The Markets (as of market close September 29, 2017)
Trading during the summer months is customarily slow, and the summer of 2017 proved no different. July kicked off the third quarter with equity markets enjoying noteworthy gains over their June closing values. Both the Dow (2.54%) and S&P 500 (1.93%) posted significant gains, as did the Global Dow (3.13%). The Nasdaq posted a very favorable 3.38% monthly increase. The yield on long-term bonds changed very little from June as investors seemed to focus on… Click here to read the rest of this market summary, Quarterly Market Review: July-September 2017.
Equities in August saw many peaks and valleys throughout the month, finally rallying at the end of the month. Strong second-quarter gross domestic product (GDP) figures, steady job gains, and increased consumer spending sent stocks higher, despite stagnant inflation and heavy personal and financial losses caused by Hurricane Harvey. The large caps of the S&P 500 and Dow posted marginal monthly gains with the tech-heavy Nasdaq leading… Click here to read the rest of this market summary, Market Month: August 2017.
The last day of July saw each of the indexes listed here post gains over their June closing values. Despite slumping tech stocks at the end of the month, the Nasdaq led the benchmarks for the month, closely followed by the Global Dow, as each index gained over 3.0%. Both the large-cap Dow and S&P 500 posted gains, spurred by charging energy stocks and favorable corporate earnings reports. The small-cap Russell 2000, which has lagged behind… Click here to read the rest of this market summary, Market Month: July 2017.
Required Minimum distributions, often referred to as RMDs, are amounts the IRS requires you to withdraw annually from your Traditional IRA or employer sponsored retirement plan (401(k), 403(b), 457, TSP, etc.) after you reach age 70 ½. You can always withdraw more than the minimum amount from your account in any year but if you withdraw less than the required minimum, you will be subject to a Federal tax penalty of 50%.
The RMD rules are calculated to spread out the distribution of your entire interest in an IRA or plan account over your lifetime. The purpose of the RMD rules is to ensure that people don’t just accumulate retirement accounts, defer taxation, and leave these retirement funds as an inheritance. In that case, the IRS is delayed in getting the tax income from them. Instead, required minimum distributions generally have the effect of producing taxable income during your lifetime. Taxable income to you means tax income for the IRS.
When Must RMDs be taken?
Your first required distribution from an IRA or retirement plan is for the year you reach age 70½. However, you have some flexibility as to when you actually have to take this first-year distribution. You can take it during the year you reach age 70½, or you can delay it until April 1 of the following year. However, after the first year, RMDs must be taken no later than December 31 of each calendar year until you die. That means that if you opt to delay your first distribution until April 1 of the following year, you will be required to take two distributions during that year–your first year’s required distribution and your second year’s distribution as well.
There is one situation in which your required beginning date can be later than described above. If you continue working past age 70½ and are still participating in your employer’s retirement plan, your required beginning date under the plan of your current employer can be as late as April 1 following the calendar year in which you retire. Again, subsequent distributions must be taken no later than December 31st.
How much do I need to take?
RMDs are calculated based on your age and the value as of December 31st of the prior year. See the IRS website for the Uniform Lifetime Table which provides the life expectancy factor used to make the calculation. If your spouse is more than ten years younger than you, there is an alternate table that can be used.
What if I don’t need the money?
Whether you need the income or not, you must take the distribution. Some financial institutions will allow you to reinvest the funds automatically into a non-retirement account which would allow the funds to remain invested. However, it would not avoid the tax liability on the distribution
At Kramer Wealth Managers, we can help you navigate your retirement income strategy around RMDs and help you make a decision on how to utilize them once you turn 70 ½. Contact us today to discuss your WealthPath.
No matter how much control we exert over our day-to-day lives, there may come a time in each of our futures when we are no longer able to make decisions for ourselves. When and if that happens, we need to have procedures in place that establish our preferences for certain treatment measures and appoint a trusted individual as a healthcare advocate.
Healthcare Proxy and Advance Directives
Generally, healthcare proxy appointments are taken care of through a legal document called a Durable Power of Attorney (POA) for healthcare. The POA document designates a representative to make healthcare decisions when the patient is either permanently or temporarily unable to make these decisions him- or herself. The decisions the proxy can make include withholding treatment, ending treatment or prolonging treatment of any medical condition that leaves the signor unable to make decisions. Some advance directives may include precise instructions to be followed in the event of specified medical incidents, with decisions for unspecified incidents left up to the healthcare proxy.
Advance Directives, often called a “Living Will”, on the other hand, sets out the patient’s declarations for medical treatment while he or she is in a terminal condition. That is, medical doctors have determined that there is no chance for survival and any measures taken would only prolong life and not ultimately save it. This can include the wish to be kept alive on life support or to not be resuscitated. Often, the living will is incorporated into the Healthcare POA but it can also be a separate document.
Both the POA for healthcare and the Advance Directives are legal documents but are not medical orders.
While the Health Care POA and Advance Directives are legal documents executed through an attorney, you can also fill out medical forms with your doctors called a POLST or MOLST form, depending on in which state you live. These stand for Physician Order for Life Sustaining Treatment (POLST) or Medical Orders for Life Sustaining Treatment (MOLST) form. This form is written by a physician and spells out instructions to medical personnel about the patient’s direct intentions for his or her treatment of a specific condition. It can include orders for end-of-life treatment, medical intervention, and orders to forgo treatment in certain circumstances. Like the living will, POLST/MOLST forms offer instructions for very specified situations and can be used by the whole medical community—including first responders, police and nursing home staff.
It’s important to have both advance directives and a POLST/MOLST form because while advance directives deal with hypothetical situations, POLST/MOLST forms give instructions for actual conditions that the patient has. Covering both ends of the spectrum is vital to ensuring the right treatment is offered.
Keep in mind that emergency medical staff will not wait to conduct CPR while your family member locates your legal or medical documents. If you already have an end-stage condition and know that you don’t want to be resuscitated in the event of an emergency, you may also want to consider a DNR bracelet.
At Kramer Wealth Managers, we can help you work with an attorney to help develop a plan for both financial and healthcare management decisions in the event you are incapacitated. To get started, contact us today.
This material is intended for informational purposes only and should only be relied upon when coordinated with individual professional advice. Neither FSC Securities Corporation, nor its registered representatives, provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.
May provided a bumpy ride for investors. However, by the end of the month, each of the indexes listed here posted monthly gains with the exception of the Russell 2000, which lost over 2.0%. Technology shares continued to climb as the Nasdaq climbed 2.50% in May over April and has risen over 15% since the start of the year. Despite terrorist attacks, mundane oil prices, a rocky first quarter in Washington, and a slowdown in economic growth, U.S. stocks closed… Click here to read the rest of this market summary, Market Month: May 2017.
Riding the momentum following the presidential election, stocks surged for much of the first quarter of 2017. Buoyed by the anticipation of tax cuts and policies favorable to domestic businesses, the benchmark indexes listed here reached historic highs throughout the quarter. At the end of January, the Dow reached the magic 20000 mark for the first time, while the tech-heavy Nasdaq gained almost 4.50% for the month. The trend continued in February, as stocks posted solid monthly gains. The Dow closed the month with a run of 12 consecutive daily closings that reached all-time highs. The S&P 500 also achieved… Click here to read the rest of this market summary, Quarterly Market Review: January-March 2017.
The Markets (as of market close February 28, 2017)
Equities continued their positive trend in February as each of the benchmark indexes listed here posted monthly gains. The Dow recorded 12 record highs in February and posted a monthly gain of 4.77% — its best month since November. The S&P 500 (3.72%) and Nasdaq (3.75%) each climbed over 3.50% for the month. For the S&P 500, February marked… Click here to read the rest of this market summary, Market Month: February 2017.