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Bob Williams

Articles by Bob Williams

5 Ways to Take Money from Your IRA Without Paying a Penalty

5 days ago

The IRA is a great retirement savings vehicle; money grows on a tax-deferred basis and that’s a good thing. Eventually, though, you have to pay the IRS piper when you choose to withdraw funds for retirement or when you’re forced to withdraw the Required Minimum Distribution at age 72.
Let’s be clear. You can take money from your IRA anytime you want. Do it before age 59 ½ and you’ll pay taxes plus that nasty 10% early withdrawal penalty. But hidden in a dusty corner of the IRS code are 5 exceptions that allow you to take money before 59 ½ without paying the penalty.
Unreimbursed Medical Expenses
Unreimbursed is the keyword here. You can withdraw money from your IRA to pay unreimbursed medical expenses that exceed 7.5% of your Adjusted Gross Income (AGI).
For example, if your AGI is

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5 Estate Planning Myths That Can Derail Your Estate Plan

19 days ago

You spend a lifetime earning, saving, acquiring. But the old adage is true—you can’t take it with you. So, what do you do with your assets when you’re gone? How do you want them distributed? That’s where a good estate plan comes in. However, some estate plans are based on ideas that just aren’t true. Plans are made based on emotion rather than logic, and that’s where the best-laid estate plans can go wrong.
Christopher D. Wright, JD is a CPA at Marks Paneth LLP. In more than 30 years of helping clients develop estate plans, he’s discovered 5 common misconceptions that should be avoided.
Myth #1:  An estate plan should be based solely on tax mitigation
No one likes to pay taxes and when you’re gone you want to leave as much to your heirs as possible, but escaping taxes should not be the

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Pre-Election Estate Planning Moves for High Net Worth Families

September 28, 2020

What to do? What to do? The 2020 presidential election is just around the corner and questions are being asked about how to protect your wealth, no matter who’s elected.
Each candidate has broadly divergent views about income taxes, capital gains taxes, estate taxes; how much you keep, and how much the government will come after.
With that in mind, our friends at Kiplinger have put together a list of moves that high net worth families can consider now before the election hits the fan.

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A Major Estate Planning No-No

September 25, 2020

Oh, my! I cringe every time I hear that someone has added their kids’ names to the deed of their house as an estate planning technique. It’s done for the right reasons, but it often backfires.
Sometimes, elderly people will add kids to the deed, thinking they’re removing the house from their assets in order to become Medicaid-eligible. Unfortunately, there are lots of rules regarding look-back periods and other issues that may pull the house back into the list of total assets even though mom or dad gifted the house away.
Another reason the kids are added to the deed stems from the belief that probate court costs will suck thousands of dollars out of the assets that are supposed to go to the heirs. Therefore, if the kids are already on the deed at the parent’s death, the kids own the house

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The COVID Penalty for Those Turning 60

September 21, 2020

If you turn 60 years old in 2020, your Social Security benefit may get hit with a double-whammy. People turning 60 this year are at the tail end of the Baby Boom generation, and the first Americans ever required to wait until age 67 to receive full Social Security benefits. Older Boomers have been able to claim full benefits at age 66.
But the other Social Security shoe may be about to drop. COVID-19 pushed the American economy into recession and quarantine keeping large numbers of people from working and earning a full year’s salary. For the 5 million people who turn 60 in 2020, it may mean a decline in Social Security benefits for the rest of their lives.
The Social Security Administration calculates benefits based on the average wage index (AWI) for the year a person turns 60. Normally,

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12 States That Keep Retirement Dollars in Your Pocket

September 15, 2020

“Will I outlive my money?” That’s one of the biggest concerns for most retirees. There’s the high cost of medical care, which gets more expensive all the time. There’s inflation, which raises the cost of goods and services, eating into your retirement budget. And then, there’s taxes, which are as certain as death, and the politicians who want to raise them.
So, if taxes are an issue where you live, and you’re thinking about moving to a place that’s more economically friendly to your retirement savings—where do you go?
There are nine states that have no state income taxes:  Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. With no state income tax, you don’t have to worry about paying taxes on distributions from 401(k) plans, IRAs, or

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Questions to Ask Before Claiming Social Security

September 9, 2020

The most frequently asked Social Security question I get is, “When should I claim my Social Security benefits?” Well, that’s a loaded question, because there are so many moving parts and everyone’s situation is different.  So, here are some considerations when you’re trying to figure out when is the right time for you to start Social Security.
Age and the size of my check
The age you begin claiming benefits will permanently affect how much money you receive every month. Key ages for claiming are 62, Full Retirement Age, and 70.
The earliest you can claim Social Security benefits is age 62. Some people claim at this age saying, “It’s mine and I’m going to take it now before the government runs out of money.” Others take it at 62 because they need the money or because of health issues;

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4 Ways to Get the Largest Social Security Check

August 17, 2020

Since the beginning of Social Security in 1935, a monthly Social Security check has become an expected part of retirement income for most Americans. And why not? Money has come out of your check every time you got paid and, supposedly, gone into the Social Security Trust Fund to ensure that you have money coming in for as long as you live. There have been questions about whether Social Security will survive, but as long as workers are paying into the Social Security system there will be money paid out to retirees.
Understandably, you want the largest Social Security check possible. So, what can you do now to maximize the amount you get later? Here are four actions to consider.
Wait to claim benefits until 70
You can claim Social Security benefits when you turn 62. But turning on your

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Who Should Watch Your Portfolio in a Post-COVID World?

August 10, 2020

The financial industry is in a state of flux, scrambling to adjust to the new normal thrust upon it by COVID-19. Most financial representatives are still working from home, talking to clients by video chat rather than the age-old norm of face-to-face, wondering if this is the way things will be from now on. Where’s it going? What does it mean? What’s the future of the financial world?
This is a time to ask questions. How will all this affect your investments, your retirement, your relationship with your financial person? In short—how will it affect your future?
I recently spoke with a friend who works for one of the large Wall Street brokerage firms. He expressed the concerns of a lot of his financial brothers and sisters. “I’m working from home, covering most of my expenses and the

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5 Tax Strategies to Help you Hold on to Your Money in Retirement

August 3, 2020

What is retirement, really? We think we know. So, we do our best to prepare for both current circumstances and as many surprises as we can conjure up.  After all, with people living longer than ever before your money has to last longer than ever before.
Certified Financial Planner Troy Sharpe, the founder and CEO of Oak Harvest Financial Group, says, “Preparing for retirement requires a lot of adapting – not just emotionally, but financially. The closer you get, the more important it becomes to look at your budget, your asset allocation, and where your income will come from when you’re creating your own paycheck.” He says it’s also critical to make tax efficiency a priority in your planning. Here are his ideas to help you get ready for your retirement years.
Taxes can take a giant bite

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How to Make Roth IRAs Work for You

July 27, 2020

As a long-forgotten TV detective used to say, “Just the facts Ma’am, just the facts.” In any discussion about Roth IRAs, there can be lots of what for’s and how come’s and what if’s. But here, we’re going to look at basic Roth IRA facts to see if a Roth makes sense for you.
The Roth IRA has been around since 1997. And as good a savings vehicle as it can be, only about 7.5% of the U.S. population has a Roth. The Roth IRA was intended to give people an additional tax-deferred way to save for retirement. You’re allowed to put money into a Roth IRA, although you don’t get a tax deduction for the contribution like you do with the Traditional IRA. The trade-off is that you get to withdraw money from your Roth tax-free any time after the age of 59 ½ and you’re never forced by the IRS to take

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Financial Success Can Skyrocket Medicare Premiums

July 20, 2020

Imagine this. You’re retired. You planned well. Your retirement income allows you to live a great life. Then, you get a letter saying your Medicare Part B premiums are going up 220%! After you pick yourself up off the floor and the panic has subsided a bit, you try to figure out why.
You may say, “But my income is about the same as it’s always been. How did this happen?” It could be a couple of reasons—both common to retired folks—selling a house or taking a large distribution from a tax-deferred account. Either one has the possibility of kicking you into “the Surcharge Zone.”
Officially it’s called an Income Related Monthly Adjustment Amount, more commonly referred to as IRMAA. It’s a surcharge on high-income Medicare beneficiaries applied on top of regular Medicare Part B and Part D

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The Newest Form of Financial Planning – Parent Planning

July 13, 2020

The financial world is filled to the brim with planning—financial planning, estate planning, retirement planning, longevity planning—and that only scratches the surface. With all this focus on planning, there’s almost no discussion about—Parent Planning.
Caring for elderly parents is a growing issue in the United States. A survey conducted by PNC Bank found that 16% of families are currently caring for at least one elderly relative. AARP translates that to 30 million households currently caring for a person over the age of 50. The number is expected to climb to 60 million households in the next 10 years.
As America ages, the need for elderly care will become as common as child care. Parent Planning is the process of preparing a strategy to meet the needs of elderly parents you may become

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No Raise for Social Security Retirees in 2021

June 15, 2020

The crystal balls are coming out early this year as financial prognosticators make projections about Social Security payouts in 2021. Because of the COVID-19 pandemic and subsequent U.S. lockdown of both people and the economy, there is a growing belief that there will be little or no Social Security cost-of-living adjustment (COLA) next year based on economic facts and the expectation of almost non-existent inflation.
Consumer prices fell 0.8% in April 2020. That’s the largest drop since the Great Recession in 2008. Some food prices, specifically meat and eggs, rose substantially. However, prices for gas, clothing, and travel-related items were hit hard. Because of those economic factors, Kiplinger expects the U.S. inflation rate to end the year at approximately 0.3%, compared to 2.3%

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Good Bye Stretch IRA—Hello Charitable Remainder Trust

June 3, 2020

The government giveth, and the government taketh away. And so it is with the Stretch IRA. For years, the stretch IRA has been a financial planning strategy used to extend the tax-deferred status of an IRA by passing it on to a non-spouse beneficiary, such as children or grandchildren, who then enjoyed the tax benefits “stretched” over their lifetimes.
With the enactment of the SECURE Act, the stretch IRA, if not dead, is severely wounded. There are no more lifetime stretches. The new law requires inherited IRAs to be fully distributed in 10 years or less. By eliminating the ability to take distributions over one’s lifetime, beneficiaries will now have to pay substantial income taxes on inherited IRAs. The only exceptions to the 10-year rule are “eligible beneficiaries”—defined as a

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