There’s now a big danger if you’re rolling money over from one IRA into another IRA, as a result of a decision from the U.S. Tax Court. Under federal law, you can only do one IRA-to-IRA rollover per year. If you try to roll over more than one IRA in a 365-day period, it’s considered a distribution, and you’ll be subject to significant taxes and penalties. In the past, the IRS has told taxpayers that this
If you’re planning to leave an IRA or other retirement account to your heirs, you might want to consider creating a trust to hold the account. That’s the upshot of a recent ruling from the U.S. Supreme Court. That’s because IRAs that are inherited from anyone other than a spouse are no longer protected from creditors in a bankruptcy. Heidi Heffron-Clark and her husband Brandon filed for bankruptcy after their pizza shop failed in 2009. They
As Yogi Berra supposedly said, “It’s hard to make predictions, especially about the future.” Yet when you create a trust for your heirs, you have little choice but to make predictions about what their needs will be many years down the road. Because circumstances change, it’s a good idea to make your trust flexible enough to accommodate the unexpected. If you tell your trustee what to do in too much detail, the trust might end up
One of the greatest perks of owning a small business is flexibility. You can set your own hours and salary. You can plot the firm’s trajectory without consulting your boss, upper management, or even corporate policy. But that same flexibility may become a curse if handled unwisely. A small business owner without discipline and a well-thought-out strategy may fall into serious financial trouble. Employees in larger firms often rely on the human resources department to establish
There’s not much time left to make tax-saving moves for 2014. Some ideas to consider: Make your January mortgage payment before December 31 to squeeze an extra interest deduction into 2014. Make tax-free gifts to use your annual gift tax exclusion for 2014. This year you can give up to $14,000 to as many individuals as you like without tax consequences. These gifts to individuals are not deductible by you; nor are they taxable to the
Your retirement funds are protected from creditors even if you file for bankruptcy, with only a few limitations. This protection extends to funds in all government-qualified pension plans, including IRAs (traditional and Roth), 401(k)s, 403(b)s, Keoghs, profit sharing, money purchase, and defined benefit plans. A recent U.S. Supreme Court decision has held, however, that an inherited IRA is not a “retirement fund” and therefore doesn’t qualify for bankruptcy protection. An inherited IRA is a traditional or
Here’s some good news for people who live in – or are thinking of entering – a “continuing care retirement community.” These are communities for older people that provide an entire continuum of care, from independent living to nursing home, so that residents can “age in place” and not have to move elsewhere if their faculties start to diminish. These communities are an appealing option, but they can be very expensive. The good news is that there
Long-term care insurance may soon be getting more expensive for women. That’s because two of the country’s biggest long-term care insurance providers have announced plans to introduce “gender-based” pricing. The simple fact is that, on average, women live longer than men. Life insurance has long recognized this fact, and life insurance premiums typically vary based on gender. However, long-term care insurance has always been gender-neutral. This started changing recently when Genworth Financial decided to charge more
Applying for Social Security can seem easy, but there are actually a great many options and choices, and figuring out which one works best for you often requires a lot of strategizing. For instance, the longer you wait to apply for Social Security, the higher the monthly benefit you’ll receive. Depending on what year you were born, Social Security calculates what it considers your “full” retirement age. If you claim benefits before that age, Social Security
Many people incorrectly believe that once seniors enter a nursing home, their freedom is over. In fact, nursing home residents have many rights, and it is important to know those rights and to be able to enforce them. Nursing home residents’ rights are protected under federal law. In broad terms, nursing homes are required to ensure that every resident be given whatever services are necessary to function at the highest level possible. Here are some of
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