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Money November 2015

Dollar Sense

October Potpourri

By Teresa Ambord

Even if you take your first RMD on April 1, 2016, you’ll still need to take your second one by the end of the year 2016. You can avoid taking two payments in one tax year by making sure to take your first distribution before the end of 2015.

Avoid Penalties: Be Ready to Take Your Required Minimum Distribution Before the End of the Year

Did you turn 70 ½ this year? If so and you have at least one retirement account (other than a Roth IRA), you’ll need to begin taking required minimum distributions (RMD) soon.  Assuming you turned 70 ½ in 2015, you have until April 1, 2016, to take your first RMD. 

In subsequent years, you must take your RMD by December 31st. In fact, even if you take your first RMD on April 1, 2016, you’ll still need to take your second one by the end of the year 2016. You can avoid taking two payments in one tax year by making sure to take your first distribution before the end of 2015. After that, you’ll need to continue to take an RMD every year by the end of the year, while you have retirement accounts.

 

What if you fail to do so? The penalty is harsh, equal to 50% of the amount you should’ve taken. 

How much must you withdraw?  If you have a financial adviser, he or she can provide you with the calculation and arrange for the withdrawal. However, many people put off requesting their withdrawals until the end of the year. Don’t make that mistake, or you run the risk of hitting a rush, and missing the deadline.

In general, the RMD can easily be calculated yourself by dividing the balance in a plan by the appropriate life expectancy factor from the IRS.

 

At Holiday Time, Keep Your Eyes Wide Open for Signs of Elder Abuse

Older people make great victims, from the point of view of a thief. Not because they’re less intelligent. More likely, it’s because they are more trusting, and often, less able to fight back. The Federal Trade Commission (FTC) suggests several signs to look for that may indicate elder abuse, from a family member, a family friend, a caretaker, or a stranger. 

  • Sudden changes in the elder’s financial situation. Did your uncle change his will, disinheriting the family in favor of his caregiver?
  • Bills left unpaid.  If the elder suddenly starts getting shut-off notices from utility companies, or threats from the bank, it could be someone is hijacking his or her funds.  Often it is the faithful postal worker who has delivered mail to your aunt for years who notices the cutoff notices first, and reports the change.
  • Unusual purchases and/or significant withdrawals.  Your aunt who is not a spendthrift suddenly starts getting credit card bills for items she is unlikely to order, like expensive electronics. Of course, if one or some of these signs is present, there could be another explanation. But be aware of the senior’s situation and do what you can to check it out. 

If there’s immediate physical danger, call 911. Otherwise, call Adult Protective Services in your area to report what you see and get advice.

The FTC says older adults are often the best people to spot elder abuse in a fellow senior. Keep your eyes open and if something seems wrong, tell someone. If you don’t want to bring in the authorities, talk to a pastor. You can even talk to a teller at your bank. Tellers are trained to spot elder abuse that involves finances. At the very least, he or she can give you guidance.

 

What’s in Your Safe Deposit Box?

If you have a safe deposit box it’s a great place to store some items, and a terrible place to store others.  Stick to storing items that are hard to replace, like your passport and other documents, and small valuable items.  According to Ryan Mack, president of Optimum Capital Management in New York, the rule of thumb for what goes in your safe deposit box should be: “If these documents were lost, I’m in big trouble now.”

  • An inventory of your major household items, in case you have to file an insurance claim.
  • Deeds and titles, such as to your home and car.
  • Original birth certificates and marriage license, death certificate, certificate of divorce, custody record.
  • Certificates of stocks and bonds.
  • Valuable jewelry you seldom wear.
  • A copy of your power of attorney, and advance directive forms, but be sure to have the originals at home.
  • Military service records.
  • Social Security cards.
  • Record of health information, like vaccinations.

 

What not to put in a safe deposit box:

  • The original or only copy of your will. Why?  Only you and a co-signer, if you have one, can get into the safe deposit box, even if you give someone your key. If you die or become incapacitated, a problem arises. Depending on the state you live in, the bank may have to seal a safe deposit box when you die and a court order may be required to open it.  And for your own protection, the process of getting items out of it may be very tough.
  • Cash.  Your bank may be federally insured, but your safe deposit box isn’t, unless you provide insurance yourself. 
  • For the same reason, don’t put valuables in the box unless you have inventoried them and insured them (they may be insured through your homeowner policy). Ask your insurance agent if your homeowner policy covers the items in your safe deposit box.  Also, a company you’ll find online called Safe Deposit Box Insurance Coverage (or call for information at 1-224-227-6181) is relatively new, and does offer insurance on your safe deposit box contents for a reasonable fee.

 

Kids Coming to Your House for the Holidays?

Here are some freebies you can get for them off the Internet.

For Thanksgiving:

http://www.snapfish.com/snapfish/storepage/storePageId=page-printables-thanksgiving

 

Printable Christmas pages to color:

http://www.free-coloring-pages.com/christmas.html

 

Color Christmas pictures online:

http://www.free-coloring-pages.com/online.html

 

Games, pictures, puzzles, and more:

http://www.snapfish.com/snapfish/storepage/storePageId=page-printables-education-christmas

 

Teresa Ambord is a former accountant and Enrolled Agent with the IRS. Now she writes full time from her home, mostly for business, and about family when the inspiration strikes.

Meet Teresa