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Dear Ed: TaxConnections Friday Financial Planning Q&A



Financial Planning Questions And Answers

As the CEO of www.taxconnections.com, I had been searching for a top expert in Financial Planning. Once I read Ed Mahaffy’s book titled “How To Select A Financial Advisor: The Least You Should Know”, interviewed him, reviewed his video library, I knew we had the right person for this special financial planning series.

On Fridays, TaxConnections presents questions often asked of a Financial Planner. Although the majority of Ed Mahaffy’s clients have in excess of 1M in assets, Ed has made himself available to answer financial planning questions for our readers.

Dear Ed: Financial Planning Questions  

Question: Do individuals have the option to forego a retirement plan required minimum distribution (RMD) in 2020?

Answer: Yes. If taken in 2020, the distribution will be treated as a voluntary distribution. The distribution is still taxable, but the withdrawal can also be converted to a Roth IRA. The RMD waiver applied to SEP, SIMPLE, 401(k), 457(b) as well as 403(b) plans although defined benefit plans are not part of the RMD waiver.

Question: When might gifting “upstream” to parents make sense?

Answer: If parents are in much lower income tax brackets, gifting stocks or mutual funds may make sense as payouts are generally treated as qualified dividends with 15%-20% income tax. Single taxpayers earning up to $40,000 and married filing jointly earning up to $80,000 have a tax rate of zero.

Question: What is your investment style?

Answer: Inquiring about an advisor’s investment style can ensure that the advisor can articulate their investment approach In a way that is easy to grasp.

Do You Have More Financial Planning Questions? Ask Below Or

You can reach Ed Mahaffy directly at ed@clientfirstwm.com or call Ed at 501.603.0406

Ed Mahaffy

Our first priority is helping you take care of yourself and your family. We want to learn more about your personal situation, identify your dreams and goals, and understand your tolerance for risk. Long-term relationships that encourage open and honest communication have been the cornerstone of my foundation of success.

Our approach is cost-effective and tax-efficient. As an independent investment advisor, we can offer you a personalized financial strategy, not a generic investment program. Your individual portfolio will be based on your unique situation, your values, your preferences and your goals. It will be designed to account for change, in the markets and in your circumstances.

As your professional partner, we’ll work hard to earn your trust and confidence, and provide the advice and service you deserve. Send me a note regarding any questions you may have about any particular investment concepts or products. We’ll get back to you quickly with a thoughtful answer.

Request A Copy of “How To Select A Financial Advisor” at

https://www.clientfirstwm.com/download-my-book

You can reach me directly at ed@clientfirstwm.com or call 501.603.0406

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