Mandatory IRA Withdrawals May Create Unforeseen Problems for Retirees

2016 is a big year for individual retirement accounts (IRA). Why? Because the first wave of U.S. baby boomers are turning 70 this year. That means they can begin taking mandatory withdrawals from their IRAs. Laura Sanders wrote a fantastic article for the Wall Street Journal about the complexities and tricky issues associated with mandatory withdrawals. She highlighted these challenges by following the withdrawal adventures of Natalie Choate, a Harvard Law graduate who literally wrote a book about IRAs and estate planning. Ms. Choate became eligible for her first mandatory withdrawal from her IRA and realized it was not as simple as she was anticipating. “Now I have sympathy for average people facing these decisions,” she says. We recommend you discuss your options with your financial advisor and ensure you have the best plan in place to meet your retirement goals. However, here are some important questions that you and your loved ones...

03 March

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The Tax and Retirement Advantages of Employee Stock Ownership Plans for Small Business Owners

Posted by Bobby Feisee

in Bobby's Blog

If you’re a small business owner, you may want to consider implementing an employee stock ownership plan (a.k.a. ESOP). An ESOP can provide an incentive for employees while reducing your corporate tax burden, according to thinkadvisor.com. Another distinct advantage is the potential bridge ESOPs create for you to retire comfortably. How? Well, you can gradually sell your business to your employees while, in the process, defer recognition of any gain you make on the sale many years down the road. This is what’s known as a Section 1042 transaction and can allow you to defer taxable gain on the sale of your business indefinitely. But before we get into those benefits, let’s review some basics about ESOPs. They were pretty much unknown until 1974. At that point, they started to grow and about 11,000 companies now have these plans, covering over 13 million employees. An ESOP is basically a trust created...

20 February

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Generation X Missing the Financial Boat by Not Working with an Advisor

Posted by Bobby Feisee

in Bobby's Blog

A new study published by the Insured Retirement Institute revealed from surprising, and disturbing, statistics. Over 75 percent of individuals categorized as “Generation X” (i.e. people with birth dates from the early 1960s to the early 1980s) do not consult with financial advisors to help them plan for retirement. Even more shocking is the fact that this is a sharp increase of 63 percent back in 2012. The study delved into different income levels and found that 65 percent of people in Generation X who make $75,000 or more in income, do not have a financial advisor. This is a big problem since many Gen Xers are missing the proverbial financial boat. For example, the study showed that people who do have a relationship with a financial advisor save more money and are much better prepared for retirement. In fact, in average, people who worked with a financial advisor had $90,400 in...