Sweeping Changes to Retirement and Required Minimum Distributions (RMD)

One of the biggest changes to RMD and tax planning in the last 20 years is now going into effect on Jan 1, 2020.  This is part of the SECURE act passed this week.

We will be hosting a workshop on January 21, 2020 at the Perry Hall MD Library to review all the details of this dramatic change.

REGARDING RMD IF YOU ARE NEAR AGE 70 1/2;

So, if you turn 70 1/2 by the end of 2019, you will need to start taking RMDs for 2019. The first one needs to come out by April 1, 2020. 

However, if you turn 70 1/2 after Jan. 1, 2020, you now won’t be required to take an RMD for 2020. In fact, no one will be required to take a 2020 RMD based on turning 70.5 in 2020 or turning 72 in 2020

REGARDING LIFE EXPECTANCY TABLES;
Expect new life expectancy tables for 2021 and beyond.  This will not have an impact for tax years 2019 or 2020. Again, these are the tables used to calculate your RMD for your DEC 31 retirement balances.  We will have more clarity on this for 2021, but the changes are certain.  

These changes, along with the 2018 income tax changes are the most sweeping of the past two decades.  It will erase a lot of financial and tax planning.  

On top of this, we will no longer be able to have the benefit of stretch IRA accounts in estate planning.  This will make billions for the Treasury, but put a hefty burden on your beneficiaries.  

Please contact our offices in West Chester, Wilmington DE, or White Marsh MD for additional information.   
Mark your calendar for our January 21 workshop. Space is limited. 

Press Contact:  B. Michael Shanley  (610) 515-5800  

*Information contained herein is not tax or financial advise. Please consult your advisor for your specific situation. 

Special Workshops for GM White Marsh Workers

"We have seen these types of cuts all over the I-95 corridor in the past 5 years" said B. Michael Shanley, President of the Brandywine Advisors Group, LLC   It started in Wilmington with the DuPont/Dow buyouts, and now is affecting those working at the General Motors Plant in White Marsh, Maryland.  GM announced in November of the cuts in this plant, as well as other in the US and Canada.
Workers will face big decisions about buyouts, layoffs, health care, Social Security, among other issues like relocation and job training.

Brandywine Advisors Group will offer several small workshops at the White Marsh Public Library this February and March.  Any family that would like to discuss your options with a professional team of advisors, tax experts, retirement income planning experts please call our office at (410) 515-5800.  We will be posting the dates of the workshops shortly, but we can help anybody in need sooner.  There is no charge for the consultation, and we are happy to explore your concerns.

We understand your anxiety over all the sudden decisions that you will need to make.  Our team has worked with many families that have gone through this same process.

You can request a meeting by calling or go to www.BrandywineValleyGroup.com  for an appointment request.  We hope that whatever road you travel, that you have a smooth ride and enjoy the sights along the way.

Our White Marsh office is located across from the Public Library and a few miles from the GM plant.

IRS and Tax Filing Update During Government Shutdown

Here is the most recent information we have during this partial government shutdown.  We do not have the schedule of updated tax software.  Please go to the IRS website for more up-to-date information.

The IRS Will Accept E-Filed Tax Returns on Jan. 28

Despite the partial government shutdown, the IRS announced that they will begin accepting and processing individual tax returns on Jan. 28, 2019.

Read more about this announcement on IRS.gov.

The IRS Plans to Issue Refunds as Scheduled

In addition, the IRS announced recently that refunds would go out even if a partial government shutdown persisted. Please remember, it can take up to 21 days  to get a refund from the IRS after you file the return.

Some IRS Operations Remain Limited

In addition, the IRS announced on Jan. 15 that while some of its operations will be operating as normal, others will be limited during the appropriations lapse:

• The IRS processes for refund fraud detection and ID theft prevention will continue to operate as normal.
• Automated systems, such as Where’s My Refund, will remain operational.
• While in-person assistance locations will remain closed, IRS will be bringing staff back to answer phones, but at a reduced level that may increase wait times.

We hope that if you have any questions, please call Tabatha at 410-515-5800 for your tax return appointment today.   Join B. Michael Shanley on Feb 7 and 12 at the White Marsh Library for a very important workshop on Taxes in Retirement.  Seating is limited, please call for reservation today.

Tax Time and Workshops - White Marsh Maryland

We welcome in 2019 with some new changes to our team and locations!  We have completed the purchase of Accurate Business Services in White Marsh, Maryland.  This adds another level of professional skills and services to all clients.  Bill and Donna Feehley decided it was time to retire, and Michael was looking for a great team of tax and bookkeeping professionals.  The Brandywine Advisors Group will now have a full tool box to assist families, business owners, and start-up businesses.  The focus will be tax planning and preparation, payroll and bookkeeping, valuation, and new company formations.  The group is also focused on retirement planning with key strategies for capital preservation and lifetime guaranteed income.  Going forward, the team can now offer a one-stop financial services platform.  This platform is what clients have asked for as retirement and taxes become more complicated and confusing.
Kicking off the year with three workshops at the White Marsh Public Library for important information on Taxes in Retirement.  Baby boomers are hitting the "tax torpedo" without any warning!  Your host, B. Michael Shanley will discuss the options, the strategies, and the long term plan for lower taxes, higher yields, and lifetime financial security.  Dates are for January 14, February 7 and 12.  Seating is limited, reservation required.

Please call (410) 515-5800 for your reservation today.  www.AccurateBusiness.com

Have a very blessed 2019 and we look forward to seeing you soon!  

www.BrandywineValleyGroup.com

Thanksgiving Advise from your Brother in Law

It all looked very, very easy a year ago this week, yes I am talking about BITCOIN.  Moving up the charts faster than anyone could believe.  Well, the proof is in the proverbial pudding now.  If you had listened to that brother-in-law about how Bitcoin was the next Amazon, Google, or Netflix, he was dead wrong.  It has proven to be the worst investment, correction, gamble of the year. 
All the talking heads, CNBC, FOX, Warren Buffet, had to try to put a spin on this cyber freak currency.  The rest of us watched the show from the sidelines. 
It has all the makings for a bust, no SEC, no asset based backing, traded in complete secrecy, and of course, now we know, manipulated for the benefit of early gamblers.  FOMO at its finest, better then the dot com bust, the penny stock bust, and right out of the pages of boiler-room (the movie).

If you lost 50-60% in a year, that is too bad.  If you feel that you where a victim of manipulation, fraud, sales fraud, or just plain old injustice - Good Luck.  You played in the wild west.  No law of the land, no enforcement agency, and of course not a shoulder to cry on. 

I hope your brother-in-law is picking up the tab this Holiday season, it is the least he could do....  be nice to him, he may have to be cutting grass for a long time. 

EDSEL, YUGO, PINTO, BITCOIN.........I will not go on....

Blessings for the Holiday Season, B. Michael Shanley

Help for DuPont Employees

DuPont announced this week that it will cut 1,700 jobs from the Wilmington, Delaware area. In a filing with the SEC, the company announced the cuts as part of a broader, 5,000 job downsize as the company prepares to merge with Dow Chemical.  The company expects to notify employees by January 4, 2016.
An icon for the Northern Wilmington business community for over 200 years, DuPont has employed generations of Delaware residents. The downsize and merger is part of a global trend of large corporations seeking to increase earnings by consolidation and selling off smaller, specialized business units.  Shareholders and activist have been pushing DuPont in recent years to make significant changes to the company balance sheet.

The Brandywine Valley Advisors Group will offer no cost workshops and seminars to those DuPont families that have been affected by this recent news.  B Michael Shanley has hosted monthly workshops in the area that help local retirees understand the complexity of social security, pensions, and IRA income strategies. These workshops will focus on how to plan a retirement that can provide guaranteed lifetime income to families, without fear of economic downturn, poor investment returns, and health problems.  A schedule of workshops will be released soon.

Please visit www.BrandywineValleyGroup.com for more up-to-date information.

Call 2015 the Year of Hope

As the calendar winds down, this past year has proven out to be much to do about nothing. A very long awaited, almost 3 years, hike in Fed interest rates came about with nothing more than a slight raise in the prime.  The new normal is certainly running the global economies. That normal is quantitative easing, currency manipulation, central bank liquidity, and Hope that all this will stabilize world markets.  There is great Hope that the Fed can normalize interest rates in time to prevent another global financial crisis.  It will be very difficult to accomplish if commodity price stay low and the dollar remains high.  Increasing domestic interest rates, with a low growth GDP, may cause deflation, therefore lowering values on all asset classes including equities and real estate.
   This interest rate increase is on uncharted waters. It is only a Hope that unemployment will fall and GDP will provide stable growth.  It is also a Hope that China remains at a growth level above 7%.  Many specialist predict that this may not be the case, and using voodoo economics, China is masking an industrial and consumption slowdown.
 The biggest Hope involves DEBT.  As interest rates rise, companies will use more cash flow to pay interest on highly leveraged balance sheets.  Sectors like energy and health care are already feeling the effects and cause a big ripple in the junk bond market. Many public companies are borrowing money to pay dividends to shareholders, this will also be an increased cost in 2016.  Stocks with good dividends are attractive to investors when markets are moving sideways and retirement portfolios are seeking yield.
There is another Hope, that is the Hope that we are not in an earnings recession.  It will take some time to determine, as many companies are using free cash to do stock buy-backs. This process will increase earnings per share, but it is hard to sustain if cash dries up.
We can HOPE for a few things; Blessings of health and happiness in 2016, good friends and family, good health and well-being for all.  Happy Holidays!  All the Best for 2016!

101 Chicken Recipes for Baby Boomers on Social Security

The administration has put into play a change that will affect all baby boomers headed toward an inflation protected retirement.  The budget released Wednesday backs replacing the Consumer Price Index (CPI-W) to a variant known as the “Chained CPI.”  This is reported to slow the growth of the social security benefits to present and future beneficiaries.  The administration says that it is a more accurate measure than the current formula, put in place in 1974, to offset the effects of inflation on the benefits.  They claim that the CPI-W is not a good measure and the revised “Chained CPI” would take into account price increases of goods, and peoples behavior toward purchasing lower priced goods, or less of them.   This bi-partisan conversation over the past few years should put Baby Boomers and Seniors on notice that your benefits are going to be reduced over time.  It is hard to predict how a behavior based index could perform, as it has no history.  The Wall Street Journal recently reported, according to the labor department, that the “Chained CPI” would follow the pattern on the historic CPI-W, but in back-testing, falls about 5% less in benefits from 2002-2012.  Does not seem like a lot, until you take the compounding effect into consideration for those that will live past age 85.  The administration is estimating that it will reduce benefits $180 billion over a decade. 

Why do you need 101 Chicken recipes?  The “Chained CPI” is set up to assume that when a consumer is faced with the choice of a high priced item, or a item that has increased in price, they will always choose the lower priced good or service.  So, on your trip to MegaMarket in 5 years, when you see a prime rib selling for $14.99 per pound, to combat the effects of inflation, you are going to bypass that delicious aged prime rib, and opt for the split breast of chicken selling for $3.99 per pound!  Always.  Every-time, every-day!  I expect the Perdue family is pretty excited at this new proposal, and at least for the consideration should be handing out a thick recipe book to all baby boomers heading to claim social security!  The effect on your retirement plan?  You need to make certain that you understand and outpace the rate of inflation.  Historically, the rate averages about 2.8% per year.  Or better understood, a dollar next year only purchases, $0.97 of product and services.  Ten years from now, that dollar buys $0.80 of goods, and twenty years from now, $0.60 of goods.  If we are tied to a “chained CPI” estimated to reduce the inflation rate index by 5% , twenty years from now you have $0.58 of buying power.  If you cannot change this, at least understand it and plan for it. 

I agree with the position of the AARP, telling administrators and congress that Social security cuts are not, and should not be the focus of deficit reduction.  The oldest and poorest Americans will feel the full effects of a “Chained CPI.” 

I cannot advise baby boomers enough about the fight for CPI, and at least understand CPI as it relates to planning for a healthy and happy retirement. 

And if you do not want to listen, I have a recipe for you.  This is my favorite “ Superfood” chicken recipe that includes Apples, Goji Berry, Kale, Olive Oil!  Stay Healthy! Stay Organic!

INGREDIENTS

·                                 1 cup apple, such as Gala or Golden Delicious, cored, peeled, and chopped

·                                 1/4 cup goji berries or cranberry (goji can be found at Wegmans and Whole foods)

·                                 2 teaspoons grated fresh ginger root

·                                 2 tablespoons brown sugar

·                                 2 tablespoons cider vinegar – pure organic

·                                 1/8 teaspoon salt

·                                 4 large boneless, skinless chicken breasts (6 ounces each), trimmed of excess fat

·                                 4 slices prosciutto, trimmed of excess fat

·                                 2 tablespoons olive oil, divided

·                                 1 large bunch kale (about 10 ounces), chopped

PREPARATION

In a small saucepan, place the apple, goji berries, ginger, brown sugar, vinegar, and salt. Bring to a boil, then reduce to a simmer and cook about 20 minutes, until most of the liquid has evaporated and a thick chutney starts to form. Remove from the heat and set aside. 

Heat the over to 400° F. Wrap each chicken breast in one slice of prosciutto. Heat a large, oven-safe skillet over medium-high heat. Add tablespoon of the olive oil. Add the chicken breasts and cook 1 minute, turning once to brown the prosciutto. Transfer to the over and bake 10 minutes, or until the chicken is cooked through. 

In a second large, oven-safe skillet, warm the remaining olive oil over medium heat.  Add the kale and cook 1 to 2 minutes, turning often, until the kale starts to soften. Slide the skillet into the over and bake 5 minutes, or until the kale starts to crisp. Remove both skillets from the oven and place the chicken and kale on plates. Top with chutney and serve immediately.

ENJOY and STAY INFORMED!  Only 100 more recipes to find!

2013 Retirement Survey - Bracing for A Retirement Crisis

The annual EBRI retirement report was published this week and it has trends that are pointing to a retirement crisis in this country.  Even as the equity markets in the US are hitting all time high levels, the survey is reporting that Americans are just not prepared for the golden years.  The survey highlights that 28% of Americans have no confidence that they will have enough money to retire comfortably.  This is the highest level of non confidence that the survey has reported in its history.

Why is retirement confidence hitting all-time lows?

• Americans are living longer.
• Employment worries and delayed retirements.
• Worries about Social Security and Medicare Benefits and Costs.
• Lack of growth in Retirement Accounts.

The report is trending toward a delay in workers retirement date, citing the economy (22%) and lack of faith in Social Security and Government (19%) as the top reasons.  The trend is heading back to the all time high, as seen in 2009 after the credit crisis.  A downturn in the stock market could again force soon-to-be retirees into a holding pattern.  The report does not address the current low yield environment but does point out that  only 42% of retirees feel confident that their retirement account will grow.  

Expenses, Expenses, Expenses.....

The baby boomers are leaving the workforce in record numbers, estimated at 10,000 per day.  The EBRI report is pointing out that many have not identified the true cost in retirement.  The survey indicated that only 67% now feel they can confidently meet basic expenses in retirement, down from 80% last year.  The numbers are similar in the estimation of covering the cost of medical expenses, down 4% from the high of 71% in 2012.  Long term care cost seem to be the elephant in the room, with only 44% confident they have this problem covered in retirement.  

Failure to Plan is a Plan to Fail

Only 23 percent of workers and 28 percent of retirees report they have obtained advise from a professional advisor who was paid through fees or commissions. Of these workers, 27% followed all of the advise, but more disregard some of it and followed most (41%) or some(27%).  If this pattern was similar to following the advise of a doctor, retirement income would not be a big issue for most.  Take the time to consult professional advisors. Baby boomers have to plan for 25-30 years of guaranteed income, most not having defined benefit (pension) plan, debt free home, and inflation protected savings. 

To RetireSmart!:

• 45- 55 year old workers should be creating a supplemental income to Social Security, remember 2033 is coming and it is YOUR problem. 
• 55-60 year old workers should have an expense and income plan in place and in conservative investment or annuity programs.  
• 60-66 year old pre- retirees should have a housing plan, health care plan, income plan, Social Security Plan, LTC plan, tax plan, transition plan, and the important distribution plan.
• 66 plus - Follow the plan, if any questions, follow the plan!  Enjoy!

Call us today at 484-881-8899 and request our guide, "10 Things to Know about Planning YOUR Retirement"  Check our event schedule for a workshop in your area HERE.

Whats Ahead for Long Term Care Protection?

The news this week is not new, but very consistent and concerning for baby boomers facing retirement. Prudential announced that effective at months end, it would no longer accept applications for long term care protection.  This is the tenth of the top twenty sales companies to discontinue policies to individuals for the important care policies.  The company cited low yields on bonds and higher then expected policy payments for this product line.
On RetireSmart Radio Show this Sunday, B Michael Shanley will discuss this problem, its impact on your retirement, and some hybrid ideas to get the best of the needed insurance, for an affordable price.  Tune in to WDEL 1150 AM at 10:30 AM Sunday March 25th for this important information.
Michael Shanley is the President and Senior Retirement Advisor for the Brandywine Valley Advisors Group with offices in West Chester and Wilmington.  Consider your options with the professional advise you need to make a  custom retirement plan for your family.  You can contact Michael at 484-881-8899

BIG Changes Coming to YOUR 401(k) Plan

There has been a two year rumbling from 401(K) plan administrators for the new regulations coming from the Department of Labor.  These sweeping changes, currently scheduled for July 1st, will require a full disclosure of the fees associated with administration, management, and expenses of your 401(k) plan.  I say, currently scheduled, because this date has been moved several times over the past 18 months.
The new disclosures cover both the direct and indirect compensation administers receive, the indirect fees have often gone undisclosed.  These changes come at a time when participants have seen very low returns, yields on safe haven investments. It will prove to many in money market type plans, that they are actually loosing money over time.
Tune into RetireSmart Radio, with your host B Michael Shanley this week for an in depth look at these changes and special guest Anne Tergesen, journalist for the Wall Street Journal.  She has been on the forefront of reporting the DOL changes, and the implications of full disclosure to the average participant.
The fallout of expensive plans is expected as participants turn to plan sponsors for relief from diminished returns, with zero protection from market downturns.
401(k) plans, are defined contribution plans, became popular in the early 1980's, today there is over $4.3 trillion in these plans.  For more details on your impact, and those questions you may have about retirement planning, listen this Sunday March 11th, at 10:30 AM WDEL 1150AM.  Remember to turn your clock ahead an hour!

To Listen to the Show, click here

Retire Smart in the Brandywine Valley

Great information for the Baby Boomers in the Brandywine Valley, aka Brandywine Boomers!  Everyday, 10,000 baby boomers are facing retirement in this country.  B. Michael Shanley, President of the Brandywine Valley Advisors Group, will be your host for many programs aimed at helping boomers in retirement!  This is one of those!  A blog that will spotlight issues, make recommendations, introduce local people and events, as well as get you connected with all that is important to Brandywine Boomers!

 This Sunday, January 8th, RetireSmart! Radio Show will premier at 10:30 AM on WDEL 1150 AM.  Michael takes some time to discuss the many challenges in today's retirees. His focus is on the shortcomings in long-term income planning, tips on Social Security, and some questions to ponder if you do not have a retirement income plan!
He will also be hosting three Savvy Social Security Workshops at the Brandywine Executive Center on Concord Pike,Wilmington DE,  January 10th and January 17th at 6:30 PM. The January 12th date is fully booked.  For more information on the workshops,  please call 484-881-8899.  Brandywine Boomers can attend one of the many workshops that will be offered in 2012, in Exton, West Chester, Chester Springs, Glen Mills, Malvern, and Wilmington DE, please check back on this blog for more information!
Michael has an all star lineup of guest for this year, including Rosemarie Kosmalski, Pubic Affairs Specialist from the Social Security Administration, YMCA directors from Wilmington and West Chester, local chefs, local wine experts, local business owners, and professors from Villanova, UPenn, and University of Delaware.  For more information, www.RetireSmartRadio.com
Have a Great Day Brandywine Valley Boomers!
B. Michael Shanley