A Few Simple Basics to Remember When Planning for Retirement

 

First Financial Tax Group pic

First Financial Tax Group
Image: fftaxgroup.us

As a principal of First Financial Tax Group, based in Boca Raton, Florida, experienced financial advisor Barry M. Kornfeld works to provide his clients with high-quality products that meet multiple strategic goals. The firm’s core offerings include Co-Lending Opportunities (CLOs), formerly known as first position commercial mortgage notes. Barry Kornfeld’s clients have appreciated this particular financial vehicle’s ability to generate at least a 6 percent annual yield, that is paid out monthly, while also protecting their principal with first lien status on high value commercial real estate. By joining together with others, or Co-Lending, Kornfeld’s clients are able to participate, with a minimum of just $25,000, in large value transactions typically only available to large, institutional lenders.

Many people consult a financial professional as they look toward retirement. Expert consensus centers on a few core pieces of advice for those approaching retirement age:

Realize that retirement planning is complex. It involves capital gains, taxes, and a wide range of potential savings and income-generating products, some subject to taxation and others tax-sheltered. A qualified financial professional can provide much-needed guidance. Kornfeld’s firm, First Financial Tax Group also offers complete tax preparation services, by a licensed accountant, to those 50 and older, for just $69, which is often a substantial savings versus what many have been paying in years past for the same exact service.

Remember that income from retirement needs to make allowances for inflation, as the buying power of the same yearly fixed income decreases each time inflation rises. Here is a tangible example of this point in action. In today’s environment, CLO’s with at least a 6% annual yield, far exceed the 1% – 2% inflation rate that is widely reported by government statistics. Given their short maturity of 1 year or less, clients have the opportunity to either redeem for cash and pursue other opportunities, or renew into another CLO, with the then current yield offered for another short term maturity.

Draft a plan, and update it annually. The plan should cover how much you need to save each year as you proceed toward retirement, and it should specify the rate of return needed to meet your financial goals in retirement.

Understand that it is never too early or too late to begin saving for retirement. While younger workers need to make constructive use of their advantage of time, those 50 and older can still begin taking positive steps that will produce practical benefits. Many clients who are already retired, would like to preserve principal, while using that principal to generate a dependable monthly income. Kornfeld adds, “So how do 6% CLO’s look, given that reasonable goal? It’s up to each potential client to learn about their options. No one will do it for them.”

Advertisements

Three Lesser-Known Rules regarding Roth IRAs

Retirement pic

Retirement
Image: fftaxgroup.us

As a principal & financial advisor with First Financial Tax Group in Boca Raton, Florida, Barry M. Kornfeld helps clients understand their retirement savings options. Barry Kornfeld’s clients often seek advice on Roth IRAs, which enable them to grow retirement savings in a tax-free savings system.

Roth IRAs enable account holders to deposit money without receiving an up-front tax deduction, which differentiates them from traditional IRAs. Here are three lesser-known Roth IRA rules you may not know about.

1. Shared contribution limit: The 2017 limit for IRAs is $5,500, which must be split among all traditional and Roth IRAs held by an individual. If you exceed this maximum value, you must pay penalty taxes until you correct the excess contribution.

2. Fewer limitations: Roth IRAs offer more liberties in several areas when compared with traditional IRAs. Roth IRAs require no minimum distribution, and you can contribute to them at any age. Roth IRAs also enable account holders to withdraw money tax free, as long as that money was deposited at least five years ago.

3. Income cap: Roth IRAs are not available to individuals whose modified adjusted gross income (MAGI) totals $132,000 or to married couples filing jointly whose MAGI totals $194,000. However, individuals who exceed these income limits may qualify for a Roth conversion. Because this may result in a higher tax bill, it is best to consult with a qualified tax or financial advisor before converting.

Many of Kornfeld’s clients utilize the 6% secured CLO note (co-lending opportunity) within their Roth IRA’s, effectively turning the 6% annual yield into a “tax free 6% annual yield”.

What Are First Position Commercial Mortgage Notes?

Barry Kornfeld pic

Barry Kornfeld
Image: fftaxgroup.us

Barry M. Kornfeld is an experienced financial advisor based in Boca Raton, Florida. As a principal of First Financial Tax Group, Barry Kornfeld advises clients on alternative income and wealth management opportunities, including first position commercial mortgage (FPCM) notes.

For individuals planning for, or who are already in, retirement, first position commercial mortgage notes present an attractive alternative income source. First position commercial mortgage notes allow clients (of a given financial institution) to act as lenders of private third party loans. Secured by high value commercial real estate properties such as multifamily residential buildings, office buildings, and retail centers, these bridge loans yield monthly interest payments for a relatively short duration. At a minimum, they provide returns of six percent for one year, paid out monthly.

FPCM notes are a lower-risk option for individuals seeking alternative monthly income. As indicated by their name, first position commercial mortgage notes allow lenders to hold the first lien on a commercial property. This ensures that they hold priority over all other lien holders, giving them greater security.

First position commercial mortgage notes typically require a low minimum initial commitment of just $25,000 and may be strategically incorporated into a diverse array of financial portfolios. To take advantage of this opportunity, lenders may use funds from a variety of accounts, including trusts, joint accounts, or IRAs.

Tax Exemption Thresholds Remain Largely Unchanged in 2017

First Financial Tax Group pic

First Financial Tax Group
Image: fftaxgroup.us

Barry M. Kornfeld is the principal of First Financial Tax Group, a Florida tax and insurance services provider. As an experienced financial advisor, Barry Kornfeld strives to keep his clients up-to-date on the regulatory developments that could impact their financial strategies.

Every year, the United States Internal Revenue Service adjusts the thresholds and limitations for retirement plan contributions, tax credits and deductions, and personal exemptions. In 2017, many regulatory requirements affecting retirement planning remained unchanged from 2016. The majority of employees enrolled in 401(k), 403(b), and most 457 plans may still defer a maximum of $18,000 to their retirement accounts, while employees over 50 years old retain the right to defer an additional $1,000. Similarly, the annual IRA contribution limits of $5,500 for individuals under age 50 and $6,000 for those over 50 years old have not changed.

The IRS did make one noteworthy change to its estate and gift tax regulations. While the annual limit for gift tax exclusion holds steady at $14,000, the threshold for gift and estate tax exclusion has risen from $5.45 million in 2016 to $5.49 million in 2017.