- Tax PlanningWhile it's not required to hold separate IRAs for deductible and nondeductible contributions, many financial experts recommend that you do so. The chief reason? Tax planning.
- Charitable GivingUsing Trusts to Maximize Charitable Giving While Minimizing Estate Taxes - Fee-Only Financial Planner in Boston and Cambridge, MA: Fisher Financial Strategies
- Estate Taxes
- Roth IRAIf you maintain a traditional IRA, a 401(k), 403(b), or 457 plan, in most cases, you must begin required minimum distributions (RMDs) after age 70½. The amount of the annual distribution is determined by your life expectancy and, potentially, the life expectancy of a beneficiary. RMDs don't apply to Roth IRAs.
- Tax DeductionsWith tax deduction phaseouts coming and going, some taxpayers may find it difficult to make full use of their itemized deductions. These taxpayers should consider making the best possible use of their deductions through careful tax planning.
- Income TaxShould you convert all or a portion of your traditional IRA assets to a Roth account? The answer may depend on the amount of time you plan to leave the assets invested, your estate planning strategies, and your willingness to pay the federal income tax bill that a conversion is likely to trigger.
- Capital Gains TaxesAlso remember that while a CLT allows assets to pass to heirs with no federal estate taxes, a CLT is not a tax-free entity. Any income the trust generates in excess of the amount paid to charity is still taxable. And the sale of appreciated assets held within the trust may trigger capital gains taxes.
- Investment ManagementOne such strategy that uses fixed-income investments is bond laddering. A bond ladder is a portfolio of bonds with maturity dates that are evenly staggered so that a constant proportion of the bonds can potentially be redeemed at par value each year. As a portfolio management strategy, bond laddering may help you maintain a relatively consistent stream of income while managing your exposure to risk.
- Mutual FundsDo investors understand the impact of mutual fund fees on their investment returns? This study, reported by Knowledge@Wharton, suggests that many don't.
- Bonds
- Wealth ManagementBecause of the possibility of human or mechanical error by Wealth Management Systems Inc. or its sources, neither Wealth Management Systems Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall Wealth Management Systems Inc. be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content.
- Money Market FundsTo get the best rate on your liquid savings, look into putting part of this nest egg into money market funds. Money market funds invest in Treasury bills, short-term corporate loans, and other low-risk instruments that typically pay higher returns than savings accounts. These funds strive to maintain a stable $1 per share value, but unlike FDIC-insured bank accounts, can't guarantee they won't lose money.
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- Retirement PlanningThe retirement benefits you accrue under a defined benefit plan are based on a formula that takes into consideration many factors, including life expectancy, current and future earnings, and years of service with the company. Some defined benefit pension plan formulas may reduce pension benefits by a percentage of the amount of Social Security benefits you can expect to receive.
- AnnuitiesIn addition, many of today's annuities offer optional living benefits that may help an investor capitalize on the market's upside potential while protecting investment principal from market declines and/or providing minimum future income. Keep in mind, however, that riders vary widely, have restrictions, and that additional fees may apply. Your financial advisor can help you determine whether an annuity is appropriate for your situation.
- Long Term CareHowever, employee backlash could be significant, so it's important to explain that the changes are necessary to maintain the overall fiscal well-being of the company. You may also want to consider offering other benefits designed to make up for the implementation of a less-generous health insurance policy. For example, if reducing your contribution to health insurance premiums, you may want to consider enhancing long-term care and disability benefits to compensate.
- Asset ManagementYou may want to consider tapping taxable accounts first to maintain the tax benefits of your tax-deferred retirement accounts. If your expected dividends and interest payments from taxable accounts are not enough to meet your cash flow needs, you may want to consider liquidating certain assets. Selling losing positions in taxable accounts may allow you to offset current or future gains for tax purposes. Also, to maintain your target asset allocation, consider whether you should liquidate overweighted asset classes. Another potential strategy may be to consider withdrawing assets from tax-deferred accounts to which nondeductible contributions have been made, such as after-tax contributions to a 401(k) plan.
- Charitable Remainder TrustsThis article describes the key characteristics and potential benefits of two types of trusts — charitable lead trusts and charitable remainder trusts.
- Charitable Lead TrustsA CLT can be set up to pay either a fixed annuity or a unitrust amount to a charitable organization, which means that it can pay either a fixed dollar amount each year or a fixed percentage of the fair market value of the trust's assets. While there is no limit on the amount of time a CLT can remain in effect, it must be for either a predetermined number of years or until the death of the donor.
- College FundingChoosing a way to save for your child's education expenses may be your family's first college planning decision, but it certainly won't be the last. From making that first deposit, to selecting a college, to choosing a course of study, you and your child will be making choices that can have a financial impact for years to come.