Wayne - Having assets titled in the name of your living trust provides a clear transition plan when you are "gone" or incompacitated. Avoiding probate and having a successor trustee are the main benefits.
Wayne, I agree with Mark and Jacob. Different states have different estate planning rules. A trust can avoid a lot of the troubles associated with probate at multiple locations. Plus there's the peace of mind knowing there shouldn't any fights over things.
Lester - Currently, $5.45 million (per person!) can be passed to your heirs without estate taxation. You and your wife will be able to pass almost $11 million using "estate portability" rules (an AB trust is not required today to ge the double exclusion). Although you are not currently in an estate tax situation, I'd still recommend working with an estate attorney to get something set up to make sure your assets transfer as you wish.
Lester - I'm not sure about Massachusetts, but the lifetime gift tax exemption is $5.43 million. There are other benefits to have trusts though. You should ask your attorney the benefits.
BG - You could have the advisor that recommended the SIMPLE IRA come in and do an educational piece on the quickest way to get a 3% raise, or 100% return on their investments (up to 3%).
Hi Charlie N -- We don't actually see your question in the queue. Would you mind submitting again?
SJ - Assuming you are married and this is your primary residence, you do not have to pay taxes on the first $500,000 of your gains on the home. If your gains exceed $500,000 you may be able to offset some of them by selling asssets in you taxable accounts that may be trading below your purchase price ("loss harvesting").
We have you coming up shortly, Max!
You're in there too, ZORCON.
Thank you to everyone who has submitted questions, and for your patience! We're hoping to get to everyone.
Stuart - Minimum required distributions typically amount to around 4% of tax deferred (IRA and 401(k)) assets. I'd start by looking to liquidate the most overweight portion of your investments (too much in one fund or in one asset class?). A 4% withdrawal does not require a complete investment overhaul if your portfolio is in good shape.
Good afternoon. This is Bobbie Munroe CFP with Supporting Your Choices Inc. I am pleased to be able to join you today. My thanks to Kiplinger for hosting this event.
Thanks for joining, Bobbie!
Charles - I'm not a fan of annuities for most folks and would not recommend making additional annuity purchases in the future. That being said, I would not worry about the safety of your MYGA (Multi Year Guaranteed Annuity).
Zorcon, if this was all before tax savings, I suggest you roll it all over into a Traditional IRA. If you do this, there will not be any tax conseqences. Set up an IRA account and then try to have your employer roll the money directly to the IRA (or send you a check made payable to the brokerage for your benefit). You will get a 1099 at year end showing the rollover. You will enter it on your tax return but the rollover code used on the 1099 will make it so that none of it is taxable.
Zorcon - Given the numbers you are providing, if you and your wife are healthy the lifetime of monthly payments looks like a very attractive option as comparred to taking the lump sum. Work with a fee only advisror to run some numbers for you.
Zocorn - The $245k figure changes the calculations quite a bit. Before making a decision, talk to someone who can run some numbers for you.
Zorcon, were you considering retiring soon anyway? Do you have enough assets to pay your bills at least until your normal retirement age (66) without using this money? I strongly suggest that working with an hourly advisor would help you sort out the big picture. One more thing, let's say you like the lifetime feature of the pension. You could take part or most (but probably not all) of the lump sum and purchase a joint life single premium annuity (a company, Vanguard is a good choice, would pay your and your wife a fixed sum until the last spouse dies). Notice that I said single premium annuity...no fancy bells and whistles...and Vanguard, a low cost provider.
Bob, you can pay the taxes on the conversion to a ROTH from any source.
Bob are you talking about the converting the entire traditional IRA? If so that could mean a big tax bill. Talk to your CPA about doing this over several years to spread out the tax burden. If you have a year with low income, as some early retirees do, that is a good time to convert. If you are older, you need assess the benefits of making such a change before you act as you won't have as many years to build up tax free money in the future. Moving some of the money to a ROTH will decrease future RMDs from the traditional IRA as your balances will be less.