Morrisville—Gary Flick, a financial educator in Bucks County, offers expert advice on financial concerns for retirees. He works with groups and individuals to educate them on their long term care financing and insurance needs. Gary urges investors age 60 and over with significant retirement assets to seek out a knowledgeable advisor. "Changes in tax rules give some investors big benefits and no one will come to your door to tell you about them. Investors need to act or they will get few of the benefits."
One of the new benefits affects millions of employees working for states and localities. These workers have 457 plans, often called deferred compensation plans, which have been taxable in many cases, soon after retirement. Now, these accounts can be rolled over to an IRA, which offers additional tax deferral and passing onto heirs for growth over 2 or 3 lifetimes.
Other new benefits include the merging of rollover and contributory IRAs into one account and still preserving the ability to roll the funds into a qualified plan. Previously, people kept their contributory and rollover IRAs separate making for extra accounts, possibly extra fees and extra paperwork. Why would someone want to roll his IRA into a qualified plan? In some States, money in qualified plans (Keoghs, profit sharing, pensions plans, etc) are protected from bankruptcy claims and creditor claims while IRAs are not. Additionally, investors can own life insurance in a qualified plan but they cannot in an IRA. Anyone buying life insurance for estate planning purposes or otherwise may want to do so in a retirement plan where they use pre-tax dollars rather than after tax dollars and effectively save 40% on the net cost of the premiums. Many people believe IRAs are simple but those who get informed realize that there's a world of opportunities to make a good thing better.
Gary recommends a book by Larry Klein, author of Retirement Investing, Asset Protection & Wealth Preservation. For details on this issue, phone Gary at 215-295-6820.
Gary Flick offers a monthly newsletter called Senior Finances, and offers a complimentary copy free to any senior who is looking for up-to-date health and financial information. Email your request to gflick@ltcadvantage.com.
