Evans Tax Advisors' Blog

If you know about a little secret buried deep in the IRS code… you can use the money you’ve saved in your IRA, 401(k) or TSP accounts, no matter what your age, completely penalty free. This might come in handy in this economic environment.

Most people think you’ve got to wait until age 59½ to start taking money out of your IRA, 401(k) or TSP accounts without paying a 10% penalty. But the truth is: You can take out your savings at any age you wish, even if you are in your 30s or 40s, without paying a penalty… thanks to Section 72(t).
[Read the rest of this entry...]

Risk. Investing is risky business. So how did your stock broker or advisor protect you from risk? If I can use a little bit of psychic ability I’m seeing that he or she told you that you needed a “diverse portfolio.” And to create this diverse portfolio he or she said you needed a combination of stocks (i.e., mutual funds) and bonds (i.e., bond funds). How much you should have in stocks and how much you should have in bonds was based on your “risk profile” and your age. And if my psychic abilities are holding up this little exercise in “diversification” was the only tool your broker used to manage your risk. So to channel Dr. Phil, how did that work for you? Bottom line:

Did Your Broker’s Plan Work?

How did your diversified portfolio stand up to a real bear market? The mental picture I’m getting is you had big losses in your “diverse portfolio.” Somehow diversification didn’t prevent catastrophic losses. And now I’m hearing your advisor telling you “Hang in there” “You’ve got to stick to the plan.” I spoke with an advisor at a party the other day who said she was trying to keep her client’s spirits up. Well if the strategy most all advisors implement actually worked, then your broker wouldn’t need to be your psychologist or your cheer leader.
[Read the rest of this entry...]

$559,000 is what a dollar would have been worth invested in stocks throughout the entire history of the U.S. stock market.

$24,000 is the exact same number as above, minus taxes (assuming you’re paying the highest tax rates).

The difference is incredible… And it’s all due to taxes. (The numbers are from the book Stocks for The Long Run 2nd Edition, by Jeremy Siegel.)
[Read the rest of this entry...]

First a quiz.  Do you think taxes are going to go up or down in the next 10 years?

______ Up    _______ Down

If you saved $300,000 in your retirement account by the time you retire and you are in a 25% tax bracket, then the IRS “owns” 1/4^th of your account.  You will have to pay 25% of every withdrawal to the IRS. So really the IRS has claim on 25% of your retirement account. [Read the rest of this entry...]

Are your family vacations spent cramped in an expensive hotel? After a long day of sightseeing, are you forced to read quietly in your room while the kids sleep?

Imagine multiple rooms, available to you for the same price. Where your kids could watch cartoons in the morning and you have a quiet cup of coffee in the living room. Did I say living room? We generally get two master bedrooms and a living room.
[Read the rest of this entry...]

How Assisted Living and Nursing Home Expenses Can Wipe Out Your Savings

Part 1

“I never thought I would end up in a place like this.” This is what Bob told me when I met him at the Assisted Living Facility. Bob’s wife had a stroke and he could no longer care for her so they had to move into an Assisted Living Facility from his rural home. This was a huge transition in lifestyle but it was also a financial strain as instantly they went from comfortably being able to pay all their bills with money left over to having $2,000 more in expenses each month than they had income. Suddenly finances were a BIG worry and the reality of Long Term Care costs hit them.
Long Term Care (LTC) Expenses, sometimes called Elder Care Costs, can be one of the biggest threats to your lifetime savings. Long term care can mean anything from Home Care, to Assisted Living to Nursing Home or an Alzheimers/Memory Care Facility. In this series of articles we will take away some of the confusion about how much all this can cost, what government programs really pay for and how you can plan for the worst without costing a fortune. [Read the rest of this entry...]

There is a better way to save for retirement

This month we begin a multi-part series on the realities of funding your retirement using “Qualified” retirement plans such as IRA’s and 401(K)’s.

Most Americans who are concerned about preparing for retirement are lured into contributing pre-tax dollars into IRA or 401(k) plans. You have probably heard it a thousand times – contribute the maximum to your 401(k). However, such “Qualified Plans” only give you tax favored advantages during the contribution and accumulation phases of your life.
[Read the rest of this entry...]