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Category: Retirement

Cracking the Medicare Code

Cracking the Medicare Code

Posted By Lineweaver Financial Group
October 01, 2020 Category: Medicare, Medicare Supplements, Retirement, General

Open enrollment for Medicare and Medicare Supplements is right around the corner. Medicare programs are notoriously challenging to navigate, but it’s a crucial decision that most of us will have to make at some point in our lives. The question most people start with is one of eligibility. There are two essential parts to Traditional Medicare, Parts A and B. Part A has to do with hospitalization, and you become eligible on the first of the month for your 65th birthday.  If you become eligible for Part A, it’s recommended to enroll immediately because there is no premium.  This remains true even if you are still working and have health insurance through your job. It will get you into the system, and you’ll start receiving “Medicare & You.” On the other hand, part B has to do with doctor visits and bills, including medically necessary services or preventive care. It’s recommended that you enroll with the Social Security office about 2-3 months prior to when you’ll be looking to receive the full Medicare enrollment benefits. When it comes to enrolling for Part B, this can be particularly tricky and could cost you. If you are already retired or will retire right at 65, the answer is simple: sign up for Part B at the same time you enroll in Part A. If you are still working, it’s something that you must figure out when the right time is to enroll. It’s essential to enroll at the right time. If you

5 Steps to Transitioning into a Successful Retirement

5 Steps to Transitioning into a Successful Retirement

Posted By Lineweaver Financial Group
July 14, 2020 Category: Retirement, General, Steps

Are you looking to start the transition into retirement? If so, we have prepared 5 critical steps to take into consideration when transitioning into this new chapter of your life. When preparing for retirement there are plenty of important decisions running through your mind. We have compiled these steps in order to help guide you along the way.  Step 1: Plan for Increasing Healthcare Cost When it comes to healthcare, you have to be prepared for what could happen in the future. Fidelity does a study every year into the average cost of healthcare for a couple who is aged 65 and retiring. In 2019 it was estimated they will need $285,000 for healthcare and healthcare-related costs. This cost, unfortunately, will only increase significantly each year.  Step 2: Consider Long-Term Care According to the U.S. Department of Health and Human Services, 70% of people aged 65 or older are likely to need long term care at some point. With such a high percentage of people in need of long-term care, it’s something to keep in mind when making the transition into retirement.  Step 3: Change Your Money Mindset After retirement, the way you invest will also begin to change. What this entails is changing your mindset from saving to spending and preservation. This means that making contributions and growing your assets becomes investing for protection, aiming to safeguard your wealth, and making sure that you will have a good, steady income stream. It’s often dif

Planning for Long-Term Care

Planning for Long Term Care

Posted By Lineweaver Financial Group
August 29, 2019 Category: Longterm Care, Healthcare, Elder Law, Estate Planning, POA, Power Of Attorney, Retirement

Many people don’t know that over 69% of people turning 65 this year will need some sort of long-term care at some point in their retirement. Our firm specializes in planning for and managing retirement for private and institutional clients, and our clients often require advanced planning to protect their assets. First of all, it’s important that you have an elder law attorney. Elder law is a niche area of legal practice covering estate planning, wills, trusts, retirement healthcare planning and protection of assets. A good elder law attorney can help advise you on all these areas. The right planning starts with the right documents, especially the Power of Attorney. The power of attorney law changed in Ohio in 2012 to the Uniform Power of Attorney Act, and many powers of attorney documents don’t conform with this legislative change. We highly recommend for anyone with a power of attorney written prior to March of 2012, that you have that document reviewed to determine if it meets the new criteria.  Another important aspect of elder law is retirement health care planning. For example, most people under 80 don’t have pensions, and their net worth is primarily invested in IRA’s and 401(k)’s. These assets present a difficult challenge when planning. For those individuals, a leverage strategy using annuities and/or life insurance with long term care benefits can be very effective. Traditional long-term care insurance is no longer the on

Bipartisan Support in Congress to Make Retirement More Secure

Posted By Lineweaver Financial Group
July 02, 2019 Category: Congress, Retirement, IRA

by LFG Tax Director, Mark Sipos On May 23rd, 2019, the U.S. House of Representatives voted overwhelmingly in favor of the SECURE Act, which stands for "Setting Every Community Up for Retirement Enhancement." Most of the provisions in the act are designed to make it easier for more people to save for retirement, and for more employers to offer retirement plans for their employees. One notable provision in the bill would essentially end what's known as the "stretch IRA." Under the current law, when a beneficiary inherits an IRA, the beneficiary can choose to have the IRA balance distributed in two ways: either in required minimum distributions based on his or her life expectancy, or during the five years after the original account holder passes. Making maximum use of the IRA's taxdeferred compounding like this is known as a "stretch IRA." Under SECURE, in most instances an inherited IRA would have to be fully distributed within 10 years of the original owner's death, although there are some exceptions. Some additional areas the bill covers are as follows: • The repeal of the maximum age for traditional IRA contributions, which is currently 70½ • An increase of the required minimum distribution age for retirement accounts to 72 (up from 70½) • Allowing long-term part-time workers to participate in 401(k) plans • Increase of the auto-enrollment safe harbor cap to 15% from 10% • Allowing more annuities

The Power of Coordination

The Power of Coordination

Posted By Lineweaver Financial Group
April 18, 2019 Category: Coordination, Tax, Legal, Insurance, Financial, Wills, Estate Planning, Taxes, Retirement

  At the Lineweaver Companies, we believe a team approach to coordinating all your financial, legal, tax, and insurance needs helps save you time, money and worry.   For example, we had clients who were both close to retirement, and unfortunately the husband had been diagnosed with terminal cancer. The first thing we did was to work with them to make sure his pension was triggered in such a way that the wife could receive a greater lifetime benefit - almost a million more dollars than she would have otherwise received.   At the same time, in this sort of situation, you have to consider powers of attorney – and other basic estate planning documents that everyone should have, like wills, and even if trusts make sense for your particular situation.   There were also huge student loan balances of more than $120,000. But, because they kept the loans entirely in the father’s name, when he passed, the debt was forgiven. But what many people don’t know is that the forgiveness of debt – in this case student loan debt - is considered income by the IRS – and therefore taxable. As you can imagine, in this case it was significant: an additional $40,000. However, we were able to work with the family and the IRS to get the entire amount forgiven as well – so they ended up having the debt and the tax bill forgiven.   Given the pension payouts and their savings, they had significant assets that needed to be managed eff

Your 401(K) Isn't Your Only Option

Your 401(K) Isnt Your Only Option

Posted By Lineweaver Financial Group
October 03, 2017 Category: IRA, 401(k), Retirement, Retirement Planning

You’ve heard it over and over again, from many places –  never, ever make an early withdrawal from your 401(k), unless it’s an emergency.  And, we agree - that’s often good advice.  But there are a few exceptions where an early withdrawal may be to your advantage. Some companies allow active employees participating in a qualified employer-sponsored retirement plan to withdraw a portion of their account balance upon request, without demonstrating a specific financial need, usually at age 59 ½. This is called an in-service, non-hardship withdrawal. One reason you may want to consider this option is that by rolling over a portion of employer-sponsored retirement plan assets to a rollover IRA, you may be able to significantly expand your investment choices, especially if you have limited choices in your employer-sponsored retirement plan.  401(k)s typically offer limited fund options to participants.  Spreading the risk among a group of investments is generally a good thing when saving for the long term.  But this usually means you miss the opportunity on select investments. Outside of your 401(k), you could invest in specific sectors that may have greater long-term growth potential, like healthcare.  You could move into investments that will have lesser impact with anticipated rising interest rates, like limited-duration bond funds. You could look at alternative investments, like real estate, gold and other com

Why a Roth Conversion can be a Smart Retirement Strategy

Why a Roth Conversion can be a Smart Retirement Strategy

Posted By Lineweaver Financial Group
June 08, 2017 Category: Roth, IRA, Retirement

There are many options when it comes to retirement, and it can be hard to know which is right for you. One of those options – a ROTH IRA conversion, can be a great strategy for some people. First, a quick refresher on how a ROTH IRA differs from a Traditional IRA. With a Traditional IRA: 1.      You receive an upfront tax deduction on your annual contributions 2.      Growth is tax-deferred growth until it’s withdrawn 3.      Withdrawals are taxable as ordinary income 4.      There are penalties if you take withdrawals before the age of 59 ½ 5.      You have required minimum distributions (RMDs) that begin at age 70 ½ With a ROTH IRA 1.      Your contributions are “front loaded” meaning you use after-tax dollars for your contributions 2.      Growth is tax-free 3.      Withdrawals are never taxed 4.      Earnings can be taken income-tax-free if you are at least 59 ½ and have had the ROTH IRA for at least 5 years 5.      There are no required minimum distributions – ever! If you currently have a Traditional IRA, but some of the benefits of a ROTH IRA sound appealing to you, there is a way to “convert” your traditional IRA into a ROTH IRA – this is

Is an Annuity the Right Retirement Option for You?

Is an Annuity the Right Retirement Option for You

Posted By Lineweaver Financial Group
May 04, 2017 Category: Annuity, Annuities, Annuity Alternatives, Retirement, Life Insurance, Dividend, Stocks, Bonds Ladder

Annuities can be great tools. Often, fixed annuities can offer higher interest rates than your bank account, a CD, or even Treasury Bonds, and they do it all with comparatively low risk. But, there are many alternatives that may be far better options for some people. One of the downsides to some annuities is that your portfolio can’t grow if you’re taking the interest as distributions, and there can be surrender charges as well. The 65-year-old retiree will see the value of his or her $500,000 stay the same over 10 years, and if you factor in an annual inflation rate of 3%, your purchasing power for that same $500,0000 will only buy $350,000 worth of goods. If that scenario doesn’t seem ideal for you, here are a few alternatives you might consider. Dividend-paying stocks that pay monthly and quarterly dividends can be good annuity alternatives. With the help of an experienced advisor, you may be able to even buy a collection of dividend-paying stocks that will not only pay you more income every year, but even offer the possibility of making your investments grow. Keep in mind, however, that there will be more risk. It’s important to have someone help you choose a diversified, broad portfolio of stocks. Diversification can help ensure that, even as some stocks may decrease in value, they will hopefully be offset by other stocks that are rising in value. This also means that you’ll be less likely to be forced to sell, because even if the

How Much Money Do You Really Need To Retire?

How Much Money Do You Really Need To Retire

Posted By Lineweaver Financial Group
March 24, 2017 Category: Retirement, Retirement Planning

Life is full of uncertainty. What your career will bring, changes in your family, your health, and the market. And these are just a few! So it’s hard for anyone to predict the future, but there are really only two ways to figure out how much you need for retirement. And, as you’ll see, one offers a better future for most. 1.      Save What You Can It’s no secret that many people are putting off or avoiding saving for retirement. A recent article on CNN.com shared that about 26% of workers said they and their spouse have saved less than $1,000 for retirement, according to a report from the Employee Benefit Research Institute. Another 16% said they have between $1,000 and $10,000 stashed away for retirement. While some of those are no doubt younger workers who have time to save, some are likely not. It’s highly doubtful that they’d be able to retire at all on that! Some financial planners point out that planning retirement spending around your current income might not make sense. Many people drastically change their spending habits in retirement. Expenses might shrink, or they might increase. But, even if they stay the same or decrease, you have to consider what the markets might do, how inflation might affect your savings, or how healthy you will be. 2.      Work Backward and Make a Plan This is the advice you’d likely hear most often. This involves some version of working b

Are You Spending Your Legacy?

Are You Spending Your Legacy

Posted By Lineweaver Financial Group
March 10, 2017 Category: Legacy, Retirement, Retirement Planning

Are You Spending Your Legacy? Retirement is supposed to be a well-earned reward – a time when you can stop worrying about the day-to-day struggles of your career, and everything that went with it. A time to enjoy your family, and to scratch a few things off your bucket list. Confronted with so much freedom, it can be tempting to do all those things without considering a plan going forward. While we find that most of our clients aren’t afraid of running out of money for themselves, many of them do want to leave a legacy to help their children or grandchildren. So how can you ensure that you’ll be able to have the retirement you want and still help your loved ones? It all comes down to your spending rate. To find your rate, start by adding up your expenses, and subtract that from any non-portfolio income you might be receiving in retirement. That can mean things like rental property income, annuity income, or even Social Security. The amount left over is what you’ll need to withdraw. You can divide that by your total portfolio, and there’s your spending rate! Most financial advisors will recommend a 4% spending rate. But keep in mind that financial professionals have arrived at this rate by making a number of assumptions. They are: 1.       That you’ll want a steady and consistent income 2.       That your portfolio asset allocation is aligned with your financial goals and ri

What Level of the Retirement Pyramid Have You Reached?

What Level of the Retirement Pyramid Have You Reached

Posted By Lineweaver Financial Group
February 23, 2017 Category: Retirement, Retirement Planning,

When it comes to retirement planning, it’s hard to know where to start. Many people put it off for years, only to discover that they’ve put themselves at a distinct disadvantage. They often have to sacrifice to catch up financially, or work for far longer than they would have otherwise. When we talk to clients, they are interested in two things: they want to maintain their quality of life while saving for retirement, and they don’t want to make sacrifices once they have retired. We’ve put together a helpful guide that can help you do just that! To simplify the many options available to you, we’ve laid these out like a pyramid – you shouldn’t think about progressing to the next level before you’ve completed the other levels from the base up. We think that this makes it easier to understand by helping clients strategically, thoughtfully, and thoroughly build the retirement of their dreams, and to have a roadmap to understand what they should be doing now, and what comes next. Level one: Make sure you’re investing enough to receive your company match If your employer offers a 401(k) with matching contributions, that is essentially free money. Although you have to contribute some of your own money, it will be matched at a certain pre-determined rate ($.50 on the dollar up to 6% is the most common), which is like giving yourself an immediate raise. Generally speaking, and even if the match is relatively small, it’s

Can You Retire Earlier Than You Thought?

Can You Retire Earlier Than You Thought

Posted By Lineweaver Financial Group
February 07, 2017 Category: Retire, Retirement, Retire Early

  Your retirement portfolio may look pretty good right now. We’re in the midst of a bull market, and still enjoying the effects of the so-called Trump rally. You may be looking at those balances and thinking – maybe for the first time – “This might be an actual possibility, and sooner than I thought!” But there are many things to consider before you make the jump. For example, what if the market declines? Do you have the right insurance in place? What about taxes – will you retire into a higher bracket, or maybe a lower one? Here are a 4 important retirement planning considerations before you make that big decision. 1.       Healthcare Healthcare is a huge concern for most retirees, and with the current uncertainty about the future of the ACA, it can make it hard to know what the best plan is. Some retirees incorrectly assume that at the age of 65, Medicare eligibility immediately eliminates your healthcare costs. According to an estimate by Fidelity Investments in August of 2016, the average couple retiring at age 65 will need $260,000 for retirement healthcare expenses during their retirement. Another report from the Kaiser Family Foundation noted that the number of firms with more than 200 employees offering retiree healthcare benefits has been declining as well. There are a number of ways that you can plan for healthcare costs, including Health Savings Accounts (HSA’s) and supplemental cov

Time is ticking….. Less than six months to take advantage of two vital Social Security pay-out strategies

Time is ticking….. Less than six months to take advantage of two vital Social Security pay out strategies

Posted By Lineweaver Financial Group
December 07, 2015 Category: Social Security, Social Security Benefits, Retirement, Retirement Planning

  With the passage of the 2015 Budget Bill, two important Social Security claiming strategies called “File & Suspend” and “Restricted Application” are going away for everyone under age 62, whether you are in retirement or thinking about retirement.  Understanding these changes, and taking certain steps prior to this enactment, can mean thousands more in lifetime benefits for you, your spouse, and your family. The benefits of these two disappearing strategies are best explained in two common scenarios: Scenario #1 Your spouse collects her spousal benefit (50% of your full retirement benefit*) while you “File & Suspend” your own retirement benefits to age 70 to take advantage of Social Security’s higher Delayed Retirement Credit (i.e., SS increases 8% per annum after FRA). Scenario # 2 Your spouse files for early SS benefits at age 62. When you reach your FRA* you file a “Restricted Application” that entitles you to 50% of her projected full benefit, while deferring your retirement benefits to age 70 to take advantage of Social Security’s higher Delayed Retirement Credit (i.e., SS increases 8% per annum after FRA). What to do? If you are under age, 62, and plan to be in either category, or, are simply not sure how these expiring benefits could affect you and your spouse, we suggest you sit down with a qualified financial planner ASAP. Because is this case, time really is

Social Security Benefits Unchanged

Posted By Lineweaver Financial Group
November 23, 2015 Category: Social Security, Social Security Benefits, Retirement Planning, Retirement

No help for the middle class. Social Security Benefits Unchanged….Again While the politicians have their political debates promising the moon, the middle class has again taken it on the chin. There will be no cost of living increase in 2016 Social Security payments. In fact, this no-increase decision has only happened three times since 1975 – 2010, 2011 and now again in 2016.  In all the years since 1975 there have only been three years with no increase- 2010, 2011 and now again for 2016. The argument is that Cost of Living Adjustments (COLA) are designed to help recipients cope with inflation. But, while the real cost of energy has declined, and pushes the overall rate of inflation down, a number of everyday items has remained the same, if not increased. For example, when was the last time you saw a dozen eggs plummet in costs? The other difficulty of course, is we are living longer lives, partially due to medical advances, and what appear to be increasing expensive drug regimens. It is well-documented the cost of drugs shows no signs of abatement, and, it seems virtually everyday, there is a new miracle drug with a heavy advertising budget suggesting you talk to your doctor about them. For many, flat Social Security payments means another year of careful budgeting. For the more fortunate it may simply mean postponing a vacation or modifying the Christmas gift list. It may also be a time to see if we can review your portfolio, and come up with some add

Heading into the Homestretch

Posted By Lineweaver Financial Group
August 24, 2015 Category: Retirement, Retirement Planning, Retirement Tips

If retirement is just around the corner, here are some tips you might want to consider in preparation for the big day. Protect your 401k. If your plans are to retire in the next 12 months or so, you might want to consider getting ultra conservative in your 401k. If you plan on taking your 401k and rolling it over to an IRA, protect your current balance from potential market declines by moving into a common 401k option, a stable value fund. You could give up some upside potential, but you may sleep better at night knowing you have limited downside risk. Even if retirement is more than 12 months away, get the 401k ready for the future. Now is probably not the time to be taking on additional risk; the opposite could be your best option. But be careful using bonds; many 401(k) investors invest in bonds to reduce risk and lock in more stable returns. But if interest rates continue to rise, bond fund returns could suffer. Don’t jump from the frying pan into the fire! Pick pension option. If you’re among the one in five private sector workers who still have a pension, you may be offered the option of taking a lump sum rather than a stream of checks for life. Do your homework before you make any decision; this decision will be carved in stone.  If you’re a disciplined investor, you theoretically could do better by taking the lump sum and investing it. The lump sum might also be a smart call if your annual pension reports show the fund is seriously underfinan

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