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Here are some questions that you may have pondered:

  • Am I structuring my assets in a way to maximize income and minimize taxes?
  • Will re-positioning my assets lower or eliminate tax on my social security?
  • Is there a way to get reasonable returns without risking my nest egg?
  • Is it possible to have tax-free income during retirement and reduce my tax liability overall?
  • Can I pay for nursing care without sacrificing my children's inheritance and my spouse's lifestyle?
  • How can I grow my money and potentially beat inflation at the same time?
  • Is it possible I might outlive my retirement savings? How can I help prevent this from happening?
  • How well have I prepared my retirement savings for market fluctuations, inflation, and income taxes?
  • How can I protect my original principal and still supplement your retirement income? 
  • What can I do to help guaranteed my retirement income?

Creating any sort of trust does not answer any of the above questions because trust is made to have solution for your questions and problems. Such as asset protection not preservation, an extra shield for a law suit, skip generation transfer asset( which by the way that could be answered by annuity and drafted in a trust). And of course much more, should you be needing additional information I will be happy to go over them.

Retirement Planning

Retirement planning today has taken on many new dimensions that never had to be considered by earlier generations.  For one, people are living longer. A person who turns 65 today could be expected to live as many as 20 years in retirement as compared to a retiree in 1950 who lived,  on average, an additional 15 years.  Longer life spans have created a number of new issues that need to be taken into consideration when planning for retirement.

Lifetime Income Need

There actually is a lifetime after retirement and the need to be able to provide for a steady stream of income that cannot be outlived is more important than ever.  With the prospect of paying for retirement needs for as many as 20 years, retirees need to be concerned with maintaining their cost-of-living. 
Health Care Needs

Longer life spans can also translate into more health issues that arise in the process of aging.  The federal government provides a safety net in the form of Medicare, however, it may not provide the coverage needed especially in chronic illness cases.  Planning for long-term care, in the event of a serious disability or chronic illness, is becoming a key element of retirement plans today. 

Estate Protection

Planning for the transfer of assets at death is a critical element of retirement planning especially if there are survivors who are dependent upon the assets for their financial security.  Planning for estate transfer can be as simple as drafting a will, which is essential to ensure that assets are transferred according to the wishes of the decedent. Larger estates may be confronted with settlement costs and sizable death taxes which could force liquidation if the proper planning is not done.

 Paying for Retirement

Retirees who have prepared for their retirement usually rely upon three main sources of income: Social Security, individual or employer-sponsored qualified retirement plans, and their own savings or investments.  A sound retirement plan will emphasize qualified plans and personal savings as the primary sources with Social Security as a safety net for steady income.

Social Security

Social Security was established in the 1930’s as a safety net for people who, after paying into the system from their earnings, could rely upon a steady stream of income for the rest of their lives.  The age of retirement, when the income benefit starts was, originally, age 65 which was referred to as the “normal retirement age”.  Now, for a person born after 1937, the normal retirement age is being increased gradually until it reaches age 67 for all people born in 1960 and beyond.  The amount paid in benefits is based upon the earnings of an individual while working.  If a person wanted to continue to work and delay receiving benefits, they could do so build up a larger benefit.  Conversely, early retirement benefits are available, at a reduced level, as early as age 62.

Employer-Sponsored Qualified Plans

Most employer-sponsored plans today are established as “defined contribution” plans whereby an employee contributes a percentage of his earnings into an account that will accumulate until retirement.  As a qualified plan, the contributions are deductible from the employee’s current income.  The amount of income received at retirement is based on the total amount of contributions, the returns earned, and the employee’s retirement time horizon.  As in all qualified plans, withdrawals made prior to age 59 ½ may be subject to a penalty of 10% on top of ordinary taxes that are due. 

Depending on the size and type of the organization, they may offer a 401(k) Plan, a Simplified Employee Pension Plan or, in the case of a non-profit organization, a 403(b) plan.

 Traditional and Roth IRAs

Individual Retirement Accounts (IRA) are tax qualified retirement plans that were established as way for individuals to save for retirement with the benefit of tax favored treatment. The traditional IRA allows for contributions to be made on a tax deductible basis and to accumulate without current taxation of earnings inside the account.  Distributions from a traditional IRA are taxable.  A Roth IRA is different in that the contributions are not tax deductible, however, the earnings growth is not currently taxable. To qualify for tax-free and penalty-free withdrawals of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take plance after age 59 ½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum).  Depending on state law, Roth IRA distributions may be subject to state taxes..

Distributions from traditional IRAs and employer-sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching 59 ½ , may be subject to an additional 10% federal tax penalty.

 Your Retirement is Our Business

 At Mac Advisory Group we are thoroughly trained to help our clients avoid many of the common pitfalls that can happen during retirement income planning.  We will help you protect your hard-earned retirement assets in diverse market conditions and help provide you with the income you need.
Our clients are the most important people in the world to us.  We care deeply that their needs and goals for a safer retirement are met and completely understood.  Whether
you are years from retirement, getting ready to enter retirement or already retired, we are here to help you realize the retirement future you have always dreamed of.
You can protect your 401 k from another market crash with an In-Service Non-Hardship Withdrawal/Rollover.

What is In-Service Non- Hardship Withdrawal/Rollover?

Some companies allow active employees that are participating in a qualified employer retirement plan to withdraw a portion of their plan’s account balance, without showing a specific financial need. You will need to verify with your company if their plan will allow this.

Why consider this?

You would like to take control of your assets You have limited investment choices in your current plan Eliminate or lower fees in current plan Eliminate market risk Provide growth potential with principal and earnings protection. 

Plans that permit non-hardship employee rollovers?

 Profit-sharing, 401(k)s, 403(b)s, 457s usually will allow these. Defined benefit plans usually do not allow them. Consult your plan’s rules to make sure you are allowed to make these withdrawals.  

Are all assets eligible for these rollovers?

 Because each plan is different, you will need to ask your employer which assets in your plan are eligible for these withdrawals. Here are a few samples; after   tax contributions plus earnings, rollover amounts plus earnings, Company match contributions plus earnings, etc.  
These rollovers are non-taxable if rolled into a product with same tax status as your initial plan; if not there might be adverse tax consequences.You still should consult your tax advisor to determine the tax implications of this strategy. 

 What issues should you consider?

 There are many different options available to you when it’s time to do a rollover. Choosing the right plan for your needs is the most important step. If you are looking for safety with no chance of market losses then a fixed investment might be the right choice.

How can you get started?

 Contact the human resources department’s retirement plan administrator to determine whether your plan allows these rollovers and whether you are eligible to take them.  How much can you rollover?  What forms are needed?  What are the processing requirements and distribution time lines?

For more information on retirement income needs and income sources, please contact us today.