November 9th, 2016
Come to the Community Room at Kaldi’s in Chesterfield with your financial planning and tax questions and enjoy a cup of coffee with CERTIFIED FINANCIAL PLANNER™ professional Michele Clark and Jan Roberg Enrolled Agent.
There is no prepared presentation, just a casual conversation in a small group environment; your opportunity to pick our brains. Feel free to invite family or friends who could benefit from an hour with us. Open to registered attendees only, due to the size of the room.
Financial Planning and Tax Questions Answered
Coffee with Michele and Jan
Kaldi’s Coffee Chesterfield
Wednesday December 7, 2016
10:30 am to 11:30 am
RSVP online Clark Hourly Financial Planning and Investment Management RSVP or call 636-264-0732. Space is limited.
Kaldi’s Coffee Chesterfield address and map
November 8th, 2016
The 2017 figures have been announced for IRA and employer plan contribution limits.
IRA contribution limits
- The maximum amount you can contribute to a traditional IRA or Roth IRA in 2017 is $5,500 (or 100% of your earned income, which ever is less), unchanged from 2016.
- The maximum catch-up contribution for those age 50 or older remains at $1,000. (You can contribute to both a traditional and Roth IRA in 2017, but your total contributions can’t exceed these annual limits.)
Traditional IRA deduction limits for 2017
The income limits for determining the deductibility of traditional IRA contributions in 2017 have increased.
- If your filing status is single or head of household, you can fully deduct your IRA contribution up to $5,500 in 2017 if your MAGI is $62,000 or less (up from $61,000 in 2016).
- If you’re married and filing a joint return, you can fully deduct up to $5,500 in 2017 if your MAGI is $99,000 or less (up from $98,000 in 2016).
- And if you’re not covered by an employer plan but your spouse is, and you file a joint return, you can fully deduct up to $5,500 in 2017 if your MAGI is $186,000 or less (up from $184,000 in 2016).
|Single or head of household
||$62,000 and $72,000
||$72,000 or more
|Married filing jointly or qualifying widow(er)*
||$99,000 and $119,000 (combined)
||$119,000 or more (combined)
|Married filing separately
||$0 and $10,000
||$10,000 or more
*If you’re not covered by an employer plan but your spouse is, your deduction is limited if your MAGI is $186,000 to $196,000, and eliminated if your MAGI exceeds $196,000.
Roth IRA contribution limits for 2017
The income limits for determining how much you can contribute to a Roth IRA have also increased for 2017.
- If your filing status is single or head of household, you can contribute the full $5,500 to a Roth IRA in 2017 if your MAGI is $118,000 or less (up from $117,000 in 2016).
- And if you’re married and filing a joint return, you can make a full contribution in 2017 if your MAGI is $186,000 or less (up from $184,000 in 2016). (Again, contributions can’t exceed 100% of your earned income.)
|Single or head of household
||More than $118,000 but less than $133,000
||$133,000 or more
|Married filing jointly or qualifying widow(er)
||More than $186,000 but less than $196,000 (combined)
||$196,000 or more (combined)
|Married filing separately
||More than $0 but less than $10,000
||$10,000 or more
Employer retirement plans
- Most of the significant employer retirement plan limits for 2017 remain unchanged from 2016.
- The maximum amount you can contribute (your “elective deferrals”) to a 401(k) plan in 2017 is $18,000. This limit also applies to 403(b), 457(b), and SAR-SEP plans, as well as the Federal Thrift Plan.
- If you’re age 50 or older, you can also make catch-up contributions of up to $6,000 to these plans in 2017. [Special catch-up limits apply to certain participants in 403(b) and 457(b) plans.]
- If you participate in more than one retirement plan, your total elective deferrals can’t exceed the annual limit ($18,000 in 2017 plus any applicable catch-up contribution). Deferrals to 401(k) plans, 403(b) plans, SIMPLE plans, and SAR-SEPs are included in this aggregate limit, but deferrals to Section 457(b) plans are not. For example, if you participate in both a 403(b) plan and a 457(b) plan, you can defer the full dollar limit to each plan—a total of $36,000 in 2017 (plus any catch-up contributions).
- The amount you can contribute to a SIMPLE IRA or SIMPLE 401(k) plan in 2017 is $12,500, and the catch-up limit for those age 50 or older remains at $3,000.
|401(k), 403(b), governmental 457(b), SAR-SEP, Federal Thrift Plan
Note: Contributions can’t exceed 100% of your income.
- The maximum amount that can be allocated to your account in a defined contribution plan [for example, a 401(k) plan or profit-sharing plan] in 2017 is $54,000, up from $53,000 in 2016, plus age 50 catch-up contributions. (This includes both your contributions and your employer’s contributions. Special rules apply if your employer sponsors more than one retirement plan.)
- Finally, the maximum amount of compensation that can be taken into account in determining benefits for most plans in 2017 is $270,000 (up from $265,000 in 2016), and the dollar threshold for determining highly compensated employees (when 2017 is the look-back year) is $120,000, unchanged from 2016.
Based on an article Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016
September 2nd, 2016
I was honored to be quoted recently in the article “Traditional vs. Roth IRAs: Understanding the Retirement Planning Benefits of Each” on Learnvest. It is a good introduction to the differences between the two types of IRA accounts and when you might choose between them.
Some of the differences and rules covered are:
- Contribution Limits
- Income Restrictions
I find when planning with families that the decision is a multi-step process. We need to take into consideration all of the vehicles available to them including work and/or self-employment, their potential matching from employers, if they have a spouse and if the spouse is considered an active participant in an employer plan, the quality of their plans, their income phaseout thresholds, and their entire picture of financial goals ranging from short term to long term to determine how much they can afford to put toward all of their goals. That then informs us what the best vehicle is, or in most cases, vehicles are.
August 8th, 2016
I was recently out of the St. Louis area for a bit while I attended The Garrett Planning Network 16th Annual Retreat which was held in Denver, Colorado. I am a member of the Garrett Planning Network which is an international group of financial planners that offer planning and investment advice on an hourly basis. Each member owns their own firm. I have written about the Garrett Planning Network before. This was the eighth year I have gone.
I attended the conference and earned continuing education credits by going to various educational programs, which I need so that I can keep my designations and licenses such as:
- CERTIFIED FINANCIAL PLANNER™
- NAPFA Registered Financial Advisor
- CHARTERED RETIREMENT PLANNING COUNSELOR℠
During the four day conference I attended various educational programs such as:
- Behavioral Finance: Psychology and Economics in Investing
- Reverse Mortgages in Retirement Income Planning
- Planning Costs Related to Caregiving
- Fiduciary Best Practices for Registered Investment Advisor Owners
- And others
Noted author William Bernstein, a bit of a rock star in our industry, gave one of the Keynote addresses titled “What the Liberal Arts Have to Teach Us about Finance.” He talked about the difficulty of forecasting, and characteristics of good forecasters. He discussed economic history; not the usual economic history going back to the market crash of the 20s, or even the tulip bulb bubble. But economic history going back to biblical times and what conclusions can be drawn from such “longitudinal studies.”
Allan Roth, another well known author and fellow financial advisor delivered the Keynote address “Behavioral Finance: Psychology and Economics in Investing”, wonderfully telling it like it is in his typical style. He shared financial decision making biases that negatively impact consumers and advisors alike based on academic research and personal observation.
You can see some of the live tweeting that I did at the conference under my Twitter handle @HourlyPlanner. You do not need a Twitter account.
The Garrett Planning Network, has dozens of conference calls throughout the year, and the members interact on an internal forum to help each other with more complex planning cases on a daily basis. One of the most beneficial outcomes of my annual trip to this retreat, is getting together with this group, sharing ideas, and getting updates from these amazing colleagues in person. I am already looking forward to next year!
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