finances

How much can you save for retirement in 2019?

How much can you save for retirement in 2019?

You remember that part of How The Grinch Stole Christmas (the Jim Carrey version, of course, because it’s the best one) where — spoiler alert — the Grinch realizes the true meaning of Christmas and his heart grows three sizes?

That basically happened in real life a few months ago, except instead of the Grinch it’s the IRS and instead of “Christmas” it’s “retirement savings.” (The heart-growing thing doesn’t really enter into it. Also Christmas was over a month ago. This was a bad analogy.)

Starting in the 2019 tax year (for filing in 2020), you can contribute even more money toward retirement accounts such as an IRA or 401(k). It’s a Christmas miracle!

Changes to IRA and 401(k) Contribution Limits

Below is a brief summary of the new inflation-adjusted numbers for retirement account contributions; see IRS Notice 2018-83 for more technical guidance.

401(k)s. In 2019, the annual contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal Thrift Savings Plan, is $19,000. That is up from $18,500 in 2018.

This is How Much You Will Pay in Taxes in 2019

This is How Much You Will Pay in Taxes in 2019

Interesting fact: many tax provisions are indexed for inflation.

Okay, I may have a loose definition of “interesting.” But the fact is still true. And inflation indexing is actually a really important thing when it comes to taxes.

The Internal Revenue Service (IRS) recently made several announcements regarding the 2019 tax year, including the updated estate and gift tax exemption.

Also included in the announcements were annual inflation adjustments for over 60 tax code provisions for 2019: tax rate schedules, standard deductions, cost-of-living adjustments, and more.

In the spirit of Christmas, I thought I would explain what these inflation announcements are and what they mean to you. After all, nothing says “Merry Christmas” like taxes.

Important note: Keep in mind that the numbers discussed in this post are for the tax year beginning January 1, 2019. These are not the numbers you will use to prepare your 2018 tax returns which will be filed in April 2019 (you can find that information here). This is the information you will need for your 2019 tax returns in 2020.**

15 Best Personal Finance Blogs

15 Best Personal Finance Blogs

I once had a client who asked me to create a comprehensive estate plan, the whole package: trust, will, power of attorney, etc. It was exactly what she needed.

So I drafted the documents, she signed them. She died about a year later.

At this point, you may be thinking, “But good thing she had estate planning documents, though, right?” There was just one problem:

There was no money left in the estate for the heirs.

My client spent all this time and thought and money for a great estate plan that was ultimately (essentially) useless because she spent all her money.

Most people want an estate plan primarily to make it easier for their loved ones to get the property you leave them. But if you don’t have any property to leave, then the plan doesn’t do much.

The point is this: Estate planning is much broader than simply creating legal documents that pass on your “stuff.” It also involves creating a financial plan to make sure you have “stuff” to pass on.

How You Can Prevent Elder Fraud

How You Can Prevent Elder Fraud

Elder fraud and financial exploitation has become an epidemic.

More than ever before, con artists and family members alike are taking advantage of their elderly relatives, friends, or neighbors.

Could your parents or grandparents be next?

The best defense against elder fraud is having caring friends or family with the senior's best interests at heart. But those friends and family can only prevent elder fraud if they know how to spot it — and that's what this blog post will teach you.

This post will cover five ways you can help keep your loved ones safe from elder fraud and financial exploitation. Specifically, you can:

  1. Talk with them about their finances.

  2. Ask them about suspicious phone calls or interactions.

  3. Keep abreast of changes to their estate plan.

  4. Inquire about about caretakers, helpers, or sudden "best friends."

  5. Investigate abrupt or unexplained transfers of assets.

But before we dive in to prevention, let's cover some of the basics of elder fraud.

Do I Need Probate to Get My Inheritance?

Do I Need Probate to Get My Inheritance?

Hardly a day goes by that someone doesn't ask us whether they need to probate a deceased loved one's estate. So when is probate necessary?

When you hold title to (i.e., own) an asset, you can generally only lose title in two ways: by inter vivos (literally, "between the living) gift or by court order. By definition, you can only make an inter vivos gift while you are alive. Therefore, once you die, the only way to transfer title is by court order. That (among other things) is the basic role of the probate process.

What is a Power of Attorney?

What is a Power of Attorney?

Kanye West once said that no one man should have all that power. Fortunately for 'Ye, one man doesn't have to have all that power if he has an essential estate planning document called a Durable Power* of Attorney. (*This was most likely the "power" Kanye was referring to in his hit song, "Power".)

What does a power of attorney do?

Generally speaking, a power of attorney gives someone (your "attorney-in-fact") the ability to act for you in financial and/or medical situations. In other words, one man doesn't have to have all that power — he can share it with someone else. This authority can be limited in scope, e.g., a single real estate transaction; or it can be broad, e.g., any and all healthcare and financial decisions.

5 Items to Put on Your Year-End Estate Planning Checklist

5 Items to Put on Your Year-End Estate Planning Checklist

As 2017 comes to a close, now is a good time to review your estate plan. Although there are many aspects of your plan to consider, we recommend performing at least the following tasks:

1. Review Beneficiaries

Are the beneficiaries listed in your Living Trust or your Will still the individuals you want to inherit your assets? Have you divorced? Have you remarried? Have any beneficiaries proven themselves financially irresponsible? If one of your children is newly married, do you want to ensure the spouse does not get your assets? Have you had additional children or grandchildren?