Monthly Archives: August 2012

Inherited IRAs

If you are the beneficiary of an IRA there are a few things that you should know.

A spouse who inherits has an option not available to other inheritors. She can roll the assets into her own IRA and postpone distributions from a traditional IRA until she turns 70 1/2.

A non-spouse, a child for example,  can draw distributions out over their own expected life spans, enjoying decades of income-tax-deferred growth in a traditional IRA.  However, to make sure that you will be able to take advantage of this “Stretch IRA”  you have to follow the proper procedures.

IRA Forbes.com has an article, “Five Rules for Inherited IRAs” that you should read.

For more details, call us.

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For Unpaid College Loans, Feds Dock Social Security

When we think of college loans, we usually think about young people and the amount of debt they carry when they graduate from college.  Here’s a story about how the Social Security Administration is getting involved in collecting unpaid college loans.

The Department of Education, which provides federal student loans to borrowers, say it tries to work out payment plans with people who fall behind on their loans. Justin Hamilton, a spokesman for the department, says that accounts aren’t sent off to collections until almost two years of non-payment; if collection doesn’t yield results, the loan balance goes to the Treasury Department, which can reduce Social Security checks. “It’s when people aren’t making any attempt whatsoever [to pay] that they start heading down that road,” Hamilton says.

For its part, the Treasury Department says it reaches out to borrowers twice to set up a payment plan or otherwise resolve their debt before offsetting money from their Social Security check. And the Treasury won’t withhold money from monthly checks that total $750 or less, says Ronda Kent, deputy assistant commissioner for debt management services at the Treasury Department’s Financial Management Service….

Student-loan experts say that changes in payment plans are partly to blame for why an aging population is still dealing with college loans. The repayment period on federal student loans can be extended to 30 years, Kantrowitz notes, if borrowers owe $60,000 or more. Another eight years can be added on for borrowers facing unemployment or other economic hardship; during those years, payments aren’t required but interest accrues.

Student loan debt now exceeds credit card debt.  It’s interesting that that the Department of Education could be taking part of your Social Security payment decades after you leave college and when you finally retire.

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Welcome to Korving & Company, LLC.

We are an Investment Management and Financial Planning firm with offices in Suffolk, Virginia.

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