Posted by & filed under Asset Protection, Estate planning, Inheritance Tax, Living Trust, Retirement Planning, Secure Act.

What Will The SECURE Act Mean For My Retirement Plans?
What Will The SECURE Act Mean For My Retirement Plans?

What are your retirement plans? Have you thought about how you will pay for your housing situation? Have you reserved enough money for extra expenses? Will the retirement age change by the time you retire? All of these questions are valid and you should take them into consideration as you grow older. With policies changing regularly, it is critical to stay up-to-date to be prepared for any situation.


In 2019 the senate will decide whether they approve the changes for the current retirement requirements or if they will make any changes at all. With the House of Representatives already approving the Setting Every Community Up for Retirement Enhancement Act (SECURE Art), the requirements for new retirement plans will change. If passed, you can expect some changes to be:

  • More part-time positions offering 401(K) plans
  • Contribution to traditional IRA’s (Individual Retirement Arrangements) for as long as desired
  • Penalty-free withdrawals for those who fall into specific groups/circumstances
  • The age for retirement to move from 70 ½ to 72 years of age
  • A requirement to withdraw from inherited retirement accounts within 10 years of retiring


Retirement should be an exciting time, away from confusing language and ever changing politics. For this reason, The Law Offices of Joel A. Harris works hard to provide you with information to make it easier for you to understand the new changes the SECURE Act brings. We are located in Concord, Walnut Creek and Antioch, to be most convenient to our clients. If you would like to visit us in person, by phone at (925) 757-4605 or via website, feel free to contact us and we will be more than happy to help!

What Changes Will I See?

There are quite a few changes that you can expect once the SECURE Act is passed and put into practice. Below are a few changes that you can expect and how you can prepare for them to better your retirement experience:

  • Part-Time 401(K) Options: There is currently a minimum number of hours worked in one year (~1000 hrs.) that decides if a worker is eligible for a 401(K) account. With the SECURE Act part-time workers will become eligible for a 401(K) account, so that they can start adding funds to their future income. If you would like to read more in detail about this change, go here.
  • Inclusion of Academic Income: At the moment, certain academic stipends and non-tuition aid are not treated as income for purposes of IRA contributions. With the SECURE Act in place, these kinds of aid and financial support will be included as a form of income. This means that higher taxes may be paid, but more money may be taken out when needed. If you would like to read more about this, check out this article
  • Removal Of Age Limit For Contributions: The SECURE Act would remove the current age (currently 70 ½ years old) restriction to contribute to a Traditional IRA. This change can be seen as a positive change since the age of retirement may change over time, which would affect the age restriction. If you would like to learn more about this, we recommend that you read this article.
  • Limitations on Tax-Advantages After Death: A benefit that was available to families in the past has been the inheritance of retirement funds. This option became popular in the 1960’s and can still be seen today. With the SECURE Act in place, family members who benefit from retirement inheritance may find themselves with stricter time limits on both the time it takes to withdraw the money, as well as how much can be withdrawn at one time. If you would like to read more, you can go here.
  • Penalty-Free Withdrawals for Birth or Adoption of Child: The changes to the SECURE Act would allow new parents, biological or adoptive, to take up to $5000 from their 401(K), IRA or other retirement accounts. This new change is beneficial for parents since there is also no limit as to how many times a future retiree can use this benefit. It is important to state that new parents should take into consideration their future retirement costs. If you would like to read more about penalty-free withdrawals,, read this article.

What Should I Do Now?

If you are planning to retire shortly or have yet to plan for retirement, The Law Offices of Joel A Harris, located in Concord, Walnut Creek, and Antioch are available to help you plan accordingly. Joel Harris is an attorney with nearly 30 years of experience in estate planning, trust and probate law. Joel works with expert tax and financial planners who can take the time to help you plan for retirement, create a budget, document progress and provide useful reminders pertaining to your personal retirement plan. If you are not sure how to begin planning for retirement, feel free to visit us online, in person or by phone at (925) 757-4605. Our priority is your future success!

Sources

  1. https://www.creditkarma.com/insights/i/proposed-secure-act-changes-for-retirement-savings/
  2. https://www.kiplinger.com/slideshow/retirement/T047-S001-how-the-secure-act-could-impact-retirement-savings/index.html
  3. https://www.forbes.com/sites/simonmoore/2019/06/27/secure-act-ira-resa-stretch-ira-estate-planning/#505fdc3335c9
  4. https://money.usnews.com/money/retirement/iras/articles/what-is-the-secure-act

Posted by & filed under Social Security Benefits.

4 Questions to Answer Before Taking Social Security

For many older people, social security benefits are their main source of income. For this reason social security is an important part of your retirement, and you should carefully consider when or how to accept those benefits. Below are some vital questions you should ask yourself before you accept social security. If you need more information and are in or near the areas of Concord, Walnut Creek, and Antioch, The Law Offices of Joel A. Harris is here to help!

1. When Should I File for Social Security Benefits?

There is really no specific answer to this as it depends on a person’s age, health, and finances. In general, though, the earliest age to file is 62 and filing early may not be such a bad idea. This accounts for why so many people retire early but simultaneously must rely on these benefits to be comfortable. Some people choose to work until 66 which can increase the social security payment, but many do not find the amount of extra work worthy of the benefits they receive. For this reason it is purely up to each person if they can afford to retire, how much money they need, and whether or not they are healthy enough or willing to continue working. If you choose to delay claiming your benefits until age 70, payments will increase by about 8 percent for each year you delay claiming Social Security up until age 70. After age 70, there is no additional benefit for waiting to sign up for Social Security. Finally if you have dependent children under age 19, you may be able to secure additional Social Security payments for them that could be worth up to one half of your full retirement benefit (certain limits may apply). Your CPA or financial advisor can help you make this important decision. If you do not have a good CPA or advisor, please contact us and we will be happy to refer you to someone we work with in your area.

2. How’s Your Health?

This is important to think about considering the average life expectancy is 79 years (I don’t think that is correct). For people who are not in the best of health, it may be best to start accepting benefits early and use them as long as possible. If you are otherwise healthy you may decide to continue working in order to keep your benefits waiting and use them only when absolutely necessary. If you expect to live past the average life expectancy, your best bet would be to retire later in order to get the most out of the program.

3. How Do I Receive my Benefits?

The AARP website gives a good answer to this question. Many people are confused about whether or not you can claim it online, in person, or through your bank account (direct deposit). In 2013, Social Security stopped mailing out their checks in order to slash delivery expenses. For this reason most people have their monthly payment directly deposited into their bank account. This is easy to set up and will save a lot of time. Another option is to get a debit card, where the benefits can be deposited and used like a credit card.

4. Can I Get Higher Benefits?

In order to get the most bang for your buck, you may be interested in additional or alternative benefits to your social security. This can be helpful to people who stopped paid work to instead volunteer or care for ailing family members. For example, those who were married for over 10 years may be eligible to some of their ex-spouse’s benefits. Survivor’s of a deceased spouse can elect to take the deceased’s larger social security benefit. Just be careful if you have a part-time job, because if those earnings, plus nontaxable interest and half of your Social Security benefit equals more than $25,000 for individuals or $32,000 for couples, up to 50 percent of your Social Security benefit could be taxable!

Lastly, we strongly encourage you to Create a My Social Security account and download your Social Security statement annually.  This will allow you to check that your earnings history and Social Security taxes paid have been recorded correctly by the Social Security Administration. You must do this to ensure you are getting credit for the taxes you’re paying into the system.

Are You Worried about Your End of Life Plan?

If you are not prepared with a current estate plan then your family could be vulnerable to higher tax bills, extensive legal fees, and familial conflicts. To avoid those obstacles you should visit an Estate Planning Attorney to get professional help, and create a plan that well suits your goals.
The Law Offices of Joel A Harris are located in the cities of Concord, Walnut Creek, and  Antioch, California.  We have worked for over 25 years giving the best guidance our clients need to protect their assets. Have a question about your planning your estate? Feel free to schedule a sit-down meeting where we are happy to patiently answer every question you may have. For your free consultation reach out to us at (925) 757-4605.

Sources

  1. https://www.fool.com/retirement/2016/12/19/6-questions-to-ask-before-taking-social-security-b.aspx
  2. https://www.therothcompanies.com/resource-center/retirement/three-key-questions-to-answer-before-taking-social-security
  3. https://www.fool.com/retirement/2018/11/04/4-questions-to-ask-yourself-before-taking-social-s.aspx
  4. https://www.aarp.org/retirement/social-security/questions-answers/benefits/

Posted by & filed under Funeral Arrangements.

Thinking about one’s death and funeral arrangements is a necessary part of life. To spare their families added grief and suffering, we recommend our clients plan their own arrangements in advance. This can be fulfilling, but many people do not know where to start. If you are located in the San Francisco Bay Area or in the cities surrounding Antioch, Concord or Walnut Creek, please reach out to The Law Offices of Joel A. Harris to get more information, but for now here are some tips to help you figure out what to put in your final arrangements checklist.

Consider Prepaying

In order to ease the cost of burial or cremation, many people sign contracts which allow them to pay their expenses in advance. You can also pre-purchase burial plots, caskets, or an urn for ashes. Some states protect your funds but others do not, so be sure to read the terms and conditions of whatever agreement you sign carefully. Before deciding to prepay, be aware of the services are you paying for. For example, the cost of a burial plot alone does not usually include opening and closing the plot and many other expenses of a funeral and burial.

Offer Specific Instructions

In this part of your final arrangements, be sure to instruct the company exactly what you want done with your burial or cremation. Be sure to include the name and address of the cremation company, funeral home, or cemetery, ceremony preferences, and specifics on burial plots or scattering instructions, along with your other wishes. You can never be too careful and you have a right to control your final wishes. Most companies will be happy to discuss this with you and allow you the right to decide how the arrangements work. If you need a referral to a good company need you, please contact us and we will connect you with a local expert.

Tell Your Family of Your Wishes

Many people state their wishes in their Will or Living Trust. However, do not just write them down in these documents. Let close relatives know about what you want done with your final arrangements so they will know before there is time to review your documents.  You can also write down additional details and wishes in a separate letter to your family to be kept with your estate plan, and opened upon your death.  Our clients have included instructions about music, officiant, and many other important details.

Figure Out Your Funeral Arrangements

There are often events before, during and after a burial or cremation. Before your burial or cremation you may want a wakes or funeral service. At the burial site, or during the scattering of your ashes, a religious officiant or family member may give a few words before to honor your life. After a burial or cremation, you may wish to have your family hold a memorial or other celebration of life to gather and celebrate your legacy in a joyous manner. If you have preferences for any of these gatherings, be sure to put them in your estate plan.

Are You Worried about Your End of Life Plan?

If you are not prepared with a current estate plan then your family could be vulnerable to higher tax bills, extensive legal fees, and familial conflicts. How to arrange your funeral, burial or cremation is just one part of this important process. To avoid those obstacles you should visit an Estate Planning Attorney to get professional help, and create an estate plan that accomplishes your goals.


The Law Offices of Joel A Harris are located in the cities of Concord, Walnut Creek, and  Antioch, California.  We have worked for over 25 years giving the best guidance our clients need to protect their assets. Have a question about your planning your estate? Feel free to schedule a sit-down meeting where we are happy to patiently answer every question you may have. For your free consultation reach out to us at (925) 757-4605.

Sources

  1. https://www.investopedia.com/university/estate-planning-guide/estate-planning8.asp
  2. https://www.investopedia.com/university/estate-planning-guide/estate-planning8.asp
  3. https://www.thebalance.com/how-to-make-your-funeral-wishes-known-to-your-loved-ones-3505376
  4. https://www.retirementwatch.com/who-decides-your-funeral-and-burial-arrangements
  5. https://www.consumer.ftc.gov/articles/0305-planning-your-own-funeral