Articles Posted in Retirement Accounts

Most of us think, “thick stack of legal papers”? Ugh! “No, thank you!” But when it comes to estate planning, it’s just the opposite. You see, legal problems in estates are often caused not by bad estate planning, but by Failure-To-Plan (“FTP”), even in estates where the person or couple thought they’d done everything right.

FTP is insidious and you don’t even know if you have it because it’s invisible! It’s the absence of a clause your estate plan needs after you’re gone and can’t add the clause anymore. It’s the missing Asset Protection Trust for the divorcing child. It’s the Special Needs Trust that they intended to get to but kept putting off because they couldn’t bear to truly face how serious their son’s mental illness was.

Avoidance of FTP is why our estate planning documents are so thick and why we include so many of them. I’ve heard clients say, I can’t even count how many times, “I just want a simple plan.” Sometimes I respond, “When? Simple now? Or Simple later?” There are exceptions, of course, but in general: the easier it is to plan now, the harder it will be to administer later.

As ever, your watchdogs, Bennett and Diedre Braverman were glued to the national scene when President Obama gave his State of the Union address in case anything of value fell out for us to tell you about.

This won’t be of interest to many of you, I’ll admit right up front. It’s a niche blog post. But I couldn’t ignore it because for those of you who own businesses or have children launching into the workforce, this could be great news!

If you don’t offer a traditional retirement plan, until now, you’ve been at a loss, without tools to help your lowest-wage earners with retirement.

First, let me share the fabulous news about “Retirement Accounts” then the bad news that I have to tell all the people who ask me about investment choices in a Retirement Account.

Tax-free Versus Tax-deferred

Retirement Accounts – 401(k)s, (403(b)s, IRAs and others – have wonderful tax advantages. Some allow you to put pre-tax money into an account, which then grows tax-free for years or evendecades until you withdraw it. When you withdraw it, you pay tax on the withdrawal. So they aren’t “tax-free”, they’re “tax-deferred.”

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