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For clients, equally important to saving money is learning how to withdraw money in retirement at a sustainable rate. This topic is important not only for retirees, but also for pre-retirees. In the attached chart, a hypothetical portfolio illustrates how long assets may last given different withdrawal rate scenarios. Some clients may discover they are
When it comes time to withdraw money in retirement, many investors choose to take money from accounts in the following order: taxable, tax deferred, and tax free. The motivation behind this conventional wisdom is often to preserve tax-deferred assets for as long as possible. However, depending on an individual’s tax situation, the conventional wisdom may
As taxpayers begin collecting their W-2s, 1099s and other tax forms, many are not aware of new provisions benefiting itemized deductions and personal exemptions. Prior to 2010, the value of claiming deductions and exemptions on the tax return diminished (or “phased out”) at higher income levels. For example, see phase-out limits from 2009: Personal exemptions
On February 14, 2011, President Obama unveiled the U.S federal government budget for fiscal year 2012, which includes steps to reduce the federal budget deficit by over $1 trillion over the next ten years. At roughly 2% lower than last year’s budget, it calls for the freezing of discretionary spending (outside of the Department of
The federal tax law extended today’s historically low tax rates through 2012 and created potential savings opportunities for taxpayers. Clients may want to explore ways of capitalizing on the tax rates now before future changes occur. Higher taxes are already on the horizon, including a new 3.8% Medicare surtax on investment income that becomes effective
Since the estate tax was technically repealed at the start of 2010 as a result of a sunset provision within EGTRRA, planning has been challenging due to uncertainty around potential legislative changes that would impose different rules. The signing of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. into law in
The start of a new year can be a good time to discuss portfolio rebalancing with your clients. Given the volatility in both the equity and bond markets during 2010, a portfolio may have experienced shifts in asset allocation. Discussing rebalancing gives your clients an opportunity to make changes and get back on track with
Several tax credits for investors saving for college were extended for two years in the passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The contribution limit for the Coverdell Education Savings Account program, which was scheduled to revert to $500, was maintained at $2,000 and extended through 2012. Depending
It’s not too late to discuss charitable giving strategies with your clients. The recent passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 also extended a program that allows retirees to take tax-free withdrawals from IRAs and to take a 2010 deduction for donations made by the end of January
The recent signing into law of H.R. 4853 — the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 — represents the most significant tax law in a decade. At a cost of $858 billion, it represents a tremendous investment at a time when the nation’s economic recovery is fragile. In addition to