Busdriver11, I noticed you balled somebody out for not using emoticons. I see you are using emoticons more and more. 
You have a good night.
Yes, I am trying to use them more, though I usually only use 
because thatâs the only one I can see what it is actually doing. Iâm resisting glasses. I edited my last post because I put the wrong one in, then couldnât figure out how to put it in the middle of a sentence after I typed it. It seems to always end up at the end, if I try to add it.
I didnât actually ball her out, I suggested she use them, because none of us seemed to be able to realize she was telling a joke. There are some people who never need to use them, because you can always tell theyâre messing with you, like GMTplus7, and DrGoogle.
Anyways, you have a good night too. And donât answer the door 8-X
Medicare is taking a hit because people are living longer and the people qualifying for Medicare is growing. Meanwhile, physician reimbursements are so slim with Medicare that for seniors relocating, finding a primary care physician accepting Medicare may be an issue. I hope they do find a way to have Medicare continue to work.
Just received my May 2015 Money Magazine. Cover story needs closer look (101 ways to build wealth). They have a 4 page (plus two page âcoverâ introduction) article âDo you really need a long-term care plan?â It says overall 30 to 40% of applicants are turned down for health reasons, and 17% of 50 to 59 year olds are disqualified (up from 14% in 2009). They mention one approach is to buy just enough coverage to provide a cushion (due to the high cost of LTC insurance premiums). Said avg age to buying is now 57, down from 67 a dozen years ago. Also one page article about Looking at Social Security and gives a break-even age (80.5) when total value of your higher benefits catches up with the amount you would have received had you started taking SS benefits earlier. It says the avg 65 year old will live about 20 more years. One page article about age proofing your home (make your house a home to last in retirement). Worthwhile read to people on this thread, including me.
@parent1337, I wasnât saying you should invest in housing. That was just an example that counters âI could do betterâ And I am not sure if you can compare SS to stock investment. Not only SS is guaranteed to be ther at FRA also I question how many people invest 100% in stocks, especially those earning less than $80K.
NRE, I am sure your numbers are correct. I picked 90% from the stat that 90% do not have savings for retirement. Regardless, the main thesis remains valid.
Is the water crisis in CA and other regions of the country making people concerned about retiring in those areas, and also how much do you think you will have to budget for increased with this precious commodity?
I feel for how the water situation will negatively affect everyone, esp those with their livelihood jeopardized.
Something about retirement is that one does need to be very aware of what can impact them, esp with very fixed retirement cash flow.
Something I have been glad about is that our home is in an area where we have septic systems (so only pay for water and not sewer) - we have never had a problem with our well-done septic (22 years). It helps that we are in the south where you donât have the septic bacteria killed over winter. We also are smart about what we put down garbage disposal, and had a separate line off of laundry room.
SOS I always assumed we will ultimately invade Canada and pipe that water where we want it.
Interesting article on buying up the worlds water supply. Disturbing to read. Written in 2010 so its old.
http://www.newsweek.com/race-buy-worlds-water-73893
So I need some very basic help.
H just retired this year. He has a great deal of income for this year and will add pension and consulting income on top of this. He is also in the process of forming an LLC.
I have 1099 income from a gig that started small but is now making some bank. I can also lose this in a heartbeat. Iâm probably good for this year though. I have never formed an LLC. I just pay self employment taxes.
We have always done our own taxes and just used his 401k for retirement funds. We have some outside stock investments and I have an IRA that I have not contributed to in years. We will be 59 1/2 in a few months.
We have made some financial errors along the way due to not having gathered enough info ( mostly concerning taxes).
So what professionals do we need to help us? Right now we have no one. Not even an attorney.
Apparently I have been leaving money on the table by not taking advantage of my self employment and want to stop that bleeding. This year will be especially confusing.
We really need to drop the taxable income.
So who am I looking for? Thanks in advance.
@sax I would ask around for some small companies that use a very good local CPA that can review your previous taxes with you (maybe worth even doing amended tax returns - can do so up to 3 years). Once you have this information in hand, you can determine if you want to use this tax service or can learn enough to navigate Turbo Tax and use all the advantages through their prompts. I used a CPA firm that I was familiar with but didnât ask enough about fees - got taxes done fine, but they charged me triple what would have been âreasonableâ. So since then I have used Turbo Tax, even with some ânew thingsâ like closing out an estate with K1 and 2K-1 forms.
I would also look around for a financial counselor who perhaps is a member of Ed Slott Advisors (very good on understanding tax implications). Our advisor Don is, and he also is quite knowledgeable about H/W SS timing. He was able to diversify our retirement holdings to make them safer for us and also having just as good or better return than higher risk that we had. We still manage 401k money that we cannot move until H retires or leaves employer - but we are also managing that better. I look at that about once a month now. This thread has me thinking about itâŠ
Sounds like you are maintaining pretty good income flow - that is great.
The mistake H and I made was not contributing to Roth over some years - we should have pulled back on 401k some and max out on Roth first. However it is not going to change our retirement picture, so donât beat yourself up over opportunities not taken.
If income is too high for Roth, can do IRA and then move to Roth IRA - this is called âback doorâ.
The advantage of having Roth investments is that you can âmanageâ your tax picture in retirement a little better IMHO.
@sax ,
To form an LLC, youâll likely need an attorney to file documents with the appropriate department in your state:
http://www.nolo.com/legal-encyclopedia/form-llc-in-your-state-31019.html
An LLC is taxed like a sole proprietorship, so youâll need to some help from a CPA about your bookkeeping and annual returns:
http://www.nolo.com/legal-encyclopedia/how-llcs-are-taxed-29675.html
Also research retirement plans for small businesses, if thatâs what you are looking for. Here are a few websites:
https://personal.vanguard.com/us/whatweoffer/smallbusiness/retirementplantool
https://www.fidelity.com/viewpoints/retirement-plan-small-business
Do some reading about small businesses and self-employment and that should point you in the right direction.
Sax, you can also set up a retirement plan on your own behalf for your business (even as a sole proprietor). Most ofhte major mutual fund companies offer prototype plans, which will help you avoid attorney fees for writing a plan doc (most use semi-customizable software for small plans, anyway). I used to be a 401(k) administrator for small plans and I would create plan docs for new clients. The plans generated by the software generally have a determination letter associated with it (a blessing from the IRS that the plan meets basic qualification standards), which also save the time, money and aggravation of getting a separate determination letter.
@SOSConcern ,@attorneymother,@countingDown.Thank you for getting me started.
So it looks like a good CPA can answer many of my questions. Looks like we need one for at least this year. I apologize to the CPAâs of the world as I did not know they did more than just enter my info into tax software. Oops. I will also get the true cost up front.
I will keep reading.
Finding a financial counselor who doesnât push to get control of my money is proving difficult. I will continue to look. I will keep reading. I will look into Ed Slott advisors. Thank you,SOS.
We will need an attorney to help with the LLC as H will be consulting with large corporations and we canât screw this up by doing it ourselves. We need to protect our assets. Thanks for all the links, attorney mother. Ugh. So much to learn. Your links are proving very helpful.
So what kind of attorney is this?
I will keep reading.
CountingDown, thanks for jumping in. That is exactly what I am looking for for myself and my little unexpected business. I donât want to start an LLC for this. I guess the CPA will keep us out of trouble with the amounts we are allowed to put in.
I need to max out the pre tax retirement monies but it canât cost me an arm and a leg to do it. I am lucky to be sitting on some cash to do this.
We donât have a Roth. I donât think it would be worthwhile for us to convert at this point⊠At least thatâs what all the calculators are telling me
I will keep reading.
Thank you, my friends. There is so much we donât know.
Sax, I found some good stuff on Vanguard, but the site is down for maintenance. (Disclosure: I worked at Vanguard in their small retirement plans unit when I first got out of college !) Will post it later.
Thanks for your time and help, @CountingDown
We made the mistake of not maxing out the 401k at his job the first 3 months so that he could reach the $24,000 limit before he retired. Now we donât have a 401 k to contribute to. So if he can have one through his LLC and I could have one as a sole proprietor of my self employment then we could reduce the income.
I think this is the right idea? Not sure what happens with filing jointly/ married but think we are on the right track.
I will look at Vanguard and start searching for a CPA. UghâŠI really do not like this stuff at all.
Sax, for consulting income (or some revenue like that) that you report on a schedule C, you can take a deduction into a SEP retirement account. This is what we do with schedule C income. You can do this even if you are contributing to other retirement plans with other types of income. So for us, with our salaries we contribute to 403s and with our consulting income to SEPs.
http://www.irs.gov/Retirement-Plans/Plan-Sponsor/Simplified-Employee-Pension-Plan-%28SEP%29
I have never set up an LLC for my consulting business and just use the Schedule C. I donât have any employees. I have had a SEP for years and maxed it out every year. I always do an extension on my taxes while the account figures out how much I can contribute and I get it funded. You have until the extension deadline to fund it. You can contribute much more than the paltry IRA lmits.
@Sax for one of your businesses, it sounds like you need to have attorney and CPA coordination (I had done this when I was in line to purchase a home healthcare business).
An interesting side note on the home healthcare business that fell through - the owner decided to use a national broker, and when my attorney discovered the lack of CON (Certificate of Need) for the business in our state, the national broker had never run into that situation with a viable home health business over all their years and all the businesses they had represented nationally.
For the smaller business, @singersmom07 suggestion may be what your CPA suggests.
I know when H worked in a small company, they had a SAR-SEP, and we eventually rolled those funds into something else - IRA I believe.
There is a lot of trust and confidence through legal and accountant representation. When our attorney moved from one law group to another, we moved with him. Our accountant did a good job on my personal returns, but ended up way pricey - I was familiar with them through a prior healthcare job where I was CFO for a physician group, and I think a lot had changed with their overhead to jack up their prices.
Up front business professional advising is money well spent. I throw out the home healthcare business example.
I would look for a lawyer that deals with consultant situations, preferably in your industry and with the states where the work is taking place - they will know the ins-and-outs (or if they are in a law group that has that expertise). For example, my lawyer consulted with his partners which were in our million plus city in our state that is a big healthcare center - and he was sorry he didnât consult with them sooner, because that is what uncovered the lack of CON âlicenseâ with the State.
@Sax â
https://investor.vanguard.com/what-we-offer/small-business/overview
https://personal.vanguard.com/us/whatweoffer/smallbusiness/retirementplantool
https://investor.vanguard.com/what-we-offer/small-business/individual-401k
http://www.vanguard.com/pdf/s579.pdf?2210038270
Wow. Well, quite a bit to figure out. I guess we will start with the CPA and work from there. If I just take advantage of the SEP it might be the best thing going.
Maybe H will end up just filing schedule C and have the same deal. I will make an appt with the CPA tomorrow.
Hey. Thank you, counting down. Sitting here in front of the TV with iPad in hand. I will be reading all your links. Hopefully someone else is also benefiting from everyoneâs knowledge. Thanks.