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C.H. Robinson

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Social Security – Facts You Might Not Know:

Written by Summit Wealth on .

• 1 in 5 20-year olds will have a disability before age 67

• For those that lose a spouse at a young age, Social Security benefits are available to your children until they reach age 18 (or they finish high school)

• The number of workers per Social Security benefit recipient is decreasing:

  • 5 to 1 in 1960
  • 3 to 1 in 2004
  • 2 to 1 in 2030 (projected)

(I guess we can all see why the system is in trouble?)

• Within 12 months of your initial receipt of Social Security benefits, you can have a "do over." You must repay the benefits received (this is a once-in-a-lifetime opportunity) and you can reset your benefit amount.

• For those now divorced – if they were married to someone for longer than 10 years, they can receive Social Security benefits based on their former spouse's earnings record.

There are literally hundreds of options / combinations when choosing to receive your Social Security benefits. We can help you analyze the options that would be best for you so that you can maximize the amount of benefits you receive over your expected lifetime. Please contact us if we can be of any assistance in this area.

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Are You Making After-Tax Contributions To Your Company Retirement Plan?

Written by Summit Wealth on .

The IRS recently clarified a ruling concerning participants that make after-tax contributions to their company retirement plans. The ruling clarified that once a retirement participant retires from employment they can:

  • Roll over the pre-tax portion of their retirement account to a Traditional IRA account, with no tax ramifications.
  • The remaining after-tax portion of their account can be converted to a Roth IRA account, with no tax ramifications.

The reason we find this ruling important is that many plans are now offering the ability for participants to make after-tax contributions. This opportunity could be another manner in which you construct a sizeable Roth account, despite the fact that you may earn over the Roth contribution limitations.

If your company offers the ability to make after-tax contributions to your plan, and you would like to discuss how you could be leveraging this opportunity, please contact us. We would be glad to help.

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The Importance of Saving Money in all 3 “Buckets”

Written by Summit Wealth on .

By “buckets,” we are referring to taxable, tax-deferred and tax-free buckets. The reason we feel it is critical to save money in all three is to maximize your ability to control the amount of taxes you pay in retirement.

For example, let’s say you arrive at retirement with a large, pre-tax bucket of money (and that’s all). While you’ve likely accomplished your goal of minimizing your income taxes all along the way, you will likely have no control over your tax burden moving forward (as you draw from your one-and-only pre-tax bucket of money). You draw out $10,000 pre-tax, just to get $7,000 after-tax.

However, if you build taxable and tax-free (Roth) buckets over time as well, we can better control your tax bill moving forward as we draw your retirement cash flow from all three types of accounts to minimize your overall tax bill.

While we understand that this strategy sounds easy, you may be thinking: Don’t I make too much money to contribute directly to a Roth? However, there are techniques we can consider that will allow you to get dollars into Roth accounts. Those methods are for a future blog.

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IRS Increases Retirement Plan Contributions Limits for 2015

Written by Summit Wealth on .

The IRS announced the cost of living adjustments (COLA) for retirement plans for 2015. Here's what they look like:

  • For those less than age 50: $18,000 maximum contribution limit for 401(k)s, 403(b), 457, etc.
  • For those age 50+: In addition to the $18,000 contribution discussed above, a catch up contribution of up to $6,000 can be made as well.

Unfortunately, the annual limits on IRA accounts remains at $5,500 while the additional catch-up contribution for those age 50+ also remains at $1,000 (meaning they can contribute $6,500 to a traditional or Roth IRA).

If you have any questions about how the changes above impact you, please contact us as we are glad to help.

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Elder Financial Abuse Is Expected to Get Worse

Written by Summit Wealth on .

A recent study by Allianz entitled, "2014: Safeguarding Our Seniors," indicates that the financial abuse of the elderly is not always reported and is a misunderstood issue that is likely to continue to get worse as our population continues to get older. The study of more than 2,000 Americans age 40+ found that misunderstandings persist about the most likely sources of financial abuse and the financial impact that abuse has on its victims. Allianz defined financial abuse as "the unauthorized or improper use of resources of an elder family member or friend who is +65 years old, for monetary or personal benefit, profit or gain."

Only 5% of elders in the study said they have experienced financial abuse. However, almost 19% of those age 40 – 64 reported that they have an older friend or family member who has been a victim in the past. Of this 19%, 55% said the victims did not report the financial abuse.

The study also highlighted a lack of awareness about the causes of elder financial abuse. The majority of survey respondents indicated telemarketing as the top source of abuse, followed by Internet scams and U.S. mail solicitation. Of those elders reporting financial abuse, 52% said a family member, friend or caregiver was the culprit.

For those of you with senior family members and friends, it's important to get educated as to the types of financial abuse taking place as well as how to keep close tabs on those responsible for the financial care of the elderly you know. You may help prevent someone you care about from losing hundreds of thousands of dollars.

North Metro: 763.355.5873
227 East River Parkway
Champlin, MN 55316-5873

South Metro: 612.987.9112
5871 Crossandra Street SE
Prior Lake, MN 55372-3337

West Metro: 763.639.3425
322 Greenhill Lane
Long Lake, MN 55356

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