The Conundrum of Naming a Trust as a Retirement Account Beneficiary

 

Naming beneficiaries to retirement accounts is a seemingly simple task, yet it’s quite often misunderstood, especially when it includes a trust. For many individuals, retirement accounts represent the majority of their assets. Therefore, getting this piece of estate planning right is crucial and should not be overlooked.

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Women and Retirement: 4 Financial Challenges

We all have women in our lives we care deeply about: mothers, daughters, sisters, cousins, work colleagues, and friends. Educating yourself on ways to challenge the economic biases that systematically disadvantage women is a crucial first step towards effecting positive change and creating a more equitable society. When that happens, we all win.

Since we’re all supposed to save a percentage of what we earn for our retirement, what happens if half of the population isn’t earning enough? The National Institute on Retirement Security (NIRS) ran a study where it concluded that women are far more likely than men to face financial hardship in retirement. Even in 2019? Yes, even in the age of raging feminism, grl pwr tattoos, the #MeToo movement, and Ruth Bader Ginsburg memes, we see time and time again how women are disadvantaged in long-term savings opportunities. Now the real question is, what can we do about it?

Women face unique financial challenges. Some of these challenges fall under large economic issues like disproportional earnings and investment potential, penalties for time out of the labor force, and longevity risk. Let's break it down.

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Social Security and Divorce: 5 “Non-Negotiables” You Need to Know

She stood in the storm, and when the wind did not blow her away, she adjusted her sails.

-- Elizabeth Edwards

Even in the most thoughtfully run and financially independent of lives, there will be heart-wrenching twists and turns. Some of these life transitions are expected and planned accordingly, while others are abrupt and uncertain. It’s no secret that a significant number of marriages end in divorce, raising many emotional and financial uncertainties.  However, understanding the benefits entitled to you will help build a secure framework for the next chapter of your life.

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What's Your Retirement Withdrawal Strategy?

 

In retirement the loss of a regular paycheck means you may need to turn to your investments for income. As a diligent saver, you likely have accumulated assets in various types of accounts like a 401(k), Roth IRA, Rollover IRA, taxable brokerage, bank savings, HSA and an annuity, just to name a few. At retirement, you may face what can seem like an overwhelming task – determining how to withdraw tax-efficiently from your different accounts to extend the portfolio’s longevity. The impact of taxes is just as important to consider now as it was when you were saving for retirement. Unfortunately, conventional wisdom regarding which order to draw down your accounts in retirement is fundamentally flawed. When followed blindly, it could potentially deduct years from the life of your portfolio.

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The IRS Just Offered You a Raise

It doesn’t happen often, but every now and then the IRS has some good news to share. For the first time in 6 years, retirement savers have just been given a “raise” for the 2019 calendar year. Thanks to persistently low levels of inflation, maximum contribution limits for various retirement accounts haven’t budged since 2013.

That’s finally changing, providing some relief for anyone looking to sock away as much savings as they can leading up to retirement. While the increases may appear relatively small at first glance, every little bit helps as the vast majority of Americans find themselves behind when it comes to saving for retirement.

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Social Security: Now or Later?

The Social Security Administration (SSA) released on October 11, 2018 its planned changes for calendar year 2019.  Not surprisingly, to both current beneficiaries and those weighing the pros and cons of starting to collect, the item of greatest interest is the cost-of-living adjustment (COLA) planned for the year ahead. More than 67 million Americans will be affected.

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A MEGA Roth Savings Opportunity Hiding Within Your 401(k)

Looking to enhance your retirement savings beyond maxing out contributions to your employer provided retirement account? Hidden deep within your 401(k) plan rules, may be an opportunity to take advantage of one of the best strategies to come along in years. It’s been dubbed the "Mega Backdoor Roth," and with a name like that, it has to be good, right?

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The Best Retirement Account You Aren't Using

Investors are used to struggling with the Traditional vs Roth retirement question - Do I take the tax savings now or will it be more advantageous to take it later? However, imagine a savings account that provides a tax deduction at the time of contribution, tax-deferred growth inside the account AND tax-free withdrawals.

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Setting Your Child Up To Be A Millionaire

In one of our recent blog posts,Are We Rich?” Raising Financially Responsible Kids, Kate Slocum wrote about the ways parents can help teach kids about money. Ultimately, the lessons she laid out can end up being the most important financial behaviors a parent can share with their child in terms of building a healthy and successful relationship with money. However, like with anything we try to teach our kids, those lessons will take time and effort before sinking in.

And while that’s absolutely the right approach, we think parents also deserve a short cut from time to time. So let’s skip the lessons (just this once of course) and talk about giving your kids a head start towards earning their first $1 million dollars. It's the "yes a balanced diet is important kids...but it's 8pm on a school night so we're making this easy and grabbing McDonald's" kind of effort everyone in the family can appreciate.

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Why You’ll (Probably) Die with Money


Leo Tolstoy’s “How Much Land Does a Man Need?” is a tale about a peasant named Pahom who’s only grief is “too little land” and claims, “If I had plenty of land, I’d fear no one—not the devil himself!” In true folkloric tradition, the devil overhears Pahom and decides to send him down a path of desire and temptation.

Presented with the prospect of being granted ownership (for a very small fee) of as much land as he can encircle on foot in one day, Pahom is overjoyed and readily agrees. However, like much in life, there is one important caveat: If he does not return to his starting point by sundown, his money is forfeited and he gets no land at all. After a restless night, Pahom sets off at sunrise and quickly becomes enamored by all the fertile land he sees.

The tale walks the line between the admirable characteristic of ambition and the destructive nature of greed. And while Tolstoy acknowledges hard work and discipline as catalysts for human development, he warns that it's also the space where unchecked ambition can turn to excess at best, and greed at worst.

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