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January 2024

important birthdays for using your retirement funds.

Important Birthdays Over 50 For Retirement

By Uncategorized

Most children stop being “and-a-half” somewhere around age 12. Kids add “and-a-half” to make sure everyone knows they’re closer to the next age than the last.

When you are older, “and-a-half” birthdays start making a comeback. Starting at age 50, several birthdays and “half-birthdays” are critical to understanding because they have implications regarding your retirement income.

Age 50: Qualified Retirement Plans

At age 50,  workers in certain qualified retirement plans can begin making annual catch-up contributions in addition to their normal contributions. Those who participate in 401(k), 403(b), and 457 plans can contribute an additional $8,000 per year in 2024. Those who participate in Simple Individual Retirement Account (IRA) or Simple 401(k) plans can make a catch-up contribution of up to $3,500 in 2024. And those who participate in traditional or Roth IRAs can set aside an additional $1,000 a year.1,2

Age 591⁄2: Retirement Plan Withdrawals

At age 591⁄2, workers can start making withdrawals from qualified retirement plans without incurring a 10% federal income tax penalty. This applies to workers who have contributed to IRAs and employer-sponsored plans, such as 401(k) and 403(b) plans (457 plans are never subject to the 10% penalty). Keep in mind that distributions from traditional IRAs, 401(k) plans, and other employer-sponsored retirement plans are taxed as ordinary income.

Age 62: Social Security

At age 62 workers are first able to draw Social Security retirement benefits. However, if a person continues to work, those benefits will be reduced. The Social Security Administration will deduct $1 in benefits for each $2 an individual earns above an annual limit. In 2024, the income limit is $22,320.3

Age 65: Qualify for Medicare

At age 65,  individuals can qualify for Medicare. The Social Security Administration recommends applying three months before reaching age 65. It’s important to note that if you are already receiving Social Security benefits, you will automatically be enrolled in Medicare Part A (hospitalization) and Part B (medical insurance) without an additional application.4

Age 65 to 67: 100% of  Social Security

Between ages 65 and 67, individuals become eligible to receive 100% of their Social Security benefits. The age varies, depending on the birth year. Individuals born in 1955, for example, become 100% of their benefits when they reach age 66 years and 2 months. Those born in 1960 or later need to reach age 67 before they’ll become eligible to receive full benefits.5

Age 73: Individual Retirement Account

In most circumstances,  once you reach age 73, you must begin taking required minimum distributions from a traditional Individual Retirement Account and other defined contribution plans. You may continue to contribute to a traditional IRA past age 701⁄2 as long as you meet the earned income requirement.

Understanding key birthdays may help you better prepare for certain retirement income and benefits. But perhaps more importantly, knowing key birthdays can help you avoid penalties that may be imposed if you miss the date.
If you have you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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1. If you reach the age of 50 before the end of the calendar year.
2. IRS.gov, 2023
3. SSA.gov, 2023
4. SSA.gov, 2023. Individuals can decline Part B coverage because it requires an additional premium payment.
5. SSA.gov, 2023

The content is
The content is

The content is de from sources believed to be providing accurate information. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used to avoid any federal tax penalties. Please consult legal or tax professionals for specific information regarding your situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered
Investment advice offered

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

New Retirement Contribution Limits for 2024

New Retirement Contribution Limits for 2024

By Uncategorized

The Internal Revenue Service (IRS) has released new limits for certain retirement accounts for the coming year.

Keep in mind that this update is for informational purposes only, so please consult with an accounting or tax professional before making any changes to your 2024 tax strategy. You can also contact your financial professional, who may be able to provide you with information about the pending changes.

Individual Retirement Accounts (IRAs)

Traditional IRA contribution limits are up to $500 in 2024 to $7,000. Catch-up contributions for those over age 50 remain at $1,000, bringing the total limit to $8,000.

Remember, once you reach age 73, you must begin taking the required minimum distributions from a Traditional IRA in most circumstances. Withdrawals are taxed as ordinary income and, if taken before age 591⁄2, may be subject to a 10% federal income tax penalty.

Roth IRAs

The income phase-out range for Roth IRA contributions increases to $146,000-$161,000 for single filers and heads of household, an $8,000 increase. For married couples filing jointly, the phase-out will be $230,000-$240,000, a $12,000 increase. Married individuals filing separately see their phase-out range remain at $0-10,000.

To qualify for the tax-free and penalty-free withdrawal of earnings, Roth 401(k) distributions must meet a five-year holding requirement and occur after age 591⁄2. Tax-free and penalty-free withdrawals can also be taken under certain other circumstances, such as the owner’s death.

Workplace Retirement Accounts

Those with 401(k), 403(b), 457 plans, and similar accounts will see a $500 increase for 2024, the limit rising to $23,000. Those aged 50 and older will continue to have the ability to contribute an extra $7,500, bringing their total limit to $30,500.

Once you reach age 73 you must begin taking required minimum distributions from your 401(k) or other defined-contribution plans in most circumstances. Withdrawals are taxed as ordinary income and, if taken before age 591⁄2, may be subject to a 10% federal income tax penalty.

SIMPLE Accounts

A $500 increase in limits for 2024 gives individuals contributing to this incentive match plan a $16,000 stoplight.

Much like a traditional IRA, once you reach age 73, you must begin taking the required minimum distributions from a SIMPLE account in most circumstances. Withdrawals are taxed as ordinary income and, if taken before age 591⁄2, may be subject to a 10% federal income tax penalty.

As a reminder, this article is for informational purposes only. Consult with an accounting or tax professional before making any changes to your 2024 tax strategy.

If you have questions about your finances, take advantage of American Wealth Management’s 1- hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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The content is developed from sources believed to be providing accurate information. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used to avoid any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice is offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

What you pay for wealth management depends on your personal goals and financial situation. Wealth management based in Reno, Nevada.

How Much Does a Wealth Manager Cost?

By Uncategorized

Google isn’t likely to serve you up a tidy cost menu for wealth management services. That’s because wealth management isn’t one-size-fits-all. What you pay depends on your personal goals and financial situation.

But, you can still choose the right wealth manager for you and figure out what it will cost. You just need to understand how different wealth managers are paid and how your situation affects what you pay.

3 Factors to Consider When Budgeting for a Wealth Manager

1. There are 3 Main Models a Financial Advisor Can Use for Compensation

In the wealth management world, you’ll encounter a few different compensation models—or payment structures. Every compensation model has strengths and weaknesses depending on your needs and how the pay structure incentivizes your manager to handle your account.

Here are the 3 basic pay structures:

Flat-Rate Model

Want to keep things simple? You can find a wealth manager who charges a flat rate for their services. Common flat rates for 2023 ranged from $2,000 to $7,500 a year. You can also find wealth managers who charge by the month or by the hour for their financial expertise.

However, what all flat rate structures have in common is that they eliminate the manager’s incentive to grow the client’s assets. In other words, the wealth manager gets paid whether you get a return on investment or not.

Commission Model

Like a credit card company that takes a small cut every time you swipe, some wealth managers earn a commission every time you buy or trade investments based on their recommendation. Those investments can include mutual funds, stocks, annuities, life insurance, and so on.

This pay structure may incentivize managers to engage in more frequent trading of your assets and to recommend specific investment products.

That might be exactly what you’re looking for. However, use caution when engaging a commission-based wealth manager, as they work around incentives that don’t always align with their client’s best interests.

Fee-Based Model

This compensation model involves paying your wealth manager a percentage of your total assets under management (AUM). That means your wealth manager takes a fixed percentage of what you’ve invested year to year. The typical range for fee-based wealth managers is 1– 1.5% AUM.

This compensation model is called a fee-based or fee-only model. (There are small differences between the two, but the overall payment structure is the same.)

This model motivates your wealth manager to grow your assets, since their compensation increases as your investments do.

Assuming you choose a fee-based wealth manager, let’s look at what the pay structure could look like.

2. Your Total Assets Affect the Cost of Wealth Management Services

If you want to know how much a fee-based wealth manager will cost you, a good place to start is knowing how much you plan to invest. With a percentage-based pay structure, you can plan to pay your wealth manager a percentage of invested assets and come up with an approximate figure.

So, for example, here’s how you would calculate the fee for a $150,000 AUM at a rate of 1.25%:

$150,000 * 0.0125 = $1,875 per year

Keep in mind that, in some cases, there may be additional costs associated with some services or transactions. These could include financial planning fees, account maintenance fees, or trading costs.

In the end, more assets will mean a larger payout for the financial manager. However, being “wealthy” is never a prerequisite for seeking out and obtaining financial guidance.

3. Wealth Management Services Cost More or Less Depending on Financial Complexity

The range of services you require, and the intricacy of your financial situation will have some bearing on how much you pay your wealth manager.

If your finances are relatively straightforward (your assets are consolidated in one or two investment categories) you might find yourself at the lower end of the fee range. On the flip side, if your financial situation is more intricate, involving complex investment strategies, tax planning,

or estate planning, you might be closer to the higher end of the fee spectrum, reaching 1.5% or more.

Have an open conversation with your wealth manager about your financial goals, the services you expect, and how the manager’s fees align with your needs.

Understanding the factors that contribute to the cost of wealth management can help you make informed decisions about the value you receive for the fees you pay.

What to Discuss When You Consult with a Wealth Manager

The best way to get an accurate reading on what financial services will cost is to sit down with a wealth manager and discuss your goals. Prepare to discuss this list of topics:

  • An overview of your financial situation, including income, expenses, assets, and liabilities
  • Short-term and long-term financial goals, such as education savings, retirement planning, or homeownership
  • Your risk tolerance and any specific concerns or preferences you have about your investments
  • The wealth manager’s approach to financial planning, investment strategies, and the range of services they offer
  • The wealth manager’s fee structure, including potential additional costs associated with their services

Get Wealth Management Services in the Reno, Nevada Area

American Wealth Management is a fee-based wealth management firm based in Reno, Nevada.

To schedule a free consultation with American Wealth Management and explore how their services align with your financial goals, click here and fill out the consultation request form.

This free consultation is the perfect chance to assess whether one of our wealth managers is the right fit for your financial needs and to establish a foundation for a successful long-term partnership.

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Investment advice is offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

transfer of wealth

How Boomers and Millennials Differ

By Uncategorized

We are in the midst of an unprecedented transfer of wealth, with trillions of dollars being moved from one generation to the next. This transfer challenges many commonly held notions as new values and interests become more prominent. In short, the economy is changing, and while some of these new practices might raise an eyebrow or two, not all of these ideas are without merit.

Boomer Generation

For someone from the boomer generation, it might be easy to become upset with or confused by millennials’ differing points of view. However, taking note of the differences between the two generations can foster better communication and understanding.

Younger Generations

The younger generations, including millennials, Gen Z, zoomers, and whatever else you call them, have a different perspective on wealth than their forebears. As these generations reach middle age, an interesting trend has emerged in emphasizing YOLO (You Only Live Once). Now that these generations have the steering wheel, they seem to be stepping on the gas and running full force into exciting, once-in-a-lifetime experiences.

At this point, it bears looking at the “why” of the YOLO economy. In other words, why do these forty-somethings spend as if there is no tomorrow?

Less money: Your average 40-year-old earns about $49,000 a year. While this is more than the 40-year-olds of the previous generation, the rising cost of living has taken a significant bite out of that difference.1

Less control: This generation also holds a smaller piece of the pie. While the post-WWII cohort controlled 22 percent of wealth in the United States once it reached middle age, millennials only controlled seven percent.2

Perhaps the biggest factor is less marriage: Middle-aged millennials are less likely to be married or start families than prior generations. Only 44 percent of millennials have walked down the aisle by age 40, compared to 61 percent for Generation X and 53 percent for baby boomers. Only 30 percent of millennials live with a spouse and at least one child, far lower than prior generations. This means that the expenses that come with a family are also off the table. If you aren’t married, the costs of a possible divorce are simply gone. Without children, you don’t have to pay for school clothes each fall, braces, and everything else that comes with helping a child grow up.3

The result is a very different economic picture for today’s middle-aged individuals. Consequently, all of these differences have informed a different set of values. Among millennials, 78 percent prefer spending money on experiences rather than material things. While prior generations may have placed more importance on things like home ownership, car purchases, and investments, millennials are looking at a different future with disparate priorities. For these reasons, spending on travel, exclusive events, and entertainment has become a priority.4

Of course, many boomers today find themselves in similar situations as middle-aged millennials. Most of the boomer generation is in their retirement, with their children growing and perhaps finding themselves needing further stimulation in their golden years. While many keep working part-time, start businesses, or help their families with childcare, there may be a pang of that YOLO spirit in them as well, and a similar yearning for adventure.

And for good reason. While their middle-age experiences may have been very different, there is no better time than now to take that big trip you’ve always thought about. Maybe it’s time to splurge on those expensive concert tickets or challenge yourself through a special adventure that always seemed impractical, like learning to SCUBA dive or skydive.

This might be too far for some, but it’s important to remember that wealth can serve us in two ways: providing security and allowing us to enjoy life. If you’ve been working hard with your financial professionals to pursue that security, maybe it’s time to talk to them about your need for enjoyment.

It’s also possible that the younger people in your family have done too much YOLO and not enough saving and investing. A conversation with a trusted financial professional may help them understand how to balance living for today and preparing for tomorrow.

If you have questions about your finances, take advantage of American Wealth Management’s 1- hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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1. Businessinsider.com, February 22, 2023
2. Fortune.com, March 22, 2023
3. Pewresearch.org, October 19, 2023
4. Harris Interactive, October 19, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.

Five Most Overlooked Tax Deductions

Five Most Overlooked Tax Deductions

By Uncategorized

Who among us wants to pay the IRS more taxes than we have to?

While few may raise their hands, Americans regularly overpay because they fail to take tax deductions for which they are eligible. Let’s take a quick look at the five most overlooked opportunities to manage your tax bill.

  1. Reinvested Dividends:

    When your mutual fund pays you a dividend or capital gains distribution, that income is a taxable event (unless the fund is held in a tax-deferred account, like an IRA). If you’re like most fund owners, you reinvest these payments in additional shares of the fund. The tax trap lurks when you sell your mutual fund. If you fail to add the reinvested amounts back into the investment’s cost basis, it can result in double taxation of those dividends.1
    Mutual funds are sold only by prospectus. Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.

  2. Out-of-Pocket Charity:

    It’s not just cash donations that are deductible. If you donate goods or use your personal car for charitable work, these are potential tax deductions. Just be sure to get a receipt for any amount over $250.2

  3. State Taxes:

    Did you owe state taxes when you filed your previous year’s tax returns? If you did, don’t forget to include this payment as a tax deduction on your current year’s tax return. There is currently a $10,000 cap on the state and local tax deduction.3

  4. Medicare Premiums:

    If you are self-employed (and not covered by an employer plan or your spouse’s plan), you may be eligible to deduct premiums paid for Medicare Parts B and D, Medigap insurance, and Medicare Advantage Plan. This deduction is available regardless of whether you itemize deductions or not.4

  5. Income in Respect of a Decedent:

    If you’ve inherited an IRA or pension, you may be able to deduct any estate tax paid by the IRA owner from the taxes due on the withdrawals you take from the inherited account.5

If you have questions about your finances, take advantage of American Wealth Management’s 1- hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.

American Wealth Management Reno, Nevada

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1. TheBalance.com, 2021 2. IRS.gov, 2022
3. IRS. gov, 2022
4. IRS. gov, 2022
5. IRS.gov, 2022. In most circumstances, once you reach age 73, you must begin taking the required minimum distributions from a Traditional Individual Retirement Account (IRA). Withdrawals from Traditional IRAs are taxed as ordinary income and, if taken before age 591⁄2, may be subject to a 10% federal income tax penalty. You may continue to contribute to a Traditional IRA past age 701⁄2 as long as you meet the earned-income requirement.

The content is developed from sources believed to be providing accurate information. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used to avoid any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.