Published: March 26, 2019

 

I have had a few clients caught up in scams of the Madoff variety, but fortunately not for large sums. The most common reaction when this happens is embarrassment, that someone who is intelligent could be caught by something that seems so obvious in hindsight. And yet scams continue. Why is that?

There are several reasons:

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Published: March 10, 2019

 

In most households, there is one spouse who handles financial matters- paying bills, filing tax returns, planning retirement income. While division of labor might be great, there could be problems if the "non-financial" spouse is the survivor- he or she might be easy prey for those who try to sell inappropriate investments or insurance policies, or might be a victim of out-and-out theft. There is a solution, but it requires work while both spouses are alive. A technique I have used is to create a notebook with important information:

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Published: January 23, 2016

More people are asking why people retire and how they enjoy it. One article reports that people in their 80’s who were surveyed said: when you retire is determined by how much you’ve saved. The same survey says that retirees found the first few years of retirement the happiest of their lives. But another survey says people pick a date when they want to retire, and do so regardless of how much money they have saved. The more likely view, in general, is that people decide when they want to retire and mold their retirement lifestyle to what they can do with what they have accumulated.

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Published: December 24, 2015

For some people, it’s abundantly clear that setting up a Roth IRA, where you get no tax deduction for the contribution but have no taxable income when amounts are distributed, makes perfect sense. People just starting out on their working careers, who might be in a very low tax bracket, are probably better off using the Roth IRA because the tax savings from a traditional IRA deduction don’t help very much.

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Published: December 21, 2015

President Obama has signed the Protecting Americans from Tax Hikes (PATH) Act, which makes permanent several provisions that were previously enacted year to year; which made any kind of careful tax planning very difficult. One provision that was revived and made permanent is the IRA charitable rollover provision. This provision permits individuals who have reached age 70 1/2 to make a direct transfer from their IRAs to certain kinds of charities (excluding donor advised funds, supporting organizations and private foundations). There is a $100,000 annual limit on such transfers.

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Published: October 29, 2015

A recent article reminds us of a scam that is still being tried: telephone callers saying they are from the IRS and demanding immediate payment to avoid arrest and imprisonment. If you won’t pay on the spot, your Social Security number is demanded. But, as the IRS frequently tells us, they don’t call people on the telephone demanding payment. So it’s a scam and you should hang up. Similar ploys involve school loan payments, and nearly all of them want your identifying numbers so they can be stolen. Never give out Social Security or bank account numbers to people who call you.

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Published: October 29, 2015

The House of Representatives just passed a two year budget deal to avoid a default by the Treasury. Next stop will be the Senate. One provision of this deal is a change in Social Security rules. Specifically, the ability to use the file and suspend method to get extra benefits will be curtailed. This is a valuable benefit, and it will still be available to people of a certain age.

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Published: October 21, 2015

Some other publication has just come out with its list of the top 10 places in the country for retirement, based on criteria such as availability of health care, activities for seniors, climate, etc. I believe all 10 were fairly small towns in less populated areas. There are magazines as well that focus solely on where retirees should go. OK, it’s an idea, but it’s not ideal for everyone. One of my colleagues just mentioned a reason to stay where you are: having children nearby. These decisions should be based on the individual’s own interests.

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Published: October 21, 2015

I saw a discussion online today about trying to measure retirement income readiness. There was discussion of Black Rock’s CORI retirement index, which tells you how many dollars you need to save to produce a dollar of income at retirement. It’s a helpful number to know, even if it’s possibly a depressing one. Of course, knowing whether you have saved enough for retirement starts with knowing how much income you need in retirement, which is a process in itself: how much income for a basic retirement or a more “robust” one.

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Published: October 21, 2015

An online report about retirement issues included the statement from one participant that 401(k) plans and IRAs were the worst ideas ever. Why? Because they are voluntary and it’s easy to put off contributing to them. The result, obviously, is too little saved for retirement. In an earlier era, which featured more defined benefit pension plans, employees were often, in effect, forced to save for retirement, which was in the form of a monthly check at retirement.

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