Although we assume many of our readers know what a 401(k) and an IRA are, let’s cover these quickly.

What is a 401(k)?

401(k) retirement, savings, and investment accounts are places to store money in which your contributions are typically matched - a portion of those earnings, usually not all of them in dollar-for-dollar fashion - by your employer. These plans are named after the section of the Internal Revenue Code - 401(k) - that lays out the rules for these plans.

There are other benefits that 401(k) plans bring to the table, such as not having to pay money on the growth of your 401(k) account over the years. You don't have to pay any taxes on the money you contribute to your 401(k) account once you wait to withdraw such money until you are 59.5 years of age.

What is an IRA?

IRA is short for Individual Retirement Account, which is a type of savings account that is one of the most popular kinds in its class across the United States.

Individual Retirement Accounts are similar to bank accounts, though they can be used to purchase things like stocks, mutual funds, other financial instruments, and investments of all sorts. Further, IRAs bring tax breaks to the table that are different than those associated with the 401(k) plan.

Now that you understand what a 401(k) plan and an IRA are, let's check up on this year's changes to the 401(k) account's contribution limit

Put simply, Americans who are saving for retirement will be able to fork over an extra $500 to their 401(k) accounts and their Individual Retirement Accounts. 

401(k), 403(b), and 457 accounts, as well as the Thrift Savings Plan, will be legally able to shelter $19,000 in earnings in 2019. This is an increase from last year's cap of $18,500. Thanks to this change, employees across the country will be able to put off paying income tax on roughly $42 if they take advantage of it by actually putting in $19,000 this year instead of just $18,500. 

Workers who are of at least 50 years of age will be able to put back a maximum of $25,000 to such accounts in 2019, which is up from the cap of $24,500 from last year. 

The 2019 Individual Retirement Account Contribution Amount

In 2018, the IRA contribution cut-off was $5,500. It had remained at this amount since 2013. This year's $500 increase in the maximum contribution one can put in in a year's time.

American workers who are of age 50 or greater will not be able to store more money to their Individual Retirement Accounts in their later years in a greater amount than what was available in previous years. The catch-up contribution cap for the Individual Retirement Account will stay true at $1,000.

Traditional IRA Changes

People who own 401(k) accounts can't claim tax deductions on their contributions for 2019 if their earnings are more than $74,000 or $123,000 in a year if they're filing individually or as married couples. Each of the amounts increased $1,000 this year and $2,000 this year, respectively. The tax deduction starts being phased out at the amounts of $64,000 and $103,000 for 2019.

Roth IRA changes

This year, the ceiling for Roth IRA contributions after taxes have been deducted rose $2,000 this year for individuals and $4,000 this year for married couples filing jointly. 

People making $137,000 individually or $203,000 as married couples can't contribute to Roth IRAs. Their abilities to contribute start to be phased out at the dollar values of $122,000 and $193,000 for individuals and married couples, respectively.

As you are working, you are in the “accumulation” phase of your life.  Remember, you need to plan for the “de-cumulation” phase as well, those are your retirement years.   We are here to help guide you as you approach retirement and guide you through your retirement years.

 Individuals working for years and planning for retirement ultimately lead to be dynamic go-getters who don't want to think about the limitations and possible incapacitations of old age. However, with smart planning in your 50's and 60's, you can protect your heirs from financial risk and even protect a business from a crippling lack of leadership.

Costs of Long Term Care 

Depending on where you live, long term care can cost you anything from $54,800 to $150,200 per year. While nearly half of all those who use a long term care facility are there for more than a year, this expense can be covered by a long term care policy. 

Average costs on long term care policies run approximately $2,700 per year, though significant discounts are available for couples. Depending on when you buy, you can lock in a low rate that will protect you from the expense of a long stay in an assisted care facility.

Business Protection

If a great deal of your assets are tied up in a business, work with your attorney and business partners to make sure that your assets and legacy will be protect in the event of a catastrophic health challenge. 

Make your intentions and goals known. Take care that any personal savings would be readily accessible to your spouse or heirs as you intend in the event you can no longer authorize withdrawals or sign checks. Consider setting up a trust to divert your assets into a tax protected vehicle in the event of your incapacitation.

Daily Cares

It's important to note that the majority of those currently receiving daily assistance are still living at home. In terms of budget, this makes good sense. While the average cost of a semi-private room is more than $80,000 in the United States, a full-time health aide will cost less than $50,000.

Spousal Protection

In the event of a catastrophic health event that requires skilled nursing care, a long term care policy can provide substantial protection for your remaining assets. For example, should your resources be exhausted and you need to rely on Medicaid due to lack of insurance, your spouse would be able to keep slightly more than $100,000. 

With a long term care policy that offers asset protection for your partner, your partner will be able to keep more. The amount of protected coverage will be determined by the policy.  

Also be aware that Medicaid rules vary from state to state, so don't rely on this protection without a careful review by your insurance agent and attorney.

Consider Touring Local Facilities

One of the greatest challenges in choosing long term care is finding a bed in an emergency. If your health history demonstrates that you may need long term care, consider finding a facility with a feeder facility, such as apartments or condos. You would likely have closer access to long term care when you need it, and you can use the features at the feeder facility to improve your health and put off long term care as long as possible. 

The best time to make plans for long term care is long before you need it. With the right policy, you can protect your assets, guard your heirs and shield your partner from great worry and expense.

Social Security is one of the main benefit programs for workers in the United States. At some point, almost everyone will collect something from Social Security. If you are getting close to collecting from Social Security, you might be wondering how the program works and what to expect. Here are some of the most commonly asked questions about Social Security benefits.

How Old Do You Have to Be to Collect?

The short answer is that it depends on when you were born. Also, you can decide if you want to start collecting benefits earlier and take a smaller amount, or if you want to wait for a higher amount.

The soonest you can start receiving benefits is at age 62. If you do that, your monthly payment will be smaller. You can delay the payment each year and it will keep increasing until you're 70 years old. So it's really up to you how you want to handle it. The "full retirement age" is considered 65 for those born before 1938. If you were born after that, there's a sliding scale up to 66 years and 4 months to reach retirement age.

How Much Can I Get?

The amount you get from Social Security varies depending on when you retire and when you were born. How much you earned over your career also plays into the calculation. To give you an idea, the average benefit for someone on Social Security as of January 2019 was $1464 per month. On the high end of the spectrum, you could earn as much as $2861 per month if you waited as long as possible to retire and were in the highest bracket. Your spouse can also receive a benefit of roughly half of your benefit. If you pass away, your spouse can also keep receiving spousal benefits from Social Security.

When Do I Get My Social Security Check?

The short answer is, you won't actually get a check. Social Security doesn't mail physical checks, but you can sign up for direct deposit. In that case you'll get an automatic deposit into your account. Another option is to receive a prepaid debit card with your benefits on it. If you do automatic deposit like most people, the day that the deposit arrives varies depending on when your birthday is.

If your birthday is in the first 10 days of the month, your payment will arrive on the second Wednesday of the month. If your birthday falls in the range of the 11th through the 20th of the month, then you'll get your payment on the third Wednesday of the month. If your birthday is after the 20th, you'll get the payment on the fourth Wednesday.

How Do I Apply for Social Security benefits?

The easiest way to apply for Social Security benefits is online at Another option is to go to the local Social Security office and apply in person. You can start this process when you're 61 years and 9 months old. You can receive your first benefits when you turn 62 if you wish to start as early as possible.

Remember, Social Security benefits should only account for a portion of your retirement income.  A retirement plan with other sources of income is ideal and we are here to help you plan for the retirement road ahead.

One of the crucial decisions in life if you have minor children is to make arrangements for the guardian or guardians who will finish raising your children if you and your spouse should happen to die in a common accident or weather disaster.

A will likely find that a lot of thought and planning have to go into that decision, and you need to give it a great deal of consideration.

The first step is to have a complete discussion with the person or people that you have considered for this very important family event. There are a multitude of factors that enter into this designation, some of which are the following:

* Does the person really want that responsibility? Will there be passion in performing the “duties” and the financial ability to do so?

* Does that person have the same parenting methods, discipline ideas, lifestyle, finances, religious beliefs, medical decisions, motivation, and future plans for the children's education that you do?

* Although you may think your parents are the perfect answer, would they be capable of assuming that role if many years go by and they have medical or age related restrictions if the time ever came?

* Where is the guardian located? Would it mean an upsetting move for your children into a totally new area without friends? Will they perhaps be put into a large family and are used to a small one?

Guardianship provisions are an integral part of your estate planning, as follows:

* You must deliberately and carefully spell out the guardian or guardians that you have chosen in your will or living trust or in a proper separate document where parents can designate a guardian. A qualified family law or estate attorney will provide all the necessary language and the required documents for your state and will even ensure that future children born or adopted would be included in the guardianship designation. The legal guardianship of minor children is regulated by each individual state, which has its own unique requirements, rules, and obligations.

* It is considered good practice to name at least one alternate guardian in case circumstances change.

* You may think that if you do not specify a guardian, one of the children's closest relatives will be appointed. Realize that the person may not want or is not prepared to take on that role, and it would be up to the court to decide who to appoint. You might not agree with that decision.

* In the future, whenever you review your will to see if it is up-to-date, remember to also review your guardian choice to make sure it still is appropriate.

How do guardianships and adoptions differ?

A guardianship of minors is a legal relationship between the guardian and a minor child where the guardian has certain obligations and rights regarding that child. A guardianship does not sever the legal relationship between the biological parents and the child, and they co-exist. 

An adoption permanently alters the legal relationship between biological parents and a child. The adopted parents become the legal parents, and the biological parents give up their parental rights and obligations.

Rest easy

You may hope and pray that the day will never come when a guardianship would be necessary, but you will have peace of mind if you have provided for your children in the event that such an event ever occurs.


This years tax deadline is behind us. If you received a refund, what’s your plan?

Some taxpayers choose to spend the entire check on clothing, shoes, and their appearance.  They never look into investing their money for their own personal future. In a sense, you may be temporarily happy about your purchases or your new hairstyle, but in the future, you might regret not investing some of the money for your retirement. 

There are many ways to put your tax refund to work, such as:

• Invest in a healthcare savings account

• Paying off school loans

• Emergency savings account

• Start an IRA

These options can help you with lowering your debt and being prepared for those unexpected situations. If have a high deductible health care plan at work, you can open a healthcare savings account or HSA. These funds are used in case you have a medical emergency that needs to be taken care of right away, such as a broken bone, a fractured ankle, or a broken hand. 

If your health insurance doesn't cover the cost of the procedure, you can use your healthcare savings account. The greatest advantage to this type of account is that you won't be taxed when using it for healthcare. 

If you reach retirement age, you can use the money for glasses or hearing aids and even medical premiums. You can use it towards your out-of-pocket expenses as well.

Let’s take a look with those that have a 401k plan. 

While contributions to a 401k plan must come from your paycheck, you can divide your refund by the number of remaining paychecks for the year and thus use it to contribute towards your 401k. According to the Internal Revenue Service, the average tax refund is over $3000.  If there are 16 more paychecks this year, you could increase your contribution by an extra $187.50 per paycheck to use your refund by the end of the year. Additionally, many plans have a matching contribution by employers which is a a great incentive for you to start investing if you’re not already doing so. 

Did you know? 

If you’re self-employed without a 401k, you can open your own 401k plan and lower your taxes by “putting away” up to $56,000 a year. Unlike a regular 401k which can be costly endeavor, a solo or individual 401k can be set up for free and operated with little ongoing administrative paperwork. If you are in a position to open an Individual 401k, you don't have to have a certain amount to open it. An Individual 401k is great for single people who have no children. In case there is an emergency that takes place in their life, they can have the option of using an Individual 401k. 


The best way to prepare for a worry-free retirement is by preparing for it.

Whether you decide to use your refund for investing towards the retirement or paying down debt, you have made a step towards having a better future. That's truly a lot to be proud of.

We are here to help you plan for your retirement years, contact us today to see what plan we can create for you. 


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