Check out the latest edition of our newsletter!
NOVEMBER/DECEMBER 2023
Financial Horizons Your Connection for Wealth, Lifestyle & Legacy
McBeathFinancialGroup.com
309.808.2224
Meet Zack, Our Newest Financial Planner! HE CAN’T WAIT TO WORK WITH YOU
Hey folks, it’s Zack here! McBeath Financial Group brought me on board as an investment
work, and I love using my skills in the McBeath office alongside Krista and Julie.
As cheesy as it sounds, I feel like I’m living my college dream: I do meaningful work, then go home to Jenna and our two beautiful kids. Our youngest, Grace, was just born this September. She has already brought so much joy to our lives. Our oldest, Bennett, is an energetic and happy 3-year-old. Jenna and I are always busy adventuring with him! She’s a stay-at-home mom, and I truly appreciate how hard she works around the clock to support our family. Without her watching the kids at home, I wouldn’t be able to spend my days at McBeath helping you. Our jobs go hand-in-hand. Of course, when I’m not at work, I spend as much time with Bennett and Grace as possible. Bennett loves frequenting every park in Bloomington-Normal and having me push him on the swings as long as possible. Our family is happiest in nature, whether we’re hiking, picnicking, or playing in the snow. I’m already looking forward to building snow forts and snowmen all winter. That said, we also spend a lot of nights inside during this time of year. My favorite indoor pastime is watching baseball — although I won’t give away who I root for. If you want to debate team loyalties, ask me about my jersey collection next time you’re in the office! I’m always happy to chat about sports, finances, or my little family. CFP, RSSA –Zack Brewer
adviser representative this summer, and I’ve been sitting in on client consultations, working on financial plans, and helping people like you with ongoing tax planning ever since. It might sound funny, but
I still enjoy meeting new people (like at the hotel), but I also love learning about your families, goals, churches, hobbies, and aspirations during the planning process. I’ve already made a
this job fulfills a dream that started way back when I was in college in Chicago, working the front desk of a huge hotel.
lot of friends among our clients — maybe including you! Building those bonds alongside your customized financial plans has been my favorite part of the job so far.
I loved my work there — it was neat to meet people from all over the world, answer their questions, and keep operations running smoothly. But I quickly realized the hotel industry wasn’t conducive to a healthy personal life for me. At the time, my girlfriend Jenna and I were talking about long-term plans like eventually starting a family, and I knew that if we had kids, I’d want to be home with them on weekends and holidays, not stuck behind a desk. So, I pursued my interest in finance instead. Luckily, it worked out well, and Jenna is now my wife! I went into banking in 2013. I started as a retail banker, then became a wealth management assistant, then a wealth management specialist, and finally the financial planning advisor. In 2019, I earned the CERTIFIED FINANCIAL PLANNER™ certification. It took three years of hard
309.808.2224 1
How Much Tax Will You Pay in Retirement? Retirement Question No. 5
Stepping into retirement can often symbolize a welcomed shift from working years to a time of rest, relaxation, and reaping the benefits of a life of sacrifice. However, an aspect of this new chapter that many retirees may find surprising is the persistent presence of taxes. It’s a common misconception that one’s tax obligations will decrease significantly during retirement due to lower income. However, the reality is often quite the opposite. Many retirees may find themselves facing higher tax liabilities. Most notably, the growth of investments within taxable retirement accounts can create more tax liabilities than anticipated. Hence, understanding the tax landscape of your retirement income sources and their specific rules is an integral part of your retirement planning. The five most common types of retirement income — Social Security benefits, IRA and 401(k) withdrawals, pension income, investment income, and annuity distributions — all have unique tax rules:
4. ANNUITY DISTRIBUTIONS: The tax rules for annuity payments vary based on whether your annuity was purchased with after-tax dollars. A part of each payment is considered a return of principal, and a part is considered interest. Only the interest portion is included in your taxable income and is taxed as ordinary income. Note: if your annuity is an IRA, all income is taxed as an IRA. 5. INVESTMENT INCOME: Even in retirement, you’ll still owe taxes on dividends, interest income, and capital gains. If you’re selling investments to generate retirement income, each sale will produce a long- or short-term capital gain or loss, which must be reported on your tax return. Another important consideration when planning for retirement taxes is your Medicare premiums. High-income retirees may face the income- related monthly adjustment amount (IRMAA). This surcharge increases Medicare Part B and Part D premiums if your modified adjusted gross income (MAGI) exceeds a certain threshold. Strategic income management in retirement can help you minimize or avoid the IRMAA surcharge.
1. SOCIAL SECURITY INCOME: If Social Security is your sole source of income, you likely won’t owe any taxes in retirement. However,
up to 85% of your Social Security benefits could be taxable if you have additional income. The more non-Social Security income you have, the greater the taxable portion of your benefits. State income tax will vary. In Illinois, Social Security Income is considered non-taxable.
In order to gauge your ongoing tax obligations in retirement, you need to establish a detailed overview of all your potential income sources, calculating how much of each will be taxable annually. But don’t stop at year one; project these calculations forward, considering the potential growth of your income sources, inflation, and the impact of required minimum distributions (RMDs) from certain accounts, starting at age 73 to 75, depending on the year you were born. Navigating this financial maze doesn’t have to be a solo mission. Financial planners with a specialization in tax planning can provide valuable assistance. They can help you strategically plan to minimize taxes,
2. IRA AND 401(K) WITHDRAWALS:
Withdrawals from tax- deferred retirement accounts
like traditional IRAs and 401(k)s are considered ordinary income and taxed accordingly. The amount of tax owed depends on your total income,
deductions, and tax bracket. However, state taxes vary — for example, in Illinois, such income is not subject to state tax. On the other hand, Roth IRA withdrawals are generally income tax-free, as taxes are paid on contributions upfront. 3. PENSION INCOME: Receiving payments from private and government pensions in retirement often comes with a tax obligation. These payments are generally fully taxable at your ordinary income tax rates, assuming no after-tax contributions were made to the pension plan. However, state taxes vary — again, like 401k and IRA income, in Illinois, such income is not subject to state tax.
advise on the optimal timing for withdrawals, assist in potential Roth conversions, guide you toward tax-efficient investments, and help manage possible IRMAA surcharges. Being proactive with your tax planning can have significant benefits. It can help you maintain your net retirement income, reduce the tax impact of RMDs, and decrease future tax liabilities for your heirs. By understanding and preparing for taxes in retirement, you’re taking an essential step towards securing a financially stable and enjoyable retirement. The complexities of the tax landscape in your retirement years may seem daunting, but with careful planning and expert guidance, you can navigate them effectively.
2 McBeathFinancialGroup.com
Believe it or not, Americans still love to read. But how we read is changing, with 52% of people reporting they enjoy their literature on an e-reader. Unlike traditional paper books, digital readers offer users a variety of accessories to enhance their reading experience, which makes them more appealing than paper. So, we wanted to share a few accessories for your device that take your reading to the next level! ANTI-DUST PLUGS These are little rubber stoppers you can pop into the micro-USB or USB-C port to prevent dust or debris from entering Elevate Your E-Reader Setup for Ultimate Comfort and Convenience!
SUDOKU
SOLUTION ON PG. 4
and damaging your device. Some even have charms on the end so they look cute while protecting your reader!
SUCTION OR STICK-ON GRIPS These tiny knobs (like the ones you can put on your phone) make holding your device with one hand a lot easier. They attach to the back of the device using suction, a light adhesive, or even magnetism. You can slip the knob between your
fingers, so you don’t need to worry about losing your grip!
AN E-READER STAND This accessory will keep your e-reader upright, so you can look straight ahead and read hands- free without craning your neck downward.
To learn more about these accessories, search online using your e-reader’s name and the accessory type you’re looking for!
309.808.2224 3
Published by Newsletter Pro • www.NewsletterPro.com
PRST STD US POSTAGE PAID BOISE, ID PERMIT 411
203 Landmark Dr., Unit A - Normal, IL 61761 - 309.808.2224
INSIDE
1
Meet Zack: Financial Wizard and Loving Dad
2
What to Know About Paying Taxes in Retirement
3
Maximize Your E-Reading Pleasure
4
Did the FBI Really ‘Steal’ $86 Million?
SOLUTION
Hang On — The FBI Robbed a Bank? Advisory services are offered through Landmark Wealth Management Inc, dba McBeath Financial Group, an Illinois Registered Investment Advisor firm. Insurance products and services are offered through McBeath Tax and Financial Services, LLC. McBeath Financial Group and McBeath Tax and Financial Services, LLC are affiliated. All content of this newsletter is for informational purposes only. Opinions expressed herein are solely those of McBeath Financial Group and our editorial staff. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual financial professional prior to implementation. Copyright 2021 McBeath Financial Group. THE STORY BEHIND A MIND-BLOWING CALIFORNIA RAID
“This was the largest armed robbery in United States history, and it was committed by the FBI.” That jaw-dropping statement came from Robert Frommer, an attorney representing several hundred people whose safe deposit boxes were emptied during an FBI raid in 2021. The story is wild from start to finish. On that fateful day in March, armed FBI agents stormed a California strip mall and burst into a U.S. Private Vaults bank branch. They searched 1,400 safe deposit boxes and confiscated the contents of many of them — making off with roughly $86 million, plus valuable collectibles like coins, gold, and jewelry. Why would the agency do this? Well, after a two-year investigation, the FBI suspected U.S. Private Vaults was catering to drug dealers and other criminals hiding cash in Los Angeles. So, the agency obtained a warrant and raided the bank to look for proof. And apparently, they found it. After the raid, U.S. Private Vaults pleaded guilty to conspiracy to launder drug money and closed its doors for good. However, that wasn’t the end of the saga.
Remember attorney Robert Frommer? Roughly 400 people who kept their money at U.S. Private Vaults hired him to get the contents of their safe deposit boxes back from the FBI. They said they weren’t criminals and wanted their money back. One of those people was Joseph Ruiz, who lost $57,000 in savings during the FBI raid. He filed a lawsuit, claiming the raid was unconstitutional. When the FBI accused Ruiz of making his money through illegal drug sales, Ruiz showed proof of his income, and in August 2021, the FBI agreed to return his funds. However, not every U.S. Private Vaults customer has been so lucky. In September 2022, a judge ruled that the FBI raid was legal under civil forfeiture laws and dismissed the depositors’ class-action lawsuit. An FBI spokesperson also said the agency was putting a process in place to return items to innocent owners, but as of March 2023, at least one person still claimed she hadn’t gotten her money back — even though she wasn’t criminally charged.
If this story ever becomes a Hollywood movie, we’ll be first in line at the box office.
4 McBeathFinancialGroup.com
Published by Newsletter Pro • www.NewsletterPro.com
Page 1 Page 2 Page 3 Page 4Made with FlippingBook Ebook Creator