News
Change is the only constant in life, and Charleton Financial is no exception. We strive to provide personal service of the highest quality for our clients. We want you to know what we are doing to achieve this and what new products and services we are offering. You can rest assured that we will be open and honest with you about all of the changes at Charleton Financial, and how they will benefit you. We also want to keep you informed of financial news that may affect you.
New Law Suspends Required Minimum Distribution for 2009
Withdraw From Your Retirement Account Only If It’s Right For You
A recent tax law change promises to help give older Americans some much needed financial flexibility as they seek to manage their finances during this difficult economic time. A key provision in the recently passed Worker, Retiree and Employer Recovery Act of 2008 (the “Act”) is designed to help alleviate the financial burden facing seniors who have seen their retirement savings decrease in value. The new provision provides relief to taxpayers by allowing them to continue to keep money in retirement accounts that they are typically required by law to withdraw once they reach age 70 1/2. Here's a brief summary of this new provision:
As you know, the tax laws generally require individuals with retirement accounts to make required withdrawals based on the size of their account and their age every year after age 70-1/2. This rule is intended to prevent wealthy individuals from using retirement accounts as a tax shelter. Any individual who fails to take a required minimum distribution (RMD) is heavily penalized under the law, which taxes the amount not withdrawn at 50%.
The new law suspends the RMD from retirement accounts for calendar year 2009. This waiver, which is available to everyone regardless of their total retirement account balances, applies to all defined-contribution plans, including 401(k), 403(b), 457(b), and IRA accounts. Suspending the mandatory withdrawal allows retirees to keep the money in their account if they choose, and possibly recover some of their losses.
The Committee Reports to the Act say the provision does not apply to any RMD for 2008 that is permitted to be made in 2009 by reason of an individual's required beginning date being April 1, 2009. Thus, a taxpayer who attained age 70-1/2 in 2008, but chose to wait until April 1, 2009 to receive his/her first RMD (for 2008), would still have to make that first RMD by April 1, 2009. However, he/she would not have to make the otherwise-required RMD for 2009.
This relief (referred to as the “2009 RMD waiver”) applies to life-time distributions to employees and IRA owners and after-death distributions to beneficiaries. For example, if the five-year rule is used for determining the RMD for an individual who dies before his/her required beginning date, then the five-year period under that rule is determined without regard to calendar year 2009. Thus, for an account of an individual who died in 2007, the five-year period ends in 2013, instead of 2012.
Please keep in mind that this is only a summary of this new provision. If you would like to discuss this matter further, please do not hesitate to contact us.
IRS 230 Disclosure: Any discussion pertaining to taxes in this communication may be part of a promotion or marketing effort. As provided for in government regulations, advice (if any) related to federal taxes that is contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. Individuals should seek advice based on their own particular circumstances from an independent tax advisor.
CRN: 200901-2024634
The Power of Lincoln
Charleton Financial Now Affiliated With Lincoln Financial Advisors®
After more than a year of careful consideration, Charleton Financial is delighted to announce its new affiliation with Lincoln Financial Advisors. Lincoln's vision is to be the country's premier fee-based financial planning firm, by being the preferred partner of fee-based financial planning professionals like us, who offer comprehensive financial services to affluent clients. Lincoln provides brokerage services and gives Charleton Financial greatly enhanced planning, technology, and investment platforms.
Lincoln is a good match for Charleton Financial, and, we believe, our clients. We are financial planners because we love to discover our clients' goals and dreams, and then help them get there. Now, with our experience, and Lincoln's team of experienced financial advisors at our disposal, we can find exactly what our clients need to help them prosper. Learn more about Lincoln Financial Group at www.lfg.com. (Lincoln Financial Group is the marketing name of Lincoln National Corporation and its affiliates.)
To our current clients: The beauty of this transition is that we get to take advantage of Lincoln's vast network, without changing any of your current investment holdings. Look for a letter in the mail with paperwork to sign so we can notify the various investment and insurance companies in your portfolio of our move. If you have not received your letter, please contact us.
Introducing Charleton Financial
Charleton Financial Launches New Marketing Initiatives
New Horizon Advisors became Charleton Financial on October 31, 2008. We renamed our company to reflect the importance of the personal relationships we have with our clients and as a tribute to our parents.
Along with our name change, we decided that now is the best time to spread the word about our growing firm. Our new logo and this website are the first installments in our quest to communicate with you on your terms, well into the 21st century. We are proud to work with iWrite Marketing, a local full-service marketing firm, and its design partner Dumbwaiter Design, on these marketing initiatives. As always, please keep the communication channels open, and call or write us with your opinions and suggestions.