12-22-2106 Columns

Investing in Your Future


What should you know about taking RMDs?

 As we get older, the end of another year takes on greater meaning, in many ways, than it did when we were young. And if you’re a certain age, December 31 has a very specific meaning in terms of your finances, because it’s the deadline for withdrawing money from some of your retirement plans. What should you know about these withdrawals? And how much control over them do you have?

Here’s the picture, in a nutshell: Once you turn 70-1/2, you generally need to start taking withdrawals – the technical term is “required minimum distributions,” or RMDs – from your traditional IRA and your 401(k) or similar plan, such as a 403(b) plan (for employees of public schools, religious institutions and other tax-exempt organizations) or 457(b) plan (for employees of state and local governments and governmental agencies). After the first year in which you take these RMDs, you must take them by the end of each year thereafter. If you don’t withdraw at least the minimum amount (calculated based on your age, account balance and other factors) you face a penalty of 50% of what you should have taken out – a potential loss of thousands of dollars.

So, here’s priority number one: Take your RMDs before the end of the year. The financial services provider who administers your IRA or 401(k) can help you determine the amount you must withdraw.

However, after that point, it’s your decision as to whether you want to exceed the minimum. Of course, you may need to take more out to meet your living expenses. But if you have enough additional income from other sources – such as Social Security and interest and dividend payments from investments held outside your retirement accounts – you may be able to stick with the minimum withdrawals. And this could prove to be beneficial, because you obviously want your retirement accounts to last as long as possible, considering you might spend two or even three decades as a retiree.    Another reason not to take more than you need from your retirement accounts is that these withdrawals are typically taxable – so the less you take out, the lower your tax bill.

You can also potentially lower your tax burden arising from RMDs by being generous. If you take money from your IRA and donate it to a qualified charity (one that has received tax-exempt status from the IRS), you can exclude the withdrawal from your adjusted gross income and count the donation against your taxable RMDs. Suppose, for example, your RMD for 2016 is $5,500. If you take $5,000 from your IRA and donate it to a qualified charity, your taxable RMD obligation will be reduced to just $500. If you were to take another $500 from your IRA, you would satisfy your entire RMD for the year. (Consult with your tax advisor to make sure you’re following the rules governing these charitable donations from your IRA.)

You worked many years to build your retirement accounts. So when it’s time to tap into them, make the right moves – and do whatever it takes to maximize the benefits you get from your required minimum distributions.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation.

Safe disposal of RX drugs

 During a time when many people will be welcoming friends and family into their homes for the holidays, Berrien County residents are reminded to sort through their medicine cabinets and properly dispose of old or unwanted medications. Sadly, more than 70% of young people abusing prescription pain relievers get them through friends or family, a statistic that includes raiding the family medicine cabinet.

Berrien County residents are encouraged to dispose of their unused, expired, and unwanted medications properly by using the MedReturn drug collection drop off locations around Berrien County. In addition to MedReturn drug collection drop off boxes within Lakeland Health Pharmacies in St. Joseph and Niles, Walgreens has also installed safe medication disposal kiosks at their St. Joseph and Niles locations. There are also safe and secure drug collection drop off boxes in Niles, Coloma, Harbert, Buchanan, Watervliet, Berrien Springs, and New Buffalo.

Berrien County Health Department Substance Abuse Prevention Supervisor, Kerri Teachout says, “this makes properly disposing of excess and expired drugs everyone’s responsibility as well as a matter of public and environmental safety.” Within the past year, more than 2,500 lbs. of unwanted and expired medications were collected from the various drop-off locations in Berrien County. Teachout said, “It is one of the best things our community can do to reduce the supply of drugs that can potentially harm teens and adults.”

The Berrien County Health Department is committed to providing a safe, secure and environmentally friendly way to help law enforcement agencies and Berrien County communities collect unwanted or expired household medication, including prescriptions, over-the-counter drugs and unused pharmaceuticals. The collection sites are open during normal business hours. Medications can be dropped off with no questions asked. The medications can be placed in a sealable plastic bag or can be disposed of in their original containers. A full list of the drug collection locations is available at www.bchdmi.org.

Wishing everyone a merry little Christmas

 The holiday season is upon us, and I would like to wish a Merry Christmas and happy New Year to everyone in Southwest Michigan. Indeed, the holiday season presents us all with a moment to spend quality time with loved ones and celebrate the true spirit of Christmas.

I hope you all are able to gather with family and friends for the holiday, reflect on the year and look forward to a new year full of possibilities.

I encourage everyone to take the weight of the world off your shoulders and enjoy Michigan’s Winter Wonderland. Get outside and try sledding with the kids or building a snowman. These are memories that I cherish the most.

I am truly blessed to be able to gather this Christmas with my family, whose love and support give me strength. They are my rock, and the greatest gift I can ask for is for us to be together.

As we celebrate, my heart is drawn to those who cannot be with their families for Christmas.

The holidays are an especially hard time for those men and women who are serving America overseas. Please consider sending a letter or card to a serviceman or woman, thanking them for their sacrifice and wishing them a safe return home.

It is a simple way to brighten their holiday. You may mail your letters to: Blue Star Mothers; P.O. Box 76; Stevensville, MI 49127.

To quote a beloved Christmas song, “Through the years, we all will be together, if the fates allow. Hang a shining star upon the highest bough; and have yourself a merry little Christmas now.” God Bless you all.

As always, I look forward to hearing your comments and feedback on the important issues facing Michigan. You can contact me at 517-373-6960.

21st Century Cures story

 The 21st Century Cures began with a simple idea: Patients needed a game-changer that could do more to foster the next era of medical innovations here in America.

In 2013, we got to work – alongside my tireless partner U.S. Rep. Diana DeGette, D-Colorado – on this bold, bipartisan effort. We broke the mold with our approach to legislating. We listened. We engaged. We solicited feedback. We listened some more. It was an inclusive, unique, transparent process. We participated in bipartisan roundtables across the country, but Michigan held a special seat at the table. Healthcare experts such as doctors, researchers, innovators and students were consulted during these bipartisan roundtables at institutions like the Homer J. Stryker M.D. School of Medicine on the campus of Western Michigan University in Kalamazoo.

This process culminated in the 21st Century Cures Act, landmark legislation to safely speed the discovery, development, and delivery of life-saving drugs and devices coupled with billions more in funding for the next generation of medical innovations.

Specifically, 21st Century Cures will help bring drugs and devices to market more quickly and at less cost by making needed reforms to the Food and Drug Administration (FDA), provide $4.8 billion to the National Institutes of Health (NIH), including: $1.45 billion for President Obama’s Precision Medicine Initiative to drive research into genetic, lifestyle, and environmental variations of disease; $1.8 billion for the Beau Biden “Cancer Moonshot” to speed research; and $1.5 billion for the BRAIN initiative to improve our understanding of diseases like Alzheimer’s and speed diagnoses and treatment. It will also provide $500 million to the FDA and provide $1 billion in grants to states to address the opioid crisis. Finally, it will address the country’s mental health crisis and help the one out of five adult Americans suffering from mental illness and substance abuse disorders receive the care they need.

The House passed this game-changing medical innovation bill 392 to 26 on November 30, and the Senate followed suit, voting 94 to 5 on December 7. Marking the peak of our three-year journey, President Obama signed the 21st Century Cures Act into law on December 13. Working together and collaborating not just across the political aisle, but also with the experts outside of Congress, we were able to get the job done.

Simply put, patients needed a game-changer – and it is our hope that history will look back at our efforts as the moment in time when the tide finally turned against disease.