How Tax Reform Could Impact Annuities

Uncertainty around the Trump administration’s tax reform efforts has made it difficult to predict the kinds of effects that could be in store for a wide variety of consumers, investors and employers. It’s especially hard for annuity experts to determine what might happen to retirement spending. If consumers have more money in their pockets because of lower taxes, they may invest it in long-term savings, while fewer savings incentives might inspire them to simply spend the money somewhere else. So how might this affect annuities? “No one has a clue,” says lawyer Mitchell Miller. The estate tax is one of the rules expected to change, but it’s unclear exactly what might happen. “We have no idea of the form estate tax reform will take: Outright elimination? Increased exemption? Will gift tax be maintained? How about the step-up in basis? What happens to annuities will depend mightily on the details.” Here …

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Make the Most of Your Pretax Deductions

Don’t set it and forget it when it comes to pretax contributions. The money that comes out of your paycheck before taxes can work for you, but only if you manage it properly. Many employees mismanage or underutilize the pretax deduction programs that employers offer, says Joe Holberg, founder and CEO of Holberg Financial, so it’s important to learn as much as you can about your options. “The first major step is to know what is available to you. This is when you read the nitty-gritty paperwork, reach out to the HR person and figure out what portions of the pretax opportunities make sense for you.” Follow this checklist to get the most out of your pretax deductions. HSAs You can get a health savings account only if you have a high-deductible health plan — but once you open the account, it sticks with you even if you change jobs. …

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The Basics of Retirement Plan Fees

You know that putting away money for retirement is important, but do you know what it really costs to manage it on your behalf? Retirement plan fees vary widely, and it’s not always easy to get your hands on hard numbers, which can be frustrating. “The most important thing is to not let your frustration with the lack of transparency when it comes to fees keep you from taking action,” says Desmond Henry, founder of Afflora Financial Life Planning. “At the end of day, employer-sponsored retirement plans are a great benefit that oftentimes includes employer match contributions to help you save for your retirement.” Here’s what you need to know. You May Find That Fees Come in Many Forms Just looking for “fees” on the information you get from the plan sponsor won’t tell you what you’re looking for, because they’re not always called “fees.” Fees may be paid by …

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Baby Boomers Boom Into Retirement – How This Impacts Your Investments

Baby Boomers Boom Into Retirement

The Baby Boomers are booming into retirement and the major economic effects they have generated have already begun. As of July 1 of this year, retired baby boomers age 70.5 (born in the first 6 months of 1946) are subject to Required Minimum Distributions (RMDs). So what does this mean? Let’s start by explaining what an RMD is. The tax-deferred benefits of many retirement plans you may have become familiar with over the years (like traditional IRAs and 401(k)s) have a time limit for how long you can defer (70.5 years to be exact). To make sure taxpayers were using the defined contribution plans as a means to secure an adequate retirement income and not simply as a way of securing tax-free wealth, the Tax Reform Act was adopted in 1986. This means that once an investor reaches age 70.5 they are required to withdrawal a percentage of their retirement …

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