Posts by Mark Henricks
Financial Advisor
I’m Going to Get $2,100 Per Month From Social Security. How Can I Reduce My Taxes?
Despite paying into Social Security throughout your working career, your retirement benefits aren’t necessarily tax-free income. In fact, up to 85% of your benefits are taxable, depending on your other sources of income. Several strategies exist for managing and potentially reducing these taxes, including timing retirement account withdrawals and using withdrawals from Roth accounts to… read more…
Retirement
Is It Wise to Convert 10% of My IRA into a Roth Each Year to Avoid Taxes and RMDs?
Roth IRAs are not subject to rules on required minimum distributions (RMDs), and qualifying withdrawals from Roth accounts in retirement are also free of federal income taxes. You can get those advantages for funds in your traditional IRA by transferring them into a Roth account. You’ll have to pay income taxes now on funds you… read more…
Investing
Potential Investors to Follow Online for Inspiration
Many fund managers, analysts, brokers and successful individual investors regularly post about their activities and insights online through blogs, newsletters and videos on various social media platforms. Following prominent online investing influencers can help you glean information on current trends and learn successful strategies. Their commentaries can also provide inspiration as you pursue your own… read more…
Estate Planning
Fiduciary Duties of Trustees
Someone named as the trustee of a trust has a fiduciary duty to the trust’s beneficiaries. At its most basic, this means the trustee must place the needs of the beneficiaries of the trust ahead of their own needs. While following this rule, the trustee must ensure that all the administrative functions involved in overseeing… read more…
Advisor Resources
Client Confidentiality for Financial Advisors
Financial advisors have a responsibility to keep client information confidential. This responsibility is laid out by professional organization ethical standards, as well as by law. Financial advisors can only share client information without the client’s permission in limited circumstances, and must take steps to ensure that client records are safe from outside eyes. Confidential information… read more…
Retirement
When I Claim My $3,500 Social Security, Will My Wife Automatically Get a Spousal Benefit?
Understanding the nuances of spousal benefits is crucial to maximizing your household’s Social Security payments. For example, if you’re set to collect $3,500 per month from Social Security at full retirement age, your spouse may be eligible to receive $1,750 based on your earnings record, although this won’t happen automatically. Eligibility for spousal benefits ultimately… read more…
Financial Advisor
I’m 62, Have $800,000 and Will Receive $2,600 Monthly from Social Security. What’s My Retirement Budget?
Planning for retirement can be both exciting and challenging. Figuring out how much you can realistically spend each year is a key piece of that puzzle. For example, a 62-year-old with $800,000 in savings and a monthly Social Security benefit of $2,600 can reasonably expect an annual income of $63,200 in retirement. Figuring out how… read more…
Taxes
What Are the Tax Consequences of Inheriting a CD?
If you inherit or plan to bequeath a certificate of deposit (CD) as part of your estate, there may be tax consequences to consider. Three kinds of taxes could apply: income, estate and inheritance. While the principal amount of the CD transfers without income tax issues, any interest earned after death and before transfer will… read more…
Retirement
Ultimate Guide to Social Security in New York (NY)
If you live in New York, you can apply for Social Security benefits online, by telephone or in person. The Social Security Administration maintains a website at SSA.gov, as well as dozens of local offices throughout the Empire State that you can call for information or schedule an appointment with. Before applying, you can use… read more…
Retirement
Ultimate Guide to Social Security in Massachusetts (MA)
Massachusetts participates in the Social Security system a little differently than most states. Massachusetts residents who belong to public-sector retirement plans don’t pay Social Security payroll taxes. As a result, these workers don’t earn credits toward Social Security benefits for their public-sector work. Some Massachusetts public workers may still qualify for Social Security benefits through… read more…
Retirement
Should I Take a $400,000 Lump Sum or $2,000 Monthly Payments for My Pension?
Deciding whether to take a $400,000 lump sum or monthly pension benefit of $2,000 requires calculating the relative value of each option. Generally speaking, the sooner you can receive the lump sum, the more value it will have since you can invest it over a longer period. The monthly payment option may be more valuable… read more…
Retirement
How to Max Out Your 401(k)
Approximately 86% of 401(k) participants don’t save the maximum allowed amount in their tax-advantaged employer-sponsored retirement plans, according to a 2022 study of retirement saving by Vanguard. If you’d like to max out 401(k) savings, techniques include automating contributions, increasing contributions over time, using catch-up contributions when available, taking full advantage of any employer matches,… read more…
Small Business
How to Protect Your Assets From a Lawsuit in California
Methods for protecting assets from lawsuit in California include shifting ownership into legal entities such as trusts, taking advantage of legal protections for homesteads and retirement accounts, and maintaining appropriate insurance coverage. Business owners can protect business assets with the help of a legal business structure such as a Limited Liability Company (LLC). Often multiple… read more…
Financial Advisor
10 Free Tools to Help Build Your Financial Plan
Taking control of your finances can pay big dividends, but it doesn’t have to cost a lot. There are a range of free personal financial planning tools that can help you create a budget, track expenses, manage investments, set financial goals and monitor your progress towards those goals. From AI-powered chatbots to old-fashioned printed worksheets,… read more…
Retirement
The Average Retirement Budget in the U.S.
When it comes to the average retirement budget, studies report a wide range of responses. A 2022 survey by the Employee Benefit and Retirement Institute (EBRI) found that half of individuals around retirement age spend less than $2,000 per month, equal to less than $24,000 per year. The Social Security Administration, meanwhile, said 2020 median… read more…
Retirement
7 Alternative Ways to Save for Retirement
401(k) plans are not the only way to save for retirement. If your employer is one of the many that doesn’t offer a 401(k) savings plan, there are still plenty of alternatives to save for retirement. Your non-401(k) options include both traditional and Roth individual retirement savings accounts (IRAs), as well as health savings accounts… read more…
Retirement
I’m 64 With $650k in an IRA. Should I Start Converting to a Roth to Avoid RMDs?
You can reduce the impact that taxes have in retirement by converting pre-tax savings into Roth assets. Doing so not only unlocks future tax-free growth, but also helps you minimize or avoid required minimum distributions (RMDs). However, converting a large IRA balance like $650,000 all at once would trigger a significant tax bill in the… read more…
Advisor Resources
What Are Regulatory Assets Under Management (RAUM)?
Regulatory assets under management (RAUM) refers to the total market value of investments managed by a financial institution on behalf of clients, according to specific calculations mandated by the Securities and Exchange Commission (SEC). RAUM can provide insight into a financial institution’s size and scope when an investor is considering working with a firm. Assets… read more…
Personal Finance
How Is Child Supported Calculated in Illinois?
In Illinois, child support is calculated using the income shares model. The income shares model takes into account the number of affected children, the parents’ combined income, and the time each parent spends caring for the child or children, among other factors. If you are divorcing or separating, and have minor children from the partnership,… read more…
Personal Finance
How Is Child Support Calculated in New York?
When parents of minor children divorce or separate in New York, one of the parents may be ordered to provide financial support to make sure the child’s needs are met. The court uses a guideline set out by the state to determine how much the non-custodial parent will pay. The payment is based on the… read more…
Advisor Resources
What Is the CFP® Board’s 7-Step Financial Planning Process?
The CFP® Board oversees the Certified Financial Planner™ designation and gives planners a guideline to a seven-step process for providing financial advisory services. The process takes the financial advisor and client through the entire relationship, beginning with the initial meetings and progressing through years or decades of monitoring and adjusting the plan as the client’s… read more…
Investing
Three Types of AI Investments to Consider
Since ChatGPT exploded in popularity in 2022, artificial intelligence (AI) has gained an image as a once-in-a-lifetime investment opportunity comparable to the early days of the internet and smartphones. But exactly how to exploit that opportunity is not necessarily obvious. You can’t invest directly in OpenAI, the privately held company behind ChatGPT. But one way… read more…
Retirement
Amount of Retirement Savings By Gender
Men and women save for retirement differently. There’s a persistent and significant gender gap in the average retirement savings women have versus men, with women more likely to have nothing saved for retirement while men are over-represented among savers with the largest retirement account balances. Men and women have similar access to retirement savings plans,… read more…
Retirement
How Much Should I Have Saved By Age 45?
Saving for retirement is a project that spans around four decades, and progresses through multiple stages. It’s not necessary to have saved enough to fund a comfortable retirement by age 25. Nor is it feasible to wait until you’re about to turn 65 to start putting money away. Mid-way through this process, by around age… read more…
Financial Advisor
How Is Alimony Calculated in New York?
Alimony is a payment from one divorced former spouse to the other that’s intended to provide the lower-earning spouse with sufficient income to meet their needs. Laws in every state provide for alimony, also known as spousal support or spousal maintenance, but they use a variety of ways to set the amount of money to… read more…