www.royalblueproductions.com RoyalBlue Productions Presents: Tech Tip

Urban Legends

We all receive those emails from well-meaning friends who want to pass along the latest "warning" or request for support for an ailing child. But how do you know if they're true or a hoax? Try checking the stories out at Snopes (www.snopes.com) - the online Urban Legend authority. Just enter the title or topic in the search box, and Snopes will return any entries they have on the subject. Well-researched information is available at your fingertips. This gives you a chance to play 30-second detective, and could help preserve your reputation with those your own contact list.

tydingslaw.com Tydings & Rosenberg LLP Presents:

MYTH: My children have a right to inherit my estate.

TRUTH: If you do not have a Last Will and Testament, your children will be entitled to a portion of your estate. However, you are able to disinherit a child in your Last Will and Testament. You cannot, however, disinherit your spouse. A spouse will always be entitled to at least a one-third share of your estate, barring a valid pre- or post-nuptial agreement to the contrary.

For more information, please contact L. Content McLaughlin, Esq., Tydings & Rosenberg LLP, 100 E. Pratt Street, 26th Floor, Baltimore, Maryland 21202. She can also be reached at (410) 752-9755 or cmclaughlin@tydingslaw.com. To view her biography, click here.

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www.wealthadvocacypartners.com Wealth Advocacy Partners Presents: Financial Savvy

QUESTION: Should I contribute the maximum to my employer’s retirement plan?

ANSWER: NEVER EVER take generic financial advice, given by the media, your friend and even your CPA before assessing your personal situation.

Many of our parents have comfortable retirements because they are receiving Social Security, maybe pensions and health benefits from their employers, and their lifestyles are fairly modest.
We recommend that our clients save between 15 and 20 percent of their gross incomes. That does not mean that all of that goes into their retirement plans.
So, how do you make this assessment?
Lack of accessibility: There is a 10 percent penalty if your take out funds before age 59½ unless you have a hardship.
Build up adequate reserves in bank accounts and cash values in whole life policies – these funds are safe and quickly available.
No Tax Diversification @ Retirement: Pre-tax is great today, but the piper will be paid. Most people are told they will be in a lower tax bracket at retirement, but think back on what you earned at your first job and compare that to today’s income. When your income goes up, so does your lifestyle.
If you can live on $25,000 a year you will be in a lower tax bracket than if you need $100,000/year. Don’t believe that you only will need 50 to 75 percent of your gross income at retirement. Are you planning for your lifestyle to go backward?
Accumulate retirement funds in investment accounts that are taxed TODAY at favorable capital gains rates, real estate and permanent life insurance. Now you also have more asset allocation than just investing in the choices in your retirement plans.
Do you have non-deductible debt? If you are carrying high-interest rate credit card debt pay this off first before making retirement contributions. It’s highly improbable that your retirement plan is earning more (especially in today’s market) than the rate your card is charging. Do you know the interest rate?
Do you have other goals that might precede your retirement? For example, funding college education or buying a home? Those need to be funded in non-retirement plan accounts and, if they are short-term goals, in accounts with minimal risk.
Borrowing out of your retirement plan to fund other goals is a BAD strategy if you have alternatives. You will never be able to recoup the growth you could have gotten had you not borrowed the money.
Your cash flow will be impacted immediately as your paycheck will be reduced as you start paying back the loan. While the loan interest does go back to you, are you aware that it is taxed before you pay it, and then again at retirement?
These are a few reasons to think before acting. At this point, you might be thinking, is there anything GOOD about these plans?

Absolutely to name a few:
Forced savings
Employer matches
Peer support at work
Limited investment choices is not as overwhelming as unlimited choices
Creditor proof until you start to spend them

The point is that maybe not ALL of your retirement savings should go into these plans. Take the time to decide how much and where to invest.These decisions will impact your life BEFORE and DURING retirement, as well as the LEGACY that you leave behind.

For more information, call Wealth Advocacy Partners at 410-527-1171 or click here.