Managing Your Financial Future with Lucia Capital Group

Required Minimum Distributions (RMDs) are a fact of life for most IRA owners who are at least 72 years of age.  A certain amount of money must be distributed out of the IRA each year, or the IRS imposes a strict penalty on the missed amount. How strict?  50 percent of the amount you were supposed to take out!  That's a scary proposition, but what if, for one reason or another, you missed your...

The Bucket Strategy is designed to give you cash flow from assets that are not affected by the whims of the stock market.  You don’t want your income to be cut simply because the markets aren’t doing well, and this is the basic premise of Buckets.  Is it complicated?  Yes and no. How each person’s Buckets should be set up is almost completely dependent on their goals and their risk tolerance.  It’...

If you're an heir who's a beneficiary of any kind of asset, then you may know that it can be both a good and a bad thing.  For many people, an inheritance is like a gift from above, something that will improve their life in one form or another. For others, especially those who don't necessarily need the inherited asset(s), that gift can turn into a real headache - especially from a...

A steady income is one of the most valuable things you can have, both before and after you retire.  If that income is guaranteed by some entity -- the federal government, the PBGC, or the claims-paying ability of an insurance company -- then so much the better. Pensions and Social Security are two forms of guaranteed income that people receive usually after they've retired.  While many (if no...

In the financial planning world, a lot of focus is put (rightly) on those who want to retire around age 65, give or take a few years.  But what about people who are looking to hang it all up well before that age - maybe 55, 50, or even younger? It's more common than you might think.  Doing it successfully, though, is a much bigger challenge.  After all, your nest egg needs to last at least as...

There are at least three important pieces to the retirement portfolio puzzle: asset allocation, asset location, and asset withdrawal.  The first two are related to the accumulation (or saving) phase, and the third has to do with the decumulation (or withdrawal) phase. Which assets should go where when saving for retirement?  Tax-free, tax-deferred, or personal accounts?  A combination of some or a...

One thing that many people would agree on is that paying no taxes is better than paying any taxes at all.  This makes the tax-free nature of Roth IRA withdrawals very attractive, as long as all of the specific rules are met. Of course, there's a cost to getting money into a Roth IRA.  Whether it's via a contribution or a conversion, a Roth can only accept post-tax money.  Thus, you have...

What if you retire at the "wrong" time?  There's a genuine fear among many people that right around the time they need to access their nest egg, their portfolio will suffer a big decline because of an unanticipated market crash. There's nothing we can do to predict or prevent a drop in the stock market.  And sometimes we have no real choice as to when we can no longer work.  So...

In the world of investing, time can be one of your biggest allies.  As your time span grows shorter, though, your risks tend to go up: if you need your money sooner rather than later, your stock investments could take a downturn at just the wrong time, leaving you without the funds you need. A Target Date Fund in a 401k is designed to deal with this time-related risk.  As you get closer to retirem...

You may have heard of the old financial planning adage that says as long as you withdraw no more than 4 percent of your portfolio's balance each year, it has statistically a much better chance of surviving over a 30-year timespan.  Some have said the withdrawal rate should be even lower than that --  maybe no more than 2 percent. But whether the amount is 4 percent, 2 percent, or some other n...

It’s tax season!  This means forms, deadlines, maybe extensions, payments, refunds, and for many, a gigantic volume of information.  And yes – it all must be done correctly.  When was your W-2 supposed to arrive?  How about your 1099 forms?  Are you getting any K-1's, or maybe a 5498 or two?  What if a form arrives in your mailbox and you’ve already filed your taxes?    These questions are va...

When should you start taking your Social Security benefits? This is an important question, and one that’s often dreaded by people who don’t want to make the “wrong” decision.    They often look at it as a “one and done” choice, which heightens their anxiety about getting it right.  But maybe it isn’t an irrevocable decision – maybe there’s a strategy that you hadn’t considered.  On this week’s epi...

The Bucket Strategy has been around for more than 25 years, in one form or another.  Why has it survived for as long as it has?  With all of the withdrawal strategies that have come and gone over the years, Buckets has managed to become a mainstay for many advisors around the country. In this week's episode of Managing Your Financial Future, podcast host Johnny Dean talks with the "Profe...

Home prices are up pretty much everywhere, and for those who own one, this is good news on many different fronts.  If you're considering selling and maybe downsizing, or moving to a less expensive area, you may be able to take advantage of one of the best tax breaks out there. On this week's episode of Managing Your Financial Future , find out from podcast host Johnny Dean and his guest,...

In the world of financial planning, it's often better to do things sooner rather than later.  That is, after all, why you do planning, isn't it?  No point in waiting until the very last minute. As it's still early on, there are some things that you're much better off taking care of right now, before the year wears on, before the ticking clock becomes louder, and before these th...

If you've been saving for a long time in your 401k, you may have decided as you approach retirement that you’d like to reallocate some of those investments into something less volatile than, say, an aggressive growth fund. So maybe you change your allocation to include something with relative safety. This can be a great idea: after all, you don’t want a big market downturn to take a huge chun...

Whether you need the money to live on or not, it's a fact that once you reach age 72, you're generally required to take a certain amount of money each year out of your tax-deferred retirement accounts.  These are your Required Minimum Distributions, or RMDs. The penalty for missing an RMD is severe: 50 percent of the amount you missed!  That's not fun, and it certainly is costly.  S...

Financial knowledge is crucial for retirement planning.  This is especially true when it comes to taxes, because knowing too little may wind up costing you a whole lot.  The problem, of course, is that taxes can be extremely complicated.  Sometimes when you make one financial move, that move can trigger an extra tax bill that you never anticipated.  In this week's episode of Managing Your Fin...

It's always nice to receive a big chunk of money outside of our normal expected income.  Whether it's a bonus check from work, a lottery windfall, or an inheritance of some kind, any extra cash is generally a good thing. If you've inherited an IRA, though, whether it's from a deceased spouse or someone else entirely, there are some rules you need to be aware of.  Depending on w...

Congress passed a law a few years ago that temporarily lowered tax rates across the board for most individuals.  With these laws set to expire after 2025, you might be wondering: is now a good time to convert my traditional IRA to a Roth IRA? It might be, but you should be aware of the consequences of adding extra income to your tax return.  While tax rates might be favorable right now, if you dec...

You’ve probably made plans to take care of those people who are close to you if you didn’t live as long as you’d expected: life insurance, trusts and wills, succession planning for your business, etc.    But have you thought about you might do if you lived much longer than you thought you would?  Are you prepared if you find yourself in your 90s, or even older, and in need of an income?  What if y...

This episode covers some of your most common Social Security questions that we get every week:  How can I avoid paying taxes on my benefits?  Is there an ideal age to start taking benefits? Can I collect a benefit even if I’m still working?  How do the spousal and survivor benefits work? Social Security provides a baseline for many people’s retirement plans, which is why it’s important to be as we...

When people ask us about our Buckets strategy, they often find themselves a bit confused on their most liquid bucket – Bucket #1.  The idea is to provide an income derived from sources with little to no volatility, shielded from the stock market’s ups and downs. But what should go into that bucket?  Do you really need to have 5, 6, or 7 years of, say, cash?  Not necessarily – in fact, it may be a...

It’s been said that taxes are perhaps the biggest drag on your portfolio’s returns. So it would stand to reason that managing your taxes, with the goal of keeping them as low as possible over the course of many years, should be one of your biggest financial planning priorities. But “managing” your taxes is different from “minimizing” them. There may indeed be times where paying a little more in ta...

For anyone with a pension, the decision of how to take the payments is an important one.  Are you offered the choice to take the entire amount as a lump sum?  If so, you’ve got to know about what could happen when you decide to go one way or the other. And for married people, there are even more choices, compounding the issue even further. On this week’s episode of Managing Your Financial Future,...