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Robert C. Dortch, Jr. | Sellers Hinshaw Ayers Dortch & Lyons PA | Charlotte

Pat Murphy
Pat Murphy is an experienced insurance professional who has been with Lawyers Insurance since 2005. You can read more about her background on her LinkedIn profile. Contact Lawyers Insurance at 800.662.8843 for information regarding insurance quotes.
There has been more than a little confusion about the impact of a 2014 Tax Court decision regarding IRA rollovers. The court held in Bobrow v. Commissioner, T.C. Memo. 2014-21 that you cannot make a non-taxable rollover from one IRA to another if you have already made a rollover from any of your IRAs in the preceding one-year period. There was concern that the new ruling would apply to the “rollover” of retirement accounts and limit a person’s ability to properly position those savings.
Over the past several years it has been common to refer to eligible rollover distributions from a qualified (pre-tax) retirement plan to another qualified plan simply as “rollovers”. It is advantageous to move from one qualified plan to another to maintain the tax deferred status of the funds and allow your money to continue to grow tax deferred until the time when you have to take Required Minimum Distributions.
When handled properly with a trustee to trustee transfer, your savings can continue to grow tax deferred until the time when you have to start taking Required Minimum Distributions.
The IRS clarified this matter as stated in the attached: “This change won’t affect your ability to transfer funds from one IRA trustee directly to another, because this type of transfer isn’t a rollover.” http://www.irs.gov/Retirement-Plans/IRA-One-Rollover-Per-Year-Rule.
This is good news for people who want to position their retirement savings according to their needs and the amount of time until their retirement. A person who is a long way from retirement may want to position their funds for accumulation. A person approaching retirement may want to move their funds to a more conservative product, such as an annuity, which will provide safety as well as accumulation and provide an income stream which they cannot outlive. Since you are not limited to one rollover a year, you may even be able to combine funds from different qualified accounts.
So, when it is a rollover not a rollover? When it is a trustee to trustee transfer.
Are you looking forward to retirement? If you are like me, the answer may be “yes” and “no”. I can’t believe that I’m old enough to think about it, but the reality is setting in. I don’t plan to retire for several more years, but time is going so fast these days I’m sure retirement will be here before I know it.
In some ways I am not looking forward to retirement. I will miss my co-workers and the stimulation that comes from interacting with people and having new experiences every day. The rhythm of the work day makes me feel connected to the world.
However, the idea of no longer being tied to a daily schedule is kind of exciting. As we move into retirement we will be able to try new things, pursue personal interests and arrange our days the way we want. We will have more time to travel – and it doesn’t have to be to exotic locales. A couple of my friends decided they want to take daytrips to every county of North Carolina (all 100 of them!) and have lunch in a popular local diner. They keep a notebook of the places they plan to visit along with their advance research notes and notes after visiting the place. They don’t do it on a regular schedule, but keep it in mind for when they have some free time.
It will be nice to have time to pursue interests to keep us active and healthy. My 79 year old friend Marge starts her day with a water aerobics class 3 days a week. Another friend has started playing pickle ball. (Yes, that is a sport. Here is a link if you want to find out more about it. http://www.usapa.org/). My husband and I look forward to more kayaking.
Of course one of the reasons that I am not looking forward to retirement is that I don’t feel like we are ready financially. My husband and I have taken a few steps to get ready and with each one of those I feel a little more confident. We continue to evaluate our savings and investments and move some of them into less risky products which can provide income after we retire.
Lawyers Insurance Agency found a great resource from Genworth. The brochure addresses not only the financial planning aspect of retirement but also the personal planning. After all, you have to know where you want to go before you can figure out how to get there. My favorite “take away” from this brochure is the reminder that retirement is not an event, it is a process. You can access the “Let’s Talk” brochure here.
Pat is an experienced insurance professional who has been with Lawyers Insurance since 2005. You can read more about her background on her LinkedIn profile.
If you would like a printed copy of the Let’s Talk brochure, contact Pat at 800.662.8843 or pmurphy@lawyersmutualnc.com.
Heath Savings Accounts (HSAs) can only be set up in conjunction with a High Deductible Health Plan (HDHP) and are generally used to pay medical care deductibles and copays. But did you know that HSAs can also be used for other unreimbursed health care expenses? For example, HSA funds can be used for dental deductibles and copays, eyeglasses and contacts.
Here are some other advantages to maintaining an HSA.
- Money contributed to an HSA and not used in a given year can roll over to the next year and continue to build up until needed to pay for qualified expenses.
- HSAs offer tax advantages. Money put into an HSA is tax deductible or, if it is paid through payroll, it is tax deferred. The funds can grow tax free and withdrawals used for qualified expenses are not taxable.
- HSA funds can be used to pay the premiums for Long Term Care coverage.
- Accumulated HSA funds can provide a source of cash in retirement. A person past the age of 65 is not charged the 20% penalty tax which normally applies for using HSA funds for unqualified expenses. The withdrawal, however, would be taxed as regular income.
HDHPs generally have lower premiums than other health plans. Putting the money you would save by purchasing a HDHP into an HSA means you may have more control and flexibility over the money you spend on your health care.
Be sure to follow the federal guidelines to make sure that your withdrawals are qualified. To learn more about withdrawals, contribution limitations and other regulations, follow this link to IRS Publication 969 about HSAs http://www.irs.gov/publications/p969/index.html.
Pat Murphy is an experienced insurance professional who has been with Lawyers Insurance since 2005. You can read more about her background on her LinkedIn profile. Contact Pat at 800.662.8843 or pmurphy@lawyersmutualnc.com.
None of us want to think about it, but it is a generally accepted fact that 70% of people over the age of 65 will need long term care at some time in their lives. According to a Genworth survey, the average annual cost for nursing home care in North Carolina in 2013 was $77,451. Here are 3 ways that you can pay for Long Term Care needs:
Long Term Care (LTC) Insurance– This product is designed specifically for long term care and can be structured for varying care needs and length of care, including home care. It is fairly inexpensive compared to the cost of long term care. Having a LTC policy allows you flexibility when making facility choices. Be sure to buy a policy that qualifies for Medicaid Partnership so that if you exhaust your benefits under the LTC policy, Medicaid will adjust their asset spend-down requirement before they begin paying benefits for your care. This will allow you to maintain assets equal to the amount of every dollar of insurance coverage already paid on your behalf. Often, a joint policy can be written to provide LTC coverage for married spouses for a lower premium than two people separately.
Indexed Annuities – An advantage to paying for long term care with annuity benefits is that you are utilizing your existing retirement savings which can grow until they are needed. They can be used for retirement income or death benefits if not needed for LTC. If you want the option of using the Indexed Annuity for LTC needs, make sure that you purchase an Indexed Annuity that has a LTC rider providing a waiver for surrender charges and that you understand the requirements for invoking the coverage. Indexed Annuities don’t require medical underwriting which may be an advantage if you have health issues. Some disadvantages are that not every Indexed Annuity offers the LTC rider and that benefits are generally not as broad as they are with a LTC policy and may not cover home health care. There is also a risk that you will deplete your retirement savings so they are no longer available for other needs.
Indexed Universal Life Insurance – These life insurance policies can be an effective way to build up funds for death benefits, LTC and cash flow during retirement. Advantages to this approach are that withdrawals may not be taxable and, if your premiums and cash value aren’t needed for LTC, they will be available for other covered needs. As with Indexed Annuities, the benefits may not be as broad as in a LTC policy so be sure to check the policy provisions or riders before purchasing the policy.
Start thinking about how you want to put aside funds to provide you with piece of mind and options later. Give us a call if you would like to look at annuity and insurance options which might suit your needs.
Pat Murphy is an experienced insurance professional who has been with Lawyers Insurance since 2005. You can read more about her background on her LinkedIn profile. Contact Pat at 800.662.8843 or pmurphy@lawyersmutualnc.com.
Are you looking forward to retirement? Your vision of a perfect retirement may be to move to the beach or mountains, travel, participate in community service, visit with children and grandchildren, go off on a grand adventure or just relax in a hammock with a good book.
Are you taking steps now to make your retirement dreams happen? This is an excellent time to take a good look at any 401k or other qualified plan rollover that you have put aside for retirement. You may find that your account is doing better now than it has in the past 10 or more years, due to recent increases in the stock market. You can lock in those increases and protect your savings from future market dips by rolling them into an Indexed Annuity.
Innovations in recent years have resulted in Indexed Annuity policies that are flexible and offer growth potential and security. You purchase an annuity in an amount of your choosing, generally subject to a minimum of $10,000, which will pay you interest that accumulates tax deferred for a specified period of time, often between 5 and 12 years. Not surprisingly, the longer the commitment you make, the better the return of interest. At the end of the surrender charge period you have options for your accumulated savings, unlike in the past when you were required to “annuitize” your savings, turning over control to the insurance company.
Features of the annuities offered by different insurance companies vary, but some of the most attractive and frequently offered benefits are:
- Growth based on the S&P or other market index credited annually or bi-annually.
- Locked-in accumulated fund values so that future market downturns don’t reduce your savings.
- Income grows tax deferred.
- Annual withdrawals of up to 10% of your account value may be available with no early withdrawal penalty.
- Inflation protection.
- Waivers of surrender charges for access to your funds in case of long-term care needs or terminal illness.
No one Indexed Annuity is right for every person. Please give me a call if you would like more information about Indexed Annuity products and features that might help you reach your retirement dreams.
Pat Murphy is an experienced insurance professional who has been with Lawyers Insurance since 2005. You can read more about her background on her LinkedIn profile. Contact Pat at 800.662.8843 or pmurphy@lawyersmutualnc.com.