Posts

What Is A ‘Roth IRA’?

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Just south of ‘Sawmill Creek…..
Hi Attorney Kevin Pritchett here
“What Is A Roth IRA?”
   There are two basic types of IRA retirement accounts. 
  ==The Regular IRA 
  ==The Roth IRA

   A Regular IRA:
   ==$6,000 annual deposit limit ($1,000 catch up if over age 50)
   ==money grows tax deferred during your working years 
==at retirement you get taxed on withdrawals  ==withdrawals prior to age 59 1/2 incur tax penalty

A Roth IRA:
 ==$6,000 annual deposit limit($1,000 catch up if over age 50)
==  money grows tax deferred
==  NO TAX on withdrawals!!!
== INCOME LIMITS:
      If you are single, you must have
    a modified adjusted gross income
    under $135,000 to contribute to a
    Roth IRA for the 2018 tax year, but
    contributions are reduced starting at
$120,000. If you are married filing jointly,
    your MAGI must be less than $199,000,
    with reductions beginning at $189,000.

True TAX FREE Income
    If you meet the income guidelines the Roth IRA is one of only two strategies that allow you to achieve truly TAX FREE GROWTH AND TAX FREE INCOME.

Converting A Regular IRA To A Roth IRA
   A question I get all the time is

“Kevin,  can I convert my regular IRA into a Tax Free Roth IRA?”  
    The answer is YES!!!  There is of course a catch…..Every dollar you convert from a Regular IRA to a Roth IRA is taxed as ordinary income. Even with this conversion tax, it almost ALWAYS makes sense to convert…..the real barrier is the psychological impact of paying the tax.

     In future newsletters I’ll discuss this topic of Roth Conversion in more detail.

Reach Out To Me If You Have Questions.  
If you have comments or questions about any of this…send me an email :ironkop@gmailcom or if reading on my blog or Facebook page leave your questions or comments below.

Remember…..
“Things Don’t Get Better With Neglect…..”

Kevin Pritchett, Esq
Law Office of Kevin Pritchett, Inc.
312-505-1957 
ironkop@gmail.com
www.KevinPLaw.com

What Is A ‘Power of Attorney For Health Care’ And Why You Need One?

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Just south of ‘Sawmill Creek…..
Hi Attorney Kevin Pritchett here:

“What Is A Power of Attorney For Health Care?”  
   A Power of Attorney For Heath Care is a document you sign that gives the person you designate the power to make medical decisions for you in the event you are unable to make decisions for yourself.

     A Power of Attorney For Health Care is”Durable” if it stays in effect even after you become incapacitated.

“Ok..But Why Do I Need A Power of Attorney For Heath Care?”
    Glad you asked!! 
   
Let’s assume you suffer a stroke or massive heart attack and you are incapacitated.  You’re on life support, a machine to help you breath and your medical prognosis is uncertain.

    What should your family do? 
==Keep you on all life support indefinitely?

==Take you off life support?  If so, when?

I Personally Had To Live This Nightmare
    I can tell you from personal experience(having had to make this agonizing decision for my mother, my father and my sister,its a living Hell not knowing.

     With a Power of Attorney For Heath Care you literally tell your designated representative what YOU want them to do.    Typically the form you complete states YOUR wishes and desires.  

Eliminates The Agony of Not Knowing What To Do
       A properly drafted Power of Attorney For Health Care gives your designated person your EXACT wishes and eliminates the agonizing guess work a family member would otherwise have to go through trying to decide what to do.

Reach Out To Me If You Have Questions.  
If you have comments or questions about any of this…send me an email :ironkop@gmailcom or if reading on my blog or Facebook page leave your questions or comments below.

Remember…..
“Things Don’t Get Better With Neglect…..”

Kevin Pritchett, Esq
Law Office of Kevin Pritchett, Inc.
ironkop@gmail.com
www.KevinPLaw.com
312-505-1957

“Do I Pay Tax On My Social Security Benefits?”

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Just south of ‘Sawmill Creek…..
Hi Attorney Kevin Pritchett here
“Are My Social Security Benefits Taxed?”    
There’s good news and bad news….

     The good news:  If you don’t have any other income other than your Social Security, chances are you won’t pay much tax.

The bad news:  If you’re like MOST people
and you’re receiving other income other than just your Social Security, your Social Security benefits WILL be taxed..and in some cases up to 85%!!

Social Security Benefit Tax Rates    
To determine the percentage of your Social Security benefits that are taxable , calculate your “provisional income,” which is your adjusted gross  income (not counting Social Security benefits), plus any nontaxable
interest and half of your Social Security
benefits.

     If that total is less than $25,000 if you’re
single  or $32,000 if married filing jointly, your
Social Security benefits are not taxable. 

     If your provisional income is more than $34,000
on a single return or $44,000  on a joint return,
85% of your benefits may be taxable.

Social Security Taxes Are Different
An entirely different issue, and one that infuriates many people, is the amount of Social Security tax you pay on your regular income.

    The issue of course is

  “If I pay tax on  my income initially to fund my
Social Security, why should I pay tax on it again?“

     This is an entirely different tax and issue…more on this in a later newsletter.

Reach Out To Me If You Have Questions.  
If you have comments or questions about any of this…send me an email :ironkop@gmailcomor if reading on my blog or Facebook page leave your questions or comments below.

Remember…..
“Things Don’t Get Better With Neglect…..”

Kevin Pritchett, Esq
Law Office of Kevin Pritchett, Inc.  
312-505-1957
ironkop@gmail.com
www.KevinPLaw.com

2019 Qualified Retirement Plan Contribution Limits

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just south of ‘Sawmill Creek…..
Hi Attorney Kevin Pritchett here

2019 Qualified Retirement Plan Contribution Limits
A ‘Qualified’ Retirement Plan is a plan==savings program just for retirement==money placed in grows tax deferred==special tax rules apply to each type  of qualified plan

2019 Qualified Plan Contribution Limits
The saying ‘there’s no free lunch ‘applies equally to Qualified Retirement Plans.

    While Uncle Sam allow your money to grow tax deferred, they at the same time place limits on the amount of money you can put into each type of Qualified Plan in any given year. 

      In 2019 here are the maximum amounts you can contribute per year per person in each type of Qualified Plan:

Traditional and Roth IRA
IRA:  $6,000 per person per year;
        $7,000 over 50
Roth IRA:  $6,000 per person per year;
                 $7,000 over 50

401k /403b/457 Plans401k/403b/457: 
$19,000 per person; age 50 catch up:  $6,000

   Employer match or profit sharing contributions
aren’t included in these limits. 401k and 403b
share the same limit.

    The 457 plan limit is separate.
You can contribute to both a 401k/403b plan
and a 457 plan.

Total Employer Contributions In
Defined Contribution Plans

Total Employer+ Employee Contribution:  $56,000

     The total employer plus employee contributions
to all defined contribution plans by the same
employer will increase by $1,000 from $55,000
in 2018 to $56,000 in 2019.

The age-50-or-over catch-up contribution is on top of this limit.

Income Limits  
Of course NOTHING from the government is easy.  There are income limits associated with each type of Qualified Plan.…something about there being ‘no free lunch!’

Reach Out To Me If You Have Questions.
   If you have comments or questions about any of this…send me an email :ironkop@gmailcom or if reading on my blog or Facebook page leave your questions or comments below.

Remember…..
“Things Don’t Get Better With Neglect…..”

Kevin Pritchett, Esq
Law Office of Kevin Pritchett, Inc.
312-505-1957
ironkop@gmail.com
www.KevinPLaw.com

What Is A Will And Why Should You Have One

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Just south of ‘Sawmill Creek…..
Hi Attorney Kevin Pritchett here

Estate Plan Series:    
‘What Is A Will And Why Should You Have One’  
In previous newsletters I’ve shared that a proper Estate Plan has 5 components:  1. Last Will;
2. Power of Attorney For Healthcare; 3. Power of Attorney For Property and5. Revocable Living Trust.

   Today I’ll explain EXACTLY what a Willis and isn’t.

A Will Is A Roadmap Through The Probate
A ‘Last Will and Testament’ is a written declaration of how you wish your estate assets to be distributed.

    To start the estate distribution process, your heirs file your will with a Probate Court.
   Probate Court is the official, legal and binding court process that reviews your Will and declares that it is valid and that your assets may be distributed according to the provisions of the Will.

   A Will in effect, is the ‘roadmap’ a Probate Judge will use to determine how your estate will be distributed.

Heirs And Creditors Can Challenge
    Every possible heir gets a copy and notice of the Probate Court filing and has the opportunity to challenge any provision of the Will.
     Possible creditors (people you may owe money to) also get notice of the Probate filing through a required notice that gets posted in a local newspaper.  Any creditor who believes you owe them money can file a petition with the Probate court.
     As you can see, the entire Probate process can be quite lengthy and as a result can become enormously expensive if there are numerous challenges from heirs and creditors.

Objective Is To AVOID Probate With A Trust
    As a result of these possible delays and expense involved the planning objective is almost always to AVOID PROBATE.

   The simple and effective way to avoid Probate is to create A Revocable Living Trust and use it in conjunction with a ‘Pour Over Will. ‘

    A Trust is simply a legal entity that can own and distribute assets.  A Trust avoids probate  because:

==A Trust is a private document that    does NOT require filing.    All provisions made in a trust    remain absolutely private.

==Since there are no court filings    there are no delays and extensive    legal fees like those associated with    a Probate proceeding which is in essence  a trial if there are legal challenges.

 A ‘Pour Over Will’
     So if a Trust is the preferable way to transfer Estate assets why have a Will at all…?

    The problem with not having a will is if for some reason your heirs or creditors challenge or there is some other challenge that must be resolved in court.

     Without a Will, the Probate Judge will be required to apply the Law of ‘Intestate Succession’ ( the priority of persons who receive your assets ) with all the
delays and expense of Probate.As a result of this law,  your assets will be divided according to that
arbitrary law rather than by your wishes.

     So the solution is to create a special Will called a ‘Pour Over’ Will that states that your intention is that all your assets are distributed through your Revocable Living Trust and not the Will.

     As a result, if for some reason your estate is brought into court, a valid Pour Over Will must be upheld and honored by a Court and your Estate will be divided according to your Trust and not through Intestate Succession or by any heirs or creditors contrary desires.

   Stay tuned for upcoming installments of this Estate Plan Series where I’ll explain the components of a Trust in more detail. 

Reach Out To Me If You Have Questions.
   If you have comments or questions about any of this…send me an email :ironkop@gmailcom or if reading on my blog or Facebook page leave your questions or comments below.

Remember…..
“Things Don’t Get Better With Neglect…..”

Kevin Pritchett, Esq
Law Office of Kevin Pritchett, Inc.
312-505-1957
ironkop@gmail.com
www.KevinPLaw.com

The Shocking Truth About Your IRA…Its NOT What You Think It Is!!

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Just south of ‘Sawmill Creek…..

Hi Attorney Kevin Pritchett here
Do You Know What Your IRA/401k/403b REALLY Is?
   You probably believe what you’ve been told…that your Qualified Retirement Accounts are a great way for you to save for your retirement….yes and no.

    What you probably DON’T know (unless you’re my client already or attended one of my seminars)is :
“Your IRA/401k/403b (IRA for short)
is a way for the IRS to force you to pay them tax!!!

The Required Minimum Distribution (RMD)
Every retirement account grows money tax deferred.
If you withdraw IRA money before age 59 1/2 you must pay a stiff tax penalty PLUS any amount you take out is taxed as ordinary income.

    And when you reach age 70 1/2 there is a requirement called the REQUIRED MINIMUM DISTRIBUTION (RMD) which REQUIRES you to take money out of your IRA whether you need or want to or not!!

    This is where the IRS springs its TAX TRAP. As I’ve explained in previous newsletters…the IRS would MUCH rather get tax on the growth of your money…and they GUARANTEE THEMSELVES of a cut of your money by REQUIRING YOU TAKE THE MONEY OUT WHETHER YOU WANT TO OR NOT!!

There are proven strategies that can avoid
or at the least mitigate this tax trap…but only if you know them and apply them in time.

Reach Out To Me If You Have Questions.
If you have comments or questions about any of this…send me an email :ironkop@gmailcomor if reading on my blog or Facebook page leave your questions or comments below.

Remember…..
“Things Don’t Get Better With Neglect…..”

Kevin Pritchett, Esq
Law Office of Kevin Pritchett, Inc.312-505-1957ironkop@gmail.com
www.KevinPLaw.com

The 5 Steps To Creating An Estate Plan The ‘Right Way’

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Just south of ‘Sawmill Creek…..

Hi Attorney Kevin Pritchett here

Why You Need An  Estate Plan
So you know you need an estate plan….To die without handling your affairs creates CHAOS and expense for your loved ones.

   So even though you KNOW you need it for all the usual excuses you never seem to get around to it….NOW’S THE TIME!!

 There’s A TON Of Misinformation
       About Estate Planning      
The other problem is that there’s a TON of misinformation about what constitutes a proper Estate Plan (most of it from people like your ‘Uncle Melvin’ or ‘the guy down the block ‘who always seem to have advice to give…..

     So to cut through all the noise…here are the 5 steps to creating an estate plan:

The 5 Steps To Creating An Estate Plan
Step 1:Decide Your Final Wishes
      Before you do ANYTHING you MUST sit down and WRITE OUT what your final wishes are.I use a FINAL WISHES PLANNER for my clients…
   Then after you’ve decided on what you want you complete these 5 steps:

Step 2:  Create Powers of Attorney For Healthcare
             and Property  
Powers of Attorney are documents you create that allow others to act on your behalf…in this case to handle your Healthcare decisions and your business affairs.   
Powers of Attorney are ONLY effective when you are still alive.  Once you pass, other documents takeover.    In Illinois, a Power of Attorney For Healthcare is used instead of a ‘Living Will.’..they both do the same thing…state your Healthcare wishes in the event you cannot.

Step 3:  Create A ‘Pour Over’ Will
    This is where people ‘mess up.’ I will is just one instrument of your Estate Plan. A will is NOT an estate plan in and of itself nor does it  avoid probate.A will is in fact the guide a probate judge will use to distribute your estate. 

      You use a will basically to state that all your assets will be distributed by your Trust (more on Trusts in a moment).     

  If ALL you have is a will your heirs will
still have to go through the expense and delay of Probate

Step 4: Create A Revocable Living Trust  
Ideally you want your Trust to be the document
that distributes your estate assets…not your Will.

     Why?  Your Trust WILL NOT go through Probate, is private and does not have delays and expense of Probate Court.

      There are many types of Trusts but the one used in most simple Estate Plans is a Revocable Living Trust…which means you can change it any time in your life.

Step 5: Update Estate Plan Regularly
      Once you create your Estate Plan make sure you review it at least once every 3 year sor so.  Life changes and your Estate Plan must adapt accordingly.

Reach Out To Me If You Have Questions. .
If you have comments or questions about any of this…send me an email :ironkop@gmailcomor if reading on my blog or Facebook page leave your questions or comments below.

Remember…..
‘Things don’t get better with neglect…..”

Kevin Pritchett, Esq
Law Office of Kevin Pritchett, Inc.
ironkop@gmail.com
312-505-1957
www.KevinPLaw.com

When Should You Take Your Social Security Benefit?

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At What Age Should You Take your Social Security Benefit?

Just south of ‘Sawmill Creek…..

Hi Attorney Kevin Pritchett here
When Is The Best Age To Take Social Security?
You can collect your Social Security benefit as early as age 62. 

  However, you only get the full 100% of your Social Security benefit when you wait until your Full Retirement Age, which is somewhere between  the ages of 66 and 67.

Full Retirement Agre (FRA)
    Quoting from a ‘Motley Fool’ article on the subject: 
 
   “ If you apply for your benefits at age 62, then your
monthly check will be much smaller than it would
be if you wait until FRA. The Social Security Administration reduces your monthly benefit payment by a fixed percentage for every month you claim earlier than FRA, and those monthly penalties can add up. For example, a person born in 1960 has a full retirement age of 67; if they claim benefits at age 62, they’d get 30% less per month than they would get otherwise.

From that same article….

“The difference between the amount you could collect
in benefits at age 62 and the amount you could collect
if you wait until age 70 to apply for benefits is significant.
Assuming a full retirement age of 67 and a full retirement
age benefit of $1,000, a person who claims at age 62
would only receive $700 per month, while a person who
claims at age 70 would receive $1,240 per month. In this
scenario, claiming at age 70 results in a monthly check
that’s a whopping 77% bigger than the check they’d
receive at age 62.”

Advantages of Collecting At Age 62 and Breakeven 
    The advantage of collecting at age 62 is that well…you can collect!!!  If you wait to collect and you die, then you lose!! Overall. there is a 40% chance a 60 year old will not live to age 80 based on 2015 data.
 
     Along these same lines…if you collect at age 62 the longer you live, the more total benefits you may collect…the point at which you ‘break even. “The breakeven point is different (with certain assumptions)for age 62, 67 and 70.

Other Factors
Of course since we’re dealing with ‘a government benefit…NOTHING IS SIMPLE!!!

   Other considerations:

==spousal benefits
==total income considerations
==what other income/assets you have

   If you’re nearing age 62 and expect to collect Social Security it pays to think very very carefully, consider all the possibilities and make a plan BEFORE you get to the critical age….you only get one shot at this!!!
Remember…..
“Things Don’t Get Better With Neglect…..”

Kevin Pritchett, Esq
Law Office of Kevin Pritchett, Inc.
ironkop@gmail.com
www.KevinPLaw.com
312-505-1957

$18,975 Or More Per Year of Guaranteed Retirement Income…No Matter What The Stock Market Does!

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How Would Your Retirement Planning Change If
You Could Receive $18,975 OR MORE Per Year
For The Rest of Your Life NO MATTER
         IF STOCK MARKET ROSE OR FELL???

Hi Kevin Pritchett here  

   Are You Worried About Outliving Your Retirement?
YOU SHOULD BE…but you don’t have to be!!!  

Case Study: $18,975 Per Year For Life

    In this example, a 60 year old client placed $250,000 in a guaranteed income plan and due to the way the case was designed, the client received $18,975 per year for life.   

  Additionally, if the client goes into a nursing home he will DOUBLE his income to $37,950 each year for 5 years or until the account reaches ZERO whichever comes first.
(all income based on the specific age and characteristics of this case…..)

You CAN Achieve Lifetime Guaranteed Income

    As sad as it may be, the TRUTH is that you’ve been LIED TO and DECEIVED by WALL STREET….FOR YEARS!!       For over 20 years I’ve helped my clients achieve LIFETIME GUARANTEED INCOME. THAT:
==lasts as long as you do

==is not affected by stock market downturns

==can increase over time to match inflation and your increasing needs   AVOID ALL STOCK MARKET LOSSES YET HAVE ACCESS TO PORTION OF STOCK MARKET GAINS.

  Custom Designed Guaranteed Income Plans
    No product or strategy is perfect for everyone.
Your individual situation and income needs must be considered to make sure a GUARANTEED INCOME PLAN is right for you.  

That’ why I’ve created my FREE NO OBLIGATION CONSULTATION where you tell me what you want, how much income you need, I review your financial assets and then tell you if you’re a good candidate for a GUARANTEED INCOME FOR LIFE PLAN.  

RISK FREE:  Not One But TWO Guarantees

Guarantee 1- 100% Money Back Guarantee The consultation is absolutely FREE, no pressure and I offer a 100% MONEY BACK GUARANTEE.  You can decide whether the LIFETIME GUARANTEED INCOME PLAN is right for you, take delivery of the annuity and if for whatever reason you don’t want it, you can cancel it and receive a full refund of any money you’ve put into it….GUARANTEED…I put it in writing!!! 

  Guarantee 2- I Guarantee I’ll Show You AT LEAST $10,000 Of Tax  And Other Fees You’re Overpaying ….or I’ll Write You A Check For $100 On The Spot!!

  So with my 2  GUARANTEES, you have absolutely nothing to lose and potentially everything to gain!!

  Schedule Your FREE NO OBLIGATION CONSULTATION

1. call  312-505-1957 to schedule your FREE, 1 ON 1 consultation.          or

2. CLICK HERE TO SCHEDULE YOUR APPOINTMENT IMMEDIATELY

You CAN achieve a LIFETIME GUARANTEED INCOME   Don’t procrastinate on this….Things don’t get better with neglect…they get worse.   Talk soon

Kevin Pritchett, Esq
Law Office of Kevin Pritchett, Inc.
312-505-1957 phone

P.S. Want to obtain GUARANTEED LIFETIME INCOME  CLICK HERE TO LEARN HOW  

P.P.S.  1. call  312-505-1957 to schedule your FREE, 1 ON 1 consultation.          or

2.   CLICK HERE TO SCHEDULE YOUR APPOINTMENT IMMEDIATELY