Maximize Your Money With Kiplinger and NAPFA, June 2016
Kiplinger is teaming up with the National Association of Personal Financial Advisors (NAPFA), whose planners will answer questions about tax preparation, filing and more. Submit your questions here and get free personalized financial advice on Thursday, June 16, from 9 a.m. to 5 p.m. ET.
3rd & 7 37yd
3rd & 7 37yd
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@JacobKuebler I have the those funds in a checking account. I never considered an emergency fund as part of my retirement account. Though I am starting to look at building a cash holding account as part of our 401k, and use it to add to the other funds when the market takes a good pullback.
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Dave,Couple options might include:
- If you can mimize other taxable income, some tax planning may allow you to take advantage of 0% capital gains rate
- If you are charitably inclined, you could consider a Donor Advised Fund (DAF) for charitable gifting using your highly appreciated investment securities.
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Dave - I would not recommend your "hope to die soon" strategy. :) Paying capital gains over time makes good sense. If you have sufficient records, you are able to select the highest cost trade lots as you sell your funds. For example, with each trade you might sell the shares you bought in 2015 instead of the shares your bought in 1992.
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Wayne,Sometimes trusts are used to avoid probate (the process of settling your estate) in multiple states. In some states, there are other mechanisms that can avoid probate (such as a Transfer on Death title). Consult your attorney for the state specific rules and best option for your situation.
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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.
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Tax Planning for Selling Your Home
www.kiplinger.comFollow these simple guidelines to sell your home tax-free. -
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I am 62, my wife is a homemaker and is 64. I make $110k with my company. I am entitled to a lifetime pension at $1445/month. My company wants to pay me a lump sum of $203,192 to get the pension off the books. They're assuming I will live 12 more years. What are the tax implications if I take the lump sum? they say I can take cash or roll it over into a 401K
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When I retire I will have a defined benefit pension of around $8300 per month with a COLA of 3 % per year. I have the option of withdrawing 250,000 (Before tax) from my contributions to the pension. This $250,000 withdraw would cost my monthly check $1750 subtracted from it for the rest of my life.
My wife and I are 50 years old and in average health.
Is withdrawing the funds a smart move? What type of investment would be a smart move in this situation (Bonds, S&P) ?
What would I want to put the $250,000 into maximize it and avoid taxes? -
Dear OrenCPA, I'm not sure which ETFs you are talking about but the 3 minimum volatility etfs at ishares are all stocks. And they probably can invest in almost anything to achieve their low volatility/risk goal. But none of these include fixed income. I suggest that you could reduce your total portfolio volatility by using equities AND fixed income/cash. I've already mentioned Vanguard Wellsley Income Fund as a good alternative for a blended fund (both equities and fixed income) with relatively low volatility. Remember you can have inidividual holdings within the ETF that have high volatility BUT if they go in different directions at the same time, the overall volatility would be low. A financial planner can help you come up with a mix that specifically suits your situation and your goal of lowering risk.
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Barry, social security rules just changed. How old are you? The key dates for grandfathered positions are 62 by 12-31-15 (there was one for another feature for those who were 66 by April 31 but it isn't effective anymore. If you WERE 62 before 12-31-15 you will be able to file a restricted application at your normal retirement age and draw off your spouse's benefit while letting yours grow until age 70. Maximizing social security is complex and alas, not everyone at the social security office can give you a good answer.
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OrenCPA, unfortunately an ETF name doesn't always match up with what it invests in. As Bobbie mentioned, it could be invested in almost anything. One way to see how it is currently invested is by visiting the ETF company's website or a third-party research tool like Morningstar.com. These resources should provide information about how the ETF is currently invested and what the goal of the ETF is in terms of types of stocks, bonds, etc.
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I find that I have not kept good records to be able to figure my deductible versus non deductible dollars in IRA's, 401k etc. I am sure that some of the dollars invested were non deductible since my income was high. Is there anything I could do to make sure I'm not taxed twice.
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I have 3 kids ages 6,9,11. I am 42 years old and I just sold some company stock around 40K. my spouse and I maximize our 401K, I have a healthy personal mutual fund acct around 175K "for the bridge" if I retire before 59 1/2. I am wondering what I should do with the 40K. I have 70K in one childs 529plan and barely nothing in the others. I feel that putting most of that 40K into the 2nd childs 529 would be best as it would grow tax free and our goal is to pay for 50% of each kids schooling. I have a mortgage under 4% and no other debt. thoughts?
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My daughter is an American citizen that has lived and worked in Europe for the last 22 years filing both American and European tax returns. This year her Swiss employer is having her work in Michigan for a year beginning in August. How can we find an international tax preparer to guide her on what will be required of her tax wise (such as filing estimated taxes and whether she will be required to pay social security and Medicare taxes, etc. in addition to her Swiss taxes).
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Seb, ask your wife's employer if her coverage would change it all if she was enrolled in Medicare part A. That will help determine if it makes sense to enroll now or wait until she stops working. As for Medicare Part B, Kiplinger has a good resource with some more information that might be helpful... http://www.kiplinger.com/article/retirement/T039-C000-S004-should-you-enroll-in-medicare-if-you-still-work.html
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Robert, people used to ask my contractor husband to give them an estimate over the phone re: painting their house. Of course he couldn't as he had no idea of what they were talking about. Well that is kind of like your question. We would need a lot of context for a good answer. Why not spend a little on an hourly fee only advisor so you can get a good answer? That said, be sure to have keep a good cash emergency fund. Then perhaps use a target date fund for the remainder. Vanguard has good ones.
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Zane, if you're truly looking for low-risk, then you might try shopping around for a good savings account. Many online banks now offer rates in the 1.00% range. It's still not great, but it beats the 0.10% or some other ridiculously low rate many other banks are paying right now. With that said, keep in mind that even a savings account has risks over the long-term if you're talking about retirement investments. In this case, it's the risk that your savings won't keep up with inflation and possibly lower your future standard of living.
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Zane the best rates I've found are at Ally Bank of Capital One 360 but we are still talking perhaps 1% (Ally offers a good rate on checking as well). Why not dollar cost average (invest an equal amount monthly...this can be set up to be automatic) into funds over the next year to ease the pain of a potential market decline? Be sure to keep enough cash for any purchases/needs in the next few years as well as an emergency fund.
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I am a 64-year-old widowed woman who is disabled and collects SSD along with my husband's SS check, which is a fraction of what he would have collected. I have a traditional IRA containing around $7,000 that's in the stock market, a small annuity, some small CD's, and some cash. I work as a substitute teacher during the year and I make about $6,000 a year. I save as much money as I can, but it is minimal.
Where is the best place to save for the future? My husband and I lost thousands in 2003 and never recovered. -
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