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Taxes

2024 IRA and Retirement Plan Limits

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We all know it is important to plan for the future. This is a time of year where we set new resolutions and a great time to make a plan for your investable dollars. Note the following chart which shows the annual savings limits of the plan for this year and adjust your savings to take full advantage of the annual contributions. Remember, a missed year is a missed opportunity that does not come back.

We love automating this for our clients to improve their behavior and increase their odds of reaching their goals.

2024 Contribution Limits

How to Use the Above Chart

Identify the type(s) of retirement saving that you currently use.

If you are 50 years or older, add the catch-up amount to your potential savings total.

Take note of the income limits within each plan type. For traditional IRA’s, if your income is below the noted threshold, your taxable income is reduced by your contributions. The deductibility of your contributions is also limited if your spouse has access to a plan. In the case of Roth IRAs, the income limits restrict who can participate in the plan.

Consider setting up new accounts for a spouse and set up automatic savings on a regularly-scheduled basis.

Please click here to connect with us if you need help in automating your contributions to help you reach your long-term retirement goals. 

My Personal Note from Art Laffer

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On June 19, 2019, President Donald J. Trump awarded the Presidential Medal of Freedom to Arthur B. Laffer.  This prestigious award is the highest civilian honor, which may be awarded by the President to individuals who have made especially meritorious contributions to the security or national interests of the United States, to world peace, or to cultural or other significant public or private endeavors.

Who is Arthur Laffer?

Arthur (Art) Laffer is an American economist and author who first gained prominence during the Reagan administration as a member of Reagan’s Economic Policy Advisory Board (1981–89). Ronald Reagan was thought to have based his 1981 economic plan on the idea that cuts in marginal tax rates would increase tax revenues. Laffer is best known for the Laffer curve, an illustration of the concept that there exists some tax rate between 0% and 100% that will result in maximum tax revenue for the government. He attracted attention for his supply-side economic theories, which held that reductions in federal taxes on businesses and individuals would lead to increased economic growth and in the long run to increased government revenue.

History of the Laffer Curve

On December 4, Dick Cheney and a young economist named Art Laffer sat at a booth in the iconic Hotel Washington—the same hotel that appeared in scenes from the Godfather II just months earlier. Cheney was U.S. president Gerald Ford’s deputy Chief of Staff and his boss, Donald Rumsfeld, were looking for alternatives to Ford’s plan to raise taxes. According to Laffer, raising taxes was a bad idea. Instead, if Ford really wanted to encourage economic growth, and therefore government revenue, he should consider cutting tax rates.

Laffer drew the famous Laffer curve on a napkin, which showed that starting from a zero tax rate, increases in tax rates will increase the government’s tax revenue but at some point when the rates become high enough, further increases in tax rates will decrease revenue. This occurs because higher tax rates become strong disincentives against earning (and/or declaring) taxable income. Cuts in marginal tax rates could, therefore, increase tax revenues.
 

 

Controversial Economist

Most economists agree that there is a point of diminishing returns where raising taxes becomes counterproductive. According to dissenters, Laffer has spent years suggesting the idea that almost any tax cut for businesses and individuals could potentially pay for itself. The real controversy was not necessarily the theory, but rather where the American economy stood on the Laffer curve. Laffer’s theory and the evidence subsequently gathered, caused economists to examine more closely the incentive and disincentive effect of taxes. 

My Note from Art Laffer

I studied the Laffer Curve and how taxes affect businesses and individuals as part of the CFA Institute curriculum. I learned that altering tax laws can have unintended consequences as people sometimes want to avoid taxes at all costs (creating more loopholes). There are also psychological effects when it comes to how people view taxes. Economists say a tax refund is bad because you’re giving the government too much of your money. However, if you ask the majority of Americans, they really want their refunds–perhaps as a way of forced savings.
 
I reached out to Art and asked him to pen something he has learned over the years. Thankfully he sent back his nugget of wisdom on his letterhead and not on a napkin:
“Always remember you make your money in bad times, yet you collect it in good times. Your friend, Arthur Laffer”
Arthur Laffer Note
We will be sharing more notes of wisdom from famous authors, economists, and businessmen and women. In the meantime, feel free to check out my note from Vanguard’s founder, Jack Bogle.

5 Things You Must Know Before You START Retirement

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Bob Jones

Intelligent Investing will be presenting to the Bob Jones Alumni on November 15th at CityRange Steakhouse. Please RSVP by emailing: alumni@bju.edu.

5 Things You Must Know Before You START Retirement

With baby-boomers comprising one of the largest groups of our population, it should come as no surprise that another large group is made up of those in retirement mode. Everyone should have a game plan as they head towards retirement or are in retirement. As Benjamin Franklin quoted, “If you fail to plan, then you plan to fail.” In this light-hearted talk, we’ll cover topics such as:

  1. Spending
  2. Time Horizon
  3. Asset Allocation
  4. Risk Alignment
  5. Tax Avoidance

 

Hans Blake, CFA, CPA Bio

Hans is a Chartered Financial Analyst® (CFA) who managed over $350M and worked with high net worth individuals and institutions around the world before founding Intelligent Investing.

Intelligent Investing strives to minimize financial stress to maximize lives through cutting-edge technology integrations and behavioral finance (improving how investors think and act with money).

Hans graduated from Bob Jones University in public accounting, before earning a Masters of Accountancy degree from the University of South Carolina. He is a licensed CPA who worked and lived in Charlotte, NC, and London, England before returning to his Greenville hometown roots.

Hans is a Chartered Financial Analyst® charter holder, which is considered by many to be the gold standard among wealth managers. Less than 20% of those who start the process ever become CFA® charterholders.

Hans writes financial articles and gives public Intelligent Talks to the community. He has been interviewed multiple times by The Greenville News , WYFF News 4, and local radio programs to talk about the markets and portfolio management. His Intelligent Money Minute podcasts are growing in popularity, and he has received the Highest Award for Achievement by Dale Carnegie.

Hans is a father of four and is the chairman of the board for Piedmont Women’s Center, a local crisis pregnancy non-profit organization.

November 2, 2018- FFN@N (2018 Tax Planning)

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2018 tax planning

2018 Tax Planning under new Trump Tax Cuts and Jobs Act

2018 tax planning is very important this year. Come join our next First Friday Networking at Noon (FFN@N) event on November 2nd. Mark Swanson, CPA, CGMA, CVA is a partner of Moore Beauston & Woodham, and will come talk about year end tax planning in this first year under the new Trump Tax Cuts and Jobs Act. Come for the complimentary lunch and bring a friend. Be sure to RSVP below.

What are some changes under the new Tax Cuts and Jobs Act?

It cuts the corporate tax rate from 35 percent to 21 percent beginning in 2018. The top individual tax rate drops to 37 percent. It cuts income tax rates, doubles the standard deduction, and eliminates personal exemptions. The corporate cuts are permanent, while the individual changes expire at the end of 2025. It affects 529 Plans as well as ABLE Accounts.

Mark Swanson, CPA, CGMA, CVA Bio

Mark is a Partner and manager of the firm’s Greenville, SC office.  He has over 20 years of public and private accounting experience.

Mark received his Bachelor of Science Degree in Accounting from Bob Jones University and a Masters of Professional Accountancy from Clemson University. His areas of specialty are corporate and individual income tax planning and preparation, business consulting and tax preparation for various nonprofit institutions, preparation of business valuations for corporate acquisitions and dispositions, family limited partnerships, buy-sell agreements and corporate litigation.

Mark has been the presenter at various seminars and has previously been an adjunct professor of tax at Bob Jones University. He also served on the boards of several charitable organizations in Greenville and the Upstate including The United Way, Meals on Wheels and Carolina Hope Christian Adoption Agency.

Mark is a member of the American Institute of Certified Public Accountants, South Carolina Association of Certified Public Accountants, and National Association of Certified Valuators and Analysts.

First Friday Networking at Noon (RSVP)

If you'd like to join our next First Friday Networking at Noon event, please RSVP below. We look forward to networking with you soon.

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How to START Planning for a Successful Retirement

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Radio

Reading Time: 2 minutes

South Carolina Business Review Interview

With baby-boomers comprising one of the largest groups of our population, it should come as no surprise that another large group is made up of those that are in retirement mode. I recently had the privilege of being interviewed by Mike Switzer on the South Carolina Business Review on this topic.

The South Carolina Business Review focuses on news from South Carolina’s business community with interviews of many small business owners and business leaders from around the state. To hear the full five minute interview, click to go to the South Carolina Public Radio website.

5 Things to Know Before you START Retirement

START Retirement

Spending

How much is needed to meet your needs, wants, and wishes. In what order should you distribute from the accounts. What if I retire and we have an extended bear market?

Time Horizon

How soon can I retire? What if I get laid off before I want? When should I take Social Security? How long do we need the assets to last? What about the next generation?

Asset Allocation

What mix of assets is appropriate to meet long-term goals and legacy wishes? What asset mix lines up with my risk tolerance preferences? Will my asset mix have a good chance to beat inflation?

Risk Alignment

Are my risks balanced so that I have aligned my ability to take on risk, my willingness to take on risk, and my actual portfolio risk.

Tax Avoidance

Proper tax planning and tax location of assets is important as well as knowing which buckets are the most tax-efficient to pull from and in what order should they be distributed.

In order to properly plan for your retirement, you need to START.

If we can help you get more confident that you are prepared and ready to land your “retirement plane,” please let us know. We would be honored to serve you and your family.

 

5 Principles to Know Before you START Retirement

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Podcast: Play in new window | Download

Reading Time: 2 minutes

We work predominantly with high net worth individuals, many of whom are approaching the “retirement runway.” A recurring theme comes up frequently in our conversations, and that is whether or not they are prepared for retirement. We have sophisticated tools and technology at our fingertips, but wanted to share the simplicity of having a retirement equation that helps know whether you are ready for retirement. These 5 principles are the bedrock of what we do to prepare our clients for retirement. We love helping our clients feeling relieved knowing they have a great chance at success in retirement. We also love helping them plan and prepare for the next generation as well. Please consider joining our Professionals’ Retirement Exit Plan (PREP Talk) on April 6, 2018. In order to be prepared for your retirement, you need to ask yourself and have answers to the following areas:

Spending

How much is needed to meet your needs, wants, and wishes. In what order should you distribute from the accounts. What if I retire and we have an extended bear market?

Time Horizon

How soon can I retire? What if I get laid off before I want? When should I take Social Security? How long do we need the assets to last? What about the next generation?

Asset Allocation

What mix of assets is appropriate to meet long-term goals and legacy wishes? What asset mix lines up with my risk tolerance preferences? Will my asset mix have a good chance to beat inflation?

Risk Alignment

Are my risks balanced so that I have aligned my ability to take on risk, my willingness to take on risk, and my actual portfolio risk.

Tax Avoidance

Proper tax planning and tax location of assets is important as well as knowing which buckets are the most tax-efficient to pull from and in what order should they be distributed.

In order to properly plan for your retirement, you need to START.

If we can help you get more confident that you are prepared and ready to land your “retirement plane,” please let us know. We would be honored to serve you and your family.

December 1, 2017- FFN@N (Year End Tax Planning Strategies)

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This month’s First Friday Networking at Noon event featured a talk on year-end tax and gift planning for individuals and businesses. Lisa Nason, CPA educated us on some strategies and options to consider before the end of the year. We do not endorse any specific firm or individual.

Disclaimer

Any tax advice contained in the body of this material was not intended or written to be used, and cannot be used, by the recipient for the purpose of promoting, marketing, or recommending to another party any transaction or matter addressed herein. The preceding information is intended as a general discussion of the subject addressed and is not intended as a formal tax opinion. The recipient should not rely on any information contained herein without performing his or her own research verifying the conclusions reached. The conclusions reached should not be relied upon without an independent, professional analysis of the facts and law applicable to the situation.

 

Year End Tax Planning for Individuals

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Lisa Nason, CPA Bio

Lisa Nason is the Managing Shareholder in Nason Accounting, LLC. She specializes in tax compliance and tax consulting services primarily to small and mid-sized businesses, as well as individuals, including professional athletes and those with international issues.   She can also provide assistance with tax audits, income, sales & use, and property tax returns.

Lisa grew up in Simpsonville, attending Mauldin High School, and later Clemson University.  She graduated from Clemson University with a Bachelors degree in Management and a Masters degree in Accounting, specializing in taxation.  She started her public accounting career with KPMG working there for nine years before moving over to Deloitte & Touche.  Upon leaving Deloitte in 2003, Lisa spent a few years in industry as the Tax Director for NewSouth Communications, which later became NuVox Communications.  But in 2006 she returned to her first love, public accounting, and opened her own firm, Nason Accounting, LLC.

On a personal note, Lisa is President of the Tajh Boyd Foundation Board of Directors, a diehard Clemson fan, loves to travel and scrapbook, and especially spending time with her family.

2018 IRA and Retirement Plan Limits

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IRA contribution limits

The maximum amount you can contribute to a traditional IRA or a Roth IRA in 2018 is $5,500 (or 100% of your earned income, if less), unchanged from 2017. The maximum catch-up contribution for those age 50 or older remains at $1,000. You can contribute to both a traditional IRA and a Roth IRA in 2018, but your total contributions can’t exceed these annual limits.

Traditional IRA income limits

The income limits for determining the deductibility of traditional IRA contributions in 2018 have increased. If your filing status is single or head of household, you can fully deduct your IRA contribution up to $5,500 in 2018 if your modified adjusted gross income (MAGI) is $63,000 or less (up from $62,000 in 2017). If you’re married and filing a joint return, you can fully deduct up to $5,500 in 2018 if your MAGI is $101,000 or less (up from $99,000 in 2017). Note that these figures assume you are covered by a retirement plan at work.

Read More and Download Here:

[gview file=”https://investedwithyou.com/wp-content/uploads/2017/11/2018-IRA-and-Retirement-Plan-Limits.pdf”]
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