Financial Matters

Tips and news from the financial experts at Attentive Investment Managers.
May
23

401(k) Options After Separation from Service or In Retirement

401k-options

When you have a job change or are facing retirement there are a number of decisions that need to be made. One of the more significant ones is what to do with your 401(k). The choice may seem straight-forward but it is anything but. When making this decision it is critical to weigh in all the factors to your decision.

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Apr
02

In-Service Withdrawals

withdrawal

Many believe that their money is locked in when you are a participant in a 401(k) or profit sharing plan through an employer where you are a participating and current employee. However, certain qualifying events allow employees to access their vested balance to either withdraw and/or roll over money from those accounts and still continue to contribute.

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Aug
28

Designating Beneficiaries & Owning an Inherited Retirement Account

retirement-beneficiary

What happens to your Retirement account if you pass away? Retirement accounts offer an advantage in the way they can be passed to your beneficiaries without a costly Trust or extensive Probate of your estate. A beneficiary designation allows you to allocate your hard earned savings to your loved ones in any manner you choose. But, there are pitfalls that should be avoided when designating beneficiaries.

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Dec
04

’Tis the Season

busy-season

The period between Thanksgiving and the end-of-year holiday season would seem like a sleepy time for financial planners, but in fact it is anything but. You might be surprised at how much activity takes place on behalf of you and your investments in the final month of the year.

For instance? Even though this has been a good year in the markets, not all investments will have gained value. This is the last opportunity to harvest any losses we find in taxable accounts, by selling investments that have gone down and “booking” the loss. Then we can look for investments that have gained value, sell some of those to offset the losses, and thereby save capital gains taxes in the future. Up to $3,000 of ordinary income can be offset by investment losses as well.

This is also the time of year when mutual fund companies post, in advance, the amount of ordinary income and capital gain distributions they will make to their shareholders. Since the value of the shares drops by the amount that is distributed, this would seem like a non-event performance-wise. But in fact some mutual funds are poised to make 20% or even 30% distributions, and this cash is immediately taxable, unlike gains in the share values, which are only realized when you decide to sell. By selling funds before the distributions, and buying them back later, we can reduce your tax bill this year.

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Jun
12

Tax Reduction Strategies

tax-cut

​1. Pay Yourself First

The utilization of company retirement plans (401-k's and Simple IRA's) are the easiest way to build up tax advantaged assets for your retirement goals. Verify that you are contributing the amount required in order to maximize the employer's match. Above that amount it would usually be prudent to try to contribute the maximum amount possible in order to minimize your income tax liability.

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Oct
27

Year-End Tax Planning

Year-End Tax Planning
​A s we near the end of another year, it's a good time to see if there are any actions to implement in order to lower your tax bill next April. Portfolio review for capital losses A review of your non-retirement accounts in order to liquidate any holdings that would produce capital losses. If your losses exceed your capital gains, you can deduct up to $3,000 against ordinary income. Any excess losses above the amount are carried forward to future years. Establishing a 401(k) plan If you're self-employed you have a 12/31 dead-line to establish a 401(k) plan. Other types of retirement accounts (SEP-IRA's, traditional IRA's) can be set up after year end and still be timely funded in 2017 to produce a 2016 write-off. Roth Conversions If your income is down in the current year (hopefully it is not), a Roth Conversion can make lemonade out of lemons. Converting an IRA to Roth IRA may be something to consider. You should talk this over with your tax preparer ahead of ...
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Oct
18

IRA vs. 401(k): Which is the better option?

IRA vs. 401(k): Which is the better option?
We can all agree that saving for retirement is a must. The next question is where. Both an IRA and 401(k) can be excellent options for retirement savings. Both offer you tax-advantages, as you don't pay any taxes on the growth of your investments. Typically, costs associated with 401(k) management are higher than those of an IRA plan. However, with many new regulations in the financial industry today, participants are given protection from exorbitant fees. Within an IRA account your investment options can be almost never-ending but many times 401(k)'s limit your investment capabilities to a select offering or have restrictions on investment types. With 401(k)'s most employers offer an "employer match", usually ranging dollar for dollar anywhere from 2%-5% of your salary deferral (depending on the plan). If you elect to not participate you are essentially "leaving money on the table" and forgoing additional monies that are employment incentives – ...
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