A Few Tips for You

General Tips

62 or older may qualify for a reverse mortgage to eliminate mortgage payments, establish a reserve for unexpected expenses, obtain funds for long-term care, fund educational costs, aid someone not employed, and help in division of assets in divorce.

An often overlooked aspect of estate planning is Wealth Transfer. Are assets set aside for use by surviving spouse? Are any designated fcor children, grandchildren or charity? Planning to build an estate is not the same as planning to preserve an estate. A periodic Wealth Transfer review may be in order.

Are you subject to the volatility of a securities market? HereÕs an alternative you might consider. Fixed indexed Annuities offer a NO LOSS guarantee with the advantages of possibilities for upside potential without suffering with the volatilities of a securities market activity.

For my female readers: between 60 and 20 years ago the percentage of women in the workforce has close to doubled. Recently almost 60% of college grads were women and in U. S. households nearly one-third have women as the sole or main supporter. In taking control of your financial future what are your thoughts concerning career, starting a business, starting over or retirement. 40% of women say the most significant barrier to manage savings and investments is lack of knowledge. HereÕs where a financial professional is an invaluable resource because in working with a financial professional women feel 50% more responsible, confident and optimistic. They also are 50% more likely to have financial security, clear thinking and satisfaction. Also, women who work with a financial professional are more likely to teach their children to be financially independent.

Services

My services include: Life Settlements, Fixed Indexed Annuities, Mutual Funds, Life Insurance, Reverse Mortgages, Short Sales, Financial Reviews, as well as reviews of Powers of Attorney and beneficiaries, College planning and financing.

Credit Trust Will

Think about a Credit Trust Will as opposed to a simple will. It serves to minimize total federal estate taxes because the estates of both spouses take full advantage of the unified credit. Continued use of the marital deduction planning should be evaluated in developing an estate plan.

Long-term Care Protection

Consider long-term care protection because average annual costs are $70,000 and the need is rising due to increasing life spans. Typical options are insurance, traditional or self- insuring. 70% of 65 or older will need long-term care. Aging increases possibilities of diseases and Medicare covers only a portion of the cost.

Estate Planning and Philanthropy

A recent study from U. S. Trust talks about affluent people and their thoughts about money and financial planning. Most advisors talk about investment, but there are other concerns which I'm prepared to discuss in depth. They are estate planning and philanthropic ideas.

A lot of those surveyed are concerned about their children's ability to manage a large inheritance which I would be pleased to discuss with you to arrive at an appropriate direction to insure preservation and what is desired to be accomplished. What is of interest to you? Please contact me to discuss these or any other matters of concern and I will spend the initial time free of charge.

ROTH IRA CONVERSIONS

Things to consider regarding the conversion of eligible retirement accounts such as traditional IRA'S, rollover IRA's, SEP-IRA's, Simple IRA's, SAR-SEP IRA's, 401(k) and 457(b).

• Beginning in 2010, virtually all taxpayers can convert those retirement accounts to as ROTH IRA without any concerns about previous income limitations.
• The converted amount is fully taxable, but in 2010 the amount may be included equally over 2 years, 50% in 2011 and 50% in 2012.
• You may be able to make partial conversions.
• The converted amount must be maintained in the ROTH account for 5 years or until age 59.5 is attained whichever occurs later, before distributions can be made.
• Any distribution from a ROTH IRA is TOTALLY NON-TAXABLE.
• ROTH funds are not subject to RMD, required minimum distributions.
• If after the conversion it is found not to be beneficial, the conversion can be re-characterized until April 15, 2011 or October 15, 2011 if the 2010 return is under extension.
• The ROTH funds may be passed income tax-free, not inheritance tax, to heirs.
• It would be best to transfer he converted amount directly from trustee to trustee.
• The tax due would be best to be paid from assets other than the converted amount to take full advantage of the conversion.
• If you are concerned that income tax rates will increase and/or are at the lowest levels currently, this may influence your decision.
• Please consult with a qualified independent financial professional for both tax and financial considerations.

Life Insurance

Are your life insurance premiums becoming too costly? Do you need cash for medical or other expenses? Are your beneficiary's no longer in need of proceeds or have they passed on?

Then you may have an interest in a life settlement whereby your policy is sold in a secondary market. Proceeds may be greater than surrendering your policy to the insurance company or you do not wish to take out a policy loan.

Contact Mike Meall at 215-654-1131, 215-260-8328, "e" at mike@mgmeall.com or web at www.mgmeall.com He will meet with you personally at no charge to determine whether this would fit in your financial plan. Mike is a CPA, often being referred to as your "trusted" financial advisor with over 4 decades of financial planning experience. He works solely in your best interest to fill your needs and objectives.

IRAs

Should you convert your traditional IRA or any eligible retirement account to a Roth IRA in 2010 when the adjusted gross income limits are eliminated? This creates the opportunity for all taxpayers to qualify for this benefit.

Note the following considerations when contemplating your decision:

• The converted amount is fully taxable in the year of conversion
• When withdrawing from the Roth you must leave the money in for 5 years or until age 59 - whichever is later
• You can make partial conversions
• The best way to do the transfer is directly between the two trustees
• Assets other than the IRA or qualified plan would be a better source of funds to pay the tax liability upon conversion
• The tax can be paid over two years - 2011 and 2012
• Your current and future anticipated tax bracket, especially if you feel tax rates are going to increase
• The period of time between the conversion and the need for retirement income
• Your desire to pass assets tax-free to beneficiaries

It is best to consult with your advisor to discuss both the tax and financial considerations.

Annuities

There are two types of annuities, fixed and variable. The benefits on the type of annuity will vary depending on the different stages of your retirement planning. A summary of the advantages of annuities include:

• Earnings are not taxed until you withdraw the money and then earnings are taxed at ordinary income tax rates, this is known as tax deferral
• No administrative fees
• Annuities are not subject to probate and will not affect taxation of social security benefits
• Guarantees of a death benefit, income, principal, tax deferral and unlimited contributions

When considering your options, review the cons and discuss with your financial advisor the best solution for your needs. Note some of the cons could be high fees and can be avoided by opting out of the riders being offered; limited investment choices; surrender charges and possible immobility.

529 Plans

Are you aware of 529 plans and how they are used and their benefits? 529 plans are helpful to families facing the increasing costs of higher education for their children. A significant benefit is the tax savings.

• Withdrawals from these plans to pay for the costs of higher education are free of federal tax on the earnings.
• There are some instances, limited to the investorss home state that may offer a state tax deduction, as well.

If you currently have a 529 plan, then you need to compare the tax considerations with the limited use of the money. The type of approach, either conservative or aggressive, is determined by your childrenÕs ages and how much time you have to save. If your child will be going to college soon then you may consider a more conservative approach.

Two resources that are helpful include Savingforcollege.com or Morningstar.com

There are a multitude of investments that can be used, although use of index funds may offer lower expenses than actively managed funds. There are five states that offer the same tax benefits to residents who invest in out of state plans, Pennsylvania being one of them.