Asset Planning, Inc Blog

The latest from the team.

Backup Contacts for your Accounts

As clients age, there is an increased risk of serious illness, diminished mental capacity and potential elder abuse. In order to protect our clients, we will be asking them to fill out a Backup Contact Information Form. This will allow our clients to direct us to who we should speak with and how to get in contact with them if we are unable to contact them for 60 days, if there is serious illness, fear of diminished mental capacity or elder abuse. This information allows for the continued protection of our clients and their finances if one of these instances occur. Due to the current privacy rules, backup contact information is needed in writing.

This information is especially essential for those who are single, as there is no co-owner of the assets and accounts. For those with co-owners/spouses, it is still important to make the designation early in order to protect yourselves. There may be things that can be done in order to protect the client and their beneficiaries. It may also be beneficial to send backup contact information to your CPAs, estate attorneys, insurance agents, etc.

Please be aware that this will not allow the backup contact to make any changes to your account or withdraw any funds.

If you would like a copy of our form, please contact us at (714) 827-5794 or

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Medicare Premiums Update and Medicare Surtax


Medicare Part B premiums are remaining unchanged for 2014 ($104.90 per month).  Those seniors who had an adjusted gross income of over $170,000 for married couples or $85,00 for all others, there will be an increase in rates for Part B and Part D premiums.  The adjusted gross income will be taken from the 2012 tax returns that were filed.  Total surcharges are phased in by adjusted gross income levels but will not be greater than $300.10 a month.  If you would like more information on the rate breakdown or how this might affect you, please follow the link below to the document provided by the Social Security Administration.

As part of the Affordable Care Act there is a new Medicare surtax that is being imposed on singles earning over $200,000 or couples earning over $250,000 for 2013.  This new surtax only applies to the earnings over the thresholds listed above.  This new surtax is only paid by the employee and does not change the employer portion of the Medicare tax.  This adds 0.9% to the amount of Medicare tax that is being paid and employers have been instructed to withhold the extra 0.9% of Medicare tax on any employee whose earnings exceed $200,000 regardless of filing status.

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Retirement Contribution Limits for 2014

The Kiplinger Letter published a great summary of the changes to Retirement Contribution Limits and it is below:


“Several dollar ceilings on retirement plans are heading up this year:

  • The pay in limitation for defined contribution plans increases to $52,000.  That’s a $1,000 hike for Keogh plans, profit sharing plans, and similar arrangements.
  • Retirement plan contributions can be based on up to $260,000 of salary. 
  • And the benefit limit for pension plans is rising to $210,000 in 2014.
  • The income ceilings on Roth IRA pay ins go up.  Contributions phase out at AGIs of $181,000 to $191,000 for couples and $114,000 to $129,000 for singles. 
  • The deduction phase outs for pay ins to regular IRAs start at higher levels, from AGIs of $96,000 to $116,000 for couples and $60,000 to $70,000 for singles.  If only one spouse is covered by a plan, the phase out zone for deducting a contribution for the uncovered spouse begins at $181,000 of AGI and finishes at $191,000.
  • And the partial credit for retirement plan pay ins phases out at higher levels.  For marrieds…at over $60,000.  Household heads…$45,000.  Singles…$30,000.

Several key items won’t change.  The 401(k) pay in limit remains $17,500.  Folks born before 1965 can put in an extra $5,500.  Ditto for 403(b) and 457 plans.  The ceiling on SIMPLEs stays $12,000…$14,500 for folks age 50 or older this year.  Pay in caps for IRAs and Roths remain $5,500 plus $1,000 for anyone 50 and up this year.”


The Kiplinger Letter January 3, 2014

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How to Collect Social Security on an Ex-Spouse’s Record

 As long as the former ex-spouse is eligible to receive benefits, you can collect a spousal benefit if you meet the following conditions:


                -You have not remarried

                -Your marriage lasted at least 10 years

                -You are 62 or older


If your ex-spouse has not yet applied for his benefit, you have to hold off until you have been divorced for two years. As long as you are full retirement age, your spousal benefit will be equal to one-half of your ex-spouse’s full retirement benefit. The benefit will be less than one-half if you’re younger than full retirement age when you start collecting. Your spousal benefit will not include any delayed retirement credits that your ex-spouse may receive. If you remarry, you generally cannot collect spousal benefits on your former spouse’s record unless your later marriage ends in death or divorce.  




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LA Times Money Makeover

Sandy was asked to be the advisor on this month's LA Times money makeover.
Click here to check it out.

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The Government Shutdown

Our government shut down October 1 with both sides vowing to not bend and give in. The last time we had an impasse was in 2008, during the passage of TARP, and the market reacted by falling 777 points. That was enough to get both sides negotiating a bit quicker. We also have the debt ceiling to deal with later this month. Failure to act would be very negative for the financial markets and the world economy. This is really the ordeal to watch- the debt-ceiling extension and our debt ceiling now stands at 16.7 trillion. If we reach an impasse, our debt will default. While the market has reacted in the past, I also believe it is becoming somewhat immune to the actions of our government.

How does this shutdown impact government services and benefits? People will still receive their mail from the U.S Postal Service, Social Security benefits and changes in address, food stamps, school meals, veteran compensation and burial benefits. National parks, museums, federal home loans, VA home loans, IRS suspension of all audit activities and passport operations are all affected by the shutdown and will be suspended until further appropriation of congressional funds. Unfortunately for our economy, it is projected that the shutdown will impact our economic growth by as much as 1.3 % in the 4rth quarter if it continues two weeks.

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Money Makeover

I had the pleasure of being asked to be the financial advisor for this month's Los Angeles Times Money Makeover.  Here is the link to the article:,0,2305366.story

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Good News: 'The Sky is Falling'

I hope you enjoy this article regarding the state of bonds  by James A Klotz, President of FMS Bonds, Inc.:

Have you heard the clucking?

It’s the sound of Chicken Little returning to the municipal bond market.

In 2008, he paid a visit during the mortgage crisis. At the time, bond insurers were downgraded when they strayed from their traditional market and ventured into exotic – and toxic – financial products, while major banks, brokerages and hedge funds, which traditionally provided support to the muni market, became net sellers to enhance their own liquidity during the tumult.

Munis themselves were fine, but the chickens clucked, bond prices slumped and too many average investors panicked and sold. Veteran bond investors, meantime, did what they always do: take advantage of the disruptions and feast on fatter yields.

Two years later, Chicken Little reappeared, this time in the guise of a banking analyst whose comments on state and local finances during a TV interview spooked investors and spurred a muni selloff. Nevermind that her warnings of Armageddon were wildly off the mark; many took heed and, as a result, blew a hole in their portfolios.

He’s back

Today, Chicken Little has returned, with the same, equity-oriented pundits warning of a calamitous interest-rate spike and urging investors to shed their bonds.

Which bonds are they referring to? We’re not sure, and due to their lack of expertise in bonds, they’re probably not either. We only hear about Treasury bonds, but we don’t know of a single individual investor who owns any.

And that’s the rub.

Successful tax-free bond investors don’t buy and sell based on prognostications. Their goal is to generate a steady and dependable stream of tax-free income. Because investors know they have a promise to be paid at a specific time – a maturity date – unrealized losses or gains are irrelevant. They know that over the life of their long-term bonds, they will sometimes be worth more than they paid for them and sometimes less. Neither scenario should initiate a sale.

In fact, a substantial number of municipal bond buyers welcome higher interest rates to boost their tax-free income, which is the reason they buy tax-free bonds in the first place.

A buying opportunity

Chicken Little’s most recent cry to indiscriminately sell an entire asset class is reckless and can once again be catastrophic for investors.

Unique opportunities abound as muni bond fund shareholders panic and rush to the exits. This forces fund managers to reluctantly toss good bonds overboard to meet redemptions.

With high-quality municipals now yielding 4.25% or more (a tax-equivalent yield of 6.54% for investors in the 35% federal tax bracket), successful long-term investors hear the shrieks for what they really are: a signal to buy.

For more information follow the link:


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Personal Financial Plans

In a recent study by deVere Group, one of the world's largest independent financial consultancy groups, they asked clients with investable assets over $1,000,000 what was their number one financial regret. The top 3 answers:

  1. Not putting in place a regular reviewed personal financial plan earlier in life. (57%)
  2. Not consistently scrutinizing personal investments (18%)
  3. Taking on too much unnecessary debt. (13%)

While this survey only surveyed high-net worth families, I think middle-class families would answer the question with similar results.  It is clear the benefits of long-term financial planning and routinely reviewing or revising the plans help keep families on-track to reach their financial goals. 


It is interesting to note that all those surveyed have done well financially, but the regret is that it might have been less stressful if they had a plan in place and were monitoring it consistently.


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Planning for your 2013 Tax Return

It is never to early to begin planning for next year's tax return. Planning ahead can save you time and money in 2014. Here are six simple steps to take to make your next tax return easier.

1. Adjust your withholding
Now is a good time to review your withholdings to make the taxes withheld from your pay closer to the taxes you will owe for this year. You can use the IRS Withholding Calculator at to complete a new Form W-4.

2.Store your return in a safe place.
Doing so can facilitate locating it in case you need to refer to your return. For example, you may need a copy of your return when applying for a home loan or financial aid.

3. Organize your records
These record include your receipts from big purchases, mileage logs, and other deductable expense.

4. Hire a tax professional
If you already have a tax professional  consult with them now to tart your tax planning for next year.

5.Consider itemizing deductions
If your itemized deductions typically fall just below your standard deduction you can bundle your deductions. If you usually claim a standard deduction, you may be able to reduce your taxes.

6.Keep up with changes
its always good to keep  up with changes in the law especially taxes. For helpful tips, and IRS announcements, visit the IRS website,


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