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Make decisions when you are comfortable

What a traumatic time, mourning the loss of a loved one.  Soon to follow will be the financial decisions make, often creating even more stress. 

It is critical that your options be thoroughly explained to you, seek help from a trusted advisor before making any decisions.

 
You have a few options:

  • You can Rollover the balance of the funds to an IRA without incurring a tax liability. You may continue the tax deferral on future growth until you reach age 70½. At that time you are required to begin taking regular annual withdrawals.
  • Depending on your age, you may want to take the distribution as an income stream based on your life expectancy.
  • Keep the account in deceased spouse’s name, allowing for stretch in the future.

Take your time in making decisions, rarely is there a critical time crunch to get this done.  Year end tax planning would possibly be one of the reasons to move a little quicker, but don’t be pressured into making decisions until YOU are comfortable.

Invest in Balance

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Get to the cake anyway you can!

 

The title of this blog may draw in some of my friends seeking weird pictures, a stupid story or crazy memories of birthdays past. Sorry to report this is not such a post, but rather important years we need to remember as we age (I will tell stupid stories of birthday’s past, just not today, even though they be more interesting to some than the content below).  A few birthdays in your future will have big impact on your financial life.  Beginning at age 59, there are several key birthdays that can affect your tax situation, health-care eligibility, and retirement benefits. 

59½ — You can start taking penalty-free withdrawals from IRAs and qualified retirement plans, provided certain conditions are met. Ordinary income taxes generally apply to these distributions. (Withdrawals taken prior to age 59½ are subject to a 10% federal income tax penalty.) 

62 — You are eligible to start collecting Social Security benefits, although your benefit will be reduced by up to 30%. To receive full benefits, you must wait until “full retirement age,” which ranges from 65 to 67, depending on the year you were born. 

65 — You are eligible to enroll in Medicare. Medicare Part A Hospital Insurance benefits are automatic for those eligible for Social Security. Part B Medical Insurance ­ben­efits are voluntary and have a monthly premium. To obtain ­coverage at the ­earliest possible date, you should generally enroll about two to three months before turning 65.1 

70½ — You must start taking minimum distributions from most tax-deferred retirement plans or face a 50% penalty on the amount that should have been withdrawn. Annual required minimum distributions are calculated according to life expectancies determined by the federal government. 

1) Social Security Manual, The National Underwriter Company 

A story of one of my unforgettable birthdays will surely follow, in the meantime these milestones may help keep your financial world up to dat.

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