Announcer:
It is time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representatives, securities offered through Cambridge Investment Research Inc., a broker dealer, member of FINRA, SIPC, investment advisor representative, Cambridge Investment Research Advisors, Inc., a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now, here’s today’s Financial Focus program.
Nate Kreinbrink:
Good morning and welcome to this week’s Financial Focus brought to you each and every Wednesday morning right here on KROS. This is Nate Kreinbrink bringing you today’s show. April is moving right along. We are winding down. I know we’re all kind of hoping and wishing and Mother Nature kind of figures herself out here and kind of gives us some consistent pleasant weather. It seems we have a nice day for a day or two and then back to reality with cloudy, rainy, 50 mile an hour wind gust, all that fun stuff. So again, but things are greening up, mowing the grass, kind of a sign of things to come. So it will be here soon enough and then it’ll be 90 and summer will be in full swing. So I know a lot of the areas schools are counting down the days. I know my kids already got about a month left.
So that last month will go by quick and again, it’ll be officially summertime, so can’t get here soon enough. I didn’t attend the KROS Plus 50 Living Fair yesterday. Another great turnout in another great event put on out at there at the Vista Grande that they have every year. And it’s always, like I said, a great event to host the screenings to have all the area businesses and see the people come through and get the information and everything with it. So again, I was out there for a few hours there in the middle, but again, another great turnout and hope to continue doing that for obviously years to come. So getting into today’s program, I know last week we had Andy Ferguson with NelsonCorp Tax Solutions on, the first show that he did after tax season. Kind of talked some of the key topics that he seemed to continuously come up during tax season.
A lot of those things that he had went into again and what to deal with those. The big thing and the key topic again that I took away as far as what we can take and what we can use as far as going forward, again, it’s just understanding what it is you are withholding from any income stream you have, whether you’re retired and it’s a pension or whether you’re working and it’s your wage income, if it’s a secondary job or you have a job where you work part-time at, what are your withholdings on that compared to what your main job would be to do that? Because again, when you start talking about how taxes turns out, everybody always wants to go to what’d you get a refund back or did you have to pay in? And they deem a successful tax year as if you get a refund and a not so good tax year when you have to pay in.
But again, those numbers we can technically control and make whatever it is you want them to be at the end of the year. The number that people never look at or what they need to be looking at is what is your overall tax? And again, understand what that number is to be able to withhold the right amount because again, if you’re getting a big refund back, you’re essentially overpaying tax throughout the course of the year, letting the IRS hold your money and then they’re going to pay it back to you when you file your taxes. Again, on the flip side of that, again, if you’re having to pay in a big chunk at the end of the year, you are underpaying your taxes throughout the course of the year. So to adjust that, you would want to withhold a little bit to maybe withhold a little bit more out of each paycheck throughout the course of the year to shrink that big bill that you have to pay at tax time when you get that done.
So again, looking at that again, if you have a life-changing event, you get married, you get divorced, your tax brackets change, spouse passes away, and all of a sudden your tax filing status is going to change where you go from single to married filing jointly or vice versa, married filing jointly back to single, your tax rates are going to change and your withholdings need to again be in line with where that is at, otherwise again, it’s going to throw things off considerably when you go to get your taxes done. So again, take a look at that. If your… new job, there’s some new forms in the way they’re getting filled out, make sure you’re understanding what those forms are and what you’re putting down and what that means to any withholding that you have. So questions on us, I’d be happy to sit down and go over that with you.
But again, that’s something that was a big takeaway from that meeting and talking with Andy as far as understanding those withholdings and that you can do things to change your end result, that tax time through that withholding period. So again, another topic that I kind of wanted to touch on a little bit today before we run out of time is a topic that I think gets overlooked a lot of time. It’s on people’s agenda to do, but always keeps getting pushed down because they don’t necessarily want to think about it. They don’t know where or how or to even get started thinking about it. And it’s estate planning. And estate planning is a topic that I think has a misconception that you have to have billions of dollars for it to apply to you when in reality, some way, shape or form estate planning applies to each and every one of you.
And the thing that we go by, and I think it really hits home, is that either you’re going to put your plan in place or somebody’s going to put the plan in place for you. And I think when people start thinking about that and you again let that sink in a little bit, it is exactly what it says. Either you’re going to do it or somebody’s going to do it for you. And again, when you say somebody’s going to do it for you and put a plan in place for the assets that you’ve worked so hard to get, I think it kind of hits home on the importance of finally acting and getting that done. Again, when you say they’re going to do it for you, usually in the sense of probate through the courts, having them say, “Hey, this is where your money’s going to go,” and then obviously charging you a fee to do that.
So again, anything that we can do in the near term to do that and have that in place is just going to benefit you and usually allows for more assets to be held in your name, less to be paid out in fees, expenses, maybe taxes, things along those lines. So when you think about estate planning, the biggest thing that comes into place and comes to mind is wills and trust and they kind of get lumped together, which again, they are both part of estate planning, but again, two very different vehicles when it comes to estate planning and what they actually do. A will is one of the more common ones that people have in place. Usually go to an attorney, have a will done up saying, “Hey, when I pass away, this is where I want my stuff to go to.” Again, effective, does get the job done for a lot of people and in some instances is all that is needed.
A trust sometimes takes it… obviously, it does take it a step farther. Being able to control your assets again while you’re alive and then also being able to possibly control them after death sometimes is a huge benefit for people and what is absolutely needed in order to again, protect and maybe protect the assets that they’ve worked so hard to accumulate or maybe were passed on to them that they want to pass it on to the next generation. All things that come into play when you start thinking about estate planning and how you want this to go out, powers of attorneys, whether they’re durable power of attorney, healthcare power of attorney, they’re so on as far as having those in place as well. Again, when nobody wants to think of the unfortunate timing of an accident or something like that. But again, when you’re in that spirit and having things in place so you’re not trying to put the pieces together in a time of need.
So again, any preparation that you can do with healthcare powers of attorneys, durable power of attorneys, just get it in place, talk to the people who you are listing, let them know that you have them listed. Again, you don’t want to throw any surprises on people and just let them know what you’re wanting to have done during that time period. Again, as I always say, we plan for the worst and hope for the best, but again, when you start looking at some of these things to have them put in place ahead of time, it’s going to give you a little bit of a peace of mind to know that, again, hopefully we never need it, but in the sense that we do, we want to make sure that we have that in place with it. So those are your two biggest things when it comes to estate planning, wills, trust, and understanding that, again, it does apply to the masses of people out there, obviously in varying capacities as to the extent of what is needed, but again, it does apply.
And lastly, something that’s pretty simple that definitely applies to estate planning is understanding your beneficiaries. Beneficiaries apply to any retirement type of account, pension plans, life insurance policies, annuities, things along those lines are beneficiary driven. So again, at my passing, this is who I wanted to go to. You usually can list a primary beneficiary and then also a secondary beneficiary. So again, it’s important to continuously update those, monitor those, make sure that they’re still in line with where you would want it to go. Again, if you get married, you add the spouse to it, if you get divorced, we’re taking the spouse off of those if we’re able to. Again, there’s all these varying different things and understanding, again, you put those beneficiaries on day one when you start, now we’re 25 years into it and we haven’t even thought about changing the beneficiaries on there is that’s still what we want it to be.
And again, understanding that those beneficiaries, when they do become enforced, again, you could have a will set up to say, “Hey, I want to put it to somebody,” but again, if your beneficiary on your retirement account or life insurance policy says it goes to someplace else, more than likely it’s going to be granted and that’s going to go to who is listed as your beneficiary. So again, you want to make sure that those are in place, they are correct, and they stay up to date with it. So again, just a very tip… touching the surface as far as the estate planning, how it applies to people, what they need to do, but again, something that I think needs to be discussed more, and it needs to be pushed up on people’s radar. Normally it doesn’t come into effect until you have some type of event coming up.
You’re planning a big trip, you’re going to be flying across country out of the country, “Okay, we need to get this done before we leave on this trip.” So again, it’s those type of events that kind of trigger action on estate planning a lot of times. But again, we want to make sure that we get that done so we’re not rushed into it and that it’s in fact. So questions on that, let us know. I’d be happy to kind of direct you and get you started to get that taken care of. But before we do run out of time, I did want to mention that every Friday, NelsonCorp Wealth Management is wearing jeans for charity. Money raised in the month of April will be donated to the Clinton MercyOne Foundation. Again, this is Nate Kreinbrink with NelsonCorp Wealth Management bringing you this week’s Financial Focus. Thanks again for tuning in and have a great rest of your week.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in the show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly registered representative Securities offered through Cambridge Investment Research Inc., a broker dealer, member of FINRA, SIPC, investment advisor representative, Cambridge Investment Research Advisors Inc., a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.