Retirement Flashcards
Heir
person who will inherit all your stuff
main goals in estate planning
- minimize taxes on the estate
- make known how you want your stuff split
- provide a smooth transfer of your stuff upon your death
Who can make a will
anyone 18 y/o and anyone sound of mind
Holographic will
written in a person’s own handwriting
intestate
when someone dies without a will
Escheated
no relatives, so everything goes to the state governement
Codicil
legal document that modifies part of a will and reaffirms the rest
Trust
a legal document where an individual gives someone else control of property, for ultimate distribution to another person
Power of Attorney (POA)
legal document authorizing someone to act on your behalf
Estate Tax
a tax on property transferred from an estate to its heirs
inheritance tax
imposed on an heir who inherits property from an estate
how much is the inheritance tax for immediate family
1%
Reverse Mortgage
loan against the equity in the borrowers home
Individual retirement account (IRA)
retirement savings plan that allows individuals to set aside up to a specified amount each year
how much can you contribute to an IRA yearly
$7,000
when can you withdraw from an IRA before its due or whatever
to buy your first home
when can you start collecting money from your IRA
59 1/2
Traditional IRA
-not required to pay taxes until it’s withdrawn
-required to start withdrawing at 70 1/2
-taxed when you withdraw
Roth IRA
-must earn less than $146,000 a year (middle class)
-tax when deposit
Keogh Plan
tax deferred retirement saving plan available to self employed individuals
401(k)
for employees of companies that operate for a profit
Max contribution for a 401(k)
$23,000 a year (22,500)
403(b)
for employees of schools, non profits, and the gov
Vested
become entitled to the full amount in the plan; work in company for a specific number of years
whats the max amount of money you can gift
$15,000
