Boomers on the Brink: Issues Affecting Participants as They Approach Retirement

Estate planning is not just for millionaires

financial advisor roth 401kHaving a core set of current planning documents, including a will, power of attorney and health care proxy, is critical to ensuring your wishes are carried out after you die. The operative word is “current.” You need to check periodically that the beneficiaries on your retirement accounts and insurance policies are up-to-date (particularly if you’re recently divorced). And everyone needs to ask: “What happens to the family finances if the chief breadwinner has a health setback or accident?”


When does it make sense to work with an accountant?

Some only contact a CPA once a year, at tax time (or not at all if they rely on tax-prep software). But checking in with a knowledgeable CPA before taking money from your retirement account can help you avoid poorly timed withdrawals, which could mean paying more taxes on Social Security benefits. Decisions you make with regard to your retirement plan can have a profound effect on your tax situation. Just as hiring a financial advisor can help you accumulate a nest egg and manage investment risk, hiring a tax advisor (and a lawyer to set up your estate plan) can ultimately save you a lot of money over the course of a retirement that can last 30 years or more.

Tax laws are complex and subject to change, so you should consult with a tax advisor before you take any distribution from a qualified retirement account.

Quarterly Reminder

There’s no escape: Taxes are due April 15. There are things you can do before the tax filing deadline to reduce your 2015 tax bill. Consider showing last year’s return to your financial or tax advisor, who may be able to identify strategies for increasing your tax refund this year.

Tools and Techniques: Resources to Help Guide Your Retirement Plan

Roth IRAs

If you are thinking about funding a new Roth IRA by converting a portion of your traditional IRA, you need to keep a few things in mind. First, the deadline for conversions is December 31, 2016, for the 2016 tax year. Second, converted assets in the Roth IRA must remain there for five years to avoid penalties and taxes on any withdrawals (i.e., five years have passed and you have reached age 59½, become disabled or make a qualified first-home purchase). Third, if you are required to take a required minimum distribution (RMD) from a traditional IRA in the year you wish to convert, you must take the RMD before converting to a Roth IRA. Paying attention to these rules will help you receive the benefits of a Roth IRA, which include tax-free growth and withdrawals, estate planning benefits, and no minimum required distributions at age 70½.

Corner on the Market: Basic Financial Terms to Know

Bond ladder

In a bond ladder, the bonds’ maturity dates are spaced evenly across several years so that the bonds mature and proceeds reinvest at regular intervals. This helps to match an investor’s need for regular income without locking in a potentially low interest rate for a long period of time.

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Disclosure: This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. LPL Financial and its advisors are providing educational services only and are not able to provide participants with investment advice specific to their particular needs. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045;

© 2015 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this newsletter are those of Kmotion. The articles and opinions are for general information only and are not intended to provide specific advice or recommendations for any individual. Nothing in this publication shall be construed as providing investment counseling or directing employees to participate in any investment program in any way. Please consult your financial advisor or other appropriate professional for further assistance with regard to your individual situation.

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