Unbiased financial advice from fee-only financial planners

Brought to you by the National Association of Personal Financial Advisors

1
The Roots of the Credit Crisis, Simplified
2
7 Mistakes With Stretch IRA’s
3
Dealing With Your 401k During Divorce
4
Splitting Up an IRA After a Divorce
5
Taking the IRA Required Minimum Distribution

The Roots of the Credit Crisis, Simplified

Are you still a little baffled about how the financial system came to be in such a mess? Here’s a very nice visualization of what happened.

By now everyone probably knows that the housing crisis has something to do with the fact that the economy has tanked, but the connection is still a bit vague if you’re not really into financial stuff.  There have been several times in the last few months when I’ve thought about trying to write a simple explanation of how low interest rates, risky mortgages, CDOs, and abysmal judgment (among other things) helped bring us into …

Read More

7 Mistakes With Stretch IRA’s

The stretch IRA, when implemented properly, can be one of the great vehicles for transferring wealth to your heirs, maintaining the tax-deferred status until much later.  The problem is that there are some very specific terms that must be met in order to achieve the stretch – and if you screw it up, there’s definitely not a do over in most of these cases.

Ground Rules

First, let’s run through the specifics that make up a stretch IRA situation.  When an IRA account owner dies, the beneficiary(s) are eligible to re-title the account(s) as inherited IRAs in the name of …

Read More

Dealing With Your 401k During Divorce

An exception to the 10% penalty on distributions from a qualified plan (but not an IRA) is when the distribution is pursuant to the imposition of a Qualified Domestic Relations Order, or QDRO (cue-DRO).

A QDRO is often put into place as part of a divorce settlement, especially when one spouse has a considerably larger retirement plan balance than the other.  What happens in this case is that the court determines what amount (usually a percentage, although it could be a specific dollar amount) of retirement plan’s balance is to be presented to the non-owning spouse.  Once that amount is …

Read More

Splitting Up an IRA After a Divorce

How does a QDRO (Qualified Domestic Relation Orders) impacts an established Series of Substantially Equal Periodic Payments (SOSEPP) – which, as we know, once established can only be changed one time?

Although not definitive, below are summaries of three Private Letter Rulings (PLRs) that seem to suggest first of all that making the distribution is not subject to the 10% penalty when a QDRO or divorce decree is involved, pursuant to the regulation in Code section 72(t)(4)(A)(ii)..

1) The transfer to a taxpayer’s spouse pursuant to a divorce decree of 50% of each of three separate IRAs owned by …

Read More

Taking the IRA Required Minimum Distribution

I’ve made the observation before – IRAs are like belly-buttons: just about everyone has one these days, and quite often they have more than one. Wait a second, maybe they’re not quite like belly-buttons after all. Oh well, you get the point – just about everyone has at least one IRA in their various investment holdings, and these accounts will eventually be subjected to Required Minimum Distributions (RMD) when the owner of the account reaches age 70 1/2.

So what are RMDs, you might ask? When the IRA was developed, it was determined that there would be a requirement for …

Read More

Copyright 2014 FiGuide.com   About Us   Contact Us   Our Advisors       Login