Annual meeting tonight with the Trustees of my Trust and the Financial Advisor. I do love seeing everyone and obviously trust all of them. Walter, of course could not be there. We tried to Skype him, but I think with the time change he missed us or forgot. He is coming in September, so will update him then. It will take me that long to get through the paperwork anyway - LOL.

 

Financial Advisor advised us to order in for dinner, it was going to be a long meeting and I had to be home by 8pm. Made it at 7:55pm.

 

There's some serious stuff going on in the Federal Government about changes in the tax structure. For this year 2012, we are OK. Nothing changed. But the forecast for 2013 through 2015 is not good. Tax brackets are due to change and not in a good way. All of this is on the Government's website. But at least for 2013, the lowest tax bracket (10%) will be gone and everyone moves up a step. Right now I think it was six tax brackets. Obama's plan was to increase the percentage for those making higher incomes - so 10% goes out and 39.5% is added.

 

The big discussion was the IRA and Roth IRA. Past thinking on the IRA was to defer paying taxes until you started to withdraw from it. Your income was less and you would be better off financially to pay the taxes at that time. Not so much with these projections. With my current tax bracket being very low - only work part time, we are considering removing from the IRA, paying the taxes due now in my lower bracket and depositing into the Roth, where the taxes have already been paid and nothing will be due on withdrawal. The limit per year deposit into the Roth, over 60, is $6000.00, so it would have to be done over several years. If the 2013 projections do not come about, I will still be good in 2013. After that, they will go up. So where you thought your tax bracket might be upon retirement, may in fact, be higher than right now. He projected mine out to 65, based on the projections, mind you - not law yet. I go from 10% right now to 35% in five years! Much less income than we projected three years ago when all this was set up.

 

Now apparently you can take your entire IRA and say I want to put this in a Roth, but the taxes on the total IRA are due at that point. And since nothing is set in stone yet with the Feds, that has to be taken into consideration. That is not considered a contribution, that is like a transfer of the whole account. I have another account that must be dealt with immediately, so transferring that amount of money right now is not in the budget.

 

We are also at a point where we have to look at my annuity. Payment I make and the interest the account accrues may not pay the administration costs, at which point, changes will have to be made there. The cash value on the annuity will decrease as the management costs rise and if (LOL) I live to 95 the whole account is worth ZERO. Family couldn't even bury me. Good enough for all of them, just for making me do this! I am a direct cremation so cost is relatively low, but only the responsible sibs know this. The rest can just angst about what to do with Debbie and how much will it cost them - LOL.

 

I wanted to share all of this, now while it is fresh. So many of us here have to deal with these decisions on our own. Fortunately I have the trustees (friends) who are there with different agendas and can deal with the cold, hard facts for me. Decision is ultimately mine, of course. But we still have a few years in which we can make changes, cost-effectively. Financial Advisors says that we should figure making the major changes within the next 4 years. With the Life Insurance policy, about 6 to 8 years.

 

We started at 4:30pm. By 5pm, I had a headache and by the time I got home, I was one wilted little flower. Kira and I are kicking back, awaiting the 10pm medications. And that is where so much of this just drags one down. You are always on deck or in the batter's box. Debbie

Source: Long term finances