NEW! IRS Retirement Plan Contributions Limits For 2015

The IRS just this week released the retirement plan contribution limits for 2015.  Here’s a chart we put together that shows what the limits are for most people:

2015 Contribution Limits

For those of you who prefer to read it, from Financial Advisor magazine:

Taxpayers can now put aside a little more toward their retirement in 2015, according to the Internal Revenue Service.
The agency has adjusted the maximum contribution allowed for pension plans and other retirement funds for tax year 2015, it announced today, a change reflecting cost-of-living increases.
Taxpayers 50 years old and over can contribute up to $24,000 in retirement funds for 2015, an increase of $1,000 from 2014.
Though some limits remain unchanged from last year, several ceilings have increased. Some of the changes include:
• The elective deferral (contribution) limit for employees who participate in 401(k)s, 403(b)s, most 457 plans and the federal government’s Thrift Savings Plan has been increased from $17,500 to $18,000.
• The catch-up contribution limit for employees aged 50 and over who participate in those same plans has been increased from $5,500 to $6,000.
• The limit on annual contributions to an IRA remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
• The deduction for taxpayers making contributions to a traditional IRA has been phased out for singles and heads of households who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $61,000 and $71,000, up from $60,000 and $70,000 in 2014. For married couples filing jointly, the income phase-out range is $98,000 to $118,000, up from $96,000 to $116,000.
For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $183,000 and $193,000, up from $181,000 and $191,000. For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
• The AGI phase-out range for taxpayers making contributions to a Roth IRA is $183,000 to $193,000 for married couples filing jointly, up from $181,000 to $191,000 in 2014. For singles and heads of household, the income phase-out range is $116,000 to $131,000, up from $114,000 to $129,000. For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

For even more written information, go to the IRS website.

For clarification, and to figure out what all of the above means for you, contact us.

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Viewing “Generation Now”

Chapter 11

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Easy prey

Most “Generation Now” investors have, at some point, had a negative experience with some type of financial advisor.

In these times, investors have been misled by advisors, or sold products with hidden fees, only to find out later what had actually happened.

The perceived lack of transparency and honesty in the broader field (of investment services) causes “Generation Now” to approach advisor relationship with caution and a degree of skepticism.

I would say for me to work with a financial advisor, I would want somebody who’s honest. You know, explains to me the fees up front… I just want something that’s real, and not cheesy, and not trying to hide anything, or hold anything back

This is the eleventh of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

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Viewing “Generation Now”

Chapter 10

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Misaligned Interests

Though exceptions exist, many “Generation Now” Investors don’t believe their best interests are taken to heart when dealing with the Financial Professionals and Advisors in their life.

For these investors, there’s the perception that advisors are simply salesmen in suits, who steer clients into products that they’re incentivized to sell – either from corporate directives, or due to high commissions – rather than based on a client’s best interests or unique needs

Sometimes I feel like they have an agenda, and they’re really interested in how much you have to invest, and how much you have. And I just kind of feel like it’s really self serving sometimes. So if they really try to get to know me as a person, and come to my level, respect me and treat me as I want to be treated, with my best interests in mind, then maybe I would trust them a little bit more.

This is the tenth of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

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Merrill Lynch Jacking Up Fees

We read of a broker at Merrill Lynch who left the firm because, and we quote:

“Under Merrill Lynch One, fees were going to go up for my clients by 30% to 40% on average.”

Wow, that’s a lot!

Account fees have always been a sore spot for us at Korving & Company, which is why we use Charles Schwab as our custodian. They don’t charge account fees.
Merrill is getting some negative reaction from the financial press. Here’s one from Forbes (Merrill’s Fee Debacle:

You’re near the top of your industry and a cash cow for your parent (Bank of America). The future looks bright as the financial crisis of 2008 fades. So, what do you do? You announce a complicated new fee structure that on the surface looks like it may increase fees for many of your top clients in a fast growing (fee-based) business. Then you explain it in murky terms. Not, in my opinion, too smart!

These fee changes are part of a platform restructuring that merges five separate managed account platforms on to a new one called Merrill Lynch One (set to rollout in September).

The author criticizes Merrill Lynch for creating confusion and a lack of clarity on how this is going to affect the clients and the brokers at Merrill.
If you have an account at Merrill Lynch, you may want to check out our clear, easy to understand and fully transparent fee structure.

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Viewing “Generation Now”

Chapter 9

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Abundant Misconceptions

Most “Generation Now” Investors are unaware of the diversity that exists in the wider world of financial advisors. Advisor perceptions, often unfairly, are based on cumulative interactions with financial professionals, most of whom aren’t technically RIAs.

Like the retail guys that we see on TV, like Schwab and TD Ameritrade… I thought they were kind of like basic advisors. You know they have a desk in the office, in the big office with a bunch of other guys with desks… They just give basic investment advice. I guess I’m looking for more of a detail or a sit down with a professional. I think that’s what Chase Private Clients is like. I think it’s really more like upscale.

This is the ninth of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

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Viewing “Generation Now”

Chapter 8

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Financial Freedom:

Above all, “Generation Now” Investors are seeking a lifestyle of financial freedom – the point where they have enough assets and security to no longer watch account balances, to know they have plenty to not just cover bills, but unknown liabilities, and are able to live life spontaneously, without so much focus on planning, budgeting and saving.

Financial freedom is the ability to do what you want, without relying on others. It is important because it elevates your soul to feel like anything is possible. And that really is what financial freedom is. It’s the ability to do anything you want and not have to rely on others, or ask others, and it feels like that is the beauty and freedom of living in a free society.

This is the eighth of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

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Viewing “Generation Now”

Chapter 7

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Redefining Luxury and Success

Along with a return to timeless values, “Generation Now” Investors are confronting and reevaluating notions of luxury and outward displays of their financial success. For some, outright material acquisition still holds appeal, but for many, they’re content to redirect or delay what would have been spent on material items for experiences for themselves and family. Today’s luxuries are more likely to be things like once in a lifetime trips to far flung corners of the globe than flashy cars, or memberships in exclusive country clubs.

In fact, I would probably sell where I live now, in San Francisco, maybe purchase something small, so I have a home base. But I would love to travel to Central America, maybe do some hiking in South America. I would like to visit some countries in Asia: Vietnam, Cambodia, revisit Thailand.

This is the seventh of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

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GE Earnings

Many of our clients are either GE employees, GE retirees or have some other relation to GE.  For that reason – and because GE is one of the big old companies that define the bedrock of American industry – we would like to share the GE earnings announcement.  The comments are taken from “Seeking Alpha.”

On October 17, General Electric (NYSE:GE) reported third quarter operating earnings of $0.38/share, up $0.02 or 6% from the prior year, beating consensus estimates by $0.01/share. Revenues increased 1% to $36.2 billion, with non-GE Capital revenues up 3%. Industrial profits increased 9%, to $4.3 billion in the quarter with margins increasing by 90 basis points. Backlog of equipment and services also grew 9%, to $250 billion. The Company confirmed the Synchrony Financial (NYSE:SYF) split-off would be completed in late 2015. The sale of the Appliance division to Electrolux is expected to generate an after-tax gain of $0.05-$0.07 per share. GE disclosed the Alstom acquisition, targeted to close in 2015, is expected add $0.06-$0.09 per share to earnings in 2016, potentially adding about 3% to current 2016 forecasts (consensus of $1.91/share). The Company also reiterated its goal of having 75% of its earnings from industrial businesses by 2016.

This article only reflects the author’s opinion. It is not designed, and should not be used as the basis of an investor’s buy or sell decision. Investors should always conduct their own due diligence and make their own buy and sell decisions.

To read a sample of our book BEFORE I GO, please visit our website.

 

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Viewing “Generation Now”

Chapter 6

Schwab funded a research study to find out what the next generation – “Generation Now” – believes and how it views the world. They wanted to understand how they view their future, determine their fears, attitudes and behaviors.

“Generation Now” is 30 – 45 years old. They have graduated from college, have a career and are making good money. But as they reached adulthood, the events they grew up with shaped them and their attitudes.

Return to timeless values:

Many “Generation Now” Investors, who previously placed greater emphasis on wealth and status, and found these aspects of their self-identity easily compromised by financial swings beyond their control, have been forced to reevaluate their priorities.

They’re focusing on creating meaningful experiences with family and friends – that typically don’t carry a high price tag – and drawing inspiration from their own parents, childhood and upbringing to find their way forward.

“Generation Now” may not yearn for the world of Ozzie and Harriett, but they long for many of the values of community that their parents and grandparents had. Some are downsizing from larger homes to smaller ones. Instead of meeting friends for dinner in expensive restaurants, they may prefer to get together at home for a dinner party.

A big life decision that my family and I made recently was to downsize a bit. We moved to west palm beach. And we did so from plantation to a three bedroom house from a five bedroom house, which was a pretty big decision for us. And we did that more or less so we could save more money, I should say, a lot more money. We needed to do that so we could get back in touch with what the more important things in life are right now. And that is family and saving for our future.

This is the sixth of 12 posts examining Generation Now.

Contact us for a complete copy of the report.

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