Over 70 And Own An IRA?

 

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Adding money to your IRA or retirement account is the relatively easy part of accumulating assets in tax-deferred retirement plans. The hard part comes later in life when money comes out of those accounts.

Get it right and you will enjoy (figuratively speaking anyway) the lowest possible tax bill. Get it wrong and the taxes and penalties can be hefty.

According to the IRS all IRA owners, and many 401k owners as well, must begin taking Required Minimum Distributions (or RMDs) by April 1 of the year afterthe year they turn 70 ½.

Failing to do so could result in a penalty of 50% of the RMD amount. This is in addition to any tax you may owe on that distribution and any interest you might have incurred by not taking your RMD when you should have.

Here is how it works: 

Ed Slott Live on PBS

How to take your IRA from "forever taxed to never taxed"

Last week I wrote about what it means to be an Ed Slott trained IRA advisor. Since then, I have learned that Ed Slott’s program “Retire Safe and Secure” will air on our local, Twin Cities Public Television stations this weekend!

If you want to learn how to avoid the most common tax mistakes people make with their retirement accounts, or why a Roth IRA is so important, or how to take your IRA from “forever taxed to never taxed” you will want to watch or record Ed’s show this weekend.

Ed Slott has been a huge supporter of Public Television for many years and is one of PBS’ all-time largest fundraisers. His programs have raised over $50 million in donations supporting PBS stations across the country. This weekend you can watch him on your local station.

Times and dates are listed below. Check with Twin Cities PBS for more information or click here.

  •  Retire Safe & Secure with Ed Slott | Friday, Jun 8 at 6pm TPT LIFE
  •  Retire Safe & Secure with Ed Slott | Saturday, Jun 9 at 11:30am TPT 2
  •  Retire Safe & Secure with Ed Slott | Saturday, Jun 9 at 9:30pm TPT LIFE
  •  Retire Safe & Secure with Ed Slott | Sunday, Jun 10 at 3am TPT LIFE
  •  Retire Safe & Secure with Ed Slott | Saturday, Jun 30 at 7pm TPT LIFE

Now this is must see TV.

Looking for an Ed Slott trained “Elite IRA Advisor”? Call me at 651.379.3935 or email me directly at mpbranch@focusfinancial.com

 

Ed Slott’s Elite IRA Advisor Group is solely an indication that the financial advisor has attended training provided by Ed Slott and Company.  Ed Slott is not affiliated with Royal Alliance Associates, Inc.

What Is An “Elite IRA Advisor”?

IRA mistakes are expensive and often irreversible.

Imagine inheriting a large IRA and “rolling” it over into your own IRA only to find out that the IRS has a very specific protocol regarding inherited IRAs and that you got it ALL wrong.

Worse still, the financial advisor you worked with and got paid to help you, he got it wrong as well!

Oh and this mistake, it can’t be fixed.

Or how about these scenarios… 

3 Steps to Financial Success for Recent College Grads

A simple strategy to create lasting financial independence

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With the national unemployment rate dropping below 4% and many state and local rates falling even further than that, the employment outlook for college grads is the best it’s been in a generation.

According to the National Association of Colleges and Employers, engineering and computer science grads command the highest salaries with an average starting salary of over $66,000. However, even college graduates with liberal arts degrees like communications and social sciences should expect average salaries of more than $50,000.

On the flip side, the average college grad carries almost $40,000 in student loan debt with many graduate and professional students exceeding that number by $100k or more.

Nevertheless, a strong economy, high employment rates and competitive starting salaries will help many young college grads to take a major leap forward in their financial life.

25 years of observing high net worth clients has lead me to believe that, for many recent grads, there are 3 key steps to financial success.

Step 1: Look for a job with great company match. Despite what you may read and hear from others, a company retirement plan combined with an employer matching contribution will likely be one of the best investment opportunities that will ever come your way.

A successful, growing company that offers a 401(k) plus an employer match on your contribution can be the difference between achieving financial independence someday and struggling financially for the rest of your life.

Even if your budget is tight, find a way to contribute at least enough to your company plan to get the full benefit of your employer match. If their contribution is capped out at 4% of your salary, contribute at least 4% to your plan. If they match more, contribute more.

Do this regardless of the economic or market conditions. Do this no matter how tight your budget is. Do this even if you have a mountain of student loan and other debt. An employer-sponsored retirement plan may not guarantee your future financial success, but your odds of success without one are small.

Step 2: Commit to always saving at least 10% of your income – starting now. Consistently saving a percentage of your income over a long-period of time is one of the keys to accumulating wealth. Ideally, you should try to save 15% to 20% of your gross income before taxes or other deductions.

In the book, The Millionaire Next Door, Authors Thomas Stanley and William Danko researched families that had a net worth of more than $1 million. What they found was that most families with a net worth greater than $1 million had consistently saved between 15% and 20% of their income for their entire careers.

In my experience, nearly all my clients who have $1 million or more investment assets committed to a long-term savings program early in their careers and they stayed with it through thick and thin.

One of the easiest ways to do save money is through payroll deduction into your retirement plan at work. Even if your employer doesn’t offer a matching contribution, find a way to add 10% or more to your workplace retirement plan.

If your employer doesn’t offer a retirement plan, start a Roth IRA. Oh, and find another employer.

Step 3: Become debt-free as soon as possible. It’s OK and perhaps necessary to have some debt from time to time. Most students borrow money to pay for college. Some student loan debt isn’t a big deal, if you pay it off quickly.

The faster you can pay off debt the less money you will pay in interest and the more you will be able to save and invest for yourself.

If you have student loan debt, create an aggressive strategy to pay off your loans within 10 years or less; sooner if possible. That may mean making extra payments or participating in a student loan forgiveness program.

Joy Sorenson Navarre, founder of Navigatestudentloans.com can help you determine if such programs are right for you. Although her niche focuses on physicians, her firm can advise anyone with high student loan balances looking to lower their student loan payments or have their loans forgiven entirely.

You can schedule a call to get more information by clicking here.

You’ve been living the life of a poor college student for the past four years. Now suddenly, you’ve got a world of opportunity before you. Make the most of it by getting a job with a good company match, saving up to 20% of your income, and paying off your student loans as soon as possible.

Follow these three simple steps and someday you may be the millionaire next door.

Yield vs. Total Return. What’s The Difference?

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Retired clients often wonder how they will generate income in retirement. Beyond Social Security, pension payments, and other forms of guaranteed income how does their investment portfolio actually produce the money they will need to keep up with inflation and pay the bills?

Two ways in which your investments can support you in retirement are “yield” and “total return”. In this post I will share how they are different and what role they play in your long-term retirement income plan.