Sep 11
22
Your minimum required distribution also known as RMD is the amount of money the IRS demands you take as IRA distributions once you turn age 70.5. This required minimum distribution calculator will help you better understand what your RMD is and what to expect.
Currently the IRA distribution is 27.4 when you turn age 70.5. This means that if you are using a required minimum distribution calculator or computing this yourself the proper thing to do is take the amount of money in your IRA balance and divide it by 27.4. This number is based on a life expectancy the IRS has determined you have once you hit age 70.5 and is used to determine the minimum required distributions.
Since this is a IRA funded with pre taxed dollars you will have to pay taxes on all of your minimum required distributions. There is a penalty that the IRS imposes if you do not make these IRA distributions. I would suggest taking this seriously because a penalty on your IRA could have a strong negative impact.
As you get older the IRS naturally formulates your life expectancy going down. The IRS basically wants as much IRA distributions to take place as possible because they know you are going to have to pay taxes. Therefore the next year following your first IRA distribution you will have to take out a higher percentage of your IRA balance. For example, when you turned 70.5 you divided, or the required minimum distribution calculator divided your IRA distribution by dividing the balance by 27.4 now the following year you will have to divide the balance by 26.5. That means a larger portion of your balance is coming out of your IRA.
This continues until death once you turn age 70.5 and there is no way to avoid minimum required distributions in the IRA’s natural fashion.
If you would like to have your own numbers ran using my required minimum distribution calculator feel free to shoot me an email at SparksFinancial@Gmail.Com. I would be more than happy to help you figure out your minimum required distributions.
Sep 11
21
Businesses that are operating in todays economy are experiencing extremely challenging times where an emphasis on cost containment and expense control must be taken. This has made it harder for employees to attract and retain the most qualified work force. Companies must now offer more than ever a very comprehensive and competitive employee benefits program.
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I represent a company that does employee benefit services for about 40% of Fortune 500 companies. The relationships we have established with carriers of those employees benefits we are able to provide a service and cost plan in the most competitive fashion.
One of the most influential aspects of our business is having solid relationships with those carriers who provide employee benefits.Enormous blocks of business gives tremendous leverage with carriers making your relationship with a company like that more valuable than any other provider of employee benefit services.
The process of providing our employee benefit services is simple. There are 5 phases to the final implementation of your employee benefit plan. First phase (evaluation phase), where we will perform an in-depth analysis to assure understanding of all components of your current employee benefit plan. Second phase (design phase), new ideas and areas of consideration to round out and enhance your program will be made. Third phase (development phase), based on your approved design, detailed specifications and requirement to competitively market and price your employee benefits will be developed. Fourth phase (negotiation phase), we will use our experience and leverage to negotiate, develop contracts, and place employee benefit programs with the right vendors. The focus of this phase is to emphasize cost, delivery, quality, resources, and services. Final phase (advisory phases), this phase is where we actually help with the ongoing management of services that include cost control and monitoring performance commitments on the awarded contract.
As you can see our employee benefit services are comprehensive and we are able to provide outstanding employee benefits that will foremost help improve the components of your business.
Employee Benefit Plans Include
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SparksFinancial@Gmail.Com or 828.606.6402
Typically from the illustrations that I have ran a tax deferred asset can grow at 1% less than a taxable asset to get the same future values. However this does not mean you should automatically run out and buy an annuity because there are advantages and disadvantages of both. Here is a look at tax deferred vs taxable Assets
By using a tax deferred calculator I can illustrate how these accounts will react over the years!
As you can see there are advantages of Tax Deferred over Taxable assets but the objective and situation has to make sense. Even after using a tax deferred calculator like this one we still have to look at other variables associated with making these decisions. These are decisions the tax deferred calculator can not figure. This would include the owner answering questions about whether or not they plan to use the assets as income in later years or if their main focus is to pass on as much as possible to their heirs with the least tax liability.
I would suggest for those most interested in passing on their legacy to leave their assets in taxable accounts and do some extensive estate planning through trust and insurance products to manage tax liabilities. The step-up basis for inherited assets like stocks are nice but you have to remember if your estate is in excess of 5 million for individuals or 10 million for couples an estate tax may exist. However, the estate tax may go down to 4 million in upcoming years and an annual review needs to happen so you can keep up with changes.
For individuals needing a guaranteed source of income you will most likely want to use some tax deferred annuity planning strategy where you latter to preserve capital or get a single LIBR to keep cost down. However, the down side with these products is that with the new rate policy these products are becoming less and less competitive in the market place and acting as soon as possible would be in your own best interest.
Either way this tax deferred calculator could be considered a growth calculator for tax deferred and taxable assets. Questions can not always be answered about what would be best just by using this tax deferred calculator. Make sure you pay attention to the other ideas I mentioned to make a more comprehensive plan.
Retirement & financial planning illustrations make client proposals or consumer analysis easier to understand. Here is ours showing life span of assets, SIPS planning, IRA, Roth Conversions, and several other types of planning concepts.
Sparks Financial retirement & financial planning illustration program is available to advisors and consumers. SparksFinancial@gmail.com