Weekly Notables

from the Desk of Brian Bickett, CFP®

for the Week of December 18, 2019

Tax-deferred, not tax-free…

This week’s notable retirement article takes us thru the negative side of tax-deferred accounts, i.e. taxes due on withdrawals.  

While the tax-deferred status is of great benefit during the accumulation phase by allowing compounding of what would have been paid annually in taxes, it becomes something to be carefully managed during distribution.  Strategic ROTH conversions during years of relatively low income, the years immediately following retirement for most folks, provide an opportunity to pay taxes at today’s low rates and move the funds into tax-free status.  This strategy is not without hazards as you need to watch for the tax affects on Social Security Retirement Benefits and the possibility of higher Medicare premiums.  Of those two hazards, one is often minimal and the other can be avoided.

This retirement article is another example of how retirement isn’t usually the finish line that most have been hoping for.  People more often than not find themselves busier in retirement than they ever were during their working careers and a finely tuned retirement income plan is not a set-it-and-forget-it situation.  As life happens, opportunities present themselves for those who are watching.

Enjoy the ride of YOUR life!

— Brian

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Rising Cost of Christmas Trees

(Nicole Lyn Pesce, MarketWatch) – This week’s personal finance article explores the “roots” of the rising cost of live Christmas trees which were “seeded” back in the 2008 financial crisis.  It’s an interesting demonstration of the effects of supply and demand over the past decade.

Death and Taxes

(John Yeigh, HumbleDollar) – This week’s retirement article explores that while tax-deferred accounts are great during the accumulation phase, withdrawals should be managed with an eye towards taxes during the distribution phase.  The article walks thru an example of the tax implications of withdrawals for a surviving spouse and the possible benefits of considering ROTH conversions while both spouses are still alive.

Fed December Meeting

(Brian Cheung, Yahoo Finance) – This week’s economic article covers the Fed Open Market Committee’s decision to keep interest rates steady during their December 11 meeting.  Barring any unexpected events, expectations are that they could continue to maintain rates as they are through 2020.

Where’s Brian?

Wrapping up year-end tax planning…

Additional Articles You May Find Interesting

Understanding Arch Coal Pension Plan Benefit Options

Understanding Arch Coal Pension Plan Benefit Options

Article written by Brian Bickett   I’ve been able to help a handful of people make educated decisions concerning their Arch Coal Pension Plan in the recent months. While it all comes down to your personal financial goals, here are a few points that have helped my...

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Summary of the 2019 Social Security Trustees’ Report

Summary of the 2019 Social Security Trustees’ Report

Summary of the 2019 Social Security Trustees' Report   Article written by Brian Bickett Earlier than in the past, the Social Security Board of Trustees released their annual report at the end of April this year.  The report for 2018 spans 270 pages that go...

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