When It Comes to Retirement Planning, One Size Does Not Fit All Part 1: The Safe Withdrawal Rate

An involuntary shift is taking place with the gradual extinction of defined benefit pensions: the individual is being thrust unwittingly into the role of retirement planner. As a firm that specializes in retirement planning, we have been cautioning clients for years about the dangers this represents. Foremost among them is the lack of training and education obtained by most who now must depend on themselves to tackle topics as broad as investment management, risk assessment and management, tax planning and economics, to name but a few.

What's In Your Retirement Plan? The Four Buckets Strategy

We’ve all seen the popular Capital One credit card commercials that always end with the same question: “What’s in your wallet?”  In the same way, I like to ask an equally important question: “What’s in your retirement plan?”

When considering this question, I’m reminded of a conversation I recently had with a couple who came to our office.  They asked if they could simply retain us and pay us by the hour, as opposed to having us manage their investments.  They went on to explain that the reason they didn’t want us to manage their investments was because they wanted to maintain the ability to pull their money out at any given time. 

Do I Really Need a Will, Living Will and Durable Power of Attorney?

A visit to our office will always include the question, “Do you have your will, living will, and durable power of attorney in place?”  Some of our clients affectionately refer to this list of questions as the “nag list.”  Our intention is not to nag our clients, but rather, to emphasize the importance of having your will, living will, and durable power of attorney in good order.  Even the most comprehensive financial plan can crumble without the appropriate legal documents in place.

How Will You Spend Your Retirement Years?

Retirement.  A single word that holds significant weight and meaning for many different people.  What does retirement mean to you?  Although the term can be interpreted differently based on personal dreams and passions, author Catherine Pulsifer seems to accurately capture the universal idea: "Planning to retire? Before you do, find your hidden passion, do the thing that you have always wanted to do."  Check out the list below of some of the most common retirement hobbies; maybe you’ll find your hidden passion!

College Savings – 529 Plans and UTMAs

In previous posts we’ve discussed considerations for college planning. In this post we are going to discuss saving for college and, specifically, two of the more common accounts for college savings: Uniform Transfer to Minor Account (UTMA) and Section 529 Plans.

The Uniform Transfer to Minor Account (UTMA) was an early popular choice for many families to save for college education as it offered a few advantages over traditional savings accounts. First, the transfer of assets was treated as a completed gift which removed the assets from the donor’s gross estate. As a gift, it was subject to the current annual gift exclusion ($14,000 in 2014). Second, any unearned income received favorable tax treatment, albeit lessened with the advent of the “kiddie tax.” Unearned income is generally investment income including interest, dividends and capital gains. Under the current tax code, the first $1,000 of unearned income is exempt using the standard deduction for dependents; and the next $1,000 of unearned income is taxed at the child’s income tax rate. However, any unearned income in excess of $2,000 is taxed at the parent’s marginal tax rate. One drawback to the UTMA is it is considered an irrevocable gift. When the recipient reached the age of maturity – 21 in Pennsylvania and most other states – the custodianship ends, meaning the recipient now has full control and can dispense with the assets however they choose.