By: Kenneth Himmler, Sr | June 19, 2018

You're beginning to accumulate substantial wealth, but you worry about protecting it from future potential creditors. Whether your concern is for your personal assets or your business, various tools exist to keep your property safe from tax collectors, accident victims, health-care providers, credit card issuers, business creditors, and creditors of others.
To insulate your property from such claims, you'll have to evaluate each tool in terms of your own situation. You may decide that insurance and a Declaration of Homestead may be sufficient protection for your home because your exposure to a claim is low. For high exposure, you may want to create a business entity or an offshore trust to shield your assets. Remember, no asset protection to...

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By: Kenneth Himmler, Sr | June 19, 2018

You've identified your goals and done some basic research. You understand the difference between a stock and a bond. But how do you actually go about creating an investment portfolio? What specific investments are right for you? What resources are out there to help you with investment decisions? Do you need a financial professional to help you get started?

A good investment portfolio will spread your risk

It is an almost universally accepted concept that most portfolios should include a mix of investments, such as stocks, bonds, mutual funds, and other investment vehicles. A portfolio should also be balanced. That is, the portfolio should contain investments with varying levels and types of risk to help minimize the overall impact if one of t...

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By: Kenneth Himmler, Sr | June 19, 2018

If you're older and/or in poor health, you're definitely somebody who should have health insurance coverage. Unfortunately, you don't, and you're having difficulty getting it. All of the insurance companies you've applied to refuse to offer you coverage because they see you as too great a risk. They may even classify you as totally uninsurable. The good news is that you're not without options.

Shop around

In reality, few people are totally uninsurable. More likely, you're one of the "hard to insure." The variety of health insurance sources in this country means that most people have at least one option available to them. Most states have an insurer of last resort (e.g., Blue Cross Blue Shield) that must accept all applicants. In add...

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By: Kenneth Himmler, Sr | June 19, 2018

The health-care reform legislation enacted in 2010 included new Medicare-related taxes that first took effect in 2013. These new taxes target high-income individuals and families. Here are the basics:


Additional Medicare payroll tax

If you receive a paycheck, you probably have some familiarity with the Federal Insurance Contributions Act (FICA) employment tax; at the very least, you've probably seen the tax deducted on your paystub. The old age, survivors, and disability insurance ("OASDI") portion of this FICA tax is equal to 6.2 percent of covered wages (up to $128,400 in 2018, $127,200 in 2017). The hospital insurance or HI portion of the tax (commonly referred to as the Medicare payroll tax) is generally equal to 1.45 percent of...

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By: Kenneth Himmler, Sr | June 19, 2018

Whether you're seeking to manage your own assets, control how your assets are distributed after your death, or plan for incapacity, trusts can help you accomplish your estate planning goals. Their power is in their versatility--many types of trusts exist, each designed for a specific purpose. Although trust law is complex and establishing a trust requires the services of an experienced attorney, mastering the basics isn't hard.

What is a trust?

A trust is a legal entity that holds assets for the benefit of another. Basically, it's like a container that holds money or property for somebody else. You can put practically any kind of asset into a trust, including cash, stocks, bonds, insurance policies, real estate, and artwork. The assets you ch...

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By: Kenneth Himmler, Sr | June 19, 2018

It's hard to talk about college without mentioning financial aid. Yet this pairing isn't a marriage of love, but one of necessity. In many cases, financial aid may be the deciding factor in whether your child attends the college of his or her choice. That's why it's important to develop a basic understanding of financial aid before your child applies to college. Without such knowledge, you may have trouble understanding the process of aid determination, filling out the proper aid applications, and comparing the financial aid awards that your child may receive.

But let's face it. Financial aid information is probably not on anyone's top ten list of bedtime reading material. It can be an intimidating and confusing topic. There are different ty...

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By: Kenneth Himmler, Sr | June 19, 2018

If you have a 401(k) plan at work and need some cash, you might be tempted to borrow or withdraw money from it. But keep in mind that the purpose of a 401(k) is to save for retirement. Take money out of it now, and you'll risk running out of money during retirement. You may also face stiff tax consequences and penalties for withdrawing money before age 59½. Still, if you're facing a financial emergency--for instance, your child's college tuition is almost due and your 401(k) is your only source of available funds--borrowing or withdrawing money from your 401(k) may be your only option.

Plan loans

To find out if you're allowed to borrow from your 401(k) plan and under what circumstances, check with your plan's administrator or read your summar...

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By: Kenneth Himmler, Sr | June 19, 2018

A natural disaster like a tornado or a fire can strike your business at any time, possibly resulting in a forced shutdown and an interruption of your normal business process. Such an event can lead to direct losses and indirect losses. Although your business's property and casualty insurance will likely cover your direct losses (e.g., any property that's been damaged, the expense of rebuilding your business facility), it probably won't cover any indirect losses. Indirect losses include ongoing business expenses and extraordinary expenses, like rent for a temporary location, that your business wouldn't have incurred if the perilous event hadn't happened.

Business interruption insurance is designed to cover your indirect losses in the event th...

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By: Kenneth Himmler, Sr | June 19, 2018

You're ready to buy an insurance policy, but you feel a bit uneasy embarking into the insurance world. After all, the language can be technical, and you're wary of insurance agents throwing sales pitches at you. Whether you're buying an auto policy, a homeowners policy, a life insurance policy, or some other type of policy, here are some general tips to help you tread the insurance waters.

Comparison shop

Perhaps the single most important thing you can do when buying insurance is to shop around. You don't want to rely on a quote from just one company. Compare the policies and prices of several different insurance companies. Prices can vary by hundreds of dollars depending on the benefits offered and the company's internal pricing strategies. ...

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By: Kenneth Himmler, Sr | June 18, 2018

When you change jobs, you need to decide what to do with the money in your 401(k) plan. Should you leave it where it is, or take it with you? Should you roll the money over into an IRA or into your new employer's retirement plan?

As you consider your options, keep in mind that one of the greatest advantages of a 401(k) plan is that it allows you to save for retirement on a tax-deferred (or in the case of Roth accounts, potentially tax-free) basis. When changing jobs, it's essential to consider the continued tax-deferral of these retirement funds, and, if possible, to avoid current taxes and penalties that can eat into the amount of money you've saved.

Take the money and run

When you leave your current employer, you can withdraw your 401(k) fun...

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By: Kenneth Himmler, Sr | June 18, 2018

You're house hunting, and you've brought along a wish list of features that you consider important, such as a certain number of bedrooms, adequate storage, and an up-to-date kitchen. But does your list include features that will affect your homeowners insurance premium? Buying a well constructed home equipped with certain safety devices may allow you to qualify for a lower insurance premium and help you avoid future insurance claims.

Home traits that affect premium rates

Because a home's location, construction, and safety features can affect the premium you'll pay for homeowners insurance, you'll usually be asked to provide specific details about the home you're purchasing when you request an insurance quote. This information will be used, al...

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By: Kenneth Himmler, Sr | June 18, 2018

Annuity distributions are categorized in two ways: withdrawals or annuitization (guaranteed income stream). The annuity contract itself explains the annuitization payout options available to you, including when they begin, whether the amount can be fixed or variable, and how long the payouts will last.

Note: Guarantees are subject to the claims-paying ability of the issuing insurance company. Annuities are not FDIC insured.

When the money starts rolling in

Annuity payouts may begin immediately or may begin many years after you purchase an annuity. This is the difference between deferred and immediate annuities. Deferred annuities allow premium payments to grow with tax-deferred investment earnings. Later (often after retirement), the annuity p...

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By: Kenneth Himmler, Sr | June 18, 2018

It's hard to imagine functioning in today's society without access to credit. However, you need to be careful not to fall victim to some of the pitfalls associated with it.

Revolving credit can make it hard for you to pay off debt

Credit cards allow you to spend money you don't currently have, and to repay what you've spent over time instead of all at once. When you use a card, the balance you owe increases, and your remaining available credit decreases. As you make your payments to reduce your outstanding balance, your available credit once again increases. Thus, your credit revolves around for you to use again.

Since you can spend more than you currently have, you can easily spend more than you can afford. As your balance increases, your min...

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By: Kenneth Himmler, Sr | June 18, 2018

A 401(k) in-plan Roth conversion (also called an "in-plan Roth rollover") allows you to transfer the non-Roth portion of your 401(k) account into a designated Roth account within the same plan. The amount you convert is subject to federal income tax in the year of the conversion (except for any nontaxable basis you have in the amount transferred), but qualified distributions from the Roth account in the future are entirely income tax-free. The 10% early distribution penalty doesn't apply to amounts you convert (but that tax may be reclaimed by the IRS if you take a nonqualified distribution from your Roth account within five years of the conversion).

What part of my account can I convert?

Assuming your 401(k) allows in-plan conversi...

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By: Kenneth Himmler, Sr | June 18, 2018

During your working years, you've probably set aside funds in retirement accounts such as IRAs, 401(k)s, or other workplace savings plans, as well as in taxable accounts. Your challenge during retirement is to convert those savings into an ongoing income stream that will provide adequate income throughout your retirement years.

Setting a withdrawal rate

The retirement lifestyle you can afford will depend not only on your assets and investment choices, but also on how quickly you draw down your retirement portfolio. The annual percentage that you take out of your portfolio, whether from returns or both returns and principal, is known as your withdrawal rate. Figuring out an appropriate initial withdrawal rate is a key issue in retirement p...

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