Estate and Tax Planning
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Employers Uncertain on Healthcare Plans

February 26, 2011 | Filed Under Insurance | Comments Off

A survey conducted by insurance broker, Willis Group Holding, and Diamond Management & Technology Consultants illustrated that only 52% of employers plan to continue their group heath care coverage once the Patient Protection and Affordable Care Act becomes active in 2014. Of the 1400, various-sized employers surveyed, at least one third of them were unsure what they would do, and 12% planned to discontinue their group plans altogether.

Whether employers will offset the drop in benefits with an increase in salaries lies largely unknown, with only 17% indicating they would raise salaries to make up for the loss.

Inheriting Trillions

February 26, 2011 | Filed Under Finance, Investment | Comments Off

A study conducted by the Center for Retirement Research at Boston College in January of 2011, indicated that approximately $8.4 trillion will be inherited by baby boomers. Those to inherit the most will receive an average of $1.5 million, while the least wealthy will average about $27,000. That translates to roughly $64,000 per person.

The study also estimates that two-thirds of the baby boomer generation will receive some inheritance.

In addition to the $8.4 trillion, some baby boomer parent’s will transfer a portion of their wealth to their children while they are still living. That would estimably increase the total transfer of assets between generations to $11.6 trillion.

The writers of the study concluded their paper with this caveat:

“It is important to stress that most boomers have not yet received any inheritance. And the amount and timing of inheritance receipts is highly uncertain. Even parents who have a strong desire to leave a bequest may be forced to revise their plans based on fluctuations in the value of their assets. Or they may exhaust their wealth as a result of medical and, especially, long-term care costs. In short, an anticipated inheritance may not materialize. Even when inheritances do occur, recipients generally get the money when they are older and the amounts are typically not large enough to be life-changing. Therefore, boomer households need to make many of their key financial decisions before they ever receive any inheritance. And they should not count on an inheritance to eliminate the need for increased retirement saving.”1

[1] How Important Are Inheritances For Baby Boomers? By Alicia H. Munnell, Anthony Webb, Zhenya Karamcheva, and Andrew Eschtruth*© 2011, by Trustees of Boston College, Center for Retire­ment Research

Shari Mattingly Bevan- “Managing Risk”

February 24, 2011 | Filed Under Finance, Investment, Retirement Savings | Comments Off

Managing risk successfully in various areas of one’s life requires
knowledge, skill, and a little bit of luck. When evaluating any investment,
risk exposure is central to the determination you make. Typically, the
better the return, the higher the risk. Before, you can make the best
choice for you, you need to understand your own comfort level of risk.
Personal circumstances, preferences, personality, knowledge base, affect
one’s ability to handle different levels of risk.. When you are reviewing
your portfolio or considering a new investment, your primary thought should
be how much risk are you willing to bear, can you withstand the potential
loss, and then to consider what returns might you gain. Whether, your
neighbor invests in derivatives and has gained a small fortune, or you are
focused solely on a rate of return those should not be what drives your
investment decisions.
The goal of investing is better expressed as having enough cash on the day
a bill comes due.

Shari Mattingly-Bevan – “Remodeling the Mortgage Interest Deduction”

February 16, 2011 | Filed Under Finance, Real Estate, Retirement Savings, Tax Articles | Comments Off


The decision to purchase a home is often influenced by the tax break a homeowner receives with the mortgage interest deduction. Recently, even those who just take the standard deduction can take advantage of the property tax deduction on their federal return.

The federal government is in desperate need of revenue and is looking for it in places it once did not touch. Altering the deduction has been a consideration by both Democrats and Republicans for years. The national concern over the federal debt may be the window of opportunity both parties are looking for.

One idea is to lower the cap on the loan amounts that qualify for the interest deduction. The Congressional Budget Office examined a proposal to cut the loan amounts to $500,000 by 2018. I speculate many of California homeowners would be left out because of this cap. Considering California’s own financial troubles, I imagine this could send California into the Pacific, sooner than an earthquake would.

Another recommendation put forth by President Bush’s 2005 Tax Reform Advisory is to remodel the deduction to a tax credit. This would mean a dollar-for-dollar reduction in the taxes you owe.

The projected revenue the modification in the benefit would bring the Federal government, is in the billions, according to the Congressional Budget Office. Perhaps, it is only a matter of time, not if, before the government takes this sacred cow to the butcher?

Reducing the national debt is going to hurt, if it is to be done right and quickly. Nobody wants “their benefits” to be on the chopping block. However, with the housing market in a whirlwind, making home buying less attractive might not be the smart choice to fix our financial woes.

Tax-friendly states for retirees. Do they exist?

February 8, 2011 | Filed Under Finance, Real Estate, Retirement Savings, Tax Articles | Comments Off

Looking for tax savings can be a full-time job these days. Whether it’s income tax, sales tax, estate tax and even taxes on your Social Security Benefits or Pension, we all could improve our financial picture by reducing the amount of taxes we pay out. Retirement brings a reduced income for most people, even with Social Security Benefits and Pensions to draw upon. That is all the more reason to look for legitimate ways to decrease your tax liability.

Reducing your taxes doesn’t always have to be complicated. Retirees have an advantage over the working class. That is, they aren’t tied down to any one spot because of a job. Freedom to pack it up, and move to greener pastures is one way that you could save on taxes.

I found this great guide to looking up which states are more favorable for reducing taxes. For instance, you can look up the 5 states with no sales tax, the 9 states with no income tax, states with the lowest sales and real estate tax. Particularly important for retirees, is the states that don’t tax your Social Security Benefits and that are Pension-Friendly. I recommend you take a look at the guide and see if perhaps a move is in your future.

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