My Latest Blog: Setting the Course for Your Retirement

My Latest Blog: Setting the Course for Your Retirement:

As seen on WordPress

from Tumblr https://gregwanderson.tumblr.com/post/185852797309

My Latest Blog: Legacy Planning: Protecting Loved Ones

My Latest Blog: Legacy Planning: Protecting Loved Ones:

When a person dies, his or her assets are typically distributed to surviving family members. In general, these assets can lose substantial value, depending on the type of assets held by the decedent and the myriad laws and regulations in place governing the distribution of assets. To preserve wealth for future generations, the concept of legacy planning is critical.

What is Legacy Planning?

Investopedia defines legacy planning as “a financial strategy that prepares a person to bequeath his or her assets to a loved one or next of kin after death.” In simple terms, this means distributing one’s estate – the financial assets and physical property – to those he or she specifies according to wishes. This plan can eliminate any family disputes, such as determining who receives which assets. It can also streamline the legal processes that occur after one passes away. Most people are familiar with the concept of a will, a legal document that clearly spells out those wishes. This legal instrument is used during probate, or the process by which a will is reviewed to determine whether it is valid. During probate, a period of time after which a person dies is set aside so that creditors have the opportunity to collect any unsettled debts.

Probate court fees can reduce the value of assets intended to be handed down to surviving family members. To avoid this, some people choose to establish a trust. This is a legal entity that in effect “owns” the person’s assets, and is managed by trustees and attorneys. Assets are placed into the trust, and when the trust’s creator dies, those assets are distributed according to his or her final wishes. The trust can protect against losses incurred by court fees, and may also shield certain assets from taxation.

Tax Implications in Legacy Planning

Estate taxes have the potential to substantially reduce estate asset value once a person dies. In fact, many people are surprised to learn that estate taxes have a negative impact on assets, and may be unaware of the true value of those assets. Naturally, minimizing those taxes or eliminating them altogether makes sound financial sense.

In legacy planning, a planner will meet with the person and his or her loved ones to discuss possible taxes. Taxable assets typically include such retirement accounts as IRAs, life insurance policies, and fixed or variable annuities. Estate taxes may also be levied on cash gifts, transfer of certain properties, and real estate transactions between loved ones. Values of assets are also determined to give surviving family members a clear picture of what to expect in terms of taxation.

Legacy Planning by Balanced Financial

In addition to its many client-focused retirement planning services, Balanced Financial offers comprehensive legacy planning. The process begins by Balanced Financial’s team evaluating current assets and their values. By taking the time to meet directly with each client and to learn about his or her specific wishes, a plan begins to take shape.

Legacy planning services include many aspects that can be used to safeguard wealth and to ensure transfer to loved ones without legal challenges. These aspects include:

• Creation of wills
• Establishment of trusts (living, revocable, and irrevocable)
• Creation of powers of attorney and advanced medical directives
• Sourcing and obtaining life insurance policies
• Obtaining long-term care insurance if desired
• Evaluation of tax exposures and implications for surviving family members

Balanced Financial, a nationally-known financial services firm in Fort Collins, Colorado, specializes in this aspect of planning. With their help, thousands of clients have been able to pass down assets to loved ones, preserving their value and minimizing tax implications in the process.

Balanced Financial is uniquely suited to help clients with legacy planning services. The team has decades of experience and knows that most people wish to support their families financially long after they’re gone. With legacy planning, one’s family can obtain the assets needed and protect their value to thrive well into the future.

Continue reading

from Tumblr https://gregwanderson.tumblr.com/post/184376706849

My Latest Blog: Income Planning: Preparing for One’s Financial Future

My Latest Blog: Income Planning: Preparing for One’s Financial Future:

In the complex process of retirement planning, there is one commonly-overlooked area. This area is the concept of retirement income, or keeping streams of income flowing after one retires from work.

Retirement accounts have many benefits, but there are also significant limitations inherent in these plans. While it is important to set aside funds for use in one’s retirement years, managing distributions from retirement accounts is critical.

There are many strategies involved in this concept, and the income planning professionals at Balanced Financial, Inc. can help. Based in Fort Collins, Colorado and founded by noted financial expert Greg W. Anderson, Balanced Financial has helped thousands of clients navigate the complex waters of retirement income planning.

What Is Income Planning?

Most people understand that retirement savings is the key to stability once the paychecks stop coming in. While Americans typically fall far behind on retirement savings – setting aside only a fraction of the money needed for future expenses – familiarity with the concept is quite common. Retirement savings strategies may take many forms, including:

• Employer-sponsored pensions
• Government benefits like Social Security
• Individual Retirement Accounts (IRAs), including Traditional and Roth forms
• 401(k) and 403(b) plans
• Traditional stock and bond investments
• Annuities
• Life insurance policies
• Real estate investments

It is important to note, though, that although there are many potential ways a person can set aside money for retirement, what happens to those funds when retirement age is reached is even more critical. It is here that the concept of income planning takes center stage. What is income planning? In simple terms, it is the process of establishing a roadmap of account and benefit distributions to ensure a steady flow of income in retirement. This can include methods of turning assets into income to fund future expenses.

Assets Into Income

You’ve saved and saved throughout your career, amassing a substantial sum of money for retirement purposes. What now? How do you turn those accumulated assets into a steady source of income that you can tap throughout your retirement years? Income planning professionals can help lay the groundwork for a systematic strategy to convert retirement assets into income without the high taxes and penalties that can harm the assets’ overall values.

Certain retirement accounts impose what are known as Required Minimum Distributions, or RMDs. These are the minimum amounts an account holder must withdraw when he or she reaches a certain age. Retirees aged 70 ½ years or older must withdraw minimum distributions from:

• Traditional IRAs
• SIMPLE IRAs
• 401(k) plans
• Simplified Employee Pension (SEP) IRAs

If these minimums are not withdrawn according to regulations, such as taking out too little or mistiming the withdrawals, significant financial penalties may occur. For those with multiple retirement accounts, managing multiple distributions across accounts can be challenging at best or a recipe for financial disaster at worst. Income planning helps to avoid the penalties.

Taking RMDs is only part of the picture, however. A wise retiree may only withdraw the earnings from certain accounts, leaving the capital in place to continue accruing interest. This is a smart solution, yet many retirees run into difficulties with taxes. Taking too much out of any given retirement account, or taking distributions from multiple accounts at the same time can result in higher taxes; because these withdrawals are seen as ordinary income, one runs the risk of falling into a higher tax bracket. By carefully planning income amounts and distributions, one can avoid the excessive tax burdens imposed.

Income Planning Services by Balanced Financial

The financial experts at Balanced Financial know that retirement brings with it many challenges. For many, it is a time of excitement – allowing one to fulfill his or her dreams of world travel, relaxation, or spending time with family. For others, the financial headaches and uncertainty can lead to stress. Planning for retirement is difficult enough; add in the potential for taxes and penalties for withdrawing too much from retirement accounts and one can understand why professional help should be sought.

With the income planning services provided by Balanced Financial, clients can gain an understanding of what it takes to lead a stable and successful financial future. Income planning creates an easy-to-follow map, allowing for a steady stream of retirement income without the worry of higher taxes and financial penalties. By carefully evaluating each client’s unique financial goals and his or her needs, the income planners are able to offer best-in-class guidance and service. Take charge of your retirement goals by ensuring that you will have sufficient income for your expenses well into retirement. The income planning service that Balanced Financial offers is designed to give you peace of mind, knowing that you and your family will have a comfortable financial future.

from Tumblr https://gregwanderson.tumblr.com/post/183782880629