Education Planning
The Section 529 (Education Savings Plan) allows for an acceleration of 5 years per person of the use of the annual exclusion ($13,000). This means that parents or grandparents can contribute up to $130,000 per donee into an education Savings Plan. The Education IRA limitations are $2,000 per year per child. Monies for education IRA's can be used for secondary education and related expenses. This is a strong benefit over the education savings accounts. Please feel free to talk with us about education planning.
Annual Gifts
Remember that the annual exclusion amount increased to $13,000 in 2009 per donor. Keep in mind that direct payments by parents and grandparents for the benefit of children and grandchildren do not count toward the exclusion amount.
Massachusetts Estate Tax Alert
Massachusetts Legislature approved changes to Massachusetts Estate Tax effective 1/01/03. The new law requires estates over $1,000,000 to pay a Massachusetts Estate Tax of between 5 - 10% on the amount over $1,000,000 in 2010.
New IRA/Simple IRA/401(k) Limits 2010
Please be aware you can make a contribution to a Traditional IRA or Roth IRA of $5,000 in 2010. If you are over age 50, the catch-up amount is an additional $1,000.
Simple IRA contribution limits are $11,500 in 2010 with a $2,500 catch-up.
401(k) limits are $16,500 with a $5,500 catch-up provision.
The Value of Long-Term Care Insurance
Wouldn't you want to know about a major risk to your financial, physical, and emotional well being? Sure you would. Most people are not aware of the risk associated with the need for long term care. When it's expected that at least two out of every five American families are likely to require Nursing Home care at some point in their lives, you realize you should consider Long-Term Care Insurance to lessen the risk. With proper planning, Long-Term Care Insurance premiums can fit into your budget. There are many ways to fund premium payments. Retirement planning is not complete without considering Long-Term Care Insurance in your financial planning profile. We would be happy to provide you with a simple analysis of the value of Long-Term Care Insurance and how it would fit into your overall financial planning profile. Please feel free to call or e-mail with a request for information on how Long-Term Care can fit into your personal needs.
Economic Growth & Tax Relief Reconciliation Act of 2001
The estate tax exemption remains at $2,000,000 per person for 2008.It increases to $3,500,000 in 2009. Congress will probably make some changes before the law expires in 2010.
Personal Financial Economics
Building personal wealth and creating financial independence is both an Art and a Science. We can have you complete a short data collection form and prepare an analysis for your review. Using this new process, we can show you how to manage cash flow, budgeting and wealth accumulation. Contact us to arrange an appointment.
Life Insurance
Cash value life insurance offers an opportunity to accumulate money on a tax-deferred basis. If used properly, the life insurance death proceeds can be income and estate tax free. If during lifetime you need use of the cash value, you can use the money in a manner that is not taxable to you. Therefore, life insurance offers tax-free accumulation and the potential for tax-free income if structured properly and used to compliment other retirement plans you've established. Life insurance does offer instant liquidity at death, and is an essential part of everyone's estate plan. Because too much emphasis has been put on accumulating money in investment accounts, many of us have ignored the value of life insurance in our overall financial plan. If you would like to review the benefits of how life insurance can work for you and your family, please contact us and we'd be happy to provide you with some information and guidelines.
IRA Minimum Distribution Requirements
If you haven't already heard, the IRS has published new distribution rules that affect everyone who reaches age 70 1/2 and is required to take their minimum distribution. The new rules allow individuals to take less. This is an advantage if you do not need your IRA money now. Another big advantage to the new rules is that a beneficiary designation can be changed for an IRA account as long as it is done within 12 months from the date of death of the IRA owner. The beneficiary has the option of taking money over his or her life expectancy, which again allows for a longer distribution period and less income tax. If you'd like a copy of the new table, or more information on the new rules, feel free to e-mail us and we'll be happy to provide you with that information.
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