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Welcome to the May edition of The Wealth Chronicle. May brings two significant financial events. The month of May is Disability Awareness month. It makes sense once a year to check your disability policies and ensure that they will provide enough income in the event that you become disabled and can't work.
May 29th (5/29) is 529 College Savings Day and attempts to bring awareness to saving for your children's education.
http://www.savingforcollege.com/articles/Celebrate_529_College_Savings_Day is a great resource that lists the different events and sweepstakes that your state has to celebrate the day.
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Are You Leaving Money On The Table?
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If someone handed you a check for $1,336 with no strings attached, would you turn it down? Probably not, but that's what one in four workers are essentially doing by not taking  advantage of their employers 401k matching contribution. A report from Financial Engines concluded that $24 billion is being left on the table each year by workers not contributing enough in their 401k to get the full match.
Typically, a company will contribute one dollar for every dollar the worker saves, up to 6% of their salary. Some companies may match more, some may match less.
Saving money is not easy. What's harder is saving more money than you anticipated, but there are ways to do it without having to resort to eating Ramen noodles each night.
Even if the $1,336 doesn't sound like a lot, over a worker's lifetime that would amount to an extra $42,000 that they would have to spend.
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While we are on the topic of 401k plans, Marco Rubio made news this month when it was published that he cashed out $68,000 from an old 401k to pay for his child's education expenses, finance his White House run and pay for appliances.
Marco's move gives a good opportunity to discuss what will happen by taking the distribution and if there are any lessons that can be learned from it. He won't actually have access to the full $68,000 he withdrew. He will have to pay tax on the amount he withdrew and because it was an early distribution (under 59 ½) a $10,000 penalty on top of that. Most likely he would be left with about $40,000 to use.
Proper planning most likely could have prevented the need to withdraw the money. Appliances can be expensive, but a good emergency fund could be used to finance such purchases. May 29th is 529 day, he probably could have benefited from starting a 529 plan when his children were younger.
I'm not sure where the money is going to for his presidential run, but Marco has known to be a great fundraiser and when he announced his presidential bid in April, his goal was to raise $100 million. Or perhaps the distribution was made as a strategy to show that he is of the same middle class of voters that he is looking for support from. Alternatively perhaps he thinks the investment in his White House run will pay off big time if he becomes president. After his presidency he could probably command $250,000 for a speech or make a couple of million dollars from writing a book.
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I recently hosted a workshop on Estate Planning along with attorney Mark Balian. A couple of questions came up on inheriting IRAs. When an IRA is passed down to a beneficiary the re-titling of the IRA is important. The re-titling of the IRA would be done after you pass away by your beneficiaries (not before).
 Every custodian is different, but the re-titled IRA should look something like this "John Smith, IRA (deceased on May 21, 2007) F/B/O John Smith Jr., beneficiary." (F/B/O stands for "for the be nefit of.") If multiple beneficiaries are going to inherit an IRA, the beneficiaries have to separate and re-title the IRA by the end of the year following the year of the original owner's death. Otherwise, they have to use the oldest heir's age to calculate everyone's withdrawals.
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Tax revenue and tax sources are remarkably different for all 50 states, as reported by a 2014 Census Bureau study that was just released. For example Alaska and Washington collect no income tax, but the latter depends on sales tax for about 60% of its tax revenue. However, over half of the overall tax revenue in Oregon, New York, Massachusetts, and Virginia comes from income tax.
According to a new report by Health View Services, a 65 year old couple retiring today can expect to pay $266,589 just for Medicare premiums and supplemental insurance. Add in other health care expenses, including dental, vision, copays, etc., and that figure rises to $394,954. Here's how those costs are distributed:
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Annual Reminder to Review Your Social Security Statement
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I received the email below from ssa.gov reminding me to check my social security statement online. It's always good practice to review it once a year. 
We'd like to remind you to review your Social Security Statement online. The Statement has important Social Security information and, if applicable, estimates of your future benefits.
If you are working, we encourage you to check your Statement yearly to make sure your earnings record is correct. The Statement also will help in planning your financial future.
To view your most recent Statement, please visit www.socialsecurity.gov/signin and sign into your account.
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Please contact me regarding any of the articles above, or if you would like to discuss your personal or business finances. Sincerely, Marc Bautis Bautis Financial
201-842-7655
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