Up and Coming Weekly is a weekly publication in Fayetteville, NC and Fort Bragg, NC area offering local news, views, arts, entertainment and community event and business information.
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14 UCW JULY 29 - AUGUST 4, 2015 WWW.UPANDCOMINGWEEKLY.COM ALAN PORTER, Strategic Wealth Strategies, Contributing Writer. COMMENTS? Editor@ upandcomingweekly.com. http://www.iflretirement. com/Alan-Porter or call 910.484.6200. When it comes to money, there are several points to consider. 1. Is the decision to be in a higher tax bracket at retirement voluntary or invol- untary? People may not have a choice but to be in a higher tax bracket if the majority of thier money is tied-up in a qualified plan such as an IRA or 401K. The law mandates investors start taking withdraw- als no later than age 70-1/2 or be subject to a penalty. A person with a million dollars in these types of accounts would be required to take about $61,000 yearly; regardless of whether the funds are needed. That additional revenue is taxed at ordinary income tax rates. And, at today's tax rates 85 percent of Social Security will be taxed also. 2. Don't overlook the value of creating a personal pension for retirement. Pensions in both the public and private sectors are disap- pearing or are being reduced. Governments and businesses can't handle the risk of people living longer. Creating a personal pension underwritten by a strong insurance company is a very efficient way of guaranteeing your money lasts as long as you do. 3. Are you paying cash for your larger capital expenditures? If so, you are "self-financing." There is a cost involved when people pay cash. They lose the opportunity to earn interest on the money, and that money is no longer available for unex- pected events including emergencies and opportunities. Efficiency planning helps resolve the confusion of "should I self-finance or find an outside source for the expenditure?" 4. High cash-value life insurance provides a lot of hidden benefits. There is no mandatory withdrawal of cash from the policy. The cash is not calculated as income when calculating taxes on Social Security. Policyholders can avoid higher Medicare Part B premiums and the death benefits pass through tax-free to benefi- ciaries. These benefits give greater control of cash. 5. All information has an expiration date and is replaced with new, relevant information. Living on less at retirement is information that is outdated. Most people spend less in retirement on expenses such as commuting, work clothes, 401K con- tributions, etc. If you are not working, you will probably spend more money on utilities, home projects, travel, golf, movies, spoiling the grand kids; just to name a few items. To play it safe, make plans for spending as much in retirement as you are currently spending. 6. Prior to 1993, the government did not tax Social Security benefits. Today, couples with income over $44,000 are taxed on Social Security. It can be as high as 85 percent. 7. What is the best way to pay a mortgage? A 15-year mortgage as compared to a 30 year mortgage. Many people think so but in a report by the Federal Reserve Bank of Chicago using an interest only loan for your mortgage and paying back the principal directly to the loan balance will save thousands of dollars in inter- est even if you do a 15-year loan. People need to think outside the box when it comes to their financial future. If what you thought to be true turned out not to be true when would you want to know about it? It's Your Money by ALAN PORTER Happy retirements don't just happen. They require thoughtfulness and planning. 2015 Best of Fayetteville Special Edition • Coming Sept. 16, 2015 Advertise & promote your business all year long effectively and affordably! UP & COMING WEEKLY'S Advertise, market and promote your business in the most popular, most read edition of the year! RESERVE YOUR SPACE TODAY! For more information, rates and deadlines call (910) 484-6200 UP & COM I NG W EEKLY 'S ASK about our SUMMER iLASIK SPECIAL & FREE Consultation