Fong Law Group

Retiring in 2019? Steps You Need to Take Now

“While some people might have been saving and planning for decades for retirement, others might not have given much thought to their life after full-time work.”

Is 2019 the year you retire? Congratulations! However, you’ve got a lot of planning to do, says CNBC in the article “If you’re planning to retire in 2019, here’s how to make sure you’re prepared.” If you’re seeing your next stage of life as full retirement, semi-retirement or an adventure into the unknown, you should start preparing and dedicating a fair amount of time to what’s coming next.

While we hope your retirement was planned, many of the people who retire—60%—do so because of health issues or because they were laid off and could not get another job. Others have continued to work long after they expected to, sometimes because they don’t see a reason to not keep working.

Whatever category you fall into, your first look should be at your finances.

Do you know what your expenses are? You can’t know how much you’ll need for retirement, unless you know what you are spending right now. Maybe you won’t be buying expensive suits for a sales career. However, you’re still going to need to buy clothing. If you are like most retirees, you’ll want to fill your free time with all of the recreational pursuits you couldn’t do when you were working. That may include travelling, entertainment, sports and other activities—all of which cost money.

Pay off any debt you can. The less debt, the better.

Healthcare is one of the most overlooked costs for retirees. Once you reach 65, you’re eligible for Medicare. If you retire at or past that age, the program is available to you. However, it does not cover everything. The single most expensive item not covered: long-term care. Dental, vision and hearing care are not covered either.

You will also need a Social Security strategy. You can file for benefits any time after age 62, but you’ll increase your benefits by some 6% to 8% every year if you delay filing up to age 70. We don’t see those kinds of returns too often. If you work part time, you’ll need to find out how that income impacts your monthly benefits.

Even though you’re retired, you have to pay taxes. Your taxes will depend on what kind of retirement accounts you have: traditional IRAs, 401(k)s, Roth IRAs, etc. Not all sources of income are taxed the same way.

If you don’t already have an estate plan in place, don’t wait until you retire to get this done. Speak with an experienced estate planning attorney, who can help you create a will, power of attorney, health care directive and examine tax strategies for your estate and to protect your family.

Reference: CNBC (Nov. 4, 2018) “If you’re planning to retire in 2019, here’s how to make sure you’re prepared.”

There’s more than a Roth or an IRA to Your Retirement 您的退休不僅僅是Roth或IRA (中英對照)

“From well-known options, like IRAs and 401(k)s, to more obscure ones, like Cash Balance Pension Plans or Rich people Roths, these accounts can help you to grow your savings.”

Most people work at a company that offers them a way to contribute to a retirement account, usually an IRA.  However, there are more options available, according to a recent article from Forbes titled “10 Retirement Accounts You Should Know About.”

Few of us need less money in our retirement accounts. Most of us enjoy the tax benefits we get from retirement accounts. Americans, in general, do a terrible job of saving for retirement. Some say the IRA, Roth IRA and other similar accounts were created to give us an incentive to do a better job. The tax advantages of these accounts make it more attractive to sock away money every year. These accounts were also set up with deliberate penalties, so people wouldn’t raid their accounts every time they needed a few extra dollars.

If you are among those who work for companies that have a retirement savings plan match, make the most out of it. If you put in the annual percentage or amount your plan requires, your employer will match that contribution. Most workers walk away from this money.  However, it’s free money!

Employees usually are offered a 401(k), 403(b) or 457 plan from their employer. The financial institution is already chosen, the money is automatically taken out of your paycheck and often you can only make decisions about what kind of funds you can select at certain times of the year. In 2018, you can contribute up to $18,500. If you’re 50+, you can make an additional $6,000 contribution, known as a catch-up contribution.

Self-employed? You need a retirement plan more than someone who works for a company. Self-employed people have many more options. If you need help, talk to your CPA. There may be some plans that are better suited or have more tax advantages than others.

For self-employed people, the basic choices are the solo 401(k) for a sole proprietor or someone working with their spouse. You can make contributions as both the employer and the employee. You could contribute as much as $55,000 in 2018 (or, if you are 50+, $61,000). Your total contributions are determined by your net business income.

Another choice for retirement savings for the self-employed is a SEP IRA, the Simplified Employee Pension. It’s easier to set up than a 401(k)and is typically used by people with self-employment income or small business owners. As the employer, you can contribute up to a quarter of your income, or $55,000, or whichever is less. There are no catch-up contributions for a SEP IRA.

Self-employed or working for a company, your retirement plan needs to include an estate plan. Your estate planning attorney will be able to help you with a will, power of attorney and healthcare directive. She will also be able to give you valuable insights, as to how your retirement plan and your estate plan can work together to minimize taxes and maximize the estate you leave behind.

Resource: Forbes July 23, 2018 “10 Retirement Accounts You Should Know About”

 “從眾所周知的選項，如IRA和401（k），到比較少人知的選項，像現金餘額養老金計劃 (Cash Balance Pension Plans)或富人Roth，這些帳戶可以幫助您增加儲蓄。”

大多數人在一家公司工作，為他們提供的退休賬戶方式，通常是IRA。但是，根據福布斯最近發表的一篇文章，有更多的選擇 “10 Retirement Accounts You Should Know About.”( 你應該知道的10個退休賬戶)

大部分人都是覺得退休賬戶的錢不夠用。我們大多數人都喜歡從退休賬戶中獲得的稅收優惠。總的來說，美國人並不擅長為退休儲蓄。有人說IRA，Roth IRA和其他類似的賬戶是為了激勵我們做得更好。這些賬戶的稅收優惠使得每年存錢都更具吸引力。這些帳戶是有懲罰條款的，因此人們不會在每次需要額外的錢時使用他們的帳戶。

如果你是那些為退休儲蓄計劃匹配的公司工作的人，請充分利用它。如果你在計劃存入所需的年度百分比或金額，你的雇主將與該存款相匹配。大多數工人都忽略了這筆錢。但是，這錢是免費的！

員工通常會從雇主處獲得401（k），403（b）或457計劃。雇主已經選擇了金融機構，這筆錢會自動從​你的薪水中扣除，而且你通常只能決定在一年中的某些時候可以選擇投資在那些基金。在2018年，你可以貢獻高達18,500美元。如果你是50歲以上，你可以額外支付6,000美元的存款，稱為追加捐款(catch-up contribution)。

自僱？你比一般受僱人士更需要退休計劃。自僱人士有更多選擇。如果你需要幫助，請諮詢你的註冊會計師。可能有一些計劃比其他計劃更適合或有更多稅收優惠。

對於自僱人士，不管是單獨經營者或與其配偶一起工作的人的基本選擇是獨自401（k）。您可以同時以雇主和僱員的身分存錢。你可以在2018年貢獻多達55,000美元（或者，如果你是50歲以上，61,000美元）。你的總捐款由您的營業收入決定。

自僱人士退休儲蓄的另一個選擇是SEP IRA，即簡化員工退休金 (Simplified Employee Pension)。設置比401（k）更容易，並且通常由自僱人士的收入或小企業主要使用。作為雇主，你可以提供高達四分之一的收入，或55,000美元，或比較哪個方法需要較少錢。SEP IRA沒有追加捐款。

自僱人士或為公司工作的人，退休計劃需要包括資產計劃。你的資產規劃律師將幫助你完成遺囑，授權書和醫療保健指令。她還能夠為你提供有價值的見解，了解你的退休計劃和你的資產計劃如何共同努力以最大限度地減少稅收並最大化地留下你的遺產。

參考: Forbes July 23, 2018 “10 Retirement Accounts You Should Know About”

Mid-Year Tax Planning: What Retirees Should Do Right Now 年中稅務籌劃：退休人員現在應該做些什麼 (中英對照)

“Halfway through the tax year is always a good time to assess where you stand with Uncle Sam. You can see how the year’s tax bill is taking shape, while you still have plenty of time to make tax-saving moves.”

This year is particularly important to do a mid-year tax review, because the new tax law may have changed your tax picture. If you’re not looking ahead, according to Kiplinger’s article “Midyear Moves for Retirees to Rein In Their Tax Tabs,” you may miss some critical opportunities.

Some taxpayers will find that they owe less taxes this year, while some will owe more. You might decide to switch from itemizing to taking the increased standard deduction. It’s also possible that you’re not going to pay the AMT (alternative minimum tax) this year.

Ramp Up Your Nest Egg. Are you still working? Then max out contributions to your retirement funds to help lower your taxable income. If you are 50 and older this year, you can put away as much as $24,500 in a 401(k) and $6,500 in an IRA.

Build Health Savings Accounts. If you have an HSA, be smart and put away as much as you can. Workers with HSA-qualified health coverage can contribute $6,900 in 2018 and those with self-only coverage can squirrel away as much as $3,450. If you’re 55+, you can put in an extra $1,000. HSAs are a great tax saving tool: the money goes in pre-tax, grows tax-free and when used to pay qualified medical expenses, is withdrawn tax-free.

Consider Your Deduction Strategy. The standard deduction in 2018 is rising to $12,000 for singles and $24,000 for marrieds filing jointly, so this is the year to figure out whether to itemize. Tax reform has also limited itemized deductions. The write off for state and local income, sales and property taxes is now capped at $10,000. Seniors (65 and up) can still take an extra standard deduction of $1,300 per person for joint filers and $1,600 for singles. For a married senior couple, itemized deductions would have to be more than $26,600. If the couple uses the full $10,000 write off for state and local income, sales and property taxes, they have to come up with more than $16,600 in deductions to save by itemizing.

Medical Expenses. The medical expense deduction is still in place.  It is better in 2018, since the threshold dropped to 7.5% of adjusted gross income. Next year, that threshold rises to 10%. If possible, you should consider bunching medical costs into 2018, so that you can take advantage of that lower threshold.

Roth IRAs. Putting money in a Roth this year won’t cut your 2018 taxes.  However, if you expect tax rates to climb, now is the time to put money in a Roth and pay taxes now, rather than later. Tax reform took away the ability to reverse a Roth conversion starting in 2018, so wait until the end of the tax year when you have a clearer vision of your numbers to do any conversions.

Reference: Kiplinger (June 29, 2018) “Midyear Moves for Retirees to Rein In Their Tax Tabs”

年中稅務籌劃：退休人員現在應該做些什麼

 “納稅年度的中途總是評估你與山姆叔叔的立場的好時機。您可以看到年度稅收法案如何形成，而您仍有充足的時間進行減稅措施。”

今年對於進行年中稅務審查尤為重要，因為新的稅法可能會改變您的稅務狀況。如果你不向前看，那麼根據Kiplinger的文章“Midyear Moves for Retirees to Rein In Their Tax Tabs,” (中年移民退休人員加入稅收選項卡) 你可能會錯過一些關鍵的機會。

一些納稅人會發現他們今年欠的稅較少，而有些人則欠更多稅。您可能決定從逐項切換到採用提高的標準扣除。你今年有可能不用支付AMT（最低稅來替代）。

加速你的窩蛋。你還在工作嗎？然後，最大限度地提供退休基金的捐款，以幫助降低您的應稅收入。如果你今年年齡在50歲以上，你可以在401（k）和6, 500美元的IRA中獲得高達24, 500美元的稅務豁免。

建立健康儲蓄賬戶。如果您有HSA，要聰明並儘可能地收起。擁有HSA資格的健康保險的工人在2018年可以捐贈6,900美元，而那些只有自我保險的人可以多花3,450美元。如果你是55歲以上，你可以額外得到1,000美元。HSA是一個很好的節稅工具：這筆錢用於稅前，增加免稅，當用於支付合格的醫療費用時，可以免稅。

考慮您的扣除策略。在2018年單身人士的標準扣除額增加到12,000美元和已婚人士共同申請增至到24,000美元，所以今年要弄清楚是否可以逐項列出。稅制改革也限制了逐項扣減。國家和地方收入，銷售和財產稅的註銷現在上限為10,000美元。老年人（65歲以上）仍然可以為聯合申報者額外扣除1,300美元的標準扣除額，單身人士則需要1,600美元。對於已婚夫婦，逐項扣除額必須超過26,600美元。如果這對夫婦使用全額10,000美元的州和地方收入，銷售稅和財產稅，他們必須拿出超過16,600美元的扣除額才能通過逐項列出來節省。

醫療費。醫療費用扣除仍然還在。由於門檻降至調整後總收入的7.5％，因此在2018年更好。但明年，該門檻上升至10％。如果可能的話，您應該考慮將醫療費用匯總到2018年，這樣您就可以利用這個較低的門檻。

羅斯IRA。今年投入資金在羅斯是不會減少2018年的稅收。但是，如果你期望稅率上升，現在是時候把錢投入羅斯並立即納稅，而不是以後。從2018年開始，稅制改革取消了扭轉羅斯轉換的能力，所以請等到納稅年度結束時，您可以更清楚地了解您的數字，以進行任何轉換。

參考: Kiplinger (June 29, 2018) “Midyear Moves for Retirees to Rein In Their Tax Tabs”