2012 End of Year Capital Gains Discussion

As you know, long-term capital gains rates are currently taxed at the 15% on the Federal level.  As it stands right now, the rate is scheduled to reset to 20% on January 1, 2013.  In other words, capital gains taxes are on sale by 25% right now compared to next year – or alternatively speaking capital gains are expected to be 33% more expensive next year.  You may have also read that there is a tax on ‘unearned income’ next year to help pay for the Affordable Care Act (more prominently known in the media as ObamaCare).  This tax only impacts married couples filing jointly with adjusted gross incomes (AGI) in excess of $250k and individual filers with AGI over $200k.

With that being said, there is a clear opportunity to capture some – or all – of your long-term capital gains this year at the 15% rate rather than paying 20% in a year or two.  The process would be rather simple, sell the position with the long-term capital gain today and repurchase it tomorrow.  You do not have to worry about the 30-day wash rule because it only applies when you are selling losses (i.e., the government only cares about you taking away revenue not when you are accelerating income to them).

What are the potential downsides to this strategy?

1) The first and most obvious is that the capital gains rate may not rise for everyone – or even anyone.  No one knows where this is going to end up and taking the gain is a risk.  However, the Administration has advocated for a 20% capital gains rate across the board since its campaign in 2008 so I think that is where it ends up.

2) The other clear risk is that you sell the position today and then repurchase it tomorrow.  Afterwards, the position does really well and you sell the position in mid-to-late 2013 for a more attractive position.  This means that you have converted the future gains to short-term capital gains (taxed as ordinary income) rather than long-term capital gains.  Depending on the percentage gain in the position and your ordinary income next year, this could completely wipe out the benefit of selling today at the long-term capital gains rate rather than waiting until next year.

3) You could also sell positions this year and recognize a gain of $X and immediately repurchase it.  Afterwards, the country falls into a recession – for any number of reasons – and then you subsequently lose all the gains that you ‘would have had if you hadn’t sold the position’ AND then you sell it to reposition it.  In other words, we run the risk of paying taxes on gains that you recognize only for tax purposes and not for your own economic benefit.

A couple of other thoughts about the year-end discussions right now are:

1) You would prefer NOT to sell any capital losses from now until the end of the year.  The reason is the exact opposite of the decision to accelerate capital gains into this year.  Capital losses will offset capital gains taxes next year at the 20% rate rather than the 15% rate this year.  In other words, capital losses should be 33% more valuable next year.

2) It does not have to be an all or nothing strategy.  You can ‘cherry pick’ a few positions that you think would be good candidates to sell.

3)     This isn't an exclusive decision for people.  There are many different tax strategies to be implemented this year.  Accelerating capital gains into this year impacts the decision to do Roth conversions at 'favorable rates'.  There are also impacts to Medicare Part B premiums if you increase your income over certain thresholds.  Any time you increase your income, you are also impacting your current year tax strategies.  In other words, no tax decision is made in isolation and should be made with your accountant or tax professional.

Playing the Odds with the Alternative Minimum Tax 

The almost annual decision about the Alternative Minimum Tax (AMT) is back. In December 2010, Congress and the current Administration gave us a two year extension on the “AMT Patch,” but that only included tax years 2010 and 2011. The Tax Policy Center estimates that without intervention, the number of American households impacted by the Alternative Minimum Tax will leap from 5 million in 2011 to nearly 30 million in 2012.

What is the AMT? The AMT is simply a parallel tax system created to make sure that individuals pay some minimum amount of taxes, even with lots of itemized deductions. One way the system achieves this is by not allowing certain itemized deductions under the AMT calculation.

Since 2006, Congress twice passed a patch during the lame duck session in December following elections, and we fully expect it to do so again this year. But even if they do, that doesn’t mean you’ll be safe from the AMT – it really depends on your tax situation. Here are two scenarios I’ve encountered with my own clients.

Patch? What Patch?

Greg and Samantha are two working spouses, whose kids are fresh out of school. Together they earn about $300,000 a year, and live in a nice area in Maryland. As I was going through their tax projections recently, I realized that because their property taxes, state income taxes, and miscellaneous itemized deductions are so high, they’ll be exposed to the AMT even with a congressional AMT patch.

That may be the case with you, as well. If you’re subject to the AMT – regardless of whether Congress intervenes or not – you should not pay any so-called “AMT adjustment items” before the end of the year (since you will not get the benefit in 2012). However, you could get the benefit in 2013, depending on what Congress does with the income tax reform currently being discussed. In other words, if you know that you will not receive the benefit of a deduction in 2012, delay the expense until 2013, and maybe you’ll receive it at that time.

But what AMT adjustment items can be delayed? There are two very common ones: state and local income taxes and miscellaneous itemized deductions.

While we’re past the third quarter estimated tax payments, you can still cease state withholdings and/or make a 4th quarter estimated tax payment to your state after the end of the year to try for a 2013 tax deduction (but make your payment by January 15th to avoid a penalty for underpayment of income taxes due!).

Hoping for the Patch

Obviously, there are a lot of families who are hoping for a congressional patch so they can avoid the AMT. If you happen to be one of them, you have two options right now. The first is simply to continue as if you will not be subject to the AMT, trusting that because Congress has always stepped in and passed the patch, they will do so again.

Your other option is to follow a similar strategy to that described in the first scenario: Stop withholding state income taxes from your paychecks now and wait to see if Congress passes the patch (which should be clear by the 2nd week of December). If Congress does act, then you can send an estimated tax check to your state Department of Revenue prior to December 31st and claim the state income tax deduction on your 2012 tax return.

 DISCLAIMER: While your Pinnacle Wealth Manager can help you better understand your tax planning opportunities, we recommend that you work with your accountant to finalize your decision. The Alternative Minimum Tax is difficult to understand and plan for, and most consumer software programs are not going to manage the intricacies appropriately. In addition, you can’t simply mail a check to your Department of Revenue and expect them to know what to do with it. You need to mail it with an estimated tax voucher that your accountant will be able to help you prepare. Additionally, there may be other tax planning opportunities at the end of this year that your accountant or your Pinnacle Wealth Manager can bring to your attention.

(Most) Increases Announced for 2013

Most tax breaks and benefits that are affected by annual increases through the Federal government have been announced during the course of the last week.  A quick breakdown of some of the more regular items follows: 

 

      1)      The 401(k) contribution limit has been increased by $500 to $17,500 from $17,000.  However, the catch up for those over age 50 still $5,500.  With that being said the maximum contribution for individuals over age 50 will increase to $23,000 in 2013 due to the increase in the base contribution level to $17,500.    

  

      2)      Contributions to individual retirement accounts (both Roth IRA and traditional IRAs) have increased to $5,500 from $5,000.  However, the catch up for those over age 50 is still $1,000.  So the maximum contribution for individuals over age 50 to an IRA is $6,500. 

   

      3)      The Roth IRA contribution limit has been increased again this year.  Individuals who file as married filing jointly who earn less than $178,000 can contribute to a Roth IRA (this is an increase from $173,000 in 2012).  Individuals who earn less than $112,000 can contribute the full amount as well before phase-outs kick in (the 2012 limit for individuals is $110,000). 

  

      4)      Social Security benefits for those already receiving them will increase by 1.7% in 2013. It is widely expected that the increase in Social Security benefits will be mostly offset by the increase in the cost of Medicare Part B premiums.   These premiums are expected to increase by $7 from $99.90 to $106.90 for couples with adjusted gross income (AGI) under $170,000 and for individual with AGI under $85,000.  However, the increase for Medicare Part B premiums has not yet been announced. 

      5)      In addition, the Social Security wage base was increased to $113,700 from $110,100.  In other words, the first $113,700 of employment income will be subject to Social Security taxes.  That tax is 4.2% for employees today and is subject to revert to 6.2% in 2013. 

      

      6)      The annual gift tax exclusion amount has been increased from $13,000 to $14,000.  This has been adjusting higher since the beginning of the last decade.  It was $10,000 as recently as 2001 and had been stuck at $13,000 since 2009.  Couples can double the amount if they elect to split the gift – meaning they can gift $28,000 to an individual without having to file a gift tax return. 

 

       

A Different Look at Spousal Social Security Benefits

With the wave of Baby Boomers reaching Social Security milestone ages each day, more couples are getting confused about the optimal strategy for taking Social Security benefits.  There are some good websites out there that can help you try to maximize the best strategy for your situation.  Additionally, many financial planners and other finance professionals are either well prepared to handle such questions OR they are getting up to speed as quickly as possible.  

The financial press has done a good job of highlighting the two most popular options for you: file and suspend and file for a restricted benefit.

My purpose today is to discuss a strategy that many couples may face.  Can a spouse take their benefit, based on their own earnings, at age 62 and then opt for the spousal benefit at age 66?  If they can, how do you calculate the benefit at each period?   

The first thing that has to be considered is whether or not the spouse is still working?  If they are still working at age 62 and earning more than $14,640 then it likely does not make sense.  This is because Social Security will deduct $1 for every two dollars that you earn in excess of $14,640 in years leading up to your full retirement age (FRA) and will deduct $1 for every $3 earned in excess of $38,880 if you reach your full retirement age this year.

For clarification, the Social Security Administration determines the full retirement age as the year in which you can get your Social Security benefit without it being subject to a reduction.  It happens to be age 66 for individuals born between January 2, 1943 and January 1, 1955. 

Let’s review a scenario that I saw recently where a husband, Jim, and wife, Peggy, are both 62 years old.  Jim is still working but Peggy has effectively retired. 

Options

Peggy has two options with regards to claiming Social Security benefits:  (1) take Social Security benefits based on her own work record or (2) take Social Security benefits based on her spousal benefits which are equal to ½ of Jim’s benefit at his full retirement age (subject to a reduction if she takes them prior to her full retirement age).  Peggy can NOT take spousal benefits until Jim has started his benefits.  Jim is still working and making more than $14,640 so it does NOT make sense for him to start claiming his Social Security benefit merely so Peggy can file for a spousal benefit. 

If Peggy takes her own benefit at age 66 – her full retirement age – she is projected to have a benefit of $8,000/year.  If Peggy opts to take her spousal benefit at age 66 she is projected to have a benefit of $13,500/year.  Remember she can’t take her spousal benefit at age 62 because Jim has not filed for his benefits.  However, she can take her benefits now – at age 62.  If she does so, then the Social Security Administration will reduce her benefit by 25% to $6,000/year. 

Social Security allows each spouse to take the higher of their own benefit or ½ of their spousal benefit.  Theoretically, you are supposed to receive the higher of the two when you file for benefits unless you file a restricted application – which can only be done once you reach your full retirement age.  Filing for a restricted application is a useful strategy that allows you to claim your spousal benefit while delaying your personal benefit (and allowing your personal benefit to continue increasing).   Peggy doesn’t have access to her spousal benefit because Jim has not filed for his benefits yet.  In other words, if Peggy files for benefits now she is only able to receive her benefits of $6,000/year. 

If Peggy files for her benefits now and Jim waits to begin his benefits until age 66 – his full retirement age – what happens to Peggy's benefits at the time that Jim files?  Does she get to step up to her full spousal benefit of $13,500 (adjusted annually for inflation)?  Is she forever locked into her early, reduced benefit of $6,000/year (adjusted annually for inflation)?  The answer is NO to both of the above.  In this particular instance, at age 66, Peggy would receive a step up to a higher benefit, but not her full spousal benefit.  Here is how the calculation would work:

      1)    The Social Security Administration would look at the difference between Peggy’s benefit at her normal retirement age and her spousal benefit at her normal retirement age.  In this instance, Peggy’s benefit at age 66 is $8,000 and her spousal benefit at age 66 would be $13,500 – making the different $5,500. 

      2)    The Social Security Administration would add the difference of $5,500 to her benefits that she initiated at age 62 – which were $6,000/year.  Therefore, at Peggy’s age 66 she will start to receive $11,500/year for the rest of her life.  From age 62 to age 66, she will receive $6,000/year. 

So being able to utilize the spousal benefit in this instance helps increase the wife’s benefit but should she do it?  You can only truly know the best utilization of Social Security benefits after both the husband and wife have passed away. 

The best way to utilize Social Security benefits depends on your life expectancy, your spouse’s life expectancy, the rate of inflation over the coming decades, the rate of return that your money could earn elsewhere, and whether your present situation demands that you need to take your Social Security benefits early.  A good financial planner can help you determine the best and most appropriate way to utilize your Social Security benefits.  

Social Security benefits are an important piece of the retirement equation for many Americans.  With the traditional pension plan fading into distant memory and being replaced by the 401(k), oftentimes Social Security is the only source of steady income that can be anticipated in retirement.  So it is no wonder that people want to make sure that they maximize that income stream.

Let’s quickly discuss a few key aspects of Social Security benefits and two important strategies available to you via the Social Security Administration:

Key Aspects:

      

      1)      Full Retirement Age (FRA) – this is the age where you can begin to receive your full Social Security benefit without being subject to a reduction.  For individuals born between January 2, 1943 and January 1, 1955 the FRA is 66.  If you initiate your benefits prior to age 66 then the Social Security Administration will reduce your benefit by 5/9 of 1% for the first 36 months  (year 66 down to 63) and 5/12 of 1% for the last 12 months (year 63 to 62).  However, if you delay your retirement benefits beyond your FRA to age 70 then you get a monthly increase of 2/3 of 1% - or 8% per year. 

      2)      Spousal benefits –married couples can qualify for the higher of your benefits based on your own work history or ½ of your spouse’s benefit at FRA.   Your spousal benefit is NOT impacted by when your spouse initiates their benefits but it is reduced if you take your spousal benefit prior to your full retirement age. 

For example, let’s assume Ken (65) and Rebecca (62) are contemplating when they want to take their benefits.  IF Ken decides to take his benefit today – at age 65 – he will receive a reduced benefit because his full retirement age is 66, so the SSA will penalize him for starting his benefits early.  However, the fact that Ken started his benefits at age 65 has NO impact on Rebecca’s spousal benefit.  If she waits until her age 66 then she will still receive one-half of Ken’s full retirement benefit – assuming it is higher than Rebecca’s own benefit.  It is worth mentioning that spousal benefits do not increase in value after age 66 so there is no reason to delay spousal benefits beyond age 66. 

      3)      Widower’s benefit – The surviving spouse will receive the higher of their benefit or their deceased spouses benefit.   If Ken has a benefit of $2,000/month and Rebecca has a benefit of $1,500/month Rebecca will receive $2,000/month IF Ken predeceases her.  On the other hand, if Rebecca predeceases Ken he will continue to receive $2,000/month since his benefit is higher. 

      4)      This has been written about a lot but it is worth mentioning again.  Your Social Security benefits are based on an actuarial table – meaning there is a breakeven point for whether “you win” or the “government wins.”  In order to know the best option, you need to know your life expectancy and the rate of return that you can earn on your money if you were to start your benefits early (and since you do NOT know either you can only make an educated guess). 

Under most assumptions, the breakeven is somewhere between ages 78 and 82.   This means that under any strategy where you start your benefits early means “you win” if you don’t live to age 78 (kind of reverse thinking in a world where you win by dying early) and the government wins if you live beyond 78 to 82.  On the other hand, under most strategies if you wait as long as possible, you win if you live beyond age 78 to 82 and the government wins if you die prior to that. 

Important Strategies

      1)      File and Suspend – this is a strategy that allows you to file for your Social Security benefits and then suspend them.  You may do this for any number of reasons.   One reason to do this is to maximize your benefits with your spouse.   The typical strategy would have one spouse file for their benefits at age 66 and immediately suspend them.  This then allows the other spouse to start their spousal benefits.  This strategy is only available once you have attained your Full Retirement Age (FRA).

      2)      File a Restricted Application – the Social Security Administration will automatically pay you the higher of your benefit or ½ of your spouse’s benefit – assuming you are eligible – when you apply.  It is great that they do that because many people do not know the rules governing Social Security benefits.  However, there may be times where you want to intentionally delay the higher paying benefit.  Once again, you can only file a restricted application at your full retirement age (FRA). 

Let’s assume that several years have passed and Ken is now 70 and Rebecca is 66.  Remember that Rebecca’s benefit was $1,500/month at age 66 and Ken’s benefit was $2,000/month at his age 66 – making her spousal benefit equal to $1,000 (50% of $2,000 is $1,000).  Since Ken is already age 70 he has started his Social Security benefits so Rebecca is now eligible for spousal benefits.  But why would she want to elect spousal benefits if her benefit is higher. 

Great question!  Rebecca MAY want to file a restricted application for just her spousal benefits and allow her benefits to continue increasing by 8% per year until her age 70.  This allows Rebecca and Ken to have an additional $1,000/month in income while letting her benefit increase by 8% per year until age 70 – essentially making her $1,500/month benefit at age 66 grow to $2,040/month at age 70. 

It’s important to work with a financial planner who is prepared to discuss these options though.  There are times when the strategy for Rebecca and Ken may not be right for you.  After all, Rebecca gets a step up to Ken’s benefit – which has also been growing – if he predeceases her.  This means that there are now three benefits to take into account when trying to determine the appropriate breakeven strategies.  Financial Planners who deal with these questions on a regular basis are likely to have some insight that is important in your decision making process.  

An Excellent Short List of Reasons to Continually Review Your Estate Documents

I have had the opportunity to meet with a number of clients recently about either updating old estate documents or drafting new ones for the very first time.  In the process, I have come to understand that estate planning isn't a check the box item.  It is always there waiting to be updated or coordinated with other aspects of your life.  I thought it would be worthwhile to point out a few key points that should be reviewed periodically:

1) Individuals named in your documents - Executors, guardians, Trustees and attorney-in-facts are likely always changing.  It may make perfect sense to have your next door neighbor, who is a responsible person and a good family friend, serve as your executor.  However, if you move away then maybe your sibling would be better served than continuing to keep the neighbor in that capacity.  

The same theory stays in place for guardians and/or Trustees.  It may be perfectly reasonable to name a good friend or sibling as the guardian of your children at some point.  However, if they end up with four kids of their own or are promoted to a high demand job, then looking after you children or managing a trust for the benefit of your children may not be the best thing anymore. 

For these reasons and more, it is nice to dust off the estate documents from time to time and review who is named to serve in various capacities. 

2) Dispositive provisions for children - When your children are young, you may tend to give them the benefit of the doubt about when and how they will inherit assets in the future or you may choose to be very skeptical of how they will handle money.  In either case, your knowledge and understanding of your children's ability to manage their affairs grows up with them.  You may ultimately change your mind and decide that it is better to keep assets in a trust indefinitely because the child is in a highly litigious career, marries an unknown spouse, or simply can't seem to make good financial decisions.   Or they may end up showing excellent management skills and you don't want to hamstring them by keeping capital out of their hands when you pass away by tying up the assets in trust indefinitely.

Regardless, choosing to review the dispositive provisions in your estate document allows you to continue to make smart decision about your heirs ability to inherit as they grow up. 

3) Laws change.  Congress - both in Washington and in states across America - are regularly passing new laws that impact your estate documents.  Maryland passed a uniform Power of Attorney in 2011 which all Maryland residents should obtain.  The Federal estate tax exemption amount is set to revert from $5 million back down to $1 million at the end of the year.  For the first time in years, the Federal lifetime gift tax exemption amount is $5 million (for tax years 2011 and 2012).

4) You change.  I can't count how many clients have left the DC area over the last 5 years.  Nor is it determinable how many clients added to their family through children or grandchildren, started a new business, bought a second home, purchased additional life insurance, or have simply rethought what they want their estate to do. 

These and others are constant reasons to review your estate documents every several years to make sure that they are up to date.  I remember as a kid (I think I was about 7 or 8) one time having a severe anxiety attack about death.   I can't remember what caused it but I had a long conversation with a family friend who is a pediatrician.  Many of us today still have anxiety in thinking about death which makes reviewing the estate documents a difficult task. 

With that being said, think about how many times we all complain about Congress not doing what is necessary even though it is difficult.  Sometimes we just need to dig deep and power through a difficult process.  Consider rewarding yourself with nice bottle of wine, a good dinner with family/friends, or some other treat once it is done.  After all it can't be bad to pamper yourself every couple of years.  

Social Security Administration Goes Digitial

For years, the Social Security Administration has mailed out annual statements to inform you of your benefits upon retirement, disability or death.  It has been a great service to have this mailed regularly so that you can stay up to date on what you could expect under the three different benefit formulas. 

"Times they are a changin'' though, because the Social Security Administration has taken the statements online in an effort to save millions of dollars a year (technically the savings are expected to be approximately $70 million annually).  In order to access the site you need to go to the Social Security Administration website and register (www.ssa.gov/mystatement/). It is a fairly straightforward process but creating a workable Username and Password that you can remember is definitely the hardest part (I recently registered myself).  Apparently, you can’t use any part of your name or Social Security number in either.

With that being said, we recommend that you visit the Social Security website by clicking on the following link and creating an account.  We recommend it for several reasons:

1)    It is good to do it now when you are thinking about it and remember.  Let's be honest we all live busy lives so doing something now is better than putting it off indefinitely.

2)    Everyone with an earnings history has an account so there is some concern that your account could be registered with someone else (i.e., stolen).   This is just an informational site so if someone does gain access to it for any reason they can't start your benefits or make changes.  Technically all the information that they could gain from the site, they would already need in order to steal your account. So realistically there is nothing gained for someone to do this, but it is a concern that can be alleviated by simply registering your account now.   

3)    We like to see these statements periodically so it will be good to have in advance rather than scrambling to get them.

4)    It is good to spot errors as they occur rather than not seeing them for many years in the future.  This allows you to  not only more accurately catch errors but should make it easier and less stressful to correct than trying to do so when you need them updated. 

Due to the complexity of the username and password to access the site, we do recommend writing or down or keeping it in a secure location. 

Net Unrealized Appreciation

Net Unrealized Appreciation

Diversification is touted by many in the investment and financial planning community because it spreads your risk over multiple stocks and/or assets classes.  For those individuals who have not heeded the advice of the investment and planning community over the years by investing directly and heavily in your company stock through your 401(k) plan, there is a very narrow and beneficial tax loophole that you can jump through.  But be very careful when jumping and be sure to review the transaction after it is completed to make sure that it was successfully executed, though once set in motion it is extremely difficult if not impossible to unwind.  If done correctly, it can be a very nice benefit – especially with tax rates likely to rise in the future – but if done incorrectly it can cost you dearly. 

The strategy is referred to as NUA – Net Unrealized Appreciation – and it relates to JUST the company stock in a 401(k).  Let’s take a look at a quick example to better understand. 

After working with your employer for many years, you end up with a $500,000 401(k) account.  Of this, $250,000 is in company stock and $250,000 is in various mutual funds that the 401(k) had as part of the plan offerings. 

Let’s further assume that your direct investment – or cost basis - in company stock was just $50,000 and the rest of the value was in ‘unrealized appreciation’ – or simply the appreciation in the stock over what you paid for it. 

The NUA strategy allows you to distribute the stock from the account and pay ordinary income taxes on JUST your cost basis (in this case the $50,000) and the appreciation gets to come out tax-free, for now.  Upon selling the stock in the future, you will pay long-term capital gains rates on the unrealized appreciation rather than ordinary income tax rates. 

It sounds like a pretty good deal, right?  It is and can be very beneficial especially if you intend to hold the position for some time AND the difference between the cost basis and the current value of the company stock is wide enough. 

There are a couple of rules to acknowledge:

1)   In order to do a NUA correctly, the entire 401(k) account balance must be empty at the end of the calendar year.  This means that you must roll over the non-company stock to an IRA and make sure that all shares of the company stock get transferred to either a brokerage account or IRA.  

It also means that it is advisable NOT to do this in November or December as it is too close to the end of the year to make sure that it all gets done correctly. 

2)   If you are under age 55 when you leave the company, you will also have to pay a 10% penalty on the BASIS in addition to the ordinary income tax. 

3)   NUA can only be done while the company stock is in the 401(k).  It can’t be done after you have already rolled the account balance to an IRA. 

4)   If you have retired from the company and taken a distribution prior to doing the NUA/rollover strategy, then you need to talk with your accountant and/or financial planner.  Previous distributions may jeopardize your eligibility to elect NUA unless you have had a qualifying event. 

As with any strategy, there are also a couple rules of the road to know about before implementing it. 

a.    The lower the basis relative to the total value of the stock the better the strategy is – in essence because you are reducing the amount that is subject to ordinary income tax rates.

b.    You can ask the 401(k) provider for a breakdown of your share purchases, as long as they kept detailed records.  This could allow you to simply identify the positions with the lowest basis and use those to implement the NUA strategy while letting the rest of the shares transfer to your IRA. 

c.    You need to expect your ordinary income to be higher than capital gains rates in the future.  This may seem like a no brainer but there are many retirees that will enter an extremely low period of tax brackets during their 60s before forced distributions out of the IRA begin at age 70.5. 

d.   The 401(k) provider will issue you several 1099s to document the rollover IRA.  They will indicate on Box 6 how much of the distribution of company stock was net unrealized appreciation versus how much was employee contributions.  You should review this to make sure that it matches your records from the rollover conference call. 

As with any complex strategy, proper execution is critical.  This starts with the initial phone call to the 401(k) provider to make sure that it is eligible for you and continues all the way to properly reporting it on your tax return.  If you are not familiar with the process, then I recommend working with your qualified professionals every step of the way to make sure that you don’t jeopardize the benefits of the strategy.  

Good afternoon.  I am very excited to get back into blogging about Financial Planning and Wealth Management.

I thought that I would start off by sharing this video I made discussing the rising college tuition costs being seen across the country and the planning that needs to be done in order to best deal with them when the time comes to send your kids off to school.

Much more to come...