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BAM Intelligence

My Take: Obama Budget Proposal Shines Light on Estate Tax and Retirement Planning — Brian Zdrowak

Brian Zdrowak, Dopkins Wealth Management, Buffalo, N.Y.

President Barack Obama’s 2014 budget proposal, which includes making changes to individual retirement accounts (IRAs) and estate tax exemptions, has been making headlines.

In the abridged version, the draft introduces:

  • A cap on IRAs based on an annual retirement income of $205,000. Once this limit is reached, an investor will be unable to contribute to any type of IRA or 401(k).
  • Stretch IRAs for non-spousal beneficiaries would be eliminated and replaced with a maximum five-year withdrawal period.
  • The estate tax exemption made permanent in the fiscal cliff deal would be reduced to $3.5 million from the current $5.25 million.
  • The estate tax would be increased from 35 percent to 40 percent.
  • The estate tax exemption amount would cease to be indexed to inflation.

A draft budget is just that — a draft. IRAs and estate taxes are constantly subject to modification from a variety of angles — budgets and otherwise. These are just the latest, and although they may not survive intact, they could portend change.

Therein lies the real message: Estate and retirement planning is not a “one-and-done” proposition. The question to ask is: When was the last time you evaluated your estate and retirement plans to make sure they still address your personal financial goals? Whether or not laws change, your life does and your plans should change with it — not with every market swing, but with significant life and tax changes.

A budget proposal is a collection of what-ifs, many of which will never come into existence in their present form. They say the devil is in the details, and while we would not suggest acting on the proposed budget, we continue to suggest that investors stay tuned for future conversations in Washington.

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The opinions expressed by featured authors are their own and may not accurately reflect those of the BAM ALLIANCE. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.

© 2013, The BAM ALLIANCE


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Advisor, Insero Wealth Strategies

Brian Zdrowak, CPA, CFP® is an investment advisor for Insero Wealth Strategies, an independent member of the BAM ALLIANCE.

Brian Zdrowak joined Insero Wealth Strategies, LLC in 2014 as a Partner, with over seven year’s experience providing financial solutions to individuals, trusts, business and employee benefit plans.

Prior to working for Insero Wealth Strategies, LLC, Brian worked at Dopkins Wealth Management, providing services to clients in the Rochester and Buffalo marketplace. Brian first joined Dopkins & Company, LLP in 2005, working as an auditor and attaining the level of Senior Accountant. In 2007, Brian joined Dopkins Wealth Management, LLC, where he provides financial solutions to individuals, trusts, small business owners and employee benefit plans. Brian obtained a Master of Business Administration and Professional Accounting degree from Canisius College in December 2004. Prior to joining Dopkins, Brian worked for 17 years with a Fortune 500 National marketer and distributor of food service products, having served as a relationship manager his last year.

His undergraduate degree is in Social Sciences from the State University of New York at Buffalo.

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