August 2014

21 Aug

Taking Taxes Into Account When Saving and Investing

It isn't always top of mind, but it should be.

How many of us save and invest with an eye on tax implications? Not that many of us, according to a recent survey from Russell Investments (the global asset manager overseeing the Russell 2000). In the opening quarter of 2014, Russell polled financial services professionals and asked them how many of their clients had inquired about tax-sensitive investment strategies. Just 35% of the polled financial professionals reported clients wanting information about strategies, and just 18% said their clients proactively wanted to discuss the matter.1

21 Aug

What Beneficiaries Need To Know

What do you do when an account owner passes away?

If your loved ones have invested, saved or insured themselves to any degree, you may be named as a beneficiary to one or more of their accounts, policies or assets in the event of their deaths. While we all hope "that day" never comes, we do need to know what to do financially if and when it does.

Legally, just who is a beneficiary? IRAs, annuities, life insurance policies and qualified retirement plans such as 401(k)s and 403(b)s are set up so that the accounts, policies or assets are payable or transferrable on the death of the owner to a beneficiary, usually an individual named on a contractual document that is filled out when the account or policy is first created.

21 Aug

Less Protection for Inherited IRAs

They are no longer exempt from creditors and bankruptcy proceedings.

A Scotus ruling raises eyebrows. On June 12, 2014, the Supreme Court ruled 9-0 that assets held within inherited IRAs by nonspousal beneficiaries do not legally constitute "retirement funds." Therefore, those assets are not protected from creditors under federal bankruptcy statutes.1,2

This opinion may have you scratching your head. "IRA" stands for individual retirement account, right? So how could IRA assets fail to qualify as retirement assets?

14 Aug

Give Yourself a Tax Cut: Contribute to a 401(k)

If you're like most people, you'd probably welcome the opportunity to decrease your taxes andincrease the amount of your earnings you get to keep. Accomplishing that may be easier than you realize. You just need to start contributing more to your 401(k). That's because the more money you can set aside in a 401(k), the more you get to deduct when you file your income taxes. We explain how this could work in practice below.