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The mission of the Partners is to empower all of us to go directly to each other with our expertise. FiduciaryFirst is considered an industry leader and our knowledge and informative blogs can help you gain an understanding about key topics within the industry.

DOL Fiduciary Rule Update: How the Future Will be Changed

The Department of Labor (DOL) has extended the applicability date of the new fiduciary rule and related exemptions to June 9, following a directive from the Trump administration to examine the rule and make sure it doesn’t affect consumers’ ability to get retirement information and financial advice. In general, the rule requires most non-fiduciary financial advisors to follow the fiduciary standard (acting in their clients’ best interest) when recommending investments, charge only reasonable compensation for their services, and avoid making misleading statements. Both 3(21) and 3(38) investment fiduciaries are already required to follow these standards, so the rule will largely affect other advisors, like insurance agents and broker-dealers. For 401(k) plan sponsors, the new rule will help them keep their 401(k) fees reasonable. Non-fiduciary advisors can recommend any investment as long as they follow the suitability standard, which, stated simply, means this investment meets their clients’ requirements. Non-fiduciary advisors aren’t...
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Better Manage Your Old 401(K)

If your employer is a retirement plan sponsor that offers access to a 401(k) plan, you should be taking advantage of it to save for retirement. 401(k)s offer significant advantages to workers, such as the ability to save on a tax-deferred basis and often, employer savings matches. However, most workers today will change jobs several times during their careers. In fact, according the Bureau of Labor Statistics, a person born between 1957 and 1964 will hold, on average, almost 12 jobs (11.7) by age 48.1 So what can you do with your 401(k) plan when you change jobs?  There are four basic options: Cash out This is not a good financial strategy. If you’re under age 59 ½, you’ll pay an early withdrawal penalty of 10 percent, and you’ll owe income taxes on the amount. Your employer will typically withhold 20 percent to pay the taxes, but depending on your...
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Buy or Refinance a Home

For most people, a home is the biggest financial commitment they will make, so it’s important to carefully review your options when you’re thinking about making a change to your housing situation. Retirement plan consultants also note that your home will also generally be your largest asset when you retire, and that’s an important consideration for many people. Buying a home Refinancing or buying a new home is often a key part of getting ready for retirement. Many people find their housing needs have changed. For example, children may have moved out. Others decide they want to relocate to areas with better climate or closer to grandchildren. In these situations, you probably want to buy a new home, rather than refinancing your existing home. It’s important to remember, though, that your home will be passed on to your heirs as part of your estate. Any mortgage obligation will typically also...
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Hidden Taxes in Your Tax-Free Retirement Account

Sometimes people are surprised to find out they owe taxes on investments in their “tax-free” retirement accounts. It’s not common, but pension consultants note that it can happen. While most earnings in tax-advantaged accounts, like IRAs, Roth IRAs, or 401(k)s, accumulates free of taxes, some types of investments within these accounts could qualify as Unrelated Business Taxable Income (UBTI) and trigger a tax bill. UBTI was originally created to make sure that tax-exempt organizations didn’t have an unfair advantage over taxable businesses like for-profit corporations. So if a tax-exempt organization regularly earns income from a trade or business that’s unrelated to the organization’s tax-exempt purpose, that income could be classified as UBTI and is subject to taxes. For example, if a university runs a pizza restaurant that sells to both students and non-students, that restaurant’s income is unrelated to the university’s tax-exempt mission of education. The university pays the same...
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Three Tax Tips That Can Help As You Approach or Begin Retirement

Retirement is a whole new phase of life. You’ll experience many new things, and you’ll leave other things behind. One thing that won’t disappear, however, are taxes. If you’ve followed the advice of retirement plan consultants, you’re probably saving in tax-advantaged retirement accounts, like 401(k)s or IRAs. These types of accounts defer taxes until withdrawal, and you’ll probably be withdrawing funds from them in retirement. Also, you may have to pay taxes on other types of income, like Social Security, pension payments, or salary from a part-time job. With that in mind, it makes sense for you to develop a retirement income strategy. Here are three tips: Consider when to start taking Social Security. The longer you wait to start taking your benefits (up to age 70), the greater your benefits will be. Remember, though, that currently up to 85 percent of your Social Security income is considered taxable if...
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