“I really like your show and this is my second question to you.
I think the inheritance tax in PA is 15% for non-relatives. Can someone who is leaving their estate to a non-relative avoid having the beneficiary pay this tax, by adding the beneficiaries name on the assets? Would that be sufficient or would JWROS on the accounts be a better way?”
Thank you for your kind words.
You can reduce the PA inheritance tax on your estate by adding someone to the ownership of your account. You cannot eliminate the tax unless you are willing to take yourself off the account – in other words give it away.
If you have a $100,000 account in your name and wish your best friend to receive those funds when you pass you may state that in your will. The tax will be $15,000. If you add your friend to ownership of that account (making an immediate gift of $50,000 to your friend) the inheritance tax will be cut in half at your passing to $7,500. If you wish the number to be reduced to zero you must transfer the entire $100,000 to your friend’s name alone. Of course, this is almost never a good idea for you to give up ownership and access to our assets.
Before taking any steps along these lines you must consult with a trusted, experienced estate attorney. He/she will be able to help you compare your options (pros and cons – no strategy is perfect). You can then select the one that best fits you.
Many folks (some studies report more than 70% of Americans) have no estate plan in place. At More than Money we are blessed to have a wonderful partnership with a firm of experienced estate attorneys we trust. They will meet with you in our More than Money World Headquarters (in the Holy Lands between Bethlehem and Nazareth). All you need do it ask. This initial consultation is provided to you at no charge.
“I have an old 401k that keeps getting kicked around from pillar to post with different firms. I’m getting tired of that and would like to have a local professional money manager (and fiduciary) see if they can achieve some fast growth. It’s a pretty good chunk of change.
I am age 63 1/2. I really like what I do (IT in support of cancer research), and while I may try to cut back to PT, I’m the type who would be bored in full retirement (and I don’t play golf, but I do fish).”
Thank you for your good work supporting cancer research.
I hear good things about fishing, but not for me.
I’m glad to hear you don’t play golf – it’s a tragically addictive waste of time.
Sadly, it does have me hooked – monkey on my back kind of thing.
Many folks have 401(k)s from former employers that are kicked around over many years. Getting that under control with a fiduciary financial advisor should not be too difficult. There are quite a few high-quality advisors in your area (heck in about every area). We can certainly assist you in finding one to your liking.
As for ‘fast growth’ that stopped me in my tracks. I can’t be sure if that’s a tongue in cheek reference or a true goal. While age is not the only factor in determining if one should be out for ‘fast growth’ or not it is one factor. If it is your goal, I would insist on a complete financial work-up to understand all the key elements of your retirement plan before I could get on board. If ‘fast growth’ fits you we can certainly accommodate with an appropriate, well thought out, consistently monitored, professionally managed portfolio.
One additional thought to perhaps consider. If your current employer offers you a 401(K) plan you might explore the option of rolling this old 401(k) into your current 401(k). There are some potential advantages to taking this action. There are also some potential disadvantages. A fiduciary financial advisor will insist on evaluating if such a rollover will be in your best interest. In fact, the financial regulators insist advisors do a rigorous, documented evaluation of the pros and cons of such an action prior to making the move.
While this all might sound a bit daunting, an experienced advisor can walk you through all of this (and quite a bit more) in a couple of hours or less.
Let us know how you make out.
“I love to watch your show, and will listen to you on Saturday mornings when I am able to.
My question for you is, what would be a good Vanguard fund to invest in this year? I have roughly $70,000 invested in the healthcare fund. I would like to stay with Vanguard to keep things simple. I am 67 years old and still working, so would like to invest the max in a better performing fund. What would you suggest? Thanks in advance.”
Thank you for your kind words and for both watching and listening. It’s always nice to find someone’s out there.
Your question seems so simple and so reasonable. Unfortunately, it really isn’t either.
Vanguard is an excellent investment company. They have a long-term track record of providing millions of clients with lots of options for their investment needs. And when I say ‘lots of options’ I do mean lots. Vanguard has more than two hundred (200) investment funds from which to choose. So, the question ‘What would be a good Vanguard fund?’ is simple to ask, but difficult to answer.
I would start with – good for what? What are your goals for these $70,000? This is a seriously significant sum of money and we need to be very clear what you are expecting it to do for you. Once we have that clear we can narrow down hundreds of funds to perhaps a few handfuls.
I would then move to – why one fund? Even if staying at Vanguard is a high priority (I could argue that it shouldn’t be) it is quite easy to have one account with multiple funds inside that account. If you were to diversify your funds into $10,000 blocks you could choose seven (7) funds to blend in one account. You might find your results fit your needs a bit better.
I would certainly take the time to point out that ‘simple’ can be achieved – even outside the Vanguard world. If you decide to consult with a financial advisor you may well find that the investments best for you are not even found at Vanguard. Or you may find that having a ‘simple’ account where the custodian allows you to add other investments to the Vanguard funds you’ve chosen benefit you even more.
You should take an hour, sit with a trusted, experienced financial advisor and explore these questions. Once you have these answers you will make your ultimate decisions with better confidence and peace of mind.
Want your own copy of our newsletter? Email: Megan@AskMtM.com