In a recently published Morningstar report, researchers drew upon data from the Federal Reserve Bank’s “Survey of Consumer Finances” and the Sallie Mae/Ipsos survey “How America Saves for College” to create two savings simulations. In the first simulation, families continued on their current course, which relied in part upon using ordinary savings and checking accounts […]
Read MoreCategory: Thursday Thoughts
Ask a Trust Officer: Retirement Readiness
Dear Trust Officer: I’m old enough to retire, but I’m not sure I’m ready yet. I think I have strong financial resources, but I don’t know if they are enough to make me financially independent for the rest of my life. Retirement seems so terribly uncertain to me. When should I make the jump? — […]
Read MoreTime for “The Talk”?
In January, 97 year old Prince Phillip, who is the husband of Queen Elizabeth, was in a car accident. Although the Prince’s car flipped upside down after striking another vehicle, he was able to walk away from the accident after a good Samaritan helped him to escape from the car. Fortunately, there were no major […]
Read MoreNotes on an Ultra-Millionaire Tax
Senator Elizabeth Warren, D-Mass, has proposed a dramatic shift of emphasis for the federal government’s focus in taxing “the rich.” Rather than looking to income, she wants an annual wealth tax, which would apply in addition to any other federal taxes due. A wealth tax is justified, according to Warren, because the share of wealth […]
Read MoreMaking the Case for a Corporate Fiduciary
As they say in the movies, the following is based upon a true story. Alex was in the market for a boat slip. He found one, owned by a brother and sister, Jack and Jill. They had inherited it from their father. However, they seemed emotionally tied to the slip, which was odd because neither […]
Read MoreAsk a Trust Officer: Traditional vs. Roth IRA
Dear Trust Officer: Which is better, the traditional IRA or the Roth IRA? — Generous, but Prudent DEAR FUTURE RETIREE: There is no simple answer to your question, unfortunately. The traditional IRA offers an immediate income adjustment and savings in federal and state income taxes. If you are short on cash, you may need the […]
Read MoreChoice of Retirement Start Date
Timing is more important than many realize. Investor rule of thumb: Time in the market is more important than timing the market. Here’s evidence for that statement. Start with the following set of hypothetical returns: Hypothetical returns Year Return 1 -28% 2 -4% 3 -2% 4 8% 5 3% 6 10% 7 12% 8 8% […]
Read MoreIRS Forgives Rollover Mistake
A man’s family noticed that he was mentally declining in 2016. It may have been the onset of dementia. In 2017, this man withdrew funds from his IRA, apparently intending to roll the money into a new IRA. However, due to his medical condition, the man never completed the rollover. This man’s grandson son was […]
Read MoreAsk a Trust Officer: Mutual Fund Distributions
Dear Trust Officer: I bought shares in a mutual fund last summer and now I’m getting a distribution of capital gains from the fund. Why? I don’t want that. Do I have to pay taxes on it? — Buyer and Holder DEAR BUYER AND HOLDER: Federal law requires mutual funds to distribute nearly all of […]
Read MorePerils of the Amateur Trustee
Glenn Forgey created a revocable living trust to manage his assets, naming his oldest child, Lyle, as trustee. The trust owned bank stock and agricultural property. At Glenn’s death in 1993, the trust was to be divided into equal shares, one for Lyle, one for his brother Wayne, and one for his sister Bessie. The […]
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