Planning for the Financial Impacts of Job Changes and Retiring

Your retirement savings plan offers you several choices when you decide to change jobs or when you retire. A distribution is a payout of realized savings and earnings from a 401(k) or other retirement plan. In general, you must begin taking distributions from your account by April 1 of the year following the year in which you turn 70 1/2. When you leave a company your distribution options may include: keeping your money in your plan, enacting a direct rollover, or taking a cash distribution. Each option has different consequences.

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Understanding Investment Risk

Ask any investor about risk and you'll probably hear that it's something the investor wants to avoid or at least keep to a minimum. Like it or not, investment risk is an essential part of any investment decision. Properly managed, risk can be turned to the investor's advantage. What is risk? The answer depends on whom you ask. If you ask an investor, particularly an inexperienced investor, you'll probably hear that risk means that you might permanently lose a portion of the money you invest.

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Are You Ready for Retirement

With summer here many of us are planning our summer get away. We take a lot of time to make sure that we get where we want to go and are able to enjoy the things we look forward to all year. We work hard all year and deserve to have a nice vacation. Planning is essential to being sure that our vacation is what we want it to be. Planning for your retirement is also very essential to insuring that you reach your goals and dreams in retirement. Unfortunately, many people never take the time to prepare for retirement. We can think of retirement as 20 to 30 years of unemployment. So we must have a plan to be sure that we can fund our dreams for retirement. Imagine for a moment that you are 70 years old. What do you want to be doing? Is it spending time with your grandchildren, family and friends? Is your dream to travel the world or to work at a favorite charity? Whatever your dreams may be you have to prepare all along the way for the journey. Unfortunately many people spend more time planning their yearly vacation than they do the journey to retirement.

Planning: The key to success.

In life, we pass through several phases, each with different requirements. For example, the financial needs of a young married couple are not the same as those of a retired couple. That is why continuous long term planning is essential. Typically, there are three basic financial steps most people take in life. These include:

1. Wealth Accumulation - the building of a solid, diversified financial foundation from which to expand over time. During this phase, allocation of money for a home, investments, life insurance and educational expenses is coordinated with tax planning strategies to ensure that current and future income is utilized effectively.

2. Wealth Conservation - the inclusion or a variety of investment strategies and further diversification, designed to preserve and grow assets to help ensure adequate funds for current living expenses and future retirement needs.

3. Wealth Distribution - the proper allocation of assets to heirs. Good estate planning should provide for the orderly transfer of assets while avoiding unnecessary tax burdens.

In addition to the complexities and changing priorities that occur over a lifetime, fluctuating economic conditions, taxes and inheritance laws also affect a financial plan. A qualified financial advisor has the expertise to thoughtfully design a plan with your circumstances in mind, helping you develop a plan for a long-term financial strategy for you to reach your individual goals and dreams. This material is not intended to replace the advice of a qualified attorney, tax adviser, investment professional, or insurance agent. Before making any financial commitment regarding the issues discussed here consult with the appropriate professional adviser.

John Dillard is an Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/  and for his latest book Overcoming Life's 9/11's: Job's Journey visit http://www.john-dillard.com/ 

Understanding Market Fluctuations

Continuing to invest in your retirement plan is sometimes difficult to do during market declines but, regularly adding to an account that's designed for a long-term goal may cushion the emotional impact of market swings. If losses are offset even in part by new savings, the bottom-line number on your statement might not be quite so discouraging.

When you regularly contribute to your retirement plan even during down times you are using a dollar-cost averaging strategy-investing a specific amount regularly regardless of fluctuating price levels-you may be getting a bargain by continuing to buy when prices are down. However, you'll also need to consider your financial and psychological ability to continue purchases through periods of low price levels or economic distress; dollar-cost averaging loses much of its benefit if you stop just when prices are reduced. And it can't guarantee a profit or protect against a loss.

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Roth's & Traditional IRA's for 2009

There are no changes to the contribution limits set for traditional or Roth IRAs in 2009. The ceiling remains as it was last year: you may contribute up to $5,000 if you're under 50 years of age, or $6,000 (using the "catch-up" provision that allows an additional $1,000 if you're over 50 or turn 50 during 2009). Current legislation stipulates that future limits will be adjusted for inflation in $500 increments.

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Helping Your Clients with Clear Concise Communications  

Taxes and Running a Business as an Entrepreneur are difficult enough without having to wonder about what to do and when. For over twenty years each and every one of our invoices to clients have detailed not only the work done but clear concise constructive communication that a client can use to stay aware of their responsibilities and duties as a business owner. The below sample client letter is indicative of the advice we might give to the owner of an S Corporation or an LLC that has legally converted to an S Corporation is presented below. If a particular client has other strategic and specific needs, these are presented first as well as highlighted for ease of review. 

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Sample Letter to Georgia Addressing Assessed/Unpaid Income Taxes Directory Presented by Atlanta CPA

Attached please find a sample letter one might use to address assessed taxes to the state of Georgia when the taxpayer is not aware of what the taxes might be for. Care should be exercised in all letters to ensure that honesty, integrity and good faith are maintained at all levels of communication, as well as to stay ever vigilant of a taxpayers rights and responsibilities.

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Offers in Compromise & Installment Plans

Working with the state and not against it is your best option for getting your tax issues resolved. Hiding you head in the sand will only make the situation worse and taxes and penalties are added and collection efforts are intensified. Having served as a CPA to Atlanta business owners and individual decades I have learned that good honest forthright communication is your best option for IRS Representation Success. Below is a sample collection letter we might use to set up an installment plan.

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Protecting Your Hard Earned Money

I am constantly encouraging homeowners to get "Fire Insurance" for their money. It's free and all it takes is a little initiative, a little time, a home and a bank. Banks and savings and loans have long helped homeowners finance life's little surprises by offering a home equity line on their home. This amount is a function of both the equity in your home as well as your credit score. Even though the market for loans is tight and home values are depressed setting up a line with the bank is usually free and will help ensure you have money "when you need it."

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WWJD...What Would Jesus Do if He Was a CPA

We strive to live our lives by a higher standard; not just to live by the world's but to live by God's standards. Though I am challenged to be the very best CPA I can be by helping clients keep their tax bills as low as legally possible. However I believe as a CPA and a Believer I am called to a much higher standard in helping clients develop tools and resources to plan for much more than their taxes. A CPA is the best one to begin this process and after a CPA has met with a client and determined much of their financial picture and tax issues, it is time to take the relationship to the next level and to help clients determine a multitude of issues including:

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