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Monday, May 12, 2014

I Make Too Much Money to Contribute to a Roth IRA…Or Do I?

A question that comes up in our planning process with clients on a regular basis; can I contribute to a Roth IRA? Well, technically the contribution phase out range for a married couple filing jointly for 2014 is between $181,000 and $191,000. But, there is a way for couples to potentially be able to contribute to a Roth IRA. A non-deductible contribution can be made to a traditional IRA and then be converted to a Roth IRA contribution. More information can be found on the IRS website including necessary tax forms that must be filed. There are restrictions, stipulations and aggregate rules that may apply if the investor already has a Traditional or Rollover IRA described in IRS Publication 590. The bottom line is that Roth IRA contributions could be a possibility in spite of a person’s income. Make sure to consult your financial advisor and tax advisor for more details.


Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

Monday, May 5, 2014

Passing Assets to the Next Generation

I recently had the unfortunate (and rather common) experience of losing both grandparents in a short amount of time. The crazy twist in this story is their deaths were not accident related, only one of them was sick, yet they both passed away within 72 hours of each other. When deaths arise, and especially when they happen so suddenly, it can be very difficult to pass the assets on to the next generation just like grandma and grandpa wanted. Most people are familiar with the liquid assets, but what many people fail to account for in estate plans are the illiquid assets or “stuff” of the deceased. How do grandma and grandpa’s sentimental items get passed to future generations?

Recently, I came across the will of another elderly couple. Interestingly enough, they had all the liquid assets accounted for, but they also had all of their belongings accounted for as well. They had each child listed and what items would belong to them. There were pieces of jewelry, art, furniture and other family heirlooms assigned to each child. I thought, wow, doesn't this make the post death family meeting easier? It may lead to some exciting family bartering, but at least there would be no argument over “who mom or dad would have wanted to get this particular item!”