Archive for the ‘Retirement Advice’ Category

Joint Ownership of Property

February 9th, 2009

Putting various types of property into Joint Tenancy is an easy planning tool since with the passing of one owner the other takes ownership immediately. However, great care must be taken in this area because the creation of joint tenancy, in many cases, creates a gift which often can be a “taxable gift”.
With bank and brokerage accounts switching the ownership to joint tenancy is not usually considered a gift unless the new owner starts withdrawing from the account. However, in the case of a business or real property, transferring the ownership to joint tenancy usually creates an immediate gift of half the value of the asset.
If you do choose to transfer an interest in a business or real property (including personal residences) be sure to obtain a reliable appraisal. And be sure to file a gift tax return. Also, be sure your state allows joint ownership.
Obviously estate and gift tax issues arise anytime property is transferred. As always, seek professional help. There is just too much money at stake when one’s total assets approach a current fair market value of around $1 million.
For personal net worth’s of less than $1 million, things can be much simpler. Putting financial assets into joint tenancy with a trusted child and creating of simple living trust, may be an easy way to have your assets transfer to the next generation with little or no hassles. Do-it-yourself books and software are readily available and really do make it simple. A good rule of thumb is to try and find a book written with your state’s laws in mind. If this is not possible, ask around for recommendations.
In my own mother’s case, we created a straight forward living trust and she transferred all her financial accounts into joint tenancy with my sister. With this small amount of estate planning, the most difficult part of transferring her assets was deciding who would get the oak dinning table and chairs. No problem there either, I got them.

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Retirement Advice

Social Security Benefits

January 29th, 2009

People are living longer than ever. What this means for a healthy, active person is whether they think they can outlive the average life expectancy for their age group. If you are willing to gamble that you will do just that, postponing your Social Security benefits until age 70 may return substantial benefits.

Say you were born in 1950. If you take SS benefits at age 62 you will receive about $1,600 per month. Waiting until age 66 gets you $2,200 and at age 70 you get $3,000. After doing all the fancy calculations and estimations, it looks to me that around age 82 those who postponed their benefits until age 70 will have already won on the bet. Living longer than age 82 (not unusual as far as I can see) will garner you substantially more money that if you had taken the money at age 62 and ran to the bank.

The bottom line – if you feel good and feel lucky, wait to draw your Social Security.

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Retirement Advice