FAQs

Frequently Asked Questions

About Barber Financial Group

How does Barber Financial Group get paid?

We get paid by you, our client. You will never feel like you’re being sold a product because we do not accept kickbacks from any product sponsors nor do we receive any commissions. Instead, we are paid a low percentage of your assets if we are managing your money.

We also get paid on a consulting basis if you choose to add on one of those services. These services will be discussed on an individual basis and will be based on the amount of work involved. We are a fee-only firm.

 

What are your fees?

Our fees are based on the percentage of assets that we manage for our clients. That percentage will be determined by the type of portfolio that is developed specifically for you, and the amount of work involved in managing the portfolio. These can range anywhere from .5% to 1.5%. All fees are disclosed upfront and in writing so that there are never any surprises. We believe that fees will only ever be an issue in the absence of value.

 

What makes Barber Financial Group different from other financial firms?

The terms financial advisor, investment advisor, and wealth manager are widely used in our industry. While the majority of financial advisors either sell a product or simply manage money, we are quite different.

Our process starts with a comprehensive financial plan that encompasses all aspects of your life. Our offices in Lenexa, Lee’s Summit, and North Kansas City all have in-house specialists including CPAs, CFP’s, Estate Planning Attorneys and Insurance Specialists. These specialists work hand-in-hand with our advisor teams on your behalf to help ensure all financial components are working together to help you live the retirement life you’ve always wanted.

We believe that your financial advisor should be a real financial advisor and not someone who is prospecting for new business or filling out paperwork. We have a dedicated staff that supports each advisor team so that your team can do what you hired them to do, which is work for you.

 

What do you mean you have “Advisor Teams”?

We feel that it’s really important that our clients feel that they’re not just another small fish in a big pond when talking to their wealth manager. In order for this to happen, we limit the amount of clients each advisor team can manage.

Each team consists of a Partner of Barber Financial Group, two additional financial advisors, an Estate Planning Attorney, a CPA, and a service team of 10 or more employees. This means that when you have questions or need to speak with someone about your accounts or concerns, someone on your dedicated advisor team will be there to help you.

 

What is a fiduciary?

In the financial services industry there are two types of advisors. The first type are the financial advisors who work on a suitability standard. Simply put, the suitability standard requires the advisor makes sure that the investment they suggest for you is suitable based on your unique situation, but does not require the investment to be in your best interest.

Secondly, is the fiduciary standard. The fiduciary standard requires that your advisor put your interests ahead of their own interests, 24 hours a day, seven days a week, 365 days a year. In order for the advisor to act in the capacity of a fiduciary, they truly have to understand everything about your financial life. Their goal is to help you make the best decisions in every area of your financial life. At Barber Financial Group, we live by the fiduciary standard.

 

Are you selling anything?

We do not have products to sell. Instead, what we do offer are services besides investment management. Our services range from comprehensive financial planning to tax planning and tax preparation, insurance analysis and solutions, as well as a complete estate plan for both simple and complex estates. Each of these services are discussed on an individual basis after considering your overall financial plan.

 

What is a retirement analysis?

A retirement analysis is an analysis of your current situation. We take a look at how much money you want to spend in retirement, what resources you have accumulated to this point, and how much you have to devote to saving for retirement in the future. This is a straightforward analysis that lets you know whether you’re on track to achieve your goals or if adjustments need to be made. Each retirement analysis is performed by one of our experienced wealth managers.

 

How much is a retirement analysis?

A basic retirement analysis is provided with no cost or obligation. Should you choose to move forward and go through a comprehensive financial planning session, which would include a thorough analysis of all of your investments, current and future tax situations, insurance policies, and your estate plan, a flat fee will be charged. This will depend on the amount of work involved in your personal situation. We will not begin working on a complete financial plan until all fees are disclosed and you are comfortable with those fees.

 

How much time does it take to set up a financial plan?

Financial planning is and should be complex. In order to prepare a complete financial plan, there are a few steps we will need to take.

First you have the discovery phase, which is an open and honest conversation with your financial advisor team to let them know everything that’s going on in your financial life and what is truly important to you and your family.

You will then be asked to share all resources that you have accumulated up to this point as well as at least two years of prior tax returns, financial statements, insurance statements, estate planning documents and any risk management documents that you have. You will be provided a list of all the documents required to help you in gathering everything necessary in order for us to begin setting up your personal financial plan.

Lastly, you will be presented with a full comprehensive plan that has carefully considered your needs and goals that encompass all areas of retirement planning in order to help you achieve the most favorable outcome.

 

How long have you been in business?

Dean Barber started his career in financial planning in 1987. Barber Financial Group was formed in 1996.

 

Do you use annuities?

While we believe that in some cases annuities may work we do not sell annuities. However, there may be an occasion where we suggest that a client use an annuity. In this case, we prefer to direct you to annuities that do not have surrender charges. In other words, any time you want to move your money away from the insurance company who issued the annuity, you can do so free of charge. Barber Financial Group will not receive compensation for these annuities.

 

Investments

What is a RMD (Required Minimum Distribution)?

All qualified retirement plans have a required minimum distribution (RMD). The required minimum distribution is the required amount that must be taken out of your IRA, 401(k), 403B and other qualified retirement plans. All RMD’s are based on the same mortality tables unless it is an inherited IRA.

Required minimum distributions start the year in which you reach age 70 ½. If you are born before July 1st, your required minimum distribution will be equal to 3.649%, if you are born after July 1 your required minimum distribution will be equal to 3.77%. Each subsequent year that you age, your required minimum distribution will increase. If you fail to take your required minimum distribution in any given year you could be subject to a 50% excise tax.

The laws surrounding RMD’s vary depending upon the type of qualified retirement plan you are dealing with. If you have multiple qualified retirement plans you should seek the advice of a qualified tax professional to ensure that your required minimum distributions are done accurately each year.

 

What is a safe withdrawal rate in retirement?

The question of a safe withdrawal rate in retirement is one of opinion rather than fact. The most appropriate way to determine a safe rate of withdrawal in retirement is to do a thorough analysis of your underlying investments including the historical rate of return and the amount of volatility in your account. A safe withdrawal rate can be determined through good financial planning. It is not a good idea to use a general of rule of thumb when determining your safe withdrawal rate for your specific retirement.

 

What is a good rate of return on your investments?

You can look at historical rates of return for stocks, bonds, savings, CDs or even real estate – this can give you a general guide for what would be considered a good rate of return. However, a word of caution, history does not always repeat itself and past performance should never be used to try to judge future results.

Many factors will need to be taken into consideration to determine if in fact you are receiving a good rate of return. For example, if you have 100% of your money invested in the stock market, and look at the long-term historical performance of the market, you will be either far above or below that number in any given year.

If you have 100% of your money invested in savings and CDs, today your actual return will likely be far different than the long-term historical average. The same thing can be said for bonds and real estate.

The most appropriate way to look at whether or not your performance is up to par is to understand your current asset allocation and your tolerance for risk and then judge your rate of return against similar benchmarks.

 

Should I pay my mortgage off before I retire?

Many people believe that being debt-free is the only way to go, and when interest rates are high this is probably a good approach. However, when interest rates are near historical lows a person may want to continue to carry that debt if they believe that the long-term performance on their underlying investments could outperform the rate of interest on their mortgage.

This is not a simple yes or no question and there is not a simple formula to determine whether you should pay your mortgage off or not. The answer to this question should come through a thorough analysis and the completion of a comprehensive financial plan.

 

Should I Buy Gold?

The question of whether you should or shouldn’t own gold in your portfolio should be determined based on current economic conditions and your overall tolerance for risk. From a historical perspective there have been many times when an investment in Gold would have delivered a favorable performance. It’s also important to note, there have been historical times when an investment in gold would have resulted in a significant loss. Never invest based on fear or greed. Most commercials you hear about investing in gold are driven on those two emotions.

 

How do interest rates affect my portfolio?

Interest rates affect the performance of just about every major asset class including stocks, bonds and real estate. During a rising interest-rate environment, bonds will typically perform less favorably than stocks. During a falling interest-rate environment bonds will typically perform exceptionally well and depending upon other economic conditions, stocks may as well perform favorably.

Understanding the effects of interest rates on different asset classes is critical when designing the proper asset allocation of your portfolio. There are many stress testing technology programs out there today that can show you how your portfolio would perform in both a rising interest-rate environment as well as a falling interest-rate environment.

 

Should I buy an annuity?

Whether or not a person should invest in an annuity will depend solely on that person’s individual financial position. For some people, allocating a portion of their money into an annuity makes sense and for others it will make no sense at all.

Keep in mind that many annuities are sold by insurance salespeople who are not necessarily financial planners. As a financial product, annuities were designed to fill a very specific need of a person’s overall financial plan. The question of whether an annuity works for you or not can only be determined through the completion of a comprehensive financial plan. It is not advised to Do not buy an annuity based on fear or greed.

 

How do annuities work?

Annuities have two different time frames or phases. The first is the accumulation phase which is where you are allow the annuity to grow in value. Second is the distribution phase which is when you begin to take income from the annuity.

Annuities will typically accumulate on a tax-deferred basis and when you begin to take income from the annuity you will pay taxes on any gain above your deposits inside of that annuity. If you choose to fund an annuity with an individual retirement account, 100% of the distributions that come out of the annuity will be taxable as ordinary income since the IRA rules override the annuity rules.

It is important to understand that not all annuities are created equal, just like not all mutual funds are created equal. There are many different forms of annuities issued by many different companies. Annuities can be complex, very confusing, and sometimes even misleading. Make sure that you have a thorough understanding of the annuity that you are investing in and if possible choose an annuity that does not carry long-term surrender charges.

 

What is an ETF?

Exchange Traded Fund’s or (ETF’s) in their simplest form are designed to track different indexes or sectors of the market. Exchange traded funds can be bought and sold on the exchange throughout the day. While this immediate liquidity can be beneficial, you should also exercise caution.

In order to sell your ETF, there has to be a willing buyer. In the event that the sector ETF that you invested in begins to go south there may not be any interested buyers on the other side. All investing carries risks and ETF’s are no different.

 

What is a Mutual Fund?

Mutual funds were formed after the “Investment Company Act of 1940”. They were formed with the intent of allowing an individual investor to have a diversified portfolio with small amounts of money. In other words, a mutual fund amounts to a pool of funds made up of many different investors who all own shares of that fund.

Most mutual funds are professionally managed and the fund manager is responsible for diversification. There are many different types of mutual funds with different investment objectives – and they all carry different levels of fees and different levels of risk. It is important that before investing in any mutual fund that you clearly understand the risks that are involved as well as the expenses.

 

What is a Mutual Fund?

Mutual funds were formed after the “Investment Company Act of 1940”. They were formed with the intent of allowing an individual investor to have a diversified portfolio with small amounts of money. In other words, a mutual fund amounts to a pool of funds made up of many different investors who all own shares of that fund.

Most mutual funds are professionally managed and the fund manager is responsible for diversification. There are many different types of mutual funds with different investment objectives – and they all carry different levels of fees and different levels of risk. It is important that before investing in any mutual fund that you clearly understand the risks that are involved as well as the expenses.

 

What’s the difference between a Mutual Fund and an ETF?

There are two major differences between mutual funds and ETF’s. First, an ETF can be traded throughout the day on the exchange. Mutual funds can only be liquidated at the close of business on any given day. Secondly, mutual funds are typically professionally managed and most ETF’s are passive and simply designed to mirror an index or sector of the market. Most mutual funds will carry fees that are higher than ETF’s but this is not the case 100% of the time. Before investing in an ETF or a mutual fund, it is important to understand the risks involved and the fees you will pay.

 

What is a fee-based advisor?

Fee-based advisers are paid a fee for either managing your money or for giving financial advice. Typically you will see fee-based advisors charging a flat rate for the time that they spend on the job that they are doing for you or a flat fee that is a percentage of the assets they are managing for you.

Some advisors will charge both. There is no right or wrong answer here but it is always wise to understand exactly how your advisor gets paid. It’s not only about how your advisor gets paid but what value you receive for the fees that you pay.

 

Is my advisor a Fiduciary?

A fiduciary is bound by law to put your interests ahead of their own – 100% of the time. Some advisors may call themselves fiduciaries but to ensure that your advisor is a fiduciary ask if they carry the Accredited Investment Fiduciary (AIF) designation. Typically fiduciaries will only be paid by you and will not receive compensation from product sponsors such as mutual fund or insurance companies. Each of our advisors at Barber Financial Group have their AIF designations.

 

What is the best investment strategy for retirement?

The best strategy for investing in retirement is a strategy that will allow you the highest probability of success in accomplishing your objectives with the least amount of risk possible. While that’s easy to say, accomplishing it is something far more difficult.

Before you have any discussion about your investment strategy, your advisor should take you through a comprehensive financial planning process. This means covering all aspects of retirement such as investments, estate planning, tax planning, insurance, and Social Security.

You need to be open and honest with your advisor about exactly what you have and exactly what you need to have happen in retirement. Once you and your advisors have agreed upon the correct path then you can begin to discuss different investment strategies. Typically in retirement it is not wise to take on any more risk than what is necessary in order to accomplish your overall objectives.

 

Can I make my own retirement plan?

It is possible to create your own retirement plan. However, it’s important to keep in mind that a retirement plan for most people is very complex. A good retirement plan will include a plan for taxes, a plan for risk management, a plan for investing and a plan for the distribution of your assets when you pass away.

If you are not well versed in each one of these four areas you would most likely be well served to seek out the advice of a professional financial planner. Do not mistake a retirement plan for an investment plan. An investment plan is simply a component of your overall retirement plan. All four of the components mentioned above are critical to the success of your retirement. A decision made in one area may affect all areas. Without a thorough understanding of this, it’s possible to make mistakes that you don’t realize you’ve made until it’s too late.

 

When can I retire?

Retirement can be summed up in two words. Financial independence. This is the point in your life that you know that you have saved enough money to have the ability to care of yourself for as long as you live. The calculation to determine whether you have enough money for retirement is a very complex calculation. There are many factors to consider prior to making the decision to retire. You must consider the amount of money you have saved, the amount of income you will need, and all sources that can drive income in the future. You also have to take into consideration the impact of taxes during retirement. Speaking with an experienced financial advisor can help you answer these important questions.

 

Can I retire early?

Anyone has the ability to retire anytime they want to. There is no set age for retirement. The real question you should be asking is “Have I saved enough to deliver the income that I need to do all the things I want to do for the rest of my life?”

Have you taken into consideration the fact that you may live much longer than your parents or grandparents? Have you taken into consideration the fact that inflation may be higher than what you’ve calculated? Have you taken into consideration the fact that returns on your investments may not be what you expect? Have you taken into consideration the possibility of a premature death of you or your spouse?

The date in which you retire is not something that’s governed by law but something that is governed by the success of your retirement plan.

 

How much money can I spend in retirement?

The amount of money that you can spend in retirement will be based on many variables. You need to consider your expected rate of return on investments, taxes due on investments, the amount of Social Security you will receive, pensions, rental income, etc. A good financial planner can set you on a course for an amount that can be safely spent each year without the threat of running out of money. This calculation should be looked at yearly and adjustments should be made when necessary.

 

Should I be contributing to a Roth IRA?

While the Roth IRA is a great vehicle not everyone at every stage of life should invest in a Roth. The only way to truly answer this question is to understand when you will need this money and what your total financial picture will be when you need income. A good retirement plan will have money in taxable, tax deferred, and tax free (Roth) accounts. The amount you should have in each and when you should invest in each will depend on the comprehensive financial plan you have built for yourself with your financial advisor.

 

How much can I contribute to an IRA every year?

Contribution limits are the same for both traditional IRAs and Roth IRAs. For 2017, IRA contributions can be made up to the lesser of (1) $5,50 ($6,500 if age 50 or older by the end of 2017) or (2) 100% of the individual’s taxable compensation. For married couples, IRA contributions can be made for each spouse if the combined compensation of both spouses is at least equal to the contributed amount and they file a joint return. The IRA contribution limit applies to the combined contributions to all the taxpayer’s traditional and Roth IRAs.

Once an individual attains age 70 ½, and all following years, contributions to traditional IRAs are no longer permitted. Taxpayers over age 70 ½ can still make contributions to Roth IRAs.

Contributions to traditional IRAs can be deductible, partly deductible, or nondeductible. Allowable contributions to traditional IRAs are always fully deductible if the taxpayer (and spouse, if married) is not an active participant in an employer-maintained retirement plan. If the taxpayer (or spouse) is an active participant in an employer plan and modified adjusted gross income (AGI) exceeds certain limits, the taxpayer cannot deduct the full amount of the IRA contribution and may not be able to deduct any of the contribution.

 

What’s the difference between a Roth Contribution and a Roth Conversion?

A Roth contribution is the amount you add each year to a Roth. That money comes from non-retirement plan assets.

A Roth conversion is when you move money from a Traditional IRA to a Roth IRA. The amount you move is taxable in the year you do the conversion. Conversions can be a good way of getting money into a tax free investment but many calculations need to be done prior to making the conversion. A Roth conversion should be considered as part of an overarching tax strategy that fits well within your overall retirement plan.

 

Are there disadvantages to a Roth IRA?

The only real disadvantage to a Roth IRA is you have to pay taxes on the deposits made. The benefit is that all future earnings will come out tax free as long as you have held the Roth for 5 years and you have attained the age of 59 ½. The question of whether you should use a Traditional or Roth IRA can only be answered with a comprehensive retirement income plan in place.

 

Retirement Planning

Can You Really DIY Your Retirement?

When it comes to planning for your retirement, we all know there are thousands of online resources and books that claim to teach you how to DIY (do-it-yourself). So is it really possible and does it work?

DIY retirement planning requires advanced knowledge and understanding in the following areas: investments, tax planning, insurance and estate planning. Not to mention, it would also be beneficial to have substantial knowledge… Continue Reading »


 
 
 
 
 

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How Does High Inflation Affect My Retirement?

When something is referred to as a “silent killer”, oftentimes you assume it’s a disease or health crisis that is being talked about. In our industry however, the silent killer is inflation. Much like heart disease or osteoporosis, inflation can slowly creep up unnoticed for years, even decades, until serious problems arise that cannot be ignored. What was once affordable is now too expensive.

Inflation will most likely never cause a frugal person to go broke but it can cause a frugal person to live like they are broke. When you put your retirement plan together, make sure to plan for an inflation rate that is along the lines… Continue Reading »


 
 
 
 
 

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Tax Planning

How Do I Pay Less Taxes?

Everyone in America who pays taxes feels like they have paid their fair share, and in some cases, far more than their fair share. This causes people to be very shortsighted when it comes to reducing your tax bill.

Most CPAs are tasked with the difficult duty of trying to find ways to save you money, on your current tax returns. The problem is, it’s too late! At this point, all of your taxable income and investment assets have made their money, and it’s almost impossible for the CPA to affect the amount… Continue Reading »


 
 
 
 
 

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How Do My Investments Affect My Taxes?

The relationship between investments and taxes is perhaps one of the most overlooked areas of retirement planning. Decisions that are made on the investment side of your retirement plan will most likely have some type of impact on your tax return. Typically an investor will have three different tax buckets that they can place money into. They will have the tax-deferred bucket, the tax free bucket and the taxable bucket.

First we will address the tax-deferred bucket…. Continue Reading »


 
 
 
 
 

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Will I Pay Taxes on My Inheritance?

There are many different forms of inheritance. Some will carry a tax burden while others will not. When inheriting IRA money or money that is in any type of qualified retirement plan, the beneficiary will pay taxes when money comes out of these retirement plans.

If properly structured, the beneficiary will have the ability to allow the assets in the retirement account to continue to grow tax-deferred. The beneficiary must take a small required minimum distribution each year. If structured improperly the beneficiary may…Continue Reading »


 
 
 
 
 

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Will my tax bracket change in retirement?

During retirement your tax situation will most likely become far more complex than when you were a simple W-2 employee. You will have different tax rates on Social Security, dividends and capital gains, as well as ordinary income and distributions from your retirement plans. While ordinary tax brackets for retirees remain the same as people who are working, it’s the source of which you take income that determines how much tax you pay in retirement. Perhaps one of the most complex parts of a financial plan is creating an efficient distribution strategy to minimize one’s taxes.

 

Social Security Planning

Is Social Security Tax Free?

A very common question we are asked at Barber Financial Group is if Social Security is tax free. The quick answer is: If the only income you have is Social Security you will not pay any taxes on your Social Security. However, If you have other sources of income you could be paying taxes on as much as 85% of your Social Security.

Before we explain how your Social Security is taxed, you must first understand what “Provisional Income” is. Provisional income is used by the IRS to determine if you’ll be paying taxes on your benefit or not. It is calculated by taking 50% of your combined… Continue Reading »


 
 
 
 
 

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How do I get more Social Security?

Social Security is a very complex system. Social Security was originally formed to allow older workers to exit the workforce without the risk of running out of money in retirement, while allowing room for younger workers to come into the workforce.

When Social Security was originally formed the average life expectancy was 62 years old. At the same time you could not claim Social Security until you turned 65. Due to advances in medical technology, we are now… Continue Reading »


 
 
 
 
 

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What’s the Difference Between Retirement Age and Social Security Claiming Age?

Many people believe that the date that they should claim Social Security is synonymous with the day that they retire. However, nothing could be further from the truth.

Your Social Security claiming age date is based on law. The earliest claiming age for Social Security is 62. You will receive a reduced benefit of 75% of your full retirement benefits if you claim at 62… Continue Reading »


 
 
 
 
 

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Should I wait to take Social Security?

The answer as to when and how a person should claim their Social Security is a very personal question. It depends on what other sources of income you have, your life expectancy, your spouse’s life expectancy and your overall tax situation. We’ve seen many situations where it makes sense to begin taking Social Security as soon as possible. We’ve also seen other situations where delaying it as long as possible is the best strategy. There is no simple one-size-fits all answer; only a thorough analysis of your entire financial situation can give you answers about when and how to claim your Social Security.

 

How has Social Security changed over the years?

Social Security has undergone many changes over the years. One of the most recent changes took away the “file and suspend” option and will gradually take away the restricted application option. These are two popular strategies that have been used since the late 1990s when President Clinton signed them into law. However, these are only two of many claiming strategies that can allow you to get more out of the Social Security system. There are still hundreds of options available to you and your financial advisor can help you discover your best option.

 

Is Social Security going to last?

As a whole, Social Security is fully funded until 2034, and after that is only about three-quarters financed.* However the fix for Social Security is not as dramatic as what some in Washington would lead you to believe. There is no question that changes need to be made to the system and the longer Congress is unwilling to address those issues, the more dramatic those changes could be. At this point, simply pushing back the age in which you can apply for Social Security for younger Americans, along with a small increase in the Social Security tax, could make Social Security solvent to the end of this century.

 

*www.ssa.gov
 

Estate Planning

What is Probate?

Probate is the process of collecting your assets, paying your debts and taxes, and transferring the property owned by you, at your death, to your heirs.

If you do not have a will before you die (intestate) the probate court will decide the disposition of your assets for your heirs. If you have a will at the time of your death, the person you named… Continue Reading »


 
 
 
 
 

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How do I protect my Assets?

There are many ways to protect your assets depending upon the nature, characterization, and value of each asset. Various types of insurance, federal, and state statutes, as well as certain types of trusts may be used to protect your assets.

 

What is a “Revocable Trust”?

According to investopedia.com, a revocable trust is a trust whereby provisions can be altered or canceled dependent on the grantor. During the life of the trust, income earned is distributed to the grantor, and only after death does property transfer to the beneficiaries.

 

Do I need a trust?

Because of their many advantages, revocable trusts are popular estate planning tools. Depending on your particular circumstances, a revocable trust may be beneficial in planning your estate. Revocable trusts are very flexible. You can make changes to the trust or revoke the trust at any time for any reason, as long as you are mentally competent. Further, there are few restrictions on the choice of trustees and beneficiaries. Finally, when drafting a revocable trust, you have many options regarding the management and distribution of your assets to your beneficiaries upon your death.

 

Will a trust avoid probate?

One of the main advantages of a revocable trust is the avoidance of probate upon your death. A revocable trust can help avoid probate because assets that have been placed into a revocable trust are considered owned by your trust at the time of your death, rather than you personally. Therefore, assets in trust will not be subject to probate. Because probate fees are generally based on the value of the assets that must go through probate, the use of a revocable trust will reduce those fees.

 

How do beneficiary IRAs work?

Beneficiary IRAs allow the beneficiary to “stretch” the Required Minimum Distributions (RMDs) over the beneficiary’s life expectancy. This IRA is treated as an inherited IRA. The use of a trust as the IRA beneficiary gives the individual beneficiaries protection from creditors and even potential divorces.

 

Should I be listed jointly on my parent’s accounts?

Some things to keep in mind If a parent or other relative adds your name to his or her account (e.g. to plan for incapacity or avoid probate), is the account could now be subject to your creditors or potentially subject to division in your divorce. Further, that parent or relative has made a gift to you, subject to gift tax, upon the addition of your name to that account.

 

How do I handle my parent’s financial accounts?

A Durable Power of Attorney is a document in which you legally appoint another person to act on your behalf on financial, legal or personal matters during times when you are incapacitated or disabled. This person is generally referred to as an “Attorney in Fact” or an “Agent.”

 

Do my parents need a Power of Attorney?

A Durable Power of Attorney is essential if you wish to provide a degree of stability in your affairs during times when you are disabled or incapacitated. The person whom you entrust as your Attorney in Fact will ensure that your bills are paid on time, your legal affairs are in order, and equally important, that your wishes with regard to medical treatment are respected and followed.

 

Insurance Planning

What is Probate?

Life insurance has two basic purposes. The first purpose is to replace income that is lost from the person who passes away. The second one is designed to be a way to enhance the estate left behind for any beneficiaries.

In regards to the first purpose, managing the risk of a premature death of either spouse is critical both while you’re working and when you are retired. In order to understand… Continue Reading »


 
 
 
 
 

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Do I need Long-Term Care coverage?

Statistics will tell you that approximately 50% of retirees will spend some amount of time in a long-term care facility or will need some sort of in-home healthcare. However, we advise to not let this be the reason for buying long-term care insurance. To determine whether long-term care insurance is needed you must first complete a comprehensive retirement analysis. If your retirement plan works with both spouses staying healthy until end-of-life, then we can simply “stress test” your plan with the assumption that one spouse will spend some time in a long-term care facility. If the plan fails for the surviving spouse then it will make sense to look into long-term care insurance. Not all long-term care policies are created equally and it is best to consult a qualified financial planner who understands how to integrate insurance planning into your overall retirement plan. Any insurance, whether it’s life insurance or long-term care insurance should never be sold to you, it should only be purchased by you to cover a very specific need that makes sense with your unique situation.

 

How I do I buy health insurance?

There are a number of ways in which you can buy health insurance with the most common being the open enrollment period of your employer’s plan. After retirement however, our options change. The days of your employer covering you (and your spouse) at a reduced rate is most likely not going to be an option. One thing to consider is that if you retire early (before the age of 65), you will not be eligible for Medicare and you will need to explore purchasing individual health care coverage. Remember, it is important to not let your coverage lapse because if you have an accident or become ill, your only option to cover this expense may be to drain your retirement accounts that you’ve worked so hard to save.

 

When do I file for Medicare?

You are required to file for Medicare at the age of 65.

 

What is Medicare Supplement Insurance?

A Medicare Supplement policy (Medigap), can be purchased through private companies. They are intended to assist you with health care costs and other things that regular Medicare doesn’t cover. Some examples of things Medigap might cover would be copayments, deductibles, or medical care when traveling, but it’s also important to remember they don’t cover everything. For more information, visit www.medicare.gov.

 

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