Thought Leadership Resource Center
In most aspects of life, we sometimes hesitate to face challenges upfront, preferring to defer them to a later time. This procrastination is especially common when it comes to paying taxes on retirement distributions, affecting not just 401(k)s and IRAs but also the beneficiaries of these accounts.
Read MoreLast month, the Social Security Trustees issued their annual report, forecasting the financial future of the program for the next 75 years. Despite its expansion, the latest projections indicate that Social Security is approaching insolvency, emphasizing the urgent need for reform. This month’s retirement insights will examine the asset reserves, revenue flows, benefits paid, and the workforce supporting the program.
Read MoreMost Individual Retirement Accounts (IRAs) inherited from non-spouses post January 1, 2020 must be fully distributed within 10 years of receiving. During those 10 years, the beneficiary is required to take a distribution every year, and cannot simply take a lump sum in year 10.
Read MoreMedicare IRMAA is an income-based surcharge that couples or individuals must pay on top of their existing monthly premiums for Medicare Part B (coverage for preventive care, doctor visits and outpatient care) and Medicare Part D (prescription drug coverage). Certain individuals and couples with higher incomes may be subject to an IRMAA surcharge.
Read MoreFinancial exploitation and elder abuse represent challenges that many seniors confront, posing grave threats to their financial stability and overall well-being. As these schemes become greater in both frequency and complexity, it is important to be aware of three prevalent forms of financial exploitation: telephone scams, home improvement scams, and sadly, family member exploitation. Each requires nuanced understanding and proactive countermeasures.
Read MoreAt the end of every year, advisors receive many questions on how to complete/maximize retirement contributions. The following article will serve as a basic guide for year-end contributions and some of the rules associated with them.
Read MoreAs I wrote in a 2019 post, the potential impact of future taxes is often an important consideration for retirees when choosing to move to another state. Besides moving to an area with a warmer climate or closer to family and friends, the goal of minimizing expenses, including taxes, is often at the top of the priority list.
Read MoreBack in March, we published a list of legislative changes the Secure Act 2.0 brought. The IRS has since released some clarifications that will impact savers.
Read MoreDeciding on your retirement date can be one of the most important decisions in your lifetime. Here are three steps to take the guesswork out of choosing a date that is right for you and your retirement plan.
Read MoreMaking informed decisions about when to claim Social Security benefits is crucial for couples to maximize their retirement income. The optimal claiming strategy depends on various factors, including each spouse's earned benefit, ages, and their ability to invest excess Social Security income. This case study explores three scenarios to show how and when the math changes on benefit maximization.
Read MoreTypically, the content in our monthly thought leadership package is reserved for original, in house written material from members of our team. There are, however, moments of exception when we come accross a piece that is just so good that we feel is worthy and worthwhile to include in this client communication. Recently, JPMorgan released their annual Guide to Retirement report. This is a piece, similar to their Guide to Markets, that we find very useful each year. This week I reviewed the 52 page report and have summarized it with their 4 major themes for 2023.
Read MoreRoth IRA’s can be one of the more misunderstood wealth accumulation tools. Traditionally, Roth IRA’s are thought of as advantageous for those earlier in their career who are earlier in their career earnings curve. However, Roth IRAs can also be used for High Net Worth individuals as a longer term wealth accumulation tool. This article will cover how individuals can utilize the account and back door Roth contributions to maximize tax free earnings.
Read More“Good things come to those who wait.” “Time is money.” “Patience is a virtue.” All famous adages that you probably didn’t ever associate with one of the main discussion points of retirement, Social Security.
Read MoreWhile 2022 has been a down year for the stock and bond markets, there are some actions that long-term investors can take now in order to take advantage of the market dip from an overall financial planning standpoint. For example, although it might not make sense for everybody, some investors may benefit from completing a Roth IRA conversion before the end of the year.
Read MoreA bipartisan follow up to the Secure Act, the largest retirement saving legislation update since 2006 which was signed into law in December of 2019, passed in the US House of Representatives on March 29th. Dubbed the Secure Act 2.0, this new legislation builds off many of the changes brought by its predecessor in an effort to improve retirement savings rates
Read MoreWhen it comes to planning for retirement, the length of the planning horizon (i.e., life expectancy) stands apart from the many other assumptions required in the modeling process. Life expectancy is defined as the average number of years a person can expect to live at a given age. The specific issue for planning is something called longevity risk, or the possibility an individual will live to such an advanced age that they will deplete their retirement savings and be forced to rely solely on Social Security and Medicare for their expenses.
Read MoreFor close to ten years, tax law rulings surrounding the Qualified Charitable Distribution (QCD) from an Individual Retirement Arrangement (IRA) to a charitable entity have flip-flopped as the tax code has grown and been modified over the years. But in 2015, the Protecting Americans from Tax Hikes (PATH) Act finally made the rules surrounding the QCD permanent, allowing individuals to give charitably while also minimizing income taxes from the Required Minimum Distribution (RMD).
Read MoreSocial Security used to have a couple of different avenues for maximizing benefits. Strategies like restricted applications and file suspend used to allow for families to obtain additional income above what each taxpayer was entitled to on an individual basis. However, in 2015 Congress passed the “Bipartisan Budget Act of 2015” which closed these “enhanced strategies” as a way to preserve the federal government from paying out more than what actuaries had predicted… or so we thought.
Read MoreIn December of 2019 in a white paper titled “Are you considering relocating when you retire? Tax issues to consider”, I provided an update on various tax differences between states to consider prior to relocating during retirement.
The popularity of relocating has grown, in particular over the past several months, and you have likely read stories about the rising interest of individuals and families moving to different areas of the United States. The pandemic has caused many to reevaluate where they want to reside, whether that be for cost-of-living (including a lower future tax burden), personal health and well-being, or closer proximity to family and friends.
Read MoreRetirement savers were given the opportunity to forgo Required Minimum Distributions (RMD) for 2020 as part of the CARES Act, which was passed into law in March of 2020 in response to the COVID-19 pandemic. This RMD relief applies to all types of IRAs (except Roth IRAs which do not require RMDs in the first place), 401(k), 403(b) and even includes inherited accounts. This benefit allows account holders to reduce their taxable income for calendar year 2020 and to preserve the tax deferred growth offered by these accounts for a bit longer. Of course, those that need the funds for living expenses are permitted to still take distributions as normal.
Read MoreDisclosures:
THIS COMMENTARY HAS BEEN PREPARED BY CLEARWATER CAPITAL PARTNERS. THE OPINIONS VOICED IN THIS MATERIAL ARE FOR GENERAL INFORMATION ONLY AND ARE NOT INTENDED TO PROVIDE OR BE CONSTRUED AS PROVIDING LEGAL, ACCOUNTING, OR SPECIFIC INVESTMENT ADVICE OR RECOMMENDATIONS FOR ANY INDIVIDUAL. ALL ECONOMIC DATA IS DERIVED FROM PUBLIC SOURCES BELIEVED TO BE RELIABLE. TO DETERMINE WHICH INVESTMENTS MAY BE APPROPRIATE FOR YOU, PLEASE CONSULT WITH US PRIOR TO INVESTING. INVESTING INVOLVES RISK WHICH MAY INCLUDE LOSS OF PRINCIPAL. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities, insurance products, or to adopt any investment strategy. The opinions expressed are as of the date of writing and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Clearwater Capital Partners to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Investment involves risks. International investing involves additional risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. S&P 500 is a registered trademark of Standard & Poor’s Financial Services, a division of S&P Global (“S&P”) DOW JONES, DJ, DJIA and DOW JONES INDUSTRIAL AVERAGE are registered trademarks of Dow Jones Trademark Holdings (“Dow Jones”). The two main risks related to fixed-income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments.
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