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Put that old 401K back in use!I've received numerous questions as to the how and why to rollover a 401K so here goes.....As retirement approaches, money decisions become increasingly major. One big decision concerns what to do with the money in your old company retirement plan.

Consider a direct rollover. For most people, the most attractive option is an IRA rollover. In other words, you transfer the money from your 401(k), 403(b) or 457 plan into an IRA. It is not hard to accomplish, provided you have the guidance of a qualified financial advisor.

Basic steps:

A direct rollover is not the same thing as a direct payment to you. Yes, your employer can actually write you a check for the full amount of your 401(k) account, but 20 percent of that money will be withheld for taxes.

Do you want to avoid that 20 percent withholding? A direct rollover is the solution. It is a "trustee to trustee" rollover, which works like this: your employer writes a lump sum check not to you, but in the name of the trustee or custodian of the IRA that you are creating to hold the funds. You then let your company’s retirement plan administrator know that you’ll be doing a direct rollover. (There is almost always a form to be filled out, on which you can state the specific instructions for the distribution check.)

Your company sends you the check payable to the IRA trustee, with no withholding, and you have 60 days to deposit it in the IRA; day 1 is the day after you get the check. (Sometimes a wire transfer of assets occurs instead, between one investment custodian and another.) If you don’t complete the direct rollover in 60 days, you will pay tax on the entire amount. (There’s no grace period for weekends or holidays.)

If you want to leave work before age 59½ or you own shares of company stock, you should consider the tax implications created by those circumstances before attempting any kind of rollover.

When you leave a company, you usually have three options with your retirement plan: you can leave the money in the plan, roll it over into a new plan (if you elect to keep working for a new employer) or do a direct rollover into an IRA.

What you can and can’t do:

(Pay attention)
Is it time to roll over your retirement money? If that time is here or getting closer, you need to be very careful with what could possibly be the largest lump sum you ever receive. Be sure to ask a qualified financial advisor about your IRA rollover options today.

You can make unlimited direct rollovers of your retirement account assets, and you can add the money in your retirement plan to an IRA you already have, if you don’t intend to go back to work and put those assets into a new employer plan. Once your retirement plan assets are in an IRA, you can invest them in practically any way you choose. You can also set up your IRA to make systematic payments to you.

Good luck.

Contact Rodney Gilbert at rtgilbert_ft.newyorklife.com or (404)729-6485 if you have any questions.2010 IRA News!!!Beginning January 1, 2010, individuals with modified adjusted gross income exceeding $100,000 will be able to convert all or some of their IRA into a Roth IRA. In 2010, taxpayers have a one-time opportunity to split the income equally into 2011 and 2012 thereby spreading out the tax owed.

Eligibility, however, does not automatically make it a good idea. One size doesn’t fit all so be sure to consider your current and future tax brackets, non-deductible basis in your IRA, cash flow needs, estate intentions, and whether you can pay the tax due from outside sources, among other things.

For more Info. contact Rodney Gilbert (404)729-6485 or email at rtgilbert_ft.newyorklife.comFour Money Lessons for Parents and their ChildrenMommy I want that new video game! Dad I want the new I-Phone! Grandma I want the new Mac Book! Most parents have heard some variation of the above statements. Parents usually are the primary financial educators for their children. Time after time, I have seen young people receive sizable allowances or inheritances, without a base of knowledge in financial planning. Consider the following four points to assist the children in your life to have a responsible attitude about money.

1) Be a Role Model - The way parents spend money and the way children view money has a significant correlation. Consider discussing the family's financial goals and plans with the children. How much you share is to your discretion, but include the younger generation in at least a portion of the monthly management. How parents deal with money issues, from the monthly bills to planning family vacations can be important in teaching the children money management and the value of money.

2) Encourage Savings and Investments - To encourage children to save money is one of the simplest ways to encourage a responsible attitude about money. This could include designating a portion of a child's allowance to a saving account, or making gifts of cash directly to an account in their name. Parents can discuss the account statements with the children and introduce the concept of "paying yourself first".

3) Develop a Sense of Financial Empowerment - It is important that parents develop responsible spending habits by well thought-out choices. In order to guide and direct rather than dictate the savings and spending. Take children on window-shopping trips to compare prices and products and adopt the mind set that every trip to a store is an exercise leading to a potential purchase. For example, consider limiting impulse buying by implementing a rule that prices and products are compared at a minimum of three locations. I learned this technique working with a local municipality who mandated 3 quotes before a purchase.......Even if the first quote was from the manufacturer!!!

Go figure!

4) Give Unto Others - Involve children in the financial decisions regarding philanthropy. By helping children contribute time or money to a charitable cause, it can teach them that money is important in ways others than personal consumption.Investing Pitfalls can become Quicksand in TimeDuring these turbulent economic times, it has been difficult for many people to invest. However, investing is an absolutely imperative exercise in order to achieve your various financial goals. Here are five common pitfalls investors face and solutions to help you avoid them.

1) Getting a late start. Few investors start investing when they can, but wait until they must. The earlier you start, the easier it will be to achieve your goals. Let's compare an investor who starts investing $2,000 a year, at age 16 when they first start working versus the person who starts investing at age 26, when they have steady employment.

Assuming this practice is continued until age 65, with an ARR (annual return rate) of 10 percent, the early investor will have accumulated $2,114,379. The procrastinator will be left with a relatively paltry sum of $802,895. The difference is astonishing. Even if all you can afford to do is invest $25 a month, you should still put it to work for you, sooner rather than later. The extra time can provide spectacular results.

2) Not doing your due diligence. Many people will put more time into purchasing a stereo than they will into selecting a suitable investment. It should be the other way around. Do the proper research, and make sure you understand what it is you are buying.
Another point is to be objective. Emotions have no place in investing. A stock price will increase because of the fundamentals as portrayed in the financial statements, not because you have a gut feeling that it will take off.

Performing your due diligence is also relevant when it comes to selecting a financial advisor. If someone else is going to select your investments, you better make sure they are competent and experienced enough to do so.

3) Confusing investing with speculating. Many people believe they are investing when in fact it is more like gambling. It is OK to speculate with a portion of your funds, but you must realize that is what you are doing. The first speculative concept to avoid is day trading (i.e., trading very rapidly in and out of a stock). If it were as easy as it seems, then professionals with more time and better resources would be doing it. Since very few do, it is a sign that you should not pursue this path.

A similar concept is investing over a short period of time in risky stocks. Investing in equities with an expectation of making a big gain over the next six months or year is more along the lines of speculation than investing. To truly be investing, you need quality investments over a substantial period of years.

Perhaps the most devastating mistake an investor can make is listening to a "hot tip." If it sounds phenomenal, then get all the information, and do your research. If you still like it, then proceed. Rarely will the "investment" be deserving of your capital. Simply because a friend's uncle says that a stock will soar does not make it so. Once again, do the proper research.

4) Not diversifying adequately. Investors have a tendency to overweight their portfolio with a specific company, industry or investment type. A balanced portfolio should consist of all three of these. Too many people put all of their eggs in one basket, and get burned badly with a market reversal. There are professionals who have used focused portfolios successfully, but they are rare, and should not be imitated.

This does not mean you should be invested evenly between bonds and stocks, but it is a commendable to have a variety of both. With that being said, it may be advantageous for most young investors to contemplate owning predominantly equities. This can be helpful in overcoming the obstacle of keeping up with inflation. However, proper portfolio diversification needs to be made on an individual basis, after considering your risk tolerance.

5) Buying high and selling low. All too often, people take a position in a stock after the price has gone up, and sell out when the inverse occurs. It should be the other way around. Lack of conviction can make it tough to invest during challenging times. However, if the proper research has been done, this should not be a problem.

Ironically, recessions and market crashes provide excellent opportunities for investors. Often times, these apocalyptic and euphoric manias are driven by the media and analysts' reports, which simply follow the herd.

A contrarian (i.e., an investor who behaves in opposition to the prevailing wisdom) mindset, with the proper research, can often prove ideal to finding the best values during chaotic market movements. This is especially true for young investors who have time on their side to allow for a market turnaround.Take control of financial fearsIn her book ‘The 9 Steps to Financial Freedom’, Suze Orman asserts that at the root of issues many of us have with financial planning and money management is our fear of money. These fears have their groundings in our childhood memories of how the persons around us dealt with money and the power it seemed to have over their lives.

Based on our own personal circumstances and reactions we may become very unwise about money, spending beyond our means, or we may be overly cautious in our investment strategy. The first two steps in the aforementioned book force readers to take a look at their attitudes to money.

In addition to a lack of courage in money matters, there also appears to be a lack of knowledge. Despite the many “economists” our nation has, evidenced by the number of persons who call the radio talk shows with their solutions, few of us really understand how many of the financial instruments that are available work. This lack of knowledge may be due to our perception that the subject is too difficult and technical to understand, or it may be that our fear has made us avoid learning about the topic.

Money matters and financial planning in general can have persons cowering, but preparing for the day when the individual is no longer able to work appears to be the scariest scenario of all. Working as a Financial Professional I have deduced that there are three major attitudes to retirement planning. One belongs to a group of people who see retirement as death’s waiting room, the last bench on which they will sit before seeing their final doctor. These people not only avoid planning for their retirement, they may also avoid buying life insurance or writing their wills. (We will address the issues of the other groups — persons who believe that they have insufficient income to plan for their retirement and thus believe planning to be pointless, and procrastinators who view retirement as a long way off — in subsequent blogs.)

There is nothing wrong with having a fear. Being afraid of the unknown, of appearing foolish, or of our own mortality is normal. Yet because ultimately we wish to enjoy financially independent lives and not be a burden to others, we need to face our fears and take appropriate action. Our families and our children depend on us to be responsible. Writing a will for example, an important part of long-term financial planning, makes life that much easier for our loved ones. Seeking to understand the investment instrument that we have purchased, why it is the best for us, and the benefits and risks, will ultimately have an impact on our families. In being responsible for our financial well being we are being responsible to our loved ones as well.

Each of us needs to examine ourselves to discover what our fears are. What is stopping you from planning for your long term financial security? Some signs that maybe you are allowing yourself to be hindered by money fears include: (1) large sums of money placed unnecessarily in low interest bearing instruments such as savings accounts; (2) lack of a will; (3) chronic bank overdrafts and overspending on credit cards; or (4) not owning anything even though you have money to do so. Some of our fears will be dispelled with information.

I suggest a lot of research and there are many books and articles readily available in the market place today. Once you’re ready to put your plan together, you should speak with a financial advisor or a Consultant. They are not that scary.Get in while you fit into Real EstateHappy Labor Day!

I know the economy isn't doing as well as we all would like which is why we probably all know someone who is taking advantage of the current housing market. Notice, I did not say "bad" housing market because of the subjective nature of the word "bad".

If you are joining the millions of opportunists "good luck" If you are waiting on the market to hit rock bottom before you get started try not to wait until it's too late. By the time sources confirm the market has hit bottom, prices and interest rates are already on the upswing. Many people tend to sit back and watch before taking action, but if you watch too long, opportunities are missed.

The time to buy is now, but it should be done carefully. Investors need to purchase with the long-term returns in mind. With the right tools and/or the expert advice of an experienced property manager, it is easy to crunch the inventory of available properties down to a short list of homes that would make a truly great investment. Once you have a short list, you can shop for the best deal without compromising long-term investment ROI. This strategy will put you ahead of the masses that are getting a great "deal" on bad investments. Good Luck!How do I prepare a Financial Plan?

First and foremost, your financial plan should be a perfect fit for your life as it is today, easily and quickly adaptable to the constant changes life throws at you, and always focused on achieving your longer-term life goals. That’s a big — and important — deal.

So, the first question you must ask yourself is, do I need a financial plan? The simple answer is yes — if you have an income, a family (or the hopes of one), dreams of a comfortable retirement, and any of the dozens of other financially-rooted reasons that are unique to you.

The next question is, what are the elements of a sound financial plan? There are two answers to that question: the general and the specific.

In general, every financial plan should include: investment planning, cash flow planning, education planning, estate planning, insurance planning, retirement planning, and income tax planning.

The key to a successful financial plan is making sure that each of those elements is made specific to you and your needs — and to do that, a competent professional adviser will take you through this six-step planning process:

1. Goal setting — to determine and prioritize your goals and concerns.

2. Data gathering — assembling the relevant financial information to understand your current financial situation.

3. Financial analysis — using your current and projected financial situation to identify and answer questions like: How much tax must I pay? How can my taxes be reduced? Will I have enough income to cover my expenses during retirement? How can I better meet my income needs? How can I protect my family and income if I should become disabled or die unexpectedly?

4. Plan formulation and recommendations — discussing, reviewing and deciding on various alternatives and solutions for achieving your financial goals and improving your overall financial life.

5. Plan implementation — providing you with a written report summarizing the steps you need to take to make your plan work.

6. Monitoring and plan review — financial planning is not a one-time event. You should review your plan at least annually or when major life events occur.

Comprehensive financial planning is complex and necessary. To be sure you get exactly the right one for your situation, it’s a good idea to put a professional adviser on your financial team — an adviser with the qualifications, tools and track record you can count on to develop a personalized financial plan that will do the job for you — today and tomorrow.

End of the Year Tax Tips for 2009With the end of the year approaching many would like to learn more about what can be done now to lower their taxes for 2009. Are there stimulus offers we can take advantage of now before they expire?Yes! The following is a list of who can benefit from the 2009 Stimulus Package. Workers Unemployed First-Time Homebuyers College Students and Their Families New Car Buyers Families Retirees, Veterans and Disabled Current Homeowners Middle-Income Taxpayers Small Business If you are a small business owner I suggest you go to the the following link from the Turbo Tax website to view an extensive list of the Top Tax Incentives for Small Business Owners. http://www.2009stimulusforbusiness.com/?tab2. For many of us, there are a number of end of year tax savings tips you can utilize. One year end tax planning strategy you may want to consider is what is known as end of year tax- loss harvesting for your Non-IRA investment holdings. If you have an investment holding ie. stock or mutual fund that is worth less than what you paid for it, you can sell the position, recognize a loss then either buy into something else( I suggest very similar in nature to stay as close to original holding as possible ) or wait 31 days to buy back into the same position. This will allow you to offset any current gains dollar for dollar up to the amount of your realized loss and carry forward up to $3,000 of additional loss(if any remaining) for future years. You may also bee able to defer a year-end bonus, or delay the collection of business debts, rents, and payments for services. Similarly, you may be able to accelerate deductions into 2009 by paying some deductible expenses such as medical expenses, interest, and state and local taxes before year end. Simply looking at your EstateI know there has been a lot of concern over what the present administration will do about estate taxes, but Obama.....I'm sorry, President Obama has reiterated that the estate tax will be here for years to come. So with that in mind, let's keep our eyes on the original purpose of estate planning.

The primary purpose of estate planning is to transfer your assets according to your wishes after you die. If you have an estate plan in place, the transferring of your assets will go more quickly, and there will be a minimal amount of tax consequences. Also, having a plan in place will limit the amount of arguing that can ensue between family members over your assets. The more decisions you make now the less worry your family will have later. This post will, simply, outline the steps that need to be taken when drawing up an estate plan.

Inventory Your Assets

When writing an estate plan, you need to inventory and assign a value to all of your assets. Separating your assets into categories will make this process easier. You will need to make categories for your residence, savings, investments, life insurance, etc. Separating things into categories will help you organize all of the documentation that you will need to give your lawyer.

Professional Team of Advisors

You should not try and write your estate plan without the help of professionals. Most people do not have the expertise to write an effective estate plan. Your team should include experts in estate planning such as insurance underwriters, accountants, trust officers, and an attorney. I know, you can do it online for a few bucks. Just make sure it is legal and addresses the "not-so-typical" concerns that make your situation a little different than others.......i.e. family businesses, step-children......you know!

Insurance underwriters can review your coverage, and help you organize everything your accountant and attorney will need to help you with your plan. They can also help you avoid cash flow problems upon your death. Many underwriters can also advise you on ways to avoid unnecessary death taxes.

Accountants, like insurance underwriters, can advise you about death taxes. They can also help calculate the tax consequences of various transfers. If you own a business or other property, accountants can advise you on how to manage these properties, and whether or not you should continue the business or sell it.

Trust officers can help you choose executors or advise in setting up a trust fund. These professionals can also offer management and investment services. Trust officers can review your financial situation and help you achieve your financial goals.

The most important person on your team of professionals is your attorney. Your attorney will evaluate the advice given by the others on your team. You will make all final decisions about your estate plan with your attorney's confidential assistance. Your attorney will be able to produce all documents that are needed for an effective and legal plan.

Review Plan

Periodically, you will need to review your estate plan. Your life is constantly changing and these changes can affect your estate plan. Some examples of these changes are marriage or divorce, birth of children or grandchildren, death, financial changes, and changes in certain tax laws. Your attorney will help you review your plan and make any necessary revisions to your estate plan.

Talking about death can be difficult, but in order for a smooth transition of your assets to take place upon your death, an estate plan must be written. Having an estate plan in place before you die, will give you peace of mind, and will provide protection, whether emotionally or financially, for your family.

Let Your 'Will' Be DoneI know, It's a tough topic for many to talk about -- What will happen to your family, children and personal effects if you weren't around? However knowing more about it could help protect your pocketbook.

In the past few weeks we've been hearing a lot about Wills, Guardianships, Trusts and Estates. Especially after the passing of high-profile individuals like Michael Jackson. It can be a pain on the family and the legacy that's trying to be created. For the majority of Americans, these terms are not personal enough-nearly two-thirds of adults do not have a Will, and most of us should, especially if you have children.

Whether it's taboo or a tight budget standing in the way, get your paperwork done even if it's only to protect your children and their future from landing in the hands of a state judge and subsequently family members who you never thought had the sense God gave a brick.

Your family lawyer, a community law center or a site like nolo.com or legalzoom.com can be a great place to start-costs can run from $3,500 to $50. First, make sure you have a will in which you can name guardians for your children and pets, and beneficiaries for your assets and property. I am not a lawyer, but I can assure that the most precious things in your life at this time should, at least, be addressed in your will.

A will is essential, as well as appointing a power of attorney. Then put together a living trust, also known as a revocable trust, which will allow you to transfer all your assets into a protected trust, keeping your business and your money out of probate court-which can be expensive-and public record.

Also consider a living will, which will speak for you should you become incapacitated and appoint a medical power of attorney. This can, further, devastate grieving families with differing opinions and God knows, you don't want anyone making decisions with your life that have an interest in your death.

In a 'plain-vanilla' situation, an intelligent person with no tax issues can go online and do a reasonable document that would be better than having no will at all but as life happens with second marriages, step children and special needs like family businesses, legal counsel may be necessary to ensure your 'will' be done!

Legacies with Life Insurance?Who would have thought? Giving a life insurance policy is one way to maximize your contribution to the legacy you are en route to building. It enables you to make a significant, lasting gift with minimal outlay of current savings or income. Donors often struggle between their desires to achieve philanthropic goals and their need to preserve their estates for their families. Well what do you know a gift of life insurance can eliminate this conflict.

Life insurance offers a way to replace the loss of income that occurs when someone dies (usually the person who produces the majority of income in a family situation). It is a contract between you as the insured person and the company or "carrier" that is providing the insurance. If you die while the contract is in force, the insurance company pays a specified sum of money free of income tax "cash benefits" to the person or persons you name as beneficiaries.

A good life insurance program does more than just replace the loss of income that occurs if you die. It should also provide money to cover the new costs that arise after your death like funeral expenses, taxes, probate costs, the need for housekeepers and child care, and so on. And these cash benefits should provide for your family's future needs as well, including college education for your children and part or all of your spouse's retirement needs. In almost all cases, your beneficiary can use the cash benefits in the way he or she sees fit, without restriction.

Some types of life insurance "permanent life insurance policies" have a cash value that you can obtain by cashing out the policy or by borrowing against it. Though it can seem attractive, most financial experts agree that this feature should be seen as a secondary purpose of life insurance. Another type of insurance is term life insurance policies are available as well.The Legacy FormulaAs each of us aspires to build our own unique legacy, we too must consider both the measurable and intangible components of the equation. Here are some suggestions to help you build.The first challenge is to expand upon what you have traditionally considered important when you account for the outcomes of your actions. One of my main challenges as an Agent is to guide my client in broadening the spectrum of criteria they typically use to measure their financial success. I, personally, like Richards Monette's formula of:Success = Results X Fulfillment

The first variable in the equation – Results Delivered – is the most intuitive and rarely a challenge for us to grasp. To build a successful legacy, concrete, tangible, and quality outcomes must be delivered. Examples? Businesses must turn a profit......and Investments must yield positive returns.

Defining the fulfillment variable in the Success Formula is not a license to avoid the hard work required to deliver results. Like triple bottom-line accounting – Profit, Planet, People – or native wisdom – act with seven generations in mind – it involves sustained awareness, purpose and discipline, and leads to more efficient and effective actions. Most importantly, it sets the stage for building a lasting legacy, one purposeful action at a time.

All in all, use the K.I.S.S method to start small and make clearly defined goals for the future. Remember, the measure of legacies in the creation stage can only be judged by future assumptions in the beginning but ensure that every decision you make today is made with the future in mind.

legacy, we too must consider both the measurable and intangible components of the equation. Here are some suggestions to help you build your own legacy, one purposeful action at a time.Start fast! The longer you wait to identify and begin working toward your goals, the more difficulty you'll have reaching them. And the longer you wait, the longer you postpone the advantage of compounding your money.Gettting to know your financial situation. First, I will identify the financial goals you want to meet, your assets and liabilities, your risk tolerance, and investmentstyle.

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Educating the community. Minorities in the U.S. are less-likely to seek the services of a financial professional due to a lack of understanding of their options. My clients gain an empowering sense of financial responsibility that enables them to share their success with their community.

Look out for Uncle Sam. Understand we don't pay taxes, he takes them. Even in the 28% tax bracket our dollar will only give us 72 cents to manage our business. Take advantage of every tax-efficient vehicle available to help you meet your goals.

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