Fundraising Strategy for Charities that is sweeping the Nation!
Posted on 04. Mar, 2010 by Cindy in Fundraising for Charities
By Jim Black
Charities are struggling to raise the funds needed to help those most in need as charitable donations continue to drop due to the sagging economy. So reports say that fundraising efforts are off more than 60%. Foundations and children’s charities alike are running into problems raising funds.
In the midst of the worst economy in decades, traditional methods of fundraising are not providing charities the means necessary to meet their ongoing expenses, Camps are closing their doors, scholarships are nearing extinction, and charities are frequently unable to serve the needs of those who they’ve helped in the past.
1) Provides an immediate donation the non-profit organization (No strings attached)
2) Costs the supporter nothing
3) Provides an immediate tax-deduction to the supporter.
4) Does not diminish the supporters estate
5) Provides and immediate and permanent income to the supporter (if the wish)
When I first heard this, I told myself that this must be to good to be true. I spent thousands of dollars to try it and test it, and now use this on a regular basis for clients who are charitable supporters and the non-profits who can use a hand to keep making a difference
I will talk more about this later, and share some stories of organizations who are raising millions of dollars using this strategy. If you would like more information, you may contact us through our office or our website.
An Alternative to Long Term Care
Posted on 24. Feb, 2010 by Cindy in Absolute Returns, Blog, Financial News, Retirement Planning
Think shelling-out for your own home-health services, an assisted-living facility or nursing-home care may be in your future? Finally, an option that allows you to get your money back if you don’t need long term care. And with a new tax law effective this year, these services can be yours tax-free.
Like so many of our clients, we dread the thought that some day one of us or our spouses may need some form of Long Term Care. But for many, the alternative seems even worse. As a result, many people choose to “self-insure,” i.e., pay for long term care out of their savings if and when the need arises. And yet, reports point out that for a 65-year-old couple, the odds of at least one spouse requiring Long Term Care in their lifetime is nearly 70%. Self-insuring may put the family’s existing assets at risk. If care becomes necessary, the family may have to spend some or most of their assets.
Good news! There is now a strategy called Asset Based Long Term Care that can be a great alternative for those who want to self-insure. This specifically designed policy is available to maximize the benefit for potential long-term care expenses by offering the flex appeal of having long term care coverage, but, if you don’t need it, you get your money back. In regular long term care insurance policies, payments are forfeited to insurance companies even if services aren’t utilized. But with this type of account, unspent funds belong solely to you, the account holder, and can eventually be withdrawn.
Great news! Thanks to the Pension Protection Act of 2006, starting Jan. 1, 2010, you’ll no longer have to pay federal income tax on this type of account — if you use those proceeds to pay for long-term-care coverage. That means that the chronically ill or disabled will no longer have to rely solely on a regular long-term-care insurance policy or Medicaid to fund their medical and non-medical care.
Important Considerations:
- Unspent funds belong solely to the account holder and can eventually be withdrawn as income if not used for medical needs.
- If the funds are not used and you pass away, the policy acts as life insurance. Your family gets a death benefit – tax free.
- Typically there are NO medical exams for Asset Based Long Term Care.
- Asset Based Long Term Care can also provide the ability to generate tax-deferred gains. This is a benefit particularly for those currently in high tax brackets who plan to be in lower brackets when they begin drawing down their accounts.
- The account may not be enough to pay for all your long-term care expenses. If you don’t deposit enough upfront, your coverage may not last during an extended long-term-care situation.
- When considering this option as part of your comprehensive plan for retirement, be sure that you have the assets available to generate the income you need for the rest of your life. (Income planning was discussed in our December Newsletter insert: The Asset Cycle Plan).
- Careful planning of the use of qualified and non-qualified assets needs to be considered to take full advantage of the tax-free distributions.
Asset Based Long Term Care is just one way to manage potential medical and non-medical care. During your retirement planning process, it is important to be aware of your choices and then make a decision that best fits your situation. If you would like to know more, please call us at 425-558-3700 to make an appointment.
*Asset Based Long Term Care are annuities that are primarily designed to meet the long term needs for retirement income. They provide guarantees against the loss of principal and credited interest along with the reassurance of a death benefit for beneficiaries. These guarantees are backed by the financial strength and claims paying ability of the insurance company. Annuities are not FDIC insured. Early withdrawals may impact annuity cash values and death benefits. There is typically a waiting period from the time the annuity is purchased before long term care benefits can be activated and an “elimination period” once a claim is filed. As with any investment, investors should consider the investment objectives, risks, charges and expenses carefully before investing in an annuity.
February’s Sudoku had an Error
Posted on 24. Feb, 2010 by Cindy in Blog, Newsletter, Sudoku Answers
We now know that many of you are completing the Sudoku Puzzle due the the numerous calls and emails regarding the lower left square. The prefilled 2 should have been a 3. We are so sorry for the confusion this caused and I will be sure to personally complete the puzzles (no matter how long it takes me) before we mail out the newsletters in the future.
Sudoku Answer to December Newsletter
Posted on 19. Jan, 2010 by Cindy in Blog, Newsletter, Sudoku Answers
Here is the Sudoku answer to our December Newsletter. If you haven’t signed up for our newsletter, give us a call at 425.558.3700
SmartIRA planning may save you money in the long run
Posted on 25. Nov, 2009 by Cindy in Blog, Retirement Planning
If you own an IRA or have another retirement account, the words that follow may ring a bell, especially if you’ve been contributing to a retirement account for a long period of time.
Think back to when you first started investing in the account. Remember what you were told? See if this sounds familiar:
1- Put money away today in a retirement account and you’ll be able to use your contribution as a tax deduction against your other income.
2- Invest the contribution that you made to the retirement account wherever you want and the growth on that contribution will grow tax deferred.
3- When you retire, and begin to take withdrawals from your retirement account, you’ll be in a lower tax bracket since you’ll be retired which means that you’ll be able to put money away on a tax deductible basis when you’re in a higher tax bracket and take money out during retirement when you’re in a lower tax bracket.
Assuming that you were told all three of these things when you started to contribute to a retirement plan, my question for you is this: Were all three things true?
My experience working with clients tells me that in many cases only 2 of these 3 things were proven true – number 3 above, for many clients, was not.
Don’t get me wrong, IRAs and retirement accounts are useful products, but many folks who put money away in one tax bracket while they were working are now retired and drawing money from these retirement accounts only to find that they’re actually in a higher tax bracket now than they were when they were putting the money away.
Why did that happen?
It could be a number of reasons, but in many cases the culprit is the fact that the Internal Revenue Code, the rules that the tax ‘game’ is played by, changed.
In fact, under today’s tax code, if your estate is large enough, up to 67% of your IRA could be lost to tax at death, unless you do the appropriate planning.
That’s where the SmartIRA planning strategy may come in. The SmartIRA planning process is designed to reduce, or in some cases, even eliminate taxes on a client’s IRA. However, the outcome of the strategy is dependent upon the circumstances of your individual situation, so results will vary.
If you have an IRA, you may want to get more information about the SmartIRA planning process. Please contact our offices for more information.
Special Note: With Traditional IRAs early withdrawals may be subject to a surrender charge. In addition, distributions prior to age 59 ½ may be subject to a 10% tax penalty.
* Assumes maximum federal estate and income tax and no state income tax. If your state has income tax, your tax may be higher. Eg. $500,000 IRA @ 45% Estate Tax. Remaining taxed at 35% Federal Income Tax Rate. Total tax of $322,500 which is approximately 65% of $500,000.
Investment advisory services offered through
Absolute Return Solutions, a Registered Investment Advisor.