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What is the SECURE Act?

What is the SECURE Act?

SECURE Act Brings Big Changes to Retirement Account Rules  

 

President Trump signed the Setting Every Community Up for Retirement Enhancement (SECURE) Act into law on December 20th, 2019. It becomes effective as of January 1, 2020. It brings sweeping changes, including a later starting age for Required Minimum Distributions, more opportunities for contributing to IRAs, and the end of the stretch IRA strategy for inherited IRAs. Below are details on some of the key provisions. 

 

The SECURE Act Allows Longer Tax-Deferred Growth for IRAs

 

RMDs (Required Minimum Distributions) to begin at age 72. If you turn age 70 ½ after December 31, 2019, your required distributions from traditional retirement accounts will begin at age 72 instead of age 70 ½.  Unfortunately, if you turned 70 ½ in 2019, you must still take your 2019 RMD no later than April 1, 2020. If you are already taking RMDs because you are over 70 ½, you must continue taking your RMDs. 

 

QCDs (Qualified Charitable Distributions) continue for those over 70 ½  

QCDs are direct transfers from your IRA to a qualified charity so that the distribution is excluded from your income. The QCD rule that you must be 70 ½ will remain unchanged even though the age for starting RMDs will increase to 72. There may be an impact to your QCD if you make deductible contributions to your IRA after age 70 ½. 

Contributions to IRA accounts allowed after age 70 ½Beginning in 2020, if you have earned income, you will now be able to contribute to your traditional IRA without any age limitationsIf you are married, your spouse can also contribute to an IRA even if they do not have any earned income.  

 

The SECURE Act Permits Students to Use 529 Money to Pay Back Loans

 

Expanded use for 529 college savings accounts. The definition of a qualified distribution from a 529 college savings has been expanded to include up to $10,000 to repay qualified student loans and expenses for certain apprenticeship programs. This provision of the SECURE Act is retroactive to distributions made after December 31, 2018. 

New Moms and Dads Get Penalty-Free Withdrawals from Retirement Accounts

 

Penalty-free withdrawals for birth or adoption expenses. Beginning in 2020, parents can withdraw up to $5,000 from a retirement account within one year of the child’s birth or adoption. You will owe taxes on the distribution, but the usual 10% penalty for account owners younger than 59 ½ will be waived.  

 

The SECURE Act Eliminates Stretch IRA for Inherited IRA Accounts

 

Inheritors must take more care with tax planning when taking distributions. There are no changes for anyone who inherited an IRA from the original owner who passed away before January 1, 2020. However, if the original IRA owner passes away after December 31, 2019, most beneficiaries will need to withdraw all assets from the inherited IRA within 10 years following the death of the IRA owner instead of spreading required distributions over their own lifetimes. This provision applies to both traditional and Roth IRA accounts. There are exceptions for spouses, minor children (until they reach the age of majority), disabled individuals, and beneficiaries who are less than 10 years younger than the decedent.

Are you on track for retirement?

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is just one part of your journey to the retirement of your dreams. A Certified Financial PlannerTM can help you navigate the complexities of financial planning. Talk to a Financial Planner>

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Dream. Plan. Do.

Is Your Financial Advisor a Fiduciary? (And Why You Need to Know)

Is Your Financial Advisor a Fiduciary? (And Why You Need to Know)

Financial advisors who are fiduciaries work from firm ethical ground to optimize their client’s financial resources.

 

Financial advisors and investment managers are from diverse professions that combine finance, economics, psychology, law, communications, and so much more to help bring balance and security to people’s financial plans. 

But, not all financial advisors are built alike. With so many different fee structures and advertisements out there, it may be unclear what you are getting with each company. In the financial advisor industry, most of the confusion rests on how the business operates and the way the financial advisors get paid for their services. These things are important because they influence your experience and the quality of advice given to you.

The financial world as a whole may not be known for its clarity and transparency, but we work to change that narrative here at Platt Wealth Management. Once you get to know us, you will find that we operate to serve our clients in the best way we know how: by being a fee-only fiduciary firm.

How does this impact your financial plan? Let’s take a look and find out.

 

Are you on track for retirement?

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is just one part of your journey to the retirement of your dreams. A Certified Financial PlannerTM can help you navigate the complexities of financial planning. Talk to a Financial Planner>

What does it mean if a financial advisor is a “fiduciary”?

 

Fiduciary has been a buzzword in the financial community for some time now, but few people outside of the industry have a clear idea of what it means. In general, a fiduciary is a legal agreement to act in the best interest of another person.

From a financial lens, this translates to a legal and ethical obligation to act in the best interests of clients, placing the client’s interest above the advisor at all times. This fiduciary relationship establishes a baseline of trust and transparency, key components for a successful financial plan.

While this idea may seem like a given, unfortunately, it isn’t. The Department of Labor worked to create the fiduciary rule in 2017 that would apply to all financial advisors working on retirement accounts. The rule stated that these financial advisors would need to provide conflict-free advice, putting the client’s interests first above any potential income from product sales of third party commissions. It also stipulated that the advice has to be fully transparent.

But in March of 2018, the rule was put to rest. This decision makes it even more crucial for consumers to ask the hard questions of their financial advisors to understand the type of advice they are getting and if it benefits them.

Fiduciary advisors often have far fewer conflicts of interest and are obligated to disclose any that they might have, offering full transparency to the client.

Remember, not all financial advisors are a fiduciary. As you are searching for an advisor, take the time to ask them if they are a fiduciary. Find out what that means to them and their business. Knowing how a financial advisor operates and how they receive compensation are two areas that can help you decide if they are a good fit for you and your needs.

10 Questions You Need to Ask

Figuring out if your financial advisor is a fiduciary can be difficult. Banks, investment brokers and insurance companies might call themselves financial planners, but do they have your best interests at heart? If they are offering financial planning or investment management for “free”, you have the right to know how they are getting paid and how that affects the advice they give you.

How a fee-only advisor is a fiduciary.

 

One way that we uphold our fiduciary status is through our fee-only compensation. This means that we receive payment through client services. This fee structure sounds pretty simple, and it is. Our pricing reflects the services we offer, and that is the only way we make money. We aren’t paid through third-party commissions or the sales of products, services, or tools.

This conflict-free model allows us to invest in you and help you make the best decisions for your financial future, which is what financial planning is really all about. Looking through a fiduciary’s wide lens, we are also able to develop long-term relationships with our clients, shifting our strategy and approach for their plan as it changes.

A good financial advisor is committed to finding the right solutions for you.

Understanding your full picture: goals, values, personal dreams, and ambitions all fit into your financial plan and can help us give you advice to best suit the life you want to live.

We want to empower you to make the best financial decisions. Knowing that your advice is coming from a financial advisor who has your back and is looking out for you will help you be more confident.

The right financial advisor for you.

 

Your best interest should be at the heart of your financial advisor. As a fee-only fiduciary firm, we work our best every day to help you reach your goals. Creating a dynamic of trust and transparency is crucial to who we are as a financial advisor, and we want to help educate and inspire our clients every day.

Your financial plan is yours. Get your financial advice tailored to your unique needs with your goals at the center. Give us a call if you would like to learn more about how this type of financial advice and financial planning. 

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Your PIMCO Settlement Check

Your PIMCO Settlement Check

Are you eligible for the PIMCO settlement check? And what should you do with it?

 

If you were invested in the PIMCO All Asset All Authority Fund from April 2011 through November 2017, you are eligible for a settlement check. PIMCO miscalculated the advisory fee waivers and is reimbursing all investors affected by this error. The reimbursement period is expected to end on March 13, 2020.

If you received a check from PIMCO regarding this management fee settlement, you can forward the check to our office: 3838 Camino del Rio North, Suite 365, San Diego, CA 92108. We will deposit the check into your respective account, if it is still open. You also have the option to cash the check, although we advise you to call your tax professional regarding potential tax consequences.

Keep in mind the check must be cashed within 90 days of the check date. It is important that the check(s) are cashed as soon as possible to ensure that you receive all the money that was allocated to you by PIMCO. Checks WILL NOT be honored after the 90 day issue date.

If you have lost your check or it was destroyed, go to Replace My Check for further information on how to stop payment and replace the original check.

For questions, please call our office at 619-255-9554.

 

Fee Only Fiduciary

 

Platt Wealth Management is a fee-only advisor helping clients acheive their financial goals. We offer customized financial advice, financial planning and investment management. If you would like to learn more about our services or get in touch for a consultation to review your current portfolio please give us a call. 619.255.9554.

We provide stand alone scenario based financial plans for a flat fee, retainer based and assets based investment management or a combination of both for full wealth management services.

We would love to learn more about you.

Year End Deadlines for Tax Savings

Year End Deadlines for Tax Savings

Check with us about these tax savings deadlines.

 

 

Deadline for Required Minimum Distributions (RMDs):

Although not a tax savings, we still include RMDs in this checklist to make sure you take your distribution before the end of the year. Not taking your RMD can have serious tax consequences with a penalty of 50% on the shortfall.

Clients who are 70½ or older must take an RMD from their IRA and/or their Qualified Retirement Plan (QRP) for the 2019 tax year. All RMDs must be withdrawn by December 31, 2019, except those for clients who are eligible to defer their first distribution until April 1, 2020. Distribution forms must be submitted by Wednesday, December 16, 2019.

 

Deadline for Roth IRA Conversions:

You might want to talk to us about your Roth IRA conversions. If you haven’t completed any conversions this year, please contact us as soon as possible. Clients must submit a Roth Conversion Form by December 16, 2019. Forms received after that date will be processed on a best-efforts basis.

Remember that under current tax laws, Roth conversions can no longer be undone through recharacterizations. If you would like to know more about how Roth IRA conversions can increase tax savings, please give us a call.

 

Deadline for Establishing a 2019 QRP (including 401(k)):

Business owners can capture great tax savings by opening a Qualified Retirement Plan. Qualified Retirement Plans for 2019 must be established by December 31, 2019. Paperwork must be received by December 16, 2019.

 

Charitable Gifting:

This is the season for caring and giving. Charitable gifting tax strategies are a wonderful gift for the giver and the receiver. Forms for Qualified Charitable Distributions from IRA accounts must be received by December 16, 2019.

Contributions to Donor Advised Funds must be completed by December 31, 2019, so please contact us by December 16, 2019, if you require assistance. You should recommend grants from your Donor Advised Fund as soon as possible if you want the charity to receive the donation before year end. Click here to understand more about tax savings through charitable giving.

Fee Only Fiduciary

 

Platt Wealth Management is a fee-only advisor helping clients acheive their financial goals. We offer customized financial advice, financial planning and investment management. If you would like to learn more about our services or get in touch for a consultation to review your current portfolio please give us a call us, 619.255.9554.

We provide stand alone scenario based financial plans for a flat fee, retainer based and assets based investment management or a combination of both for full wealth management services.

We would love to learn more about you.

Increase Your Retirement Savings in 2020

Increase Your Retirement Savings in 2020

Higher contribution limits in 2020 mean more retirement savings for you.

 

If you recently hit 50, you might have realized that your retirement savings is not quite where you want it. You’re not alone. Many people come to us for a financial plan worried that they don’t have enough retirement savings to keep the lifestyle they want in retirement. 

Luckily, the IRS seems to know this also and recently announced higher contribution limits for qualified retirement accounts. This can mean more retirement savings for you. Next year, the contribution limits for qualified retirement plans including 401(k)s and 403(b)s are increasing from $19,000 to $19,500If you are 50 or older, the catch-up contribution is also increasing by $500, from $6,000 to $6,500, so you can make a total contribution of $26,000 in pre-tax or Roth contributions. If you are turning 50, you are now eligible to boost retirement savings through catch-up contributions. You can make catch-up contributions at any time during the year that you turn 50 (you don’t have to wait until you actually turn 50). 

 

IRA contribution and catch-up limits are staying at the same levels for 2020, with $6,000 per person, plus an additional $1,000 catch-up contribution for people that are 50 and older. 

 

Are you on track for retirement?

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is just one part of your journey to the retirement of your dreams. A Certified Financial PlannerTM can help you navigate the complexities of financial planning. Talk to a Financial Planner>

Health Savings Accounts

 

The contribution limits for Health Savings Accounts (HSA) are also increasing. Individuals can contribute $3,550 next year (up $50 from this year), and families can contribute $7,100 (a $100 increase). The catch-up contribution for those age 55 years and older remains at $1,000.

Business Owner Retirement Savings

The limit for SEP IRAs will be $57,000; since SEP IRAs are considered an employer plan, there is no catch-up contribution. SIMPLE IRA limits have increased by $500 from $13,000 to $13,500. The over-50 catch-up contribution remains at $3,000 for 2020, for a total contribution of $16,500.

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

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