Lucia Capital Group Weekly

Beware of the Hidden Taxes in Retirement
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Beware of the Hidden Taxes in Retirement

February 11, 2021

One of the bigger myths that people often take into retirement is that their tax situation will become simpler once they’ve stopped earning a paycheck.  While this may be true in some instances, it’s certainly not the case for everyone.  In fact, it may be that your tax headaches are just beginning. Knowing what to expect, and then making plans in anticipation of that, is one of the best things you can do to potentially improve your financial situation in retirement. 
Is It Smart to Pay Off Your Mortgage?
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Is It Smart to Pay Off Your Mortgage?

January 7, 2021

If you’ve ever considered taking some extra money and paying down (or paying off) your home mortgage, you may have found that arriving at a decision wasn’t as easy as you thought. The choice usually is this: either put those funds toward the mortgage, or invest it and hope for greater net returns. There are two aspects to consider here: the emotional and the rational. And those two are often in conflict with one another.  How do you decide what to do?
Living Trust or Will? What You Need to Consider
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Living Trust or Will? What You Need to Consider

December 17, 2020

When you’ve worked hard over your lifetime and you’ve done all you can to be a conscientious saver, it stands to reason that you’d want some control over what happens to your assets after you’re gone. Having an estate plan may ensure that your assets are distributed according to your wishes. But what should that estate plan include? Do you need a standard will, or should you have something that offers you a few more options? These are questions that should be considered by anyone who’s concerned about potential conflicts and costs for their heirs. Questions, of course, need answers.
Beware the High-Yield Siren Song
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Beware the High-Yield Siren Song

December 10, 2020

Once upon a time in America, a married couple could afford to have one spouse stay at home and take care of domestic responsibilities while the other spouse went out and earned the income.  And while that scenario does still exist today, it’s far less common than it was 30 or 40 years ago. It would seem plausible that having two incomes instead of one would make a family more financially secure.  This is true, but only to an extent – especially for affluent households.  In fact, having two working spouses may in some cases have an adverse effect on a family’s financial situation.
The Dual-Income Dilemma
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The Dual-Income Dilemma

December 3, 2020

Once upon a time in America, a married couple could afford to have one spouse stay at home and take care of domestic responsibilities while the other spouse went out and earned the income.  And while that scenario does still exist today, it’s far less common than it was 30 or 40 years ago. It would seem plausible that having two incomes instead of one would make a family more financially secure.  This is true, but only to an extent – especially for affluent households.  In fact, having two working spouses may in some cases have an adverse effect on a family’s financial situation. Are two incomes really better than one? 
Sorting Out the Self-Employed Retirement Plan Options
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Sorting Out the Self-Employed Retirement Plan Options

November 12, 2020

Retirement Plan Options blurb: If you run your own business, chances are pretty good that you know a lot about the products or services you offer. That’s why you’re in business for yourself, right?But while you’ve surely got that part of it down, you may find that you aren’t nearly as familiar with your business finances — taxes, payroll, accounting, and employee benefits, just to name a few. For those with employees, the financial complications can become overwhelming, especially if you’re not familiar with all of the rules and options available to you as a business owner. One particularly confusing aspect has to do with employee retirement plans. Even if you have no employees and you yourself are the only one involved, you still may want to set up a retirement plan for yourself. There are several tax-advantaged options available to a business owner, and finding one that’s suitable for you can be a daunting task.
Pension Decisions, Part 2: Lump Sum, or Annuity Payments?
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Pension Decisions, Part 2: Lump Sum, or Annuity Payments?

October 29, 2020

A little while back we told you about a way to take your maximum pension benefit option while potentially mitigating the income risk to your spouse with a life insurance policy.  That technique is called “pension maximization.” If you have a pension, it’s just one of the decisions you’ll be faced with when it’s time to take your benefits. Another decision you may have is whether to take your benefits in the form of an annuity or a lump sum.  Which option you select can have a large impact on how much money you ultimately wind up with in retirement.  Factors such as current interest rates, future inflation, and your own investing abilities may all come into play.
A Strategy to Maximize Your Pension Payments
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A Strategy to Maximize Your Pension Payments

October 22, 2020

If you’re the owner of a traditional pension plan, you need to be aware of an important rule when the payments start: unless your spouse elects to sign a waiver that allows otherwise, your pension benefits will be paid out to the both of you in the form of what’s called a “qualified joint and survivor annuity.” In other words, the amount you’ll get will be reduced during your lifetime, so that your spouse will continue to receive at least 50% of that amount if you happen to die first. You could both elect instead to receive the higher single-life annuity payment, but the payments, while significantly higher, would stop at your death and not continue for the surviving spouse.  This can be a real dilemma for people who want the higher payments, but are reluctant to lose that income if the pension owner doesn’t outlive the spouse. There is a potential solution to this problem, though.  Is it possible to have both the larger payments AND provide an income for your surviving spouse?