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Imbrey & Associates

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Question:

Anonymous
3/2/14 2:48 PM

IRA moved to 401K

My wife and I both retired last year and we have several IRA's that would make sense to move to an existing 401K GWRS through the University Of Tennessee while we were working. Other than I need to...

Expert Answer:

Richard
3/2/14 2:48 PM

Dear Retired Couple

There are 2 caveats:
#1) my answers are assuming you each have separate 401(k) accounts with GWRS into which you can rollover your respective IRA’s.
#2) a verification of this with a CPA or someone with GWRS is also obtained. Great West Retirement Services may not allow the rollover into the U.T 401(k) now that you are retired.
If GWRS will allow the rollover, there is no reason why you can’t consolidate your various accounts into one account for each of you and avoid immediate IRS taxation, presuming you complete the appropriate Direct Rollover forms.
You will receive “informative” 1099’s from each IRA rolled over that will also be sent to the IRS “for reporting purposes only”.
If you need more detailed information regarding this issue or, if you would like to have information regarding protecting these retirement assets for the future, please contact me by email - Jacki@ImbreyTN.com or feel free to call me @ (865) 588-9333.

JACKI S. IMBREY
CERTIFIED FINANCIAL PLANNER ™ professional

Question:

Anonymous
2/20/14 3:21 PM

IRA RMD. Tax credit?

Is the law, which allowed RMDs which were sent directly from a broker to a charity, still in effect as an income reduction for 2013 taxes?

Expert Answer:

Richard
2/20/14 3:21 PM

Charitable Deduction for IRA's

P.S. One thing I did not mention.

For the 2013 Tax year, In order to qualify, the distribution would have to have been completed prior to 12/31/2013.

Question:

Anonymous
10/25/13 12:38 AM

Mutual Fund Investment

I have investments in my 401(k) from work (I am retired), and also in a Roth IRA and a standard IRA. These investments are in various mutual funds. How can I best determine if I am truly...

Expert Answer:

Richard
10/25/13 12:38 AM

Mutual Fund Investment


The best way to find out about your actual investment diversification, is to first do a portfolio analysis listing every fund from all your investments and then do a "stock intersection" analysis. This will tell you exactly what companies each fund invests in and how much of your total portfolio is invested in each company. It will take special software to do the “stock intersection” report. Your financial advisor may be able to do this for you or if you are not currently working with an advisor, we would be happy to assist you.

Regarding fees charged by various funds, some fund families do charge higher fees than others. But just because growth fund (a) in your portfolio charges a higher fee than growth fund (b) doesn’t necessarily mean that the less expensive fund would be better for you. You would need to take “net after fees” performance into consideration. Also, a no load fund may not do as well as a fund that charges an upfront sales charge, so the net return after all charges should be what influences your decision to keep or sell or buy a fund.

If we can be of assistance to you, please feel free to give us a call.

Regards,

Richard M. Imbrey, CFP®,CLU, ChFC

Question:

Anonymous
10/12/13 12:36 AM

investmets

when looking up a stock or mutual fund on the internet, it usually gives "yield" and "year to date return".
I believe each is usually given as a percentage.
What does each term mean?? It is...

Expert Answer:

Richard
10/12/13 12:36 AM

Investments Re: Return & Yield

Stocks & Mutual Funds Re: Return & Yield
Kenneth,

Thank you for the opportunity to address your question. As you probably know, a stock symbol is representative of one specific stock, while a mutual fund is a "basket" of stocks, bonds, cash, derivatives, etc., or a combination of any of these.

Generally speaking, a year-to-date return is going to reflect the percentage change in the stock price or mutual fund unit price price from January 1st until the current date. There is no consideration in this calculation for any reinvested dividends, interest or capital gains.

When expressing a yield, the calculation will include the total percentage return an investor will realize from January 1st until the current date, including all of the above. As you point out, some individual stocks will pay a dividend and some will not. This why an investors investment goal is considered carefully before selecting the individual investments for a portfolio. Some investors desire dividends for income while others prefer the stock of a company where cash is used inside the company for further growth and development.

With mutual funds, the cash flow internal to the fund is harder to control. Since a mutual fund is a basket of securities managed by a professional money manager, dividends, interest and capital gains can be realized at most any time by the mutual fund investor whether needed or not. As many investors have learned during down market cycles, taxable dividends and capital gains can be distributed even when the unit value or net asset value of a mutual fund is in a 'loss' position.

As a last word, it is very important to understand when comparing investments that returns can be very easily misunderstood. And as your question reveals, you cannot always make an 'apples to apples' comparison without digging deeper and looking at how and when an investment's return is derived. Additionally, it is very critical to understand the specific risks inherent with any investment and not just the rate or return or yield.

Again, thank you for your insightful question. If our firm can be of any further assistance to you, please let us know.

Best regards,

David H. Jeffries
Certified Financial Planner™ professional
Imbrey & Associates
AXA Advisors, LLC
1322 Dowell Springs Blvd.
Knoxville, TN 37909

Office 865-588-9333
Fax 865-558-8436

Question:

Anonymous
7/2/13 5:28 PM

Joint Social Security Benefits

I retired at 61 and began drawing SSI at 62. My wife is still working at age 62. We had both paid the SSI max every year for over 40 years. My wife will delay her own SSI benefit until age 70 but...

Expert Answer:

Richard
7/2/13 5:28 PM

Joint Social Security Benefits

Dear tmp242044,

Thank you for your question. Social Security planning strategies can be confusing, as well as permanent, so understanding your options are very important.

Because your wife is age 62, and therefore less than FRA (Full Retirement Age), if she opts to begin collecting benefits, she will be locked into her choice and will not be able to receive a non-reduced benefit at her FRA. Her options now would be to collect a reduced spousal benefit (35% vs 50%) or collect her own benefit which would also be reduced (75% vs 100%).

An additional consideration is that because your wife is not yet FRA and still working, her Social Security benefit could be subject to further reduction if her earnings exceed $15,120 per year. $1 of benefit is withheld for every $2 in earnings above $15,120 threshold.

To add insult to injury, if 1/2 of your household benefits + Modified Adjusted Gross Income exceeds $32,000 (Married, Filing Jointly), some of your benefits could be subject to income taxes.

These are the types of decisions that we assist our clients with on a daily basis. If we can be of any further service to you in the future, please feel free to contact our office.

David H. Jeffries
Certified Financial Planner™ professional
Imbrey & Associates
AXA Advisors, LLC
1322 Dowell Springs Blvd.
Knoxville, TN 37909

Office 865-588-9333
Web Site: www.ImbreyTN.com

Question:

Anonymous
3/21/13 4:18 PM

Annuities

I have heard from friends that annuities can be useful for retirement but to be carefuI in choosing which ones to use. I've looked at several and found that there seems to be little difference...

Expert Answer:

Richard
3/21/13 4:18 PM

Dear Reader

Thank you for your insightful question. Indeed, annuities can be a very valuable tool to help provide guaranteed income in retirement.
In today's financial marketplace, there are many different types of annuities with a multitude of riders that can be attached to provide guaranteed income and death benefits. There is no one type that is right for every scenario, so it is important to understand exactly what is right for your individual situation. Be wary of allowing generic information in the media to determine the value of an annuity for your specific retirement planning.

Annuities can be very complex, and a complete breakdown of all of the aspects of an annuity are beyond the scope of a simply reply, but in general there are four major areas that an investor should be certain to understand before considering an investment in an annuity: 1.) Type of annuity (i.e. fixed, indexed or variable), 2.) Surrender Charge Schedule, 3.) Fees and charges, 4.) Optional income and/or death benefit riders. You should receive a complete prospectus in addition to the sales materials which details information on all of the above topics. The amount of information can be overwhelming, but do not let that deter you from fully investigating whether an annuity is appropriate for you.

Annuities can be an important part of a retirement income plan if used appropriately. With employer funded pension plans becoming extinct and the growing concerns about the Social Security system, many retirees are now beginning to understand the potential value of other guaranteed income sources such as annuities. Like all investment decisions, it should be determined based on whether it's appropriate for you.
As qualified advisors, We would take the time to ask questions so that together, we would thoroughly understand your financial goals and needs before discussing any type of annuity or investment product.

If you would like to discuss your specific financial goals and concerns, we'll be happy to schedule an appointment to meet with you one on one. Again, thank you for the opportunity to address your question.

David H. Jeffries
Certified Financial Planner ® professional

Imbrey & Associates
1322 Dowell Springs Blvd.
Knoxville, TN 37909
David@ImbreyTN.com
www.ImbreyTN.com

Office 865-588-9333

Question:

Anonymous
3/19/13 7:38 PM

Thrift Savings Plan

I retired a year ago with money in my TSP. It is located in the C Fund, S Fund and I Fund. I would like to know what I should do, leave it alone or withdraw and pay the taxes on the money?...

Expert Answer:

Richard
3/19/13 7:38 PM

Dear Retired with a TSP

There are a number of factors to be considered before a decision can be reached. For example, what other assets and income do you have for your retirement and how much will your income be, both initially and into the future; when do you anticipate using this money; do these investments still meet your investment goals now that you are retired?
The short answer is that the big picture must be considered prior to reaching a conclusion for this money. Please feel free to contact us if you need a more in depth analysis.

Thank you,



JACKI S. IMBREY, CFP®, ChFC, CLU
Imbrey & Associates
1322 Dowell Springs Blvd.
Knoxville, TN 37909

Phone: (865) 588-9333

Email: Jacki@ImbreyTN.com
Website: www.ImbreyTN.com

Question:

Anonymous
3/5/13 3:35 PM

Deceased Ex Spouse Soc Sec

I am getting this. Am 62 years old. Can you draw these benefits and your own soc sec at the same time, if your personal soc sec does not exceed the 15,120 per year?

Expert Answer:

Richard
3/5/13 3:35 PM

Dear Anonymous,

Thank you for your question.

In response, the short answer is... you can not draw both, but can draw the higher of the two amounts. But you have to have been married at least 10 years.

The following is an excerpt from the Social Security Administration to explain the rules further.

You can receive benefits as a surviving divorced spouse on the Social Security record of a deceased former spouse who is fully insured. If you:

Are at least age 60, or age 50 and disabled;

Were married to the former spouse for at least 10 years;

Are not entitled to a higher Social Security benefit on your own record;
and
Are unmarried, unless the following exception applies: You remarried after age 60; or after age 50 and at the time of re-marriage you were entitled to Social Security disability benefits.

The benefits paid to a surviving divorced spouse will not affect the benefit amount paid to other family members who receive benefits on the same record.

We are not CPA's or attorneys, so we can not give you accounting or legal advice, therefore you should contact appropriate counsel for an official answer to your question.

Please feel free to contact us again if we can be of futher assistance to you.

Regards,

Richard Imbrey, CFP®,CLU,ChFC

Question:

Anonymous
9/8/12 8:10 PM

RMD

Since RMD is taxed as income when I must take it out of my IRA, can I then put the same amount into my ROTH IRA?

Expert Answer:

Richard
9/8/12 8:10 PM

Dear IRA Owner


People who own Traditional IRAs, SIMPLE IRAs or Simplified-Employed Pension IRAs are required to take required minimum distributions. The IRS requires taxpayers to begin RMDs in the year that they turn age 70 1/2. If you fail to take at least the minimum amount, you will be liable for a 50 percent penalty on the required amount in addition to the income tax on the distribution.

Regarding the Roth IRA:
A Roth IRA allows you to contribute up to $5,000 per year for people under age 50 and $6,000 for you since you are over 50. If you have earned income each year, and you don't make over the adjusted gross income limits, you'll be able to make Roth IRA contributions each year.
In answer to your question about the contribution to the Roth, the amount you are required to take from your retirement accounts could be put into a Roth IRA as long as it was not greater than the allowed limits. It does not have to be the exact amount since there is no tax deduction for the Roth.
If you need help with a Roth IRA, we would be glad to assist you.

Before you take any action on retirement plan distributions, it would be prudent consult with a tax professional regarding your particular situation. Choose carefully, because your decision and the consequences will remain with you for life.

Regards,
Richard M. Imbrey,CFP®,CLU,ChFC

Question:

Anonymous
6/29/12 9:02 PM

rolling over a 401k

My husband is on disability due to cancer. He is drawing disability from his job, also. We can't touch his 401k, unless he choses to retire (job told us). If he chooses to retire from work, he will...

Expert Answer:

Richard
6/29/12 9:02 PM

Rolling Over A 401k

Susan,

This is way too personal to answer online. Please email your question to Service@ImbreyTN.com and I will be glad to answer it offline.

Thanks,

Jacki S. Imbrey,CFP,CLU,ChFC