4 Ways to help yourself settle debts during retirement

Posted on June 25, 2010 by robin

Are you already retired, or retirement is around the corner? Do you have your retirement money planned or are you sure that you have to go for debt settlements during retirement? If you are in debt and are confused about how to settle your debts during retirement, then have a look at the ways that will help you pay off debts and secure your financial future.

1. Settle debts from the retirement fund: You must be having a stable retirement savings plan which is necessary to secure your financial life post retirement. Common retiree income sources are pension, personal savings and sometimes even part time work. Take help of the money accumulated in these funds for debt settlement.

2. IRAs: Individual Retirement Account (IRA) is also a retirement savings account which can be used for paying off debts. In an IRA, you can deposit a stated amount each year. The money in the account grows with time and you need not pay any taxes until you withdraw it. You can withdraw from an IRA account prior to age 59 and a half.

3. 401k Retirement plan: The employer sponsors this retirement plan where a certain percentage of the employee’s income is withheld by the employer and deposited in the company’s plan. The employer may also choose to contribute a matching amount and save it in the employer’s 401k account. You can withdraw this money anytime and pay your debt settlement company.

4. Income from work: Most retirees are getting engaged in some work or the other to remain busy as well as to earn money to support themselves. If you are in serious debt and need immediate help, then look for some work to earn money.

Seek help of such options mentioned above and utilize these funds to make the debt settlement attempt a success.

Investment Plan Reorganized: Job Change

Posted on April 28, 2010 by Michael Cohen

Investment Plan Reorganized

Many Americans now tend to rethink on their retirement strategies as an impact of the current economic and market conditions.

Some Basic Decisions

One key component of the retirement strategy is the employer-sponsored plan. Usually there are three options applicable during the job transition. Those include To Take a Lump sum Distribution, To Leave your assets in the employer-sponsored plan or to move your assets into a Rollover IRA.

With the first option, the assets in your plan are distributed directly to you in a lump sum, which provides you with immediate access to your funds. You will be receiving the distribution directly, the plan administrator must withhold up to 20 percent of the value of the distribution for federal income tax purposes.

In the Status quo option, you can decide to do nothing, leaving your assets in your former employer’s plan.

Some of the outcomes of this plan include the following:

Establishing a Rollover IRA will simultaneously addresses the issues of taxation, flexibility and control, and may hold significant benefits for you.

If your distribution is transferred directly to a custodian, rather than to you, the Rollover IRA eliminates the withholding requirement and penalties that may result from a lump sum distribution.

You may gain access to a wider range of investment options and more retirement planning and distribution flexibility.

You can contact Suzie Moraco, a certified financial planner and financial adviser at Morgan Stanley Winter Haven.

Basics of What is a Roth IRA

Posted on March 10, 2010 by Michael Cohen

Basics of What is a Roth IRA

A Roth IRA is an individualized retirement account, which is more popularly referred to as IRA. It is permissible under the tax laws in the United States. The name of this retirement account came about from the person who sponsored it. This was the chief legislative, the late Senator William Roth from Delaware. The Roth IRA is different from the other traditional instruments of investments as it has a specific eligibility criteria attached to it along with filing status that is set into place by the Internal Revenue Service.

The main advantage of the Roth IRA is the ability to differ the tax structure. After the Roth IRA is set up one can manage it in such a way so as to gain maximum tax benefits from it. So, it is prudent to understand what is a Roth IRA.

The amount of money that a person can gain in one taxable year is less than the taxable compensation. If a married couple files for a Roth IRA, then each of them can contribute that particular sum. The Roth IRA is calculated based on the person’s age, which falls under two main brackets; under the age of 49 and above the age of 50.

Roth IRA brings several benefits to the person who contributes to this scheme. It is a tax deferred savings scheme where you are not taxed when you withdraw from it. Also, there are some regulations such as the account should have been opened for at least five years before the person withdrew any amount from it. Therefore, the Roth IRA is a good way to make money by compounding returns on it. Continue reading →

Start a Roth IRA Now

Posted on March 5, 2010 by Michael Cohen

Start a Roth IRA Now

If you have read about all the possible benefits of the Roth IRA and have decided to start a Roth IRA then there are several places wherein you can open a Roth IRA. There are many banks and credit unions that offer to have a Roth IRA account. Although, there is a catch, as they may only allow the money in this account to be used for certificates of deposit or for investment in the money market accounts. There are big companies that run mutual funds such as Vanguard but you will need a minimum investment of at least $1000. There are discount brokers that allow you to open an account too. This does not require a bare minimum but the fees that they charge could be higher.

If you are convinced about the Roth IRA and the need to save for retirement then there is no better time than now. The sooner you open the account, the better it will be for you. You will be able to increase the amount of funds available to you upon retirement.

The best individual retirement plan that you could ever consider is the Roth IRA. It provides one with the best of opportunity to allow their money to grow and has tax free benefits. It is the simplest of investment options and in the long run the most effective too with the best possible outcome for the investor. Also, it has the most secure and protective features.

What most people prefer in the Roth IRA is that there is no need to pay the income tax before they enter the investment scheme and at the time of withdrawing there is no tax to be paid. This gives them the benefit of knowing that they will not be burdened with having to pay tax during the retirement phase. Therefore, when you invest in the Roth IRA you give your principal to grow tax-free and there are no taxes for you to grapple with during withdrawal.

The Roth IRA is the simplest schemes that you will ever find and it does not require you to report to the IRS. The Roth IRA requires you to pay tax up front so that you are not faced with any obligations or concerns at a later date. If the taxes were to increase in the future this will not affect you. Hence, it is a great idea to start a Roth IRA now and for 2010 Roth IRA Contribution and Deduction Limits, Go Here.

2010 IRA Contribution and Deduction Limits

Posted on February 2, 2010 by Michael Cohen

2010 Combined Traditional and Roth IRA Contribution Limits

2010 ira contribution limits

According to the Internal Revenue Service, in 2010 many limits have been updated. However with the poor performance of so many IRA’s the question may be why aren’t you invested in gold in your IRA? But I digress. Below you will find the official limits for both traditional and Roth IRA’s for 2010.

If you are under 50 years of age at the end of 2010: The maximum contribution that you can make to a traditional or Roth IRA is the smaller of $5,000 or the amount of your taxable compensation for 2010. This limit can be split between a traditional and a Roth IRA but the combined limit is $5,000. The maximum contribution to a Roth IRA and the maximum deductible contribution to a traditional IRA may be reduced depending upon your modified adjusted gross income (modified AGI).

If you are 50 years of age or older before 2011: The maximum contribution that can be made to a traditional or Roth IRA is the smaller of $6,000 or the amount of your taxable compensation for 2010. This limit can be split between a traditional and a Roth IRA but the combined limit is $6,000. The maximum contribution to a Roth IRA and the maximum deductible contribution to a traditional IRA may be reduced depending upon your modified AGI.

Looking for 2009 IRa Limits?

How to Add Gold To Your IRA

Posted on February 2, 2010 by Michael Cohen

How to Add Gold To Your IRA

add gold to your Individual Retirement account

With the economy still attempting a half hearted recovery from what is perhaps the worst fall since the depression if not greater than the depression, gold and silver have been on a pace of growth not seen since the days of the conquistadors. Everywhere one looks its easy to find gold commercials on television and rightfully so. But if the prospect of owning physical gold in your home is one that you prefer to avoid consider adding gold and silver to your IRA.

Adding Gold and Silver to your IRA is simple.

Thanks to President Clinton’s 1997 Taxpayer Relief Act, US citizens can now enjoy the benefits of owning gold and silver in their retirement accounts. The Act specifically states:

Starting in 1998, IRA account holders can invest in metals such as gold, silver, platinum and palladium. Previously, such IRA investments were banned.

The law also created the very popular Roth Individual Retirement Account. Limits and age restrictions were also listed in the language:

The tax law creates a new type of individual retirement account called a Roth IRA (also called IRA Plus), which allows nondeductible contributions of up to $2,000 a year. The maximum contribution allowed to a Roth IRA is phased out for individuals with Adjusted Gross Income between $95,000 and $110,000 ($150,000 and $160,000 for joint filers). Earnings within the account accumulate tax-free, and withdrawals are tax-free after five years if the money is used for retirement (that is, the distribution occurs after age 59-1/2) or for a first-time home purchase ($10,000 lifetime limit). The distribution can also be tax-free if attributable to the disability or death of the individual. No more than $2,000 per year may be contributed to the combined IRAs of an individual.

Adding Gold to your IRA is a simple as locating a precious metals broker. An individual is not allowed to place the metals into an account for their benefit, which is why a broker is needed. Various brokers have various costs associated to do your homework.

Additionally you will need to know what type of gold or silver you want to place in your account based on your desired growth outcomes. Here is a partial list of coins that are investment grade and allowed to go into your account.

Generally these IRA allowable coins fall into
two categories:
1. Coins specifically listed in the Internal
Revenue Code and minted by the US. These
include:
a. American Gold Eagles
Interestingly, these US minted coins are not
of sufficient purity to classify them as bullion.
They are only approximately 91% pure gold.
The other material in the coin off sets the
softness of the gold and makes the coin more
durable. Gold Eagles arrive in one of 4 forms:
1/10, ¼, ½ and 1 full ounce coins.
b. American Gold Buffalo coins.
First minted in 2006, they are of bullion fineness,
.9999 fine (known as four nines). Note
that the specially processed proof version of
this coin is NOT acceptable, due to the treatment
raising the value of the coin beyond the
value of the metal.
c. American Silver Eagles.
Silver Eagles land in only one form: 1 full ounce
coin. They are of bullion fineness, but are only
.999 (three nines) due to the addition of a
touch of copper for added durability.
d. American Platinum Eagles.
The rarest of birds, the Platinum Eagles are
minted in 4 forms: 1/10, ¼, ½ and 1 ounce
coins. These are of .9995 fineness.
Any of the above coins which have been graded
for condition by certification organizations
and placed in tamper-proof plastic containers
called “slabs”, will generally fall into the collectible
category and thus are not allowed for IRAs.
If you’re not sure about this, ask your custodian
or metals dealer. All US minted coins have
nominal face values, but the true value is based
on the value of the metal in the coin.

Taking possession of your IRA gold is qualified as a distribution. Under that circumstance, the IRS requires that a possible penalty and the appropriate taxes be paid. To avoid the penalty and taxes you want to have your IRA gold stored at a depository through the gold IRA custodian we provide.

Investors that want to take advantage of a gold IRA use an already designated specialized precious metals depository for the storage of gold. The depository offers a secure safekeeping service and provides easy access for the physical delivery of your gold.

The last step is to find a reputable Custodian. There are several companies out there, I would recommend that you avoid Sterling Trust, as they are very expensive.

Gold IRA’s have tauted great returns since their inception. Consider diversifying a portion of your retirement account into gold and silver.

IRA Conversion

Posted on July 1, 2009 by Michael Cohen

IRA Conversion

I want to convert my IRAs to Roth IRAs in 2009. Can you spread the taxes over two years?

A step to take advantage of the stock market’s dive is to move assets from a traditional individual retirement account to a Roth IRA. When we Roll over traditional IRA assets to a Roth IRA, we have to pay income taxes upfront on the account’s value.

Ed Slott an IRA consultant from Rockville Centre says, “income-tax rates are relatively low at the moment”.

A few more advantages with regard to this are: With a Roth, there are generally no taxes on withdrawals or future earnings, unlike with traditional IRAs. If you hope to leave an inheritance, it is more advantageous for your heirs to receive a Roth than a traditional IRA, because they would never have to pay tax on Roth withdrawals.

Legislation approved by Congress earlier this June suspends retirement-account distribution requirements for 2009. Mr. Slott says, “we can roll over assets from a traditional IRA to a Roth next year without first having to take a mandatory distribution”

In simpler terms it means the taxes you pay on your IRA assets’ presumably beaten-down value would all be helping you get those savings into a Roth.

To be eligible to convert traditional IRA assets to a Roth, your modified adjusted gross income must be no more than $100,000 a year, either for an individual or a married couple filing jointly.

The mandatory IRA distribution wouldn’t count against that limit, and neither would the assets you convert to a Roth. From 2010 there would be no income limits for Roth conversions.

There are chances for tax rates to increase in next few years. Mr. Slott says, “Paying the tax now removes the uncertainty of what future tax rates might be”. Full Story…

Bernie Madoff Identification

Posted on July 1, 2009 by Michael Cohen

Bernie Madoff Identification

Tony Guernsey has been in the wealth management business for four decades. Some of the questions asked by his clients on how they would know what they own.

Mr. Guernsey, head of national wealth management at Wilmington Trust says, “I understand why investors are asking the question, but it still unnerves me, “They got their statements from Madoff, and now they get their statement from XYZ Corporation.

Dan Rauchle, president of Wells Fargo Alternative Asset Management says, “It used to be that if you owned I.B.M., you could pull the certificate out of your sock drawer”. Mr. Madoff, was not charged just after an investigation by the Securities and Exchange Commission, before his firm collapsed. Some considerations include:

Cut Through The Clutter: The Financial disclosure rules compel money managers to send out statements. The frequent occurrence of the statements and trade confirmations cause the investors to fail in understanding what they own. Many wealth management firms have developed their own systems to track and present client assets to lesser the force.

Mary Duke, head of global wealth solutions for the Americas at HSBC Private Bank says, “Our reporting is only as good as the data we receive”. No consolidation program is foolproof. Aaron Gurwitz, head of global investment strategy at Barclays Wealth says, “If a complex instrument is completely transparent, you’re still not going to be able to figure it out”.

One simple example is municipal bonds, which have been attracting investor interest because they are perceived as secure. The reason is that there is no designated market-maker for municipal bonds.

Six Rules for Hedge Funds: Full information is key to investing in hedge funds now. Mr. Rauchle says, “He believed that a simple six-step plan could benefit investors and keep hedge fund managers from having to submit to excessive government regulation”.

Some of the straightforward points are: Each fund larger than $100 million needs to register with the S.E.C. and have an independent custodian who holds the money, an independent administrator who prices the securities and an independent auditor.

Mr. Rauchle’s last two proposals may be backed by some of the managers. He wants hedge funds to reveal how they price securities and to submit to an independent, quarterly analysis of their portfolios.

Kelly Campbell,an adviser in Fairfax, VA., suggests on calling the firm that actually holds your money to check on the manager. Most independent advisers use a separate custodial firm to hold their funds. And this type of checking is not harder.

Dean Barber, an adviser in Kansas City says, “Just about every piece of information an adviser could get a client could get, too”.

Mike Saghy, director of investments at PNC Wealth Management, says, “To prevent this concern he steers clients with at least $1 million into separately managed accounts. “People are showing some angst over mutual fund holdings,” he said. “The want to know that they own a muni bond from the state of Pennsylvania and not a portfolio of muni bonds.”

One way to rebuild trust is by insisting on openness. Full Story…

Reverse Mortgage Use

Posted on May 21, 2009 by Michael Cohen

Reverse Mortgage Use

Reverse Mortgage Use
Home Equity Conversion Mortgage Questions
The down payment required, verification of income or assets applicable or not, is it necessary to sell the current house first, any possibilities of finding a condo in a retirement development in Southern California.

Monte Howard a director at Atlanta-based Generation Mortgage says the down payment on the new residence is based upon three factors. He explains them as:
1.   The youngest purchaser’s age i.e. the older the buyer, the smaller the down payment.
2.   Prevailing interest rates that states the lower the rate, the smaller the down payment on a reverse mortgage that comes with a fixed rate that never changes over the life of the loan. However, adjustable-rate reverse loans “have special rate factors” called “the expected rate” that is used in the down payment calculation.
3.   Value which signifies, Lenders use either the property’s sale price or appraised value, whichever is less, to determine the loan amount, which is then used to determine the down payment.

Howard further continues to say, “Neither a purchaser’s income nor credit score are factors in qualifying for a HECM. He also says that purchasers are not required to sell their current home prior to the closing of their reverse mortgage purchase, but need to occupy their new home within 60 days of closing. The Purchasers can hang on to their current home as a rental property provided they are capable of meeting the financial obligations of maintaining both homes.

Howard later tells that any condo that meets FHA requirements can be purchased through the HECM reverse mortgage program. The Wells Fargo Reverse Mortgage is especially well suited for condos as well.

Eric Bachman, CEO at Golden Gateway Financial, Oakland, says seniors who want to remain in their homes use most HECMs. They work best when you own your home sans mortgage, or at least almost free and clear.

Bachman says “”If you still hold a forward mortgage on your property, a reverse mortgage can help eliminate your remaining debt while potentially creating additional funds that can be drawn as a lump sum or a monthly payment over time,”.

Golden Gateway’s Web site, www.GoldenGateway.com/reverse/compare-loans.do gives information on how a reverse mortgage stacks up against other loans. Full Story…

Get the Most from Retirement Planning

Posted on May 21, 2009 by Michael Cohen

Get the Most from Retirement Planning

Get the Most from Retirement Planning
The Present economy offers many opportunities for people planning their retirement in spite of the retirement accounts have taken a defeat in the stock market, says Ethan Ewing, president of Bills.com.

There was a crash down in the stock market during 2008 which resulted in the severe knock down if retirement investments. The Employee Benefit Research Institute (EBRI), estimates that the average 401(k) account balance fell nearly 20 percent for those closest to retirement, workers over age 55.

Ewing commented, “For those approaching retirement, the drop in the stock market has indeed put a crimp in their plans,”

Ewing further says, some of the suggestions on what to do next to salvage your retirement could be as follows:
1.   Take credit for retirement contributions.
2.   Social Security recipients get $250 credit.
3.   Watch for the Make Work Pay Credit.
4.   Taking a break in the Taxes due to the influence of reduced interest rates.
5.   Ewing suggests “If you are still paying a home mortgage, consider refinancing while you have income from work, especially if you can shorten your payment term to 15 years or even seven years,”
6.   Home prices have dropped along with interest rates, so it is the best time to buy one.
7.   Get mortgage help through www.makinghomeaffordable.gov.
8.   Ewing says, “If you own your home outright, consider looking into a reverse or home equity conversion mortgage (HECM) now or in the future,” He also adds a few points to it telling “Although our current economy makes for challenging retirement planning, it has brought several benefits for individuals and families,”

About Bills.com (www.bills.com)
Bills.com is a free one-stop portal through which consumers can educate themselves on the complex personal finance issues and comparison shop for products and services including credit cards, debt relief assistance, insurance, mortgages and other loans. It has been providing services to more than 50,000 customers nationwide since 2002. Full Story…

Learn About Retirement Planning – Newport Review

Retirement Planning and Financial Planning Today

4 Ways to help yourself settle debts during retirement

Investment Plan Reorganized: Job Change

Basics of What is a Roth IRA

Start a Roth IRA Now

2010 IRA Contribution and Deduction Limits

How to Add Gold To Your IRA

IRA Conversion

Bernie Madoff Identification

Reverse Mortgage Use

Get the Most from Retirement Planning