Welcome To Pacific Retirement Planning

Common Retirement Income Mistakes

1. Underestimating income needs;

Investments have to compensate for taxes and inflation. If inflation increases at 3% per year, your cost of living doubles every 24 years.

1. Relying too much on Social Security;

While the current system may be sound for now, it will not be able to provide much growth.

1. Not understanding the different levels of taxation;

Levels of income can affect the taxability of Social Security benefits.

1. Proper investment allocation;

The markets change constantly. Diversify and review regularly.Even though you are retired, you still want your investments to grow.

1. Taking “Required Minimum Distributions”;

Required Minimum Distributions (RMDs) generally are minimum amounts that a retirement plan account owner must withdraw annually starting with the year that he or she reaches 70 ½ years of age or, if later, the year in which he or she retires. Failure to make timely withdrawals can result in penalties.

6) Inheriting an IRA

If you've inherited an IRA, you should know about rules that may impact your inheritance before you make any moves.
The rules for inherited IRAs are complex. If you inherit an IRA, it's a good idea to ask your tax professional, estate planning attorney or financial advisor for help.
Federal tax laws and these IRA documents will govern your inherited IRA:
Account agreement describes the rules that apply to the account as set by the custodian.

Beneficiary designation establishes your status as a beneficiary.
Federal tax rules governing inherited IRAs provide you with choices for planning distributions (withdrawals) from the account. If you make a wrong move, you could reduce the amount of your inheritance.
What are the rules?
In general, distribution rules for inherited IRAs will differ depending on two factors:

• If the deceased was your spouse; and
• If the deceased died before or after his/her required beginning date (RBD) — April 1 of the year following the year the IRA owner reached age 70½.

General Guidelines
If you're not the surviving spouse, you must generally take distributions from the IRA account, cannot make contributions and cannot roll over any distributions you take.
If you are the surviving spouse, you may roll over the IRA account assets into your own IRA and continue to make contributions.
If you withdraw the money in one lump sum, it will be subject to federal, state and local income taxes. You will not be subject to the 10% early withdrawal penalty, however, even if you and/or the deceased are under age 59½ (the age at which account holders can start withdrawing money without penalty). 
You can receive withdrawals over a period of time. With proper planning, any beneficiary may be able to receive payments from the account over a period of years to spread out taxes due or to bequeath to their own beneficiaries.
If the owner died after his/her RBD date, you may be able to:

• Continue receiving the same payments over the same time period;
• Continue receiving payments based on your own life expectancy;
• Speed up payments and receive larger sums over a shorter time period; or
• Receive a lump sum distribution or, if you're the spouse, roll the money over into an IRA.