Taxes

Unlike Social Security, which people tend to think about many years before claiming, Medicare is almost an afterthought. As long as people are working and covered by an employer plan, they don’t think very much about how their health insurance might change upon turning 65 or leaving employment. This leaves them open to all kinds of potential mistakes.

Prior to 2020, when a non-spouse beneficiary inherited a traditional retirement account, that beneficiary was eligible for a planning strategy known as a stretch IRA. A stretch IRA extends the tax-deferred status of an inherited IRA when it is passed to a non-spouse beneficiary. The benefit of this planning technique is that the non-spouse beneficiary would not have to recognize the entire inheritance as taxable income in the year they inherit the money.

As a new year approaches, it is only natural for us to reflect on how things went in 2019. Personal and professional accomplishments may take center stage. Or, we may take stock of any disappointments and re-calibrate as 2020 approaches. Yet, I know it’s a busy time. Christmas shopping, holiday parties, tree trimming, family visits, and year-end cheer may already be stacking up on the calendar. Nevertheless, it’s not too soon to start thinking about taxes. In prior conversations, we have talked about tax reform. Some are comfortable with the new rules. Others are still just wading into the tax reform pool, so to speak. Before we jump into our year-end planning piece, I want to stress to you that it’s my job to partner with you. I can’t over emphasize this, and I would be happy to review your options. As with any tax matters, also feel free to consult with your tax advisor.

As a financial planner who specializes in helping people make sure they have enough money to retire, I’m distressed when people put off their planning. Even though I get it!It’s hard to start planning for retirement. Perhaps you tried and gave up. Too hard. Too frightening to think about not having a job. But I don’t want you to mess yourself up and not be able to retire when you want. So, here are some of the most common reasons I hear for putting off retirement planning and my thoughts on moving past your reluctance. Who knows, you could even wind up enjoying yourself!