Broker Check

Life Changing Events

Working with Couples

We have worked with couples to ascertain their needs and to create compromises, particularly where the issues surround second marriages. One couple was hitting roadblocks regarding the estate planning and distribution of assets as the children from the first marriage and the second wife could not agree. We solved the problem by holding several family sessions resulting in the purchase of life insurance (naming the children as beneficiaries) and allocating the retirement accounts to the second wife. The family has continued as a client of the firm, participating in quarterly “family meetings” to keep the lines of communication open, to continually assess the family’s financial status and to ensure that the financial plan is meeting everyone’s needs.

The Sudden Widow

After managing the money for several years without his wife’s involvement, the husband unexpectedly passed away leaving an estate worth $2 million to be administered by the wife. However, the wife had never participated in any of the decision making and had no knowledge as to how to proceed. The wife contacted our offices within forty eight hours of the husband’s death, and we guided her through the entire estate administration process, hiring the attorneys and CPA’s, reviewing their work product, and attending meetings with them to ensure a smooth transition.

Getting Divorced

The statistics suggest that 50% of marriages end in divorce and that women’s standard of living decrease as a result. Many women call upon America Group during this difficult time to assist with everything from hiring matrimonial attorneys to consulting and reviewing the settlement agreement. In one instance, we accompanied the woman client to all meetings with her attorney, insuring that her settlement made sense and reflected the best after-tax results possible. In another instance, we organized over 20 years’ worth of the husband’s investment statements and submitted them to the appraiser with whom we then worked with to obtain a favorable settlement for the wife. And in another instance, where the wife suffered a debilitating sickness during the final phase of the divorce proceeding, we stepped in to ensure that all assets were transferred to her, contacting the matrimonial attorneys and the pension administrator on her behalf and negotiating the settlement so as to generate no negative tax consequences.

CHANGING JOBS

I'm Changing Jobs. What Should I Do With the Money in My Plan?

Changing jobs is an important decision -- one that many of us are making more often. Once you've decided to switch jobs, your next move is to determine what to do with the money in your former employer's retirement plan.

Four Common Options

Generally, you have four options for handling the money in your account:

Option #1. Keep the Money in Your Former Employer's Plan

If your former employer permits, leaving your money where it is may be an attractive option because it allows you to continue enjoying the benefits of tax-deferred compounding. If you are happy with the plan's investment options, this could be a good choice. On the downside, there may be special conditions or fees associated with your continued participation, and you may have withdrawal restrictions in the future.

Option #2. Roll the Money Into Your New Employer's Plan

This option also has its advantages -- continued tax-deferred growth of your investment and the convenience of having all of your retirement assets in one place. But because every employer has its own rules governing rollover money, before you choose this option, review your new employer's plan and possible eligibility restrictions carefully.

Option #3. Take the Money in Cash

While this option may seem appealing because it gives you immediate access to your money, Uncle Sam is the real winner here. Cash distributions are subject to a mandatory 20% federal withholding in addition to regular income tax. Furthermore, if you are under age 59½, your distribution would also be subject to a 10% additional federal tax. Finally, if state or local taxes apply, they could claim an even bigger portion of your account.

Option #4. Roll the Money Directly Into an IRA

This final option allows you to roll all or a portion of your money into an IRA. To avoid withholding taxes and potential penalties, arrange for a direct rollover of the entire amount into an IRA. An IRA offers the same benefits of tax-deferred investing for retirement and typically provides a wider range of investment options to choose from. However, additional fees or commissions may apply.

The money you accumulate through an employer's plan may become a primary source of income after you retire, so how you manage it today could have a big effect on your financial situation in the future.

Retirement 

You’ve accumulated what seems like a sufficiently sized nest egg coming into retirement. The next step is to figure out how to get your money out of it. At first blush, the answer seems simple: Buy income-producing securities – bonds and dividend-paying stocks –and call it a day. When yields are higher, so is your payday; where they’re lower, you have to get by on less. If you have a principal during your lifetime; the money then can pass to kids, grandkids, or charity. That’s certainly one way to do it, but it’s not the only retirement spending strategy out there. To home in n the right one, retirees need to consider two sets of questions: first, the extent to which they’re comfortable with a fluctuating payday and, second, whether they want their paycheck to come from income alone or other sources as well. To arrive at the best decision for you, it makes sense to consider each of the following decisions one by one in full consideration of the pros and cons.