- Tax PlanningHad his father passed away in 2020, the son would be required to take distributions from the IRA and deplete it over a maximum of 10 years. He could withdraw equal or unequal amounts, or nothing in any year, so long as the IRA balance became zero in the year of the tenth anniversary of his father's death. The son should consider income tax planning and investment projections over the ten years since the IRA withdrawals are
- Charitable GivingYou have the option of donating your IRA Required Minimum Distribution (RMD) to your favorite charity as a qualified charitable distribution (QCD). The donation counts as your RMD but does not increase your adjusted gross income. This can be particularly helpful if you do not itemize your deductions and cannot deduct charitable contributions. In addition, keeping some or all of your RMD out of your adjusted gross income could help you avoid the Medicare high-income surcharge or reduce the amount of taxation on your Social Security benefits.
- Avoiding ProbateIf you have questions about avoiding probate, such as how to title your retirement accounts, or would like a referral to an estate planning professional, please click here to schedule a call with Eric Sigdestad.
- Roth IRAThe rules are very different for non-spousal beneficiaries (most commonly children of the deceased). With the passage of the SECURE Act of 2019, the IRS requires the inheritance (IRAs, Roth IRAs, 401(k)s, etc.) to be fully liquidated within 10 years from the original owner’s date of death. When coaching beneficiaries, we remind them of the most important provision of the law...
- Income TaxI've been telling this to my clients for years: Small withdrawals, small taxes. Big withdrawals, big taxes. However, there has been a significant adverse income tax consequence to a beneficiary who inherits an IRA after January 1, 2020—if that beneficiary is not your surviving spouse—because of the Setting Every Community Up for Retirement Enhancement (SECURE) Act.
- Financial PlanningDebt is a big piece of the financial planning puzzle, and we recommend tackling it in the years leading up to your retirement. The logic behind this is simple: the less money you must pay towards debt each month, the more you will have to support your lifestyle in retirement or keep invested to support your long-term goals. This raises the question, “Should I just take money out of my IRA to pay off my mortgage?” After all, your mortgage is likely the largest bill you pay each month and eliminating it can provide ample breathing room for the household budget.
- Retirement PlanningA Financial Planning Session is a valuable tool for understanding your current financial situation and ensuring you are on track to reach your financial goals. This one-hour session with a Certified Financial Planner is designed to give you a financial overview. We'll tackle key issues such as managing an inheritance, formulating a retirement strategy, evaluating an investment portfolio you have with another institution, or helping you prioritize your financial to-dos. It is a good idea to have a session at least once a year or more often if you experience a significant life change, such as getting married, having a child, or changing jobs. If you're uncertain where to start, this consultation may set you on the right path.
- Long Term CareSomething else to consider is that the IRS allows making educational contributions and providing for medical expenses tax-free. Providing that support and thus reducing your overall assets can play a role in Medicaid planning and possibly result in savings for any long-term care you may need.
- Asset ManagementWe aim to help you get the most out of your money. The team at SimpliFi has been guiding clients through markets and economies since 1998. We work with you to understand your financial objectives and help determine the most appropriate asset allocation plan. Depending on your situation, we choose a plan of action aligned with your goals.
- Living TrustsProbate is the legal procedure your estate goes through after death to start the distribution process to your heirs. It can be easier when you clearly state your final wishes in a will or living trust—particularly for your beneficiaries and an executor to oversee the process. It can become problematic when those documents do not exist.
- Charitable Remainder TrustsIRA Charitable Rollovers. If you are 70 1/2 or older, you may take a one-time withdrawal from your IRA of up to $50,000 to fund a charitable gift annuity or charitable remainder trust. This is a win-win since the funds don’t count as income but can count toward any RMD amount for the year.