CCM INSIGHTS
A Newsletter by Compass Capital Management
CONGRATULATIONS JULIE!
A LOOK INSIDE THIS ISSUE:
2.USING A ROTH IRA FOR WEALTH PLANNING 1.Congratulations Julie!
3. Native American Heritage Month
UPCOMING EVENTS: Holiday Hoedown: November 13th
Our Compass Capital Management team would like to send a huge CONGRATULATIONS to our very own Julie Hokit! Julie just completed the third course, out of eight, to obtain her Chartered Financial Consultant (ChFC) designation.
Julie is full steam ahead and on to the next course.
We are SO proud of you Julie, and we can not wait to see the great things you do!
USING A ROTH IRA FOR WEALTH PLANNING
BY: JIMMY J. WILLIAMS, CPA/PFS, CFP , CRPC ® ™
If you are planning to retire in the next five years, it is critical that you analyze your current investment assets and the accounts that hold them. Many individuals accumulate their retirement assets in an employer retirement plan such as a 401(k) or 403(b) These plans are excellent accumulation accounts and the matching employer contributions assist the participant in growing their account much faster than they otherwise would However, once you decide to retire and start taking distributions from the employer account, you will begin paying taxes on the funds you receive What if you could balance your tax burden in the future by paying a few dollars in taxes now? By funding a Roth IRA, you will be paying taxes today at a rate that may be lower than what you might experience in the future. At the current rate of debt in the United States Government, it is plausible that tax rates will need to rise at some point to pay for the interest and principal payments to the bondholders.
Another point about Roth IRAs that are helpful for your heirs is that the funds within a Roth IRA are not required to be distributed within a ten-year period such as Traditional IRAs If you convert your Traditional IRA, or a portion of it, to a Roth IRA, you will not be required to pay taxes on the growth since you have no requirement to receive the required minimum distribution (RMD) An added benefit is that your heirs may receive a greater inheritance since the RMDs would lower your IRA balance over time
Truly a bonus for inheriting in Roth IRAs is that you may be able to control your future Medicare costs and Social Security Benefits taxability. Certain payments are not considered in the calculation of determining taxability of SSA benefits Another consideration is that you may impact your Medicare premium costs by receiving required minimum distributions from an IRA This extra charge for certain higher income individuals on Medicare is called “Income-Related Monthly Adjustment Amount (IRMAA) ” Based on the prior two years of tax returns, the SSA will calculate the increase in your Medicare premiums for Part B and Part D to determine if you owe the additional charge The good news about this additional charge is that it is evaluated annually If your modified adjusted gross income decreases below the threshold, your Medicare premiums may be less in the following year.
To effect a Roth conversion from your Traditional IRA, it is better to have post-tax assets to pay the tax burden. Think about your brokerage or savings account serving this purpose By paying the tax with other funds, your full IRA amount will be converted to the Roth IRA
The steps you should take in this process are to first determine your current effective tax rate Analyze your various investment accounts by type of account (i e , IRA, Roth IRA, brokerage, etc ) You may convert a portion of the IRA to the Roth IRA and certain assets are better suited for such conversion than others
It is important that you reduce your exposure to taxation as much as legally possible. Seek out a complimentary consultation with a CERTIFIED FINANCIAL PLANNER practitioner. You may find that your current situation may be one of a patriotic American – you are paying too much in future taxes. If you believe tax rates will be lower in the future, there are other strategies that may be helpful to explore Go for a walk and enjoy the fall foliage!
NATIVE AMERICAN HERITAGE MONTH
Compass Capital Management is celebrating Native American Heritage Month by showcasing fine art from local Native American artists through the Month of November.
Our team at Compass Capital Management is honored to showcase these beautiful works of art, the talented artists and help share their Native American heritage with the community.
“When I think of Native American Heritage Month, I think of our ancestors and the strength and resiliency they had,” Choctaw Council Woman Regina Mabray representing District 12 said. “I also consider where we are now as a thriving and leading nation, and for our futurewhat we do now and how it will affect our children and grandchildren.”
Various artists such as Connie Phillips (Choctaw), Jane Semple-Umsted (Choctaw) and Jaime Misenheimer (Choctaw) donated their work to showcase the beauty behind Native American heritage representing their stories, history and culture
“At Compass Capital Management, we bring far more than wealth advisory services and retirement planning to the communities we serve,” Jimmy Williams, CEO of Compass Capital Management said. “One of our passions is art. We are exhibiting 3 wonderful Native American artists with four paintings unique to our area, displaying the talent and culture of Native American heritage.”
This project has allowed various artists to come together to showcase their different perspectives of Native American culture through different mediums of art
“It doesn’t always have to be representing the traditional ideas, native topics or native subjects, it’s just family for me,” Choctaw artist Jaime Misenheimer said. “As a native artist, I work in every medium, every subject... It’s more about the personal expression.”
CCM is inviting the communities at large to visit our main offices on Choctaw Avenue in McAlester to come and admire these works of art during the Month of November.
