roughly 40 million people every month.  For just over 60% of Americans, this makes up more than half of their total retirement income. This is why when changes are made to the program, it is a very big deal and the entire nation tends to listen.  The Social Security Administration (SSA) generally makes an announcement every October to detail the changes to the program for the upcoming year.  This announcement came as scheduled a few weeks ago, and boy was it big.  There are several changes coming to Social Security for 2017 that could have major impacts for many people.

Let’s start with arguably the most followed SSA decision each year which involves whether the benefits are going to receive a cost of living increase for the upcoming year. For 2017, payments are expected to rise by .3%, which amounts to be an increase of between $4 and $5 dollars for most recipients.  

However, some people are not going to receive this increase.  In fact, these people will see their Social Security check plummet in 2017.  Why?  Well, this is because of a special rule related to Medicare premium increases for millions of Social Security recipients.

There are more changes coming, including the payroll tax earning cap going up, full retirement age raising for new retirees, maximum earnings threshold increasing a little bit and disability thresholds are increasing. To learn of all the changes coming to Social Security for 2017 and how they will affect your retirement plan, feel free to reach out to us Heritage Solutions Group at (801) 727-8780.

Painful Facts about Retirement

November 21, 2016

The financial and economic world today is so complex, cumbersome and ever changing.  In addition to this, volatility has picked up substantially in the stock market over the last decade and a half.  This makes planning for your retirement much more difficult than ever.  And what makes it even harder is that many Americans are clueless to some very painful facts about retirement.

The end game to a hard working career is having a comfortable retirement.  And everyone dreams about this time and how it’s going to be. To some people this means golfing or just relaxing every day. For others it might include traveling, more time with grandchildren, volunteering, or taking on some projects that you have always wanted to do.  Unfortunately though, there are some daunting facts about retirement that could derail your dreams and plans from actually becoming a reality.  And not being aware of these facts before hand could turn your retirement into something much less than you envisioned.  

Obviously nobody likes to be the bearer of bad news, but sometimes it is necessary in order to protect or prevent people from hurting their retirement. For example, consider the fact that average retirement savings will generate less than $500 per month, or that tax deferred savings while you are working will cost many people more in taxes in retirement than they saved by deferring.  There are many more painful retirement facts that you need to know.  

Feel free to reach out to us to learn about many daunting facts that could plague your retirement, obliterate your best intended plans and wipe out your future.  By learning of these facts, you will be well on your way to avoiding being part of these statistics.  We can be reached at Heritage Solutions Group at (801) 727-8780.

Are You Scared?

November 7, 2016

Last week was Halloween which was the time for scary stories, costumes, haunts, etc. Fortunately, all of those things are just make believe for just a few days each year. Unfortunately though, there are many scary issues going on in the financial, economic, tax and political world right now that are not make believe. And many people are fearing the worst and are downright worried. Are you scared?

Last week we addressed some financial tools and moves that could either be a real treat for your retirement plan, or a trick that could cause some real hardship. This week I want to address several fears that, unfortunately, are not fiction or here for just a few days. I don’t think I can ever remember a time in my lifetime where there was so much uncertainty and concern on people’s minds. These are some real issues out there that very well could have negative impacts on your retirement planning, such as: the fear

of rising taxes in the near future; the fear of an imploding stock market and the fear of reductions in entitlement programs. In addition, everyone has concerns on what will happen with a new Presidential administration taking office soon, no matter who is elected.

Halloween is a made up theme, but unfortunately these issues are not. They are very real, and each and every one can cause great fear for your retirement plan. Fortunately though, with proper planning you can calm these fears and prevent them from having a severe impact on your retirement plan. To learn more about the above issues and what you can specifically do to help protect and grow your retirement nest egg, reach out to us at Heritage Solutions Group at (801) 727-8780.

A Trick or a Treat?

October 31, 2016

Halloween is near, so the season is here for scary stories, costumes, haunts and of course, tricks and treats. Trick or Treat is one of the main themes of Halloween. It is also a main theme right now in the financial planning world as there are a lot of financial moves out there that could be either a trick or a treat. So, how do you know which one it is?

In your pre-retirement and retirement years, there are literally thousands of different planning moves, options and strategies that are available. And many of these moves and strategies could either cause you financial success or financial hardship; depending on when and how you implement them. For example, one very popular move people make when they need money from their retirement plan before the age of 59 ½ is a 72(T). This move allows you to access money in certain ways from your retirement plan early

without getting hit with a penalty. Now, obviously that sounds good and in some circumstances this can be a very good thing. However, there are also circumstances where making this move could really cost you a lot of money and hurt your retirement plan.

 

The bottom line is that every financial tool, option and strategy has its proper fit for where it will work successfully, and a time where it could possibly do tremendous harm to your plan. Determining each is the difference between having a trick or a treat in your retirement plan. To learn more about several popular retirement planning tools and moves that people make and the circumstances where they can be a very good thing, and where it can be a very bad thing, feel free to contact us at Heritage Solutions Group at

(801) 727-8780.

Question of the Month

October 24, 2016

“Hi Todd. Last week you mentioned that one effective tool available to become more tax efficient is a Roth IRA. So, I am considering doing a Roth conversion for this year. But, how do I determine if it is the correct move for me or not? Thank you.”                                                                                                                                                       -Andy

 

Hi Andy. Great question. You are smart for trying to think of ways to become more tax efficient, and one possible way to accomplish this currently is a Roth IRA conversion. But, you have to consider many factors before being able to figure out if this is the most proper way or move for you specially to accomplish your goal.

Of course the main benefit of the Roth IRA is tax free growth and tax free qualifying withdrawals. In other words, you will not pay tax on that money ever again, including the interest it makes. Plus, income from a Roth IRA is not included in the formula that determines how much of your Social Security is taxed. In addition, there are not any required minimum distribution requirements to meet, and if you do not use all your money, it will pass to your heirs’ tax free.

Of course, the downside to getting the money in this tax free position is that you have to pay the tax on the amount you convert. So, if you are in a lower bracket now than you expect to be in the future, or if you feel that taxes will be higher in the future, then that is a good move. However, if the conversion will put you in a higher tax bracket or you expect to be in a lower bracket in retirement, then it may not be the best move for you at the current time.

There are many other factors to consider before you make this move, and all of those factors have to be considered before you do a Roth conversion. To learn of all these factors, reach out to a retirement planning expert or feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

Do You Hate Taxes?  Consider These Moves.

October 17, 2016

Taxes seem like they are everywhere and unfortunately, as we said last week, they don’t stop in retirement. The bottom line is most people hate paying taxes and want to do everything possible to minimize or eliminate them by law. Fortunately, there are ways to accomplish this.

I personally feel that tax efficiency is key in retirement planning. It can literally make a huge difference in the ultimate value of your retirement plan.  The proper understanding of how different types of retirement assets and incomes are treated that wise is the first step in figuring out how to save taxes and become more tax efficient.  The next step is learning and knowing specifically how to do it.  

Because of our nation’s debt issue and continued excessive spending, many people, including me, expect tax rates to rise in the near future.  If this happens then the more money you have in tax free vehicles, and the more tax efficient you are, the better off you will be. Fortunately, there are some valuable tools and moves you can use and make to help minimize your tax burden legally, and become tax free or as tax efficient as possible.  You just have to be aware of all these tools and moves, and then take the necessary actions to implement them.

To learn of these tools and get the proper advice on how to use them requires professional assistance from an experienced retirement advisor and tax consultant.  We do this work every year for our clients.  So, if you would like more information and help on these moves and strategies which can help you save tax dollars and become as tax efficient as possible, feel free to reach out to us at Heritage Solutions group at (801) 727-8780.

The Tax Bite in Retirement

October 10, 2016

One of the most common and well known phrases in life is one by Benjamin Franklin, who said “In this world nothing can be said to be certain, except death and taxes.”  Many people, though, feel that the tax part of this does not apply during their retirement years.  Unfortunately, this is not the case in most situations.  The fact of the matter is, taxes are everywhere in retirement and they can take a big bite out of your retirement nest egg if you are not careful.

Fortunately though, there are ways to limit or eliminate some of these taxes if you know what you are doing.  This starts by properly understanding how each type of the different retirement assets and incomes are treated tax wise. For example, pensions, Social Security, Retirement Savings Plans, Annuities, Savings Bonds and even Inheritances all have specific tax rules. You absolutely have to know and understand the tax rules of all of these in order to be able to minimize your tax consequences.

There are many other retirement assets and incomes, some of which are tax free.  They key to a successful retirement is properly knowing and understanding how each type is taxed, and having a strategic plan to minimize your taxes owed.  To learn more on this topic and the different strategies available, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

Can You Believe This?

October 3, 2016

According to several sources including U.S. News Money, there are 75 million baby boomers on the verge of retirement.  The most amazing statistic is, for the next 20 years, an average of 10,000 people, each and every day, will reach the age of 65 (which has historically been the retirement phase of life).  That statistic is just amazing.  Can you believe it?  

Between 2000 and 2010, the number of people age 65 to 84 in the U.S. grew by 3.3 million. While 13 percent of Americans are currently age 65 or older, that proportion will jump to 18 percent by 2030. The current 40 million senior citizens will balloon to 89 million by 2050.  All of this will have dramatic and drastic causes to our financial and economic system.  

These numbers and their impact are a bit frightening. Baby boomers entering retirement age will dramatically change the financial and retirement landscape, especially with entitlement benefits, health care and a lot of other financial related areas.  In addition to this, there is a significant shift happening in retirement planning because of new technology.  And despite being the most affluent generation of Americans, baby boomers are most at risk of missing the boat on this technological change.  All of these factors put baby boomers at risk for making many mistakes.  

To have a successful retirement, you will have to avoid these mistakes.  To learn of these top mistakes that baby boomers need to look out for, and what you can do to prevent yourself from making these mistakes, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

IRA Inheritance Disasters to Avoid

 

September 26, 2016

IRAs and other types of retirement accounts are perceived by many people as pretty simple plans. But, as we have discussed in the past, there are many complexities to IRAs that can cause big problems. And when it comes to inheriting an IRA, the rules and guidelines are more complicated than most people realize. Without the proper understanding, an IRA inheritance could spell disaster.

 

It is not unusual for IRA heirs to not know about or misunderstand some key rules and guidelines. A wrong move can often cause much of the inherited IRA to end up with the IRS from income and estate taxes. And unfortunately, the IRS does not give much mercy at all when things are not done properly, even from ignorance of the rules. Here are some key inherited IRA mistakes that can be disastrous.

 

Inaccurate or wrong documents – Your will or living trust has no effect on an IRA. Only the beneficiary designation form matters. IRA owners often make the mistake of using the wrong form or not designating a beneficiary all together.

 

Misplaced documents – Make sure you keep your documents. Don’t depend on your custodian to keep copies as they may not have them. Not being able to produce your documents can cause big problems.

 

Ignoring Spousal Options – Spousal beneficiaries have special options available to no one else. Spouses who do not know or understand these special options can lose valuable money.

 

Not Realizing the Tax Issues – Most inherited IRA accounts are completely and fully taxable to the beneficiaries. Fortunately, there are ways to minimize these taxes, but most people are not aware of them or do not follow the specific guidelines. Consequently, they lose out on the tax savings options and cost themselves money.


Inheriting money, specifically IRAs, is a complex process filled with many rules and guidelines. If not understood or followed properly, an inheritance can turn into a disaster. To learn more about these and other mistakes to avoid, feel free to contact me at Heritage Solutions Group at (801) 727-8780.

Question of the Month

September 19, 2016

“Hello Todd.  My wife and I want to make a contribution to an IRA or a Roth IRA for this year.  In order to be able to do this, I have heard we have to have earned income.  We do have a few sources of income, but are unsure if it qualifies as ‘earned’ income.  Can you please explain what qualifies as ‘earned’ income so we can determine if we are eligible to contribute?  Thank you, Ryan.”

 

Hello Ryan.  As you know, to be eligible to make and an IRA or Roth IRA contribution, you must have ‘compensation’.  Your question is a popular one as any people don’t quite understand what the definition of compensation is for IRA purposes.  By far the most common form of compensation is wages. Wages, salaries, tips, professional fees, self –employment income, bonuses and any other amounts you receive for providing personal services are considered compensation. Generally, if you have a W-2 that “properly” shows income in box 1 then you have compensation, and thus you can make an IRA or a Roth IRA contribution if you meet the income limits. Self-employment income also counts.  In this case, your compensation is the net earnings from your trade or business minus deductible contributions made to your retirement account and the deductible part of your self-employment taxes, if any. Interestingly, a self-employment loss is not deducted from any salaries or wages to determine your total compensation for IRA contribution purposes.

In addition, alimony and separate maintenance received, as long as they are taxable, are considered compensation. The payments must be a result of a decree of divorce or separate maintenance.

Now, there are several sources of income that do not qualify as ‘compensation’, such as:  Earnings and profits from property – including rents, Pension or annuity income, Deferred Compensation from a previous year, Partnership income when you do not provide income producing services.

Now, generally, if you do not have compensation, you cannot make IRA or Roth IRA contributions. The exception to this rule is for spousal contributions.  This means that if your spouse does not have ‘compensation’ but you do, then you can contribute for both of you as long as you have enough compensation to do this.  To learn more regarding this topic as well as get answers to your other questions on retirement and estate planning, feel free to contact us at Heritage Solutions Group at (801) 727-8780.

When Will This Party End?

September 12, 2016

The stock market has certainly been an interesting place this year.  The swings so far have been some of the wildest ever seen.  With all the volatility and turbulence, many people are wondering if this is the beginning of the end for this long term bull market run.  So, is the party ending?

Obviously, no one can predict what exactly the market is going to do.  In fact, the market has an uncanny ability to do exactly the opposite of what most people think.  But, that sure does not stop so called experts from making predictions.  

When you read and listen to all the talking heads in print media and on radio and television, you will hear predictions from doom and gloom all the way to completely positive.  American financial newsletter writer Harry S. Dent, Jr. recently said there are now fresh details that tell him that the next crash will happen between now and early 2017, and that it will be spread across the board.  He said it will be much like 2008, only deeper, more pervasive and longer lasting.  However, there are others, including Wharton School finance professor Jeremy Siegel, that are predicting the complete opposite saying the value of the Dow will possibly hit 20,000 in the near future. That is a huge disparity, and there are thousands of predictions in between these.  

So, what do you think will happen?  Is the punch being put away, the decorations taken down and people being told to go home?  Or, are we just at halftime, the band taking a break and people out buying more food and drinks for the party?  Feel free to reach out to us to get some updated information on what realistically to expect from here as well as information to help protect and grow your retirement nest egg. We can be reached at Heritage Solutions Group at (801) 727-8780.

It’s Getting Worse

September 5, 2016

Every year there are surveys done to gauge retirement readiness.  In the past, the results of these surveys have not been good.  Unfortunately, the 2016 survey results are getting worse.

 

Imagine fearing life more than death.  That’s a reality many Americans are now facing as according to a new survey released by the IALC, nearly 50% of American are afraid of outliving their income or their inability to pay for basic necessities like healthcare.  Specifically, American’s top 3 retirement fears are outliving their income, maintaining their current lifestyle and healthcare expenses.

 

However, in unbelievable fashion, despite these fears many American aren’t doing anything about this.  They are not taking enough action to address these fears, to mitigate the risk and plan for a better retirement,  The survey found that one in four Americans have absolutely nothing saved for retirement, and one in four baby boomers have less than $5,000 saved for retirement.  Even worse is that nearly one in five Americans don’t even have a clue about how much they have saved for retirement!

 

Obviously, many Americans need some help with this.  With Americans living longer than ever, they need to take steps now to address this risk and plan for a better retirement.  Fortunately there are tools and strategies available that can and will help ensure that you will have enough income that will last a lifetime.

 

To learn about more about this and get the proper help you need to ensure your retirement plan is not part of these bad statistics in the surveys, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

I have Had It!

August 29, 2016

 

I always try to provide good quality information and education in this column with a positive message. Unfortunately, this week I have to be a bit negative because I am upset.  Too many people are being sold bad financial products for the benefit of the financial person, and it has to stop.  I have had it! So, I am exposing annuities to help people figure out if they purchased an annuity as a proper tool for their retirement plan, or if they have been sold an annuity for the salesman’s benefit.

 

The main problem is that annuities are mostly a commissionable product to the financial person, and some financial people who are able to get an insurance license sell annuities to make a good living. Instead of acting in the client’s best interest by recommending the best financial products for the client’s specific situation, they focus on annuities and put their own interests and benefit first. And that is a major problem!  

 

Too many people are being sold annuities that are not a proper fit, that they don’t understand and / or have fees they are not aware of.  So, it is time to set the record straight and give people the proper information they need to know. To help with this major problem, we are offering our expertise in this area by providing the pros, cons, and accurate and specific information on annuities that you need to know. This way if you already own an annuity, you can determine if it is the right plan for you, or if not, how to get rid of it and save yourself a lot of money. In addition, if you are thinking about purchasing an annuity, you can get all the proper information you need to know to help make sure it is the proper fit for your specific situation.  To get this review and information, feel free to reach out to me at Heritage Solutions Group (801) 727-8780.

Question of the Month

 

August 22, 2016

“Hi Todd. I have purchased and owned series EE savings bonds over many years. I have just saved these bonds and put them away. In fact, I kind of forgot about them. Now, I would like to start using this money. But, from the research I have done, it appears there will be some tax consequences. Can you explain? Thank you.”  -William

 

Hello William. Your question is a very good one as many, many people own savings bonds for which they have stashed away for many years. They have always been perceived as a very safe and simple savings plan. Unfortunately, the tax implications of Series EE bonds is anything but simple. In fact, the proper understanding of these factors and options is critical in minimizing the amount of the savings bonds that you have to give to Uncle Sam. There are several considerations, such as:

 

- No state or local income tax on the interest

 

- You can defer you interest income up until a certain point

 

- You can choose to accrue your interest income each year to possibly prevent a big tax hit later in life

 

- Interest used for certain things may be tax free

 

- There are inheritance options to minimize the tax obligation

 

The tax rules of Series EE bonds is complex. However, making the right choices and handling this the proper way can lead to big tax savings if you know what you are doing. To learn the specifics of these rules and options, and / or to get help with your retirement and estate planning, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780.

It’s Halftime!

August 15, 2016

It’s hard to believe more than half the year is already over. Time passes so quickly! But now that the first half of 2016 is behind us, the world is wondering what will the rest of the year hold for financial markets and the economy? It is halftime for 2016, so let’s get the halftime show started.

It certainly has been a very active and interesting first half of the year. The financial markets have been like a wild roller coaster ride, going through several extreme up and down periods. In addition to that, there have also been a lot of major economic events and happenings so far in 2016. Let’s start by taking a look at how markets performed in the first half of the year. The first two months were the worst start to a year in history. The overall markets then recovered most of those losses over the next two months. May and June were nearly just as volatile. At the end of the day, some indexes are up a little and some are down a little over the first half of the year with the Dow Jones up about 2.9%, the NASDAQ down around 3.3% and the S&P 500 up 2.7%. On the economic side, we have been dealing with news about potential interest rate increases, entitlement program cut backs and of course the implications of a new presidency administration. But the main news has of course been Brexit and the effects that it will have on the markets and the economy.

A mid year review is always a good idea to make the proper adjustments in your planning for what has happened so far in the year, and to properly prepare you for the second half of the year to help protect and maximize your retirement plan. Feel free to reach out to us for this complimentary review of your unique plan. We can be reached at Heritage Solutions Group at (801) 727-8780.

What Does This Mean and What Happens Next?

August 8, 2016

The main financial news story lately has been all about Brexit. Great Britain shocked the world by voting to exit the European Union on June 23rd. This move is unprecedented and has caused anxiety for many people around the world. So, what does this mean and what happens next?

Let’s start by taking a step back and asking: How did Britain get here? To answer that, we have to go back in time and take a look at some history of Britain and the European Union. Britain originally voted to join the European Economic Community in 1973. In 1975, Britons voted to remain within the new European Community, which then becomes the modern European Union in 1991.

Economic and political circumstances have changed drastically since the 90s, and British citizens demanded a new national referendum on EU membership. The issues at stake were complex and involved British sovereignty, trade, regulations, and immigration policy. Ultimately, the vote was about this: Did Britain see a future within the EU or did it want out? As we saw, British citizens voted to leave.  So, this leaves many critical questions and concerns, such as: How could the Brexit affect U.S. markets?

What impact could the Brexit have on the global economy? How could the Brexit affect the U.S. economy? What should investors be doing right now?

These are all very good questions and concerns. To get the answers and to help make sure your retirement planning is set up properly and will any Brexit affects, feel free to reach out to us at Heritage Solutions Group at (801) 727-8780

Don’t Forget About This

August 1, 2016

When people think of estate planning, it is generally thought to be needed only by the ultra-wealthy. However, that actually isn’t the case. Whether people realize it or not, estate planning is a big part of retirement planning. Because of legislation and demographic changes, as well as tax, inheritance and privacy laws, proper estate planning is greatly needed in almost all retirement plans. So, make it a point to not forget about estate planning.

The ultimate goal of estate planning is to pass along as much of your unused assets with the least amount of taxes, expenses, fees and time, and to do it as privately as possible. In other words, to protect and preserve your legacy for your family, loved ones and your charitable causes and interests. And you do not have to be extremely wealthy to have this desire. That is why you cannot forget about proper estate planning, and the many areas and factors that

it entails. A few of these areas and factors are common, like proper estate planning documents, but most are just not thought about by most people. So, make it a point to learn about these factors and areas that must be addressed in estate planning in order to maximize, protect and preserve your legacy the absolute best way. To learn more on the above factors and many more, call us today at (801) 727-8780.

Do You Have Financial Independence?

July 25, 2016

This week people will be celebrating Independence Day. Independence Day honors the birthday of the United States of America and the adoption of the Declaration of Independence on July 4, 1776. The Declaration of Independence is our nation's most cherished symbol of liberty, and this is a special time for many Americans. To me, the 4th of July represents not only the birth of our nation and the sacrifices that millions of military members and their families have made throughout our nation’s history, but it also represents the symbol of freedom and hope. It is not a stretch to take this a step further to relate freedom and hope to financial independence in retirement.

There is no absolute definition for financial independence in retirement. The most common sense of the term is someone having enough wealth to do anything at any time. Most Americans will never achieve this goal. A much better definition of financial independence in retirement should mean the ability to have the lifestyle that you desire, the freedom to do the different things you want to do and a financial sense of security. To achieve this you will need to do proper planning and make the right strategic moves at the proper time, as well as keep up with all the tax law and legal changes each and every year. If you do not adjust and keep your retirement plan up-to- date based on all the changes then your financial independence in retirement could be lost.

As the Fourth of July should remind us all, independence is something worth fighting for. Fight for your financial independence and call us today at (801) 727-8780.

Question of the Month

July 18, 2016

“I am a father and I try to pass down much of the advice my father gave to me, which is what he received from his father. Both of these fine gentlemen were very conservative and did not believe in taking much risk on investing their money. One of their main pieces of advice was to save as much as possible, and invest a good amount in FDIC insured bank CDs. However, as you know, bank CDs are not paying much anymore; I wish my father was still around to see what he would do in this situation. What options do I have to invest conservatively so I can help myself as well as provide good advice for my children? Thank you.” Leonard.

 

Great question Leonard. I can sense the tremendous genuine care and concern in your question, which is very timely with Father’s Day being last weekend. As you are well aware, interest rates are at historical lows, and based on many national and world economic factors, interest rates may remain very low for a long time. Even if the Federal Reserve succeeds in their attempt and goal of raising interest rates, it will happen slowly and incrementally. Obviously this is great for borrowing money, but not for those trying to save money in fixed interest savings vehicles.

 

So, in low interest rate environments like these, you need to explore and learn about all of the available options that may meet your objectives for paying you some interest without taking market risk. Fortunately, and contrary to popular belief, there are several solutions. Call our office today! (801) 727-8780

To Roll Over Or Not?

July 11, 2016

The employer sponsored retirement plan is one of the most popular types of retirement savings plans. In fact, most people at some point in their lives have contributed to some type of employer savings plan like a 401k or 403b. However, the popularity of this type of plan brings many questions and options. One common question that we get on a regular basis is the rollover question; what should one do with the plan once they change employers, separate from service or retire.  When one separates from service for any reason, the option to take the money out of the retirement plan and do something else with it comes available. The decision you make here is very important and can have many consequences. Participants generally have five options when leaving their employer- sponsored plan, consisting of:

- Leaving the money in the former employer’s plan, if permitted

- Rolling the assets to a new employer’s plan, if one is available and rollovers are permitted

- Rolling the assets into a self directed IRA or a managed account IRA

- Converting the money to a Roth IRA

- Cashing out the plan

There are advantages and disadvantages to each of these options. Deciding what to do is not easy as many factors must be considered for your unique and specific situation. To learn more on all of these options, including the advantages and disadvantages of each and what specifically you can do call our office today! (801) 727-8780

Is This Market Bullish or Bearish?

July 4, 2016

We are well into 2016 now and the markets have certainly been on a roller coaster ride since the beginning of the year. So, obviously market conditions have changed from the low volatile condition of the past seven years, and the change started in August of 2015 when volatility spiked. Ever since that point, risk has been elevated causing the markets to swing wildly up and down, just like a roller coaster.

So, where are we now and where are the markets going in the near future? Are we bullish or bearish? The first two months of 2016 saw the worst start in history to a year in the markets. This caused many people to feel like the markets were getting ready to fall apart, just like what happened in 2008. Then, the markets recovered much of those losses in March and April, calming the fears of many people and suggesting that it was just a minor correction in a bull market. Then in May we had big swings in both

directions, causing more confusion. So, what is going on? Are these indicators bearish and a sign that the markets could drop sharply in the near future? Or are the indicators bullish and these wild swings are just temporary before the markets head higher?

​Are You Clueless?

June 27, 2016

You work and save over many years to build a nest egg for retirement, and basically for one simple reason. Do you know what that is? Well, the ultimate objective of retirement is to provide yourself a sufficient or desired income stream throughout your retirement years. Unfortunately, most people, financial advisors included, are simply clueless as to how to setup their retirement plan properly for providing this lifetime income.  

 

Taking income from your nest egg the proper way comes down to many factors and considerations. Of course, each is based on your unique set of goals, objectives and desires, but here are some main provisions to consider.

What should you do with your money once you retire? Specifically, which accounts should you tap first and why?

How old are you? Different plans have different age rules and requirements for tapping into your nest egg.

Are you still going to work after retirement? If so, you need to be aware of and understand the rules and provisions that will affect taxes, Social Security and RMDs.

 

Beware of the taxman. Tax planning is critical in retirement. You want to setup your income plan and distributions to minimize

the taxes that you pay. Remember, tax evasion is illegal, but tax avoidance using the right tools and strategies is not.

Question of the Month

June 20, 2016

“Hi Todd.  In some of your previous columns, you have talked about how to pass on and inherit money properly.  My sister and I recently inherited an IRA from our mother, and we each established our own inherited IRA. We believe that we will not use all of the inherited IRA money during our lifetime.  When it passes to our beneficiaries, can they also do an inherited IRA to avoid the big tax hit all at once?  Thank you, Pamela.”

Hello Pamela and thank you for your question.  Congratulations to you and your sister for doing some proper planning and establishing inherited IRAs to meet your goals and objectives.  The tax liability on inherited retirement dollars can be absolutely huge, and many people have lost over half of their inherited amount to taxes because of the lack of proper planning. 

 

The Multi-generational IRA, or commonly referred to as the Stretch IRA, is a tremendous benefit in the tax code for allowing people to control and limit taxes on inherited taxable money.  Unfortunately though, there are some limitations to the Stretch IRA, and one of them is that it is not designed to last for multiple generations.

If a person who inherits an IRA should pass away before all of the money has been withdrawn from their inherited IRA, then the money will pass on to their beneficiary(s).  However, that person cannot establish a new inherited IRA and take distributions over their own life expectancy.  The distribution payout period over which funds must be taken from that IRA is determined by your life expectancy as the original “designated beneficiary,” and at least the fixed required minimum distribution schedule based on your own life expectancy must continue to be followed by the new beneficiary. 

Are You Ready?

June 13, 2016

Retirement is an ultimate goal that everyone has, and getting to that point requires a lot of hard work, commitment to savings and strategic planning. First and foremost, your retirement plan will have to contain some essential elements. And once you get close to the point where you feel you can successfully retire, you have to avoid some last minute mistakes. So, are you ready and prepared?

 

Most people work 40 years or more before they retire. They spend all of those years saving and building up their nest egg to the point where they feel they have enough money to meet their lifestyle objectives and can retire comfortably. And once the time comes to pull the plug on the steady income source of employment and start relying on your nest egg for income, this can be a very difficult, emotional and scary decision. However, there are some things you can do in the years leading up to your retirement to make this decision with confidence.

 

In the preceding years leading up to the time when you make this huge decision, two very important things need to be addressed. First, you need to make sure your retirement plan has some essential elements; in my mind, there are at least five. Secondly, you have to make sure you avoid some last minute mistakes that could set your retirement date back or even derail it all together.

 

Mothers and Women Face Many Challenges

May 16, 2016

Last week was Mother’s Day week. Even though Mother’s Day was on Sunday May 8 th , they

deserved a whole week of recognition and attention. To honor mothers and women everywhere, we

are going to share some information and advice with them for a secure financial future.

In the past, men dominated financial affairs. Today, however, things are much different because of

the growing presence of women in the workplace and as head of households. Women are taking an

increase in responsibility for their long term goals and financial health, but they face many challenges

when building wealth and securing their financial future which makes financial literacy and advanced

planning especially important.

 

Specifically, women control over $18 trillion in consumer spending, hold approximately 30% of

global wealth, and 32% are the sole head of U.S. households. Plus, more women are inheriting

wealth because of longevity and demographic patterns. In addition, many women outlive their

husbands and at some point in their lives will have sole responsibility for their own finances. Based

on these factors and many more, women have substantial financial planning, investment and wealth

management needs.

Did You Miss The Deadline?

May 9, 2016

It has been a crazy and very busy last few months fielding phone calls, emails and letters from panicky people trying to understand the changing Social Security laws and worried about beating the deadlines for claiming Social Security benefits under existing rules. And as the deadline for one of these very popular election strategies came to an end on April 29th, the questions came in more rapidly. So, did you qualify and make the deadline?

 

When Congress passed the Senior Citizens Freedom to Work Act in 2000, it introduced some new claiming options, specifically ‘File and Suspend’ and ‘Restricted Application’. These two claiming strategies essentially allowed married couples to claim benefits off of a spouse’s record while letting their own benefits continue to build delayed retirement credits in order to collect more money later.They are essentially ‘have your cake and eat it too’ options, which is why the Government is eliminating them. Late last year, Congress voted to eliminate several Social Security claiming options. However, they put in a phase-out provision for each as to when these options would be officially off of the table. The File and Suspend election strategy had the first deadline as the phase-out period for this option ended on April 29 th . If you qualified for that, hopefully you took advantage of it before the deadline. But if you didn’t, you may still qualify for some other options before they expire.

 

This is why we decided to send out a special bulletin last week to address this issue and answer the many questions we have received. Proper retirement planning is about maximizing your income, and maximizing your Social Security is a big part of that.To help you better understand and know if you can and should make a move to take advantage before the next deadlines. Call us at (801) 727-8780

 

You Can Still Protect Your Assets

May 2, 2016

Your accumulated assets are subject to a lot of different risks during your retirement years. So, you have to protect these assets. Some people do a good job of protecting against market downturns, increasing tax rates and many other risks. Unfortunately though, many people don’t believe they can anymore or fail to protect their assets against one of the biggest risks which is a long-term care illness.

 

This can be a major problem, especially after looking at these common statistics from various sources including longtermcare.org:

 

- Today, someone turning age 65 has almost a 70% chance of needing some type of long-term care service and support in their remaining years.

 

- The average nursing home stay is 2.44 years or 892 days.

 

- The median annual rate of a semi-private room in a nursing home is now $77,380. Costs for in-home care can be much higher.

 

- On average, long-term care costs are increasing by more than 10% each year.

 

When you add all that up, it is not surprising that a long term care illness, which is not covered by Medicare or private health insurance, very well could severely hurt or wipe out many people’s assets very quickly. Additionally, with older Americans entering assisted living facilities at an unprecedented pace, it is clear that they will incur more long-term care costs throughout their lifetimes.

 

So what can you do? Fortunately, there are several options. You can also obtain this information by contacting us at Heritage Solutions Group at (801) 727-8780

Your Retirement Plan is Under Attack!

April 25, 2016

In February of this year, President Obama’s final budget proposal as President of the United States was unveiled to the American public.  This year’s version of the budget, as usual, included a number of provisions targeting retirement accounts.  If these are approved by Congress and become law, your retirement plans could be greatly affected.  

 

It’s no secret that our national debt continues to climb to astonishing levels, and that our nation’s spending is out of control.  Combine that with several underfunded entitlement programs like Social Security and Medicare, it is utterly apparent that our nation will need to raise additional money very soon.  Since retirement accounts of Americans contain trillions of dollars, mostly pre-taxed, these accounts are a prime target of revenue for the Government.  Thus, your retirement plan is under attack.   

 

All in all, this year’s budget contains over 15 provisions that relate and target retirement accounts and many tax breaks.  Now many people say that the proposed changes will never become law.  However, as our nation continues to get further into debt these changes are much more likely to become law.  In fact, it started happening last November after President Obama proposed eliminating "aggressive" Social Security claiming strategies a couple of years ago. This provision went nowhere until late last year when Congress eliminated those valuable opportunities; folks who turn age 66 by the end of April can still take advantage of them, if they act quickly.

 

So, changes are happening! We address many of these proposed changes in the President’s budget that directly relate to retirement accounts and other retirement-saving breaks that are getting a reputation for being too good to last.  We want you to be able to take advantage of them while you still can and find out what you can do to protect yourself.  You can obtain this information by contacting us at Heritage Solutions Group (801) 727-8780  

Misconceptions Can Be Costly

April 18, 2016

There is a saying by Mark Twain that I like as it really makes you think.  It says – “It’s not what you don’t know that gets you into trouble.  It’s what you know for sure that just ain’t so.”  There are many misconceptions in this world, and these misconceptions can cost you a lot, including money, in the retirement arena.

 

One of the most common misconceptions is in regards to the IRA.  The IRA is one of the most popular and utilized financial tools used in America as millions of people have an IRA or similar retirement plan. However, even with the popularity and use of this tool, there are many misconceptions and misunderstandings about IRAs, such as:

 

An IRA is an Investment - An IRA is an account registration, not an investment.    

 

Contributions can only be made for the current year - Actually, an IRA contribution can be made for the prior year up until a certain deadline.

 

There is only one type of IRA - There are many different types of IRAs.

 

I can only contribute to an IRA for myself – In some circumstances, you can contribute for yourself, a spouse and children. 

 

These are just a few of the misconceptions about IRAs.  For a list and thorough analysis of many more IRA misconceptions, online at www.heritagesolutionsgroup.com.  You can also obtain this information by contacting me at Heritage Solutions Group at (801) 727-8780.

 

Bye Bye 2015; Hello 2016

January 4, 2016

It is hard to believe that the year 2015 is already over.  It certainly was an interesting year in the financial, economic, tax and investment arenas.  Let’s close the books on 2015 with a quick year in review and prepare you for 2016.  

 

One of the main things that we have been dealing with the last several years is the national debt.  In December, the fed once again kicked the can down the road by increasing the debt ceiling to avoid a government shutdown.  As we all know, this is going to have major consequences at some point in 

the future.  2015 saw many tax increases.  With the nations continued spending and debt issues, it is hard to imagine 2016 and the future not having more tax increases, no matter what all the politicians preach.

 

The US economy continued its slow improvement; to the point that the fed finally decided to start raising interest rates in December.  It will be interesting to see what effect this and more potential rate hikes will have on the economy in 2016. Volatility finally increased dramatically in August after a very long bull run.  It will be interesting to see if volatility settles back down in 2016 and we go back to a bull market, or if this is the beginning 

of major correction.  2016 will be a very interesting year.  Not only is it a presidential election year, but we are dealing 

with war on terror, continued spending, debt issues and stock markets near all-time highs.  Call today to set up an appointment with Todd at (801) 727-8780.

 

Investment Advisory Services offered through Brookstone Capital Management LLC, a Registered Investment Advisor. Investments and/or investment strategies involve risk including the possible loss of principal. There is no assurance that any investment strategy will achieve its objectives. This information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to 

meet the particular needs of an individual’s situation. Content is provided by third parties for informational purposes only and is not a solicitation to buy or sell any products mentioned.