Author - Lon Jefferies, CFP®, MBA

1
When Assets Get a ½ Step-Up in Cost Basis
2
How Much of Your Social Security Benefit is Actually Taxed?
3
2014 Market Review: What Do We Know?
4
The Smartest Things Said at the NAPFA Conference
5
How Obama’s 2015 Proposed Budget Impacts Retirement Accounts

When Assets Get a ½ Step-Up in Cost Basis

Many people are aware that when the owner of a taxable asset passes away, the party that inherits that asset do so at a stepped-up cost basis. For example, suppose a husband owns a stock in a taxable investment account that he purchased for $100,000 but is now worth $150,000. If the husband sells the stock, there will be taxes due on the $50,000 of growth, or the difference between the current value and the cost basis. However, if the husband passes away and a wife inherits the stock, the wife’s cost basis gets increased to the full $150,000, the… Read More

How Much of Your Social Security Benefit is Actually Taxed?

If Social Security is your only source of income, it is unlikely that your monthly benefit is subject to taxation. However, people with substantial income outside of Social Security may have to pay federal income taxes on their benefits. In fact, it is possible that as much as 85 percent of your Social Security payout is taxable.

To determine whether you are required to pay taxes on your benefit, the first step is to determine what the federal government deems your “combined income.” Your “combined income” is one-half of your Social Security benefit, plus all other income received during the
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2014 Market Review: What Do We Know?

If you pay close enough attention to the news media you'll eventually learn that much emphasis is placed on pundits' forecasts, but very little consideration is given to how accurate the projections turn out. When 2014 started, there were some pretty widely-accepted expectations regarding the investment environment. Let’s take a minute to review those anticipations and analyze how precise they turned out to be.

One of the most universally accepted beliefs going into 2014 was that interest rates were on the cusp of rising, and that consequently, bond returns would drop. (Of course, this has been the expectation for around
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The Smartest Things Said at the NAPFA Conference


Last month, over 300 fee-only financial planners gathered for NAPFA’s annual conference to hear the latest thinking on behavioral finance, investment management, health care, and more.  Here are a few of the smartest things said at the conference.

Speaker: Nick Murray, Author of Behavioral Investment Counseling
  • Ten thousand people retire every day and will continue to do so for the next 12 years.
  • According to the Annuity Mortality Table published by the Society of Actuaries, the last surviving spouse of a 62-year-old non-smoking couple will pass at age 92.
  • The dominant
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How Obama’s 2015 Proposed Budget Impacts Retirement Accounts

President Obama recently unveiled his proposed budget for 2015. Included in the proposal were the following potential changes to investor retirement accounts:

Apply Required Minimum Distribution Rule To Roth IRAs

There are currently two main reasons to invest in a Roth IRA – to pay taxes at your current rate in anticipation of being in a higher tax bracket in the future, and to invest in an account that does not require minimum distributions when the investor reaches age 70½. However, President Obama’s 2015 budget calls for Roth accounts to be subject to the same RMD rules as other retirement

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