New Social Security Rule Will Hurt Women by Eliminating Benefits Options

Posted on December 16, 2015 by James Lange in Beneficiary Designations, Estate Planning, Lange’s Cascading Beneficiary Plan, Retire Secure!, Retirement Planning, Social Security, The Lange Money Hour, Video Resources and tagged beneficiary designation, Social Security.

James Lange, CPA/Attorney, Advises Married Couples Ages 62-70 to Apply and Suspend NOW. After April 29, 2016, it will be too late!

In early November, President Obama signed the Bipartisan Budget Act of 2015 into law and the repercussions are devastating to the married women of our country.

Pittsburgh – December 16, 2015 – Married women, statistically the widows of the future, will pay a high price due to the changes that the Bipartisan Budget Act of 2015 has made to Social Security. Pittsburgh attorney and CPA James Lange takes action by releasing audio and video presentations as well as transcripts and a report that will help couples ages 62-70 navigate this new rule and protect their benefits while they still can!

SOCIAL SECURITY SURVIVOR BENEFITS ARE CRITICAL TO WOMEN

The financial well-being of widows is often dependent upon the choices that are made while their spouses are still alive. Spousal and survivor Social Security benefit choices can mean the difference between living comfortably in retirement and falling under the poverty line for women whose spouses leave them behind. Widows are commonly younger than their deceased husbands and the Social Security benefits they have earned, especially in the Boomer generation, are commonly less than that of their deceased husbands. This means that a widow will depend on collecting survivor benefits, often for many years, based on the benefits to which their deceased spouses were entitled.

“One of the best things a husband can do to protect his wife in widowhood is to maximize his own Social Security benefits. One technique that we use with our clients is apply & suspend.” James Lange of Pittsburgh-based, Lange Financial Group, LLC comments. “The law prior to the Bipartisan Act allowed the husband to apply for, and then suspend collection of his benefits, while allowing his wife to collect a spousal benefit. It was a win-win for our clients!”

This technique was used strategically to maximize the husband’s and wife’s long-term benefits. That, unfortunately, is coming to an end, with the exception of certain couples who take the appropriate action between now and April 29, 2016. For many couples, the income stream from spousal benefits in the previously allowed apply and suspend technique made it possible (or at least more palatable) for the husband to wait until age 70 to collect Social Security, thus maximizing their benefits.

“This new law cuts off that income stream, making it if not impossible, at least more difficult, for husbands to choose to delay collection of their benefits.” Lange warns, “Unfortunately, it is the widows of these husbands who cannot maximize their Social Security benefits who will be left in reduced circumstances for the rest of their lives.”

JIM LANGE’S ADVICE

DO NOT WAIT. Congress has eliminated one of the best Social Security maximization strategies. Fortunately, some recipients may be grandfathered already and others could be grandfathered if they act between now and April 29, 2016. Others will have to make do with the new laws. In either case, now is the time to review your options. We have posted a one hour audio with a written transcript explaining the old law, the new law and the transition rules. Readers can go to www.paytaxeslater.com to access this audio and transcript.

ABOUT JAMES LANGE

James Lange, CPA/Attorney is a nationally-known Roth IRA and retirement plan distribution expert. He’s also the best-selling author of three editions of Retire Secure! and The Roth Revolution: Pay Taxes Once and Never Again. He hosts a bi-weekly financial radio show, The Lange Money Hour, where he has welcomed numerous guests over the years including top experts in the fields of Social Security, IRAs, and investments.

With over 30 years of experience, Jim and his team have drafted over 2,000 wills and trusts with a focus on flexibility and meeting the unique needs of each client.

Jim’s recommendations have appeared 35 times in The Wall Street Journal, 23 times in the Pittsburgh Post-Gazette, The New York Times, Newsweek, Money magazine, Smart Money and Reader’s Digest. His articles have appeared in The Journal of Retirement Planning, Financial Planning, The Tax Adviser (AICPA), and other top publications. Most recently he has had two peer-reviewed articles published on Social Security maximization in the prestigious Trusts & Estates magazine.

To learn more, or sign up for their newsletter, visit www.paytaxeslater.com.

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Donations to Charity: Is There Still a Tax Benefit if I Donate?

Posted on July 15, 2015 by James Lange in Income Tax, Retire Secure!, Retirement Planning, Tax Law and tagged charitable donations, charity, Income Tax, Income Tax Returns, James Lange, Retire Secure! A Guide to Getting the Most out of What You've Got.

Imagine 100 years in to the future: Two people are playing a word association game. One player gives the clue, “Bill Gates.” Today, you’d probably say, “The founder of Microsoft,” right? Well, I’m going to go out on a limb and suggest that, 100 years from now, Microsoft’s importance will have faded because of ever-evolving technology and many people will not recognize the company name, much less know who its founder was. However, I’m confident that Bill Gates will still be a household name. Why? It is because Bill and his wife Melinda have donated, and continue to donate, the vast majority of their immense wealth to charity. The impact of their generosity is astonishing. Thanks to their largesse, it is possible – maybe even likely – that diseases such as malaria will be eradicated within our lifetimes. Certainly, their philanthropy will save millions of lives, and improve the lives of virtually everyone on the planet. My own charitable gifting is nowhere near the scale of Bill and Melinda’s, but, even so, I can see how my donations benefit others. And it makes me happy to think that I can make someone else’s life better, even in my own small way.

The American Taxpayer Relief Act of 2012 reinstated a phase-out of itemized deductions for high income taxpayers. For those individuals, it meant that they were unable to receive the full benefit of their charitable contributions on their tax returns, and they were very unhappy. A few taxpayers didn’t care. I have a client who donates an unusually significant amount of her annual income to charity every year, and who steadfastly refused to give me a list of the donations so that I could deduct them on her tax return. She felt that it was morally wrong for her to receive any benefit from them. It was an admirable position, to be sure, but then I pointed out that the government does not do a very good job of dealing with social problems in this country. I told her that I believe that the reason charities don’t have to pay taxes is because they do a much more efficient job of distributing money and services to the needy than our government does. Under those circumstances, it seemed wasteful to me to not deduct the donations. She listened to me, and the following year presented me with hundreds of donation receipts, which I deducted on her return. She received a significant tax refund, which she promptly used to donate even more to charity!

If donating to charity is important to you, you may find it worthwhile to review the ideas discussed in Chapter 18. Many readers will be surprised to learn that there are strategies available that can give them far more bang for their charitable buck than they may have thought possible. Charitable gifting does not necessarily have to come at the expense of family members either, and in some instances it may even benefit them! Your distant dreams of establishing a scholarship fund, building a bicycle trail, or providing ongoing medical care to people in need are more achievable than you may realize. The secret is to take advantage of all of the gifting strategies that are available to you.

See you soon!

Jim

A nationally recognized IRA, Roth IRA conversion, and 401(k) expert, he is a regular speaker to both consumers and professional organizations. Jim is the creator of the Lange Cascading Beneficiary Plan™, a benchmark in retirement planning with the flexibility and control it offers the surviving spouse, and the founder of The Roth IRA Institute, created to train and educate financial advisors.

Jim’s strategies have been endorsed by The Wall Street Journal (33 times), Newsweek, Money Magazine, Smart Money, Reader’s Digest, Bottom Line, and Kiplinger’s. His articles have appeared in Bottom Line, Trusts and Estates Magazine, Financial Planning, The Tax Adviser, Journal of Retirement Planning, and The Pennsylvania Lawyer magazine.

Jim is the best-selling author of Retire Secure! (Wiley, 2006 and 2009), endorsed by Charles Schwab, Larry King, Ed Slott, Jane Bryant Quinn, Roger Ibbotson and The Roth Revolution, Pay Taxes Once and Never Again endorsed by Ed Slott, Natalie Choate and Bob Keebler.

If you’d like to be reminded as to when the book is coming out please fill out the form below.

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Ways to Cut Taxes for the Next Generation – Consider Gifting Money to Children

Posted on May 14, 2015 by James Lange in Beneficiary Designations, Estate Planning, Retire Secure!, Retirement Planning, Tax Law and tagged Gifting Money to Children, James Lange, Pittsburgh, Retire Secure Book, Retire Secure! A Guide to Getting the Most out of What You've Got, Retirement, Tax Planning, Taxes, Western Pennsylvania.

gifting money to children lange financial group In January of 2015, President Obama proposed eliminating the tax-free benefits of Section 529 college savings plans. Under his proposal, savings would grow tax-deferred, but withdrawals would be taxed as income to the beneficiary (usually the student). His belief was that taxpayers who save in 529 plans are families who can better afford the cost of college than everyone else. In reality, it is estimated that close to ten percent of 529 accounts are owned by households having income below $50,000, and over 70 percent are owned by households with income below $150,000. What isn’t surprising, though, is that the tax revenue realized by this action would have been significant, because as of the end of the 4^th quarter of 2014, the assets held in 529 and other college savings plans reached almost a quarter of a trillion dollars. How many students would have been forced to apply for loans if they had been required to pay tax on withdrawals from their college savings plans? Fortunately, the House of Representatives thought differently than the President and, in February of 2015, they passed HR 529. This bill not only maintains the tax-free status of 529 plans, but also makes them more flexible and easier to use. Hopefully the Senate will follow the House’s lead and pass a companion bill with similar provisions.

Do you have college savings plans established for your children or grandchildren and, if so, were you aware of this attack on their tax-free status?

Gifting money to children

Contributing to college savings plans for children and grandchildren is a form of gifting, which is a topic that I discuss in detail in Chapter 11 of Retire Secure!. Gifting money to children is an excellent way to minimize taxes at your death, and, depending on the amount gifted, can also provide the recipient with tax-free income. Unfortunately, strategies that reduce taxes frequently come under fire and it is critical that you stay on top of the rules. Also discussed in this chapter are the perils of gifting to relatives in an attempt to avoid seizure of your to pay for nursing home care. It’s a bad idea – don’t even think about it – but it is still beneficial to understand the laws on this subject.

Many couples are not aware that the American Taxpayer Relief Act of 2012 introduced a concept called portability that makes estate taxes less of a concern for many individuals than in the past. If you have not had your estate plan reviewed since 2012, you should read Chapter 11 to learn about the potential pitfalls of what I call “The Cruelest Trap of All”. Since the passage of this act, many estate plans are outdated and could cause the surviving spouse to be disinherited at the first spouse’s death.

Gifting money to children strategies, and the tax implications of gifting, should be a critical part of every estate plan. Changes in legislation that were not anticipated at the time the plan was established, though, can make your plan ineffective and in some cases disastrous. As much has changed in this area; please read Chapter 11 thoroughly to see how you might be affected.

Stop back soon!

Jim

Jim Lange, Retirement and Estate Planning A nationally recognized IRA, Roth IRA conversion, and 401(k) expert, he is a regular speaker to both consumers and professional organizations. Jim is the creator of the Lange Cascading Beneficiary Plan™, a benchmark in retirement planning with the flexibility and control it offers the surviving spouse, and the founder of The Roth IRA Institute, created to train and educate financial advisors.

If you’d like to be reminded as to when the book is coming out please fill out the form below.

Thank you.

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Retirement and Estate Planning Case Study: Plan with the Big Picture in Mind

Posted on May 7, 2015 by James Lange in Estate Planning, Retire Secure!, Retirement Planning and tagged Estate Planning, James Lange, Retire Secure Book, Retire Secure! A Guide to Getting the Most out of What You've Got, Retirement, Retirement Planning.

Knowing that many people aren’t as enthusiastic as I am about topics like taxes, interest rates and so on, I tried to make Retire Secure! as reader friendly as possible. Even so, I know there are still folks out there who find it difficult to apply the concepts outlined in the book to their own personal situations. It’s for those people that I wrote Chapter 10, a Retirement and Estate Planning Case Study on Eddie & Emily. It is a real life retirement story loosely based on an actual client who came to me with some concerns.

Chapter 10 is written from this couple’s point of view. It walks the reader through the thought process that these clients went through as they entered retirement, and how we helped them achieve peace of mind about their concerns. Every client’s situation is different, so it would wrong to imply that one course of action is always better than another. Since we helped them plan with the big picture in mind, though, they were confident that the decisions that they made were the best possible for themselves and their children.

Stop back soon for a peek at Chapter 11. It’s a lot more technical than Chapter 10, but contains important information on the best ways to transfer wealth to your heirs.

See you soon!

Jim

If you’d like to be reminded as to when the book is coming out please fill out the form below.

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Sneak Peek at the Updated Retire Secure!

Posted on February 25, 2015 by James Lange in Retire Secure!, Retirement Planning and tagged IRA, James Lange, Retire Secure, Retire Secure! A Guide to Getting the Most out of What You've Got, Retirement, Retirement Planning, Roth IRA, Roth IRA Conversion, Traditional IRA.

Retire Secure A Guide to Getting the Most Out of What You've Got, James Lange 2015 The third edition of Retire Secure! has been completed and will be going to the printer shortly. Some of you may be thinking, “So what? I already read that book.” Since the second edition of Retire Secure! was published in 2009, there have been two major revisions to the tax code and several landmark court decisions that have significantly changed the way we approach the cases we handle in our office. We try to keep you informed of these changes through our newsletters. If you’re a client, we also meet with you at least once a year to review your situation and, if needed, we help you make changes so that you can achieve the best results possible based on the current laws.

So why should you read this book? Reviewing their finances regularly isn’t a top priority for a lot of individuals – although it should be – and it is human nature to become complacent about things that we’d really rather not have to think about. When we were writing Edition 3, though, I found that so much has changed since I published Edition 2 that it became necessary for me to discuss many of the old laws and the old solutions we used to use, and then explain why the old solutions are no longer effective under the new laws. The legislative changes also created new and possibly unforeseen problems for taxpayers that require proactive management on their parts. Without proactive management, those individuals can pay far more in taxes than they need to. Ultimately, it is their wealth that suffers from their lack of attention.

I’ve been accused of being a self-appointed ambassador of information, and I guess that’s true. I believe this information is so important that everyone should read my book from cover to cover, but I’m enough of a realist to know that not all of you share my enthusiasm for the subject matter. Since I’m a nice guy, though, I’ll respect your time and use this blog to point out the highlights of what’s changed in every chapter. Hopefully a sneak peek at what’s contained within will inspire you to read the whole book.

Happy Reading!

Jim

Jim Lange A nationally recognized IRA, Roth IRA conversion, and 401(k) expert, he is a regular speaker to both consumers and professional organizations. Jim is the creator of the Lange Cascading Beneficiary Plan™, a benchmark in retirement planning with the flexibility and control it offers the surviving spouse, and the founder of The Roth IRA Institute, created to train and educate financial advisors.

If you’d like to be reminded as to when the book is coming out please fill out the form below.

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