2016 Tax & Financial Planning – Tips for the Over-50 Set

2 August 2016

When you pass your 50th birthday, new tax and financial planning concerns arise. Chances are, you have made sure your opportunities yield rewards – let Rigby Financial Group design a plan to help keep those rewards in your hands, so that you can protect your and your family’s future, and meet your individual needs and goals. Contact us to see how RFG can help tailor a tax and financial plan for your unique situation. Some general strategies you may want to consider are:

1. Continue to Save for Retirement

Make sure you are contributing the maximum amount allowed to your retirement plan, whether employee-sponsored or individual. For tax year 2016, qualified plan contribution limits for those 50 and over are:

• 401(k): $24,000 ($18,000 standard maximum, plus a $6,000 “catch-up” contribution)
IRA: $6,500 ($5,500 standard maximum, plus a $1,000 “catch-up” contribution
SEP: the lesser of 25% of the employee’s annual compensation or $53,000 (no “catch-up” for those over 50)
• Roth IRA: contact us for contribution limits and details on potential Roth conversions of existing IRAs

For a limited time, Rigby Financial Group is pleased to offer a free review of your retirement plan. Just sent us the most recent statement of your account, the investment options available to you, and your current beneficiary statement. Call us today to arrange your free portfolio review!

2. Make Charitable Donations of up to $100,000 From Your IRA

Those over 70 ½ are permitted to make a tax-free “qualified charitable distribution” of up to $100,000 annually, by instructing your IRA trustee to make the distribution, in the form of a rollover, directly to the specific charity you wish to benefit.

As a result of making such a distribution, you can satisfy your Required Minimum Distribution without incurring any income tax liabilities, and, at the same time, benefit the charity of your choice.

Such a rollover distribution is of particular benefit to those individuals over 70 ½ who either:

• Don’t itemize deductions on their income tax returns, or
• Whose charitable contributions are limited based on their high income

3. Don’t Overlook the Basics!

Everyone, but most especially those over 50, should have the following in place:

• Wills
• Medical Powers of Attorney
• Durable Powers of Attorney

These documents, properly and thoroughly drafted and executed, should state your wishes clearly and unambiguously; this will make things easier for your family, in the event of your illness or decease.

4. Insure the Future!

You should consider:

• Life and Disability insurance policies, to protect your family by replacing your income, should you pass on or become unable to work.

Every family has different needs, and, accordingly, requires different levels of income protection. Some families need less insurance, some need much greater coverage.

Check your beneficiary statements! Beneficiaries on all insurance policies and retirement accounts should be reviewed regularly – you would be surprised how many people don’t even have beneficiaries listed! Others named beneficiaries before marriage, or the birth of their children, and have never updated their beneficiaries to account for these huge life-events. Don’t let this happen to your family!

Let Rigby Financial Group review your life and disability insurance coverage for appropriateness – just send us the declarations pages and beneficiary statements on all in-force policies! Contact us to learn more, and arrange a comprehensive insurance review – make sure your family is protected!

5. Fund a Child’s or Grandchild’s Education

Consider funding a 529 Plan for your child(ren) or grandchild(ren). While 529 Plan contributions are not tax deductible at the Federal level (states’ rules vary on this), the income earned appreciates free of Federal income tax, and withdrawals used to pay for most educational expenses are not subject to Federal income tax.

Note that withdrawals for non-educational purposes may be subject, not only to Federal and State income tax, but to additional penalties as well.

6. Annual Gifts

Gifts of up to $14,000 per person can be made to as many individuals as you desire without incurring any gift tax liability. Taking advantage of this gift tax exclusion annually can significantly reduce your estate tax liability down the road.

Call us to find out how RFG can help plan for your financial future. Together, we will create and implement an individually-tailored tax and financial planning strategy, designed and fine-tuned for your unique situation, to take care of your needs and protect your family – now and for the future.

The above represents general advice. When it comes to planning, one size does not fit all. Rigby Financial Group provides highly individualized, specifically tailored plans for individuals and businesses. Please contact us for advice and assistance in creating a specialized plan that suits your unique situation.


The information presented here is not specific to any individual’s personal circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.