Withdrawal Strategies: IRAs, 401ks, and Required Minimum Distributions

rmd.jpgIt is important to have an understanding of how Required Minimum Distributions, often referred to as “RMDs”, fit into your overall financial plan.  This blog post will cover the basics, but it always makes sense to consult with a financial planner or CPA for personalized advice.





Your Money Personality

money_personality-213x213.jpgWe all have different intellectual and emotional motivators in money matters.  These can range from needing more security to wanting the prestige of wealth.  By understanding what drives your decisions, or creates your challenges, you can be more financially aware and healthy, and operate more effectively and in-tune with your money personality.

Susan Zimmerman, LMFT, ChFC has written extensively on discovering the “core drivers” that motivate people financially. Here are just a few of the money motivators that Susan has found to be powerful.



Social Security: Claim Early or Wait?


Research shows that a large number of Americans (about 50 percent) file for Social Security benefitsas soon as they are eligible – which means when they turn 62. While you’re entitled to do that — and there are many instances in which it makes perfect sense – delaying filing might actually be a better idea.

Health Savings Accounts: Do they make sense for me?

health-savings-account-213x213.jpgHSA plans have been available since 2004, with few changes.  Think of this as a medical IRA.  You own it and control it, and it follows you from employer to employer.  

There are three parts to a HSA.  The health insurance policy that is approved for HSA plans, a savings account that you can choose to fund or not, and an administrator for processing claims and deposits through the savings fund.



The 4 Percent Rule

spring_bike-300x200-213x200.jpgThe Wall Street Journal’s recent article titled 

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  • Time to Evaluate Discretionary 401(k) Contributions

    MFP_401k_Services-213x213.jpgThis is the time of year that small business owners are reviewing their options for making extra 401(k) contributions and evaluating discretionary matches or profit sharing contributions based on last year’s numbers.   They are to be congratulated for having a 401(k) plan, and for planning well enough to have the funds to consider going the “extra mile” with contributions.

    For the owner who wants to maximize the benefits of having a 401(k)/profit sharing plan, the first thing to fund is his own (and if applicable, a spouse’s) salary deferrals.  Maximizing one’s salary deferrals does not change the staff expense of having a 401(k) (for the purposes of this article a Safe Harbor plan is assumed), so deferrals are the most cost effective of contributions.

    The Need for Estate Planning

    estate_planning-213x213.jpgAn important part of financial planning is determining a plan for distributing one’s estate and getting it in writing.  Without a plan in place, an estate is divided based on state law, and every state has different laws for “intestate succession”.  While succession starts with close family members, percentages and priorities are not always what you might have assumed or preferred.

    Without estate documents in place, the person in charge of administering and distributing your estate would also be determined by state law, or chosen by the courts.

    Most people have some preferences about how they would like their life’s work and accumulations distributed or cared for, but many have avoided facing the sobering task of putting their preferences on paper.

    Rescued from the Fiscal Cliff

    fiscal_cliff-213x213.jpgThere are many details yet to be researched and hammered out, but taxpayers were “saved” from the fiscal cliff in the nick of time.

    Points in the new tax bill that will be of most interest to our clients:

    • The new 39.6% tax bracket starts at $450,000/400,000 (Married filing joint/single). People in that tax bracket will also see an increase in their qualifying dividends and capital gains rates.

    • Everyone else got a “permanent” extension of the Bush-era tax cuts, and their capital gains rate remains at 15%.

    • Everyone else: before you get too happy, the Alternative Minimum Tax (AMT) is subject to a flat 26% rate on income up to $175,000 and 28% thereafter.

    Mission Financial Planning Begins 2013 Insurance Reviews

    coins-213x213.jpgInsurance is used in financial planning to mitigate risk, replace lost income, restore assets or leave a legacy. Because of its importance, we schedule regular reviews for our clients’ policies, and keep an ear open for changes in our clients’ lives that would warrant a change in insurance.

    Dental practice owners need to have an insurance review their business interruption, office overhead, property, general and professional liability policies annually, especially when changes have occurred in size of staff, revenue, location or services;  changes that would warrant a personal insurance policy review would include marriage or divorce, change in dependents, significant change in net worth (debt / investments), change in earning potential, buying or selling a business or nearing retirement.

    While Christmas Memories are Fresh . . .

    christmas_memories-213x213.jpgChristmas may be over but, for many, the process of paying for it has just begun.

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