New IRS guidance on 401(k) rollovers

Good news: If you have after-tax money in your traditional 401(k), 403(b), or other workplace retirement savings account, you can roll it over to a Roth IRA without paying taxes, as long as certain rules are met. A recent clarification from the IRS confirmed this. Previously, the rules weren’t entirely clear. Now it is clear that you can roll after-tax money to a Roth IRA and pretax money to a traditional IRA and avoid creating taxable income. There is one catch: The after-tax and pretax balances must be rolled over at the same time, and in the same proportions as in the 401(k). (more…)


Excerpts Published Thursday, November 20, 2014 by Lakeland Ledger


The amount of coverage you may need can depend on many factors including the number of dependents relying on your salary, outstanding debt, future debt, or a future need such as education for your children.    You want to make sure the coverage is adequate to cover these items in the event of an unexpected death.  Along with proper dollar coverage, certain riders may be added to better assist in planning for uncertainties in life.    Once the coverage amount is determined the next step is to decide on buying term versus permanent insurance and what your budget can afford.  Term life insurance is substantially less expensive but the death benefit expires at the end of the term, 5, 10, 20 or 30 years.  Permanent insurance, often referred to as whole life, is more expensive but often provides a cash value and is often fully paid at the end of a period with no further premiums due.  A qualified advisor should provide a comparison of the various of the types of coverage and the related cost of each. (more…)

CPS 4th Quarter Newsletter

Posted on November 7, 2014 in

CPS Q4 2014 Newsletter

Welcome to our Quarterly Newsletter! We hope you find the information useful and enlightening.  This month, we will discuss stable consumption trends, proper estate planning and longevity, and the likelihood of high inflation.


Feel free to share this newsletter with interested friends. We thank you for your kind referrals.

By CHAS P. SMITH, CPA/PFS and Derek Oxford

Excerpts Published Thursday, November 6, 2014 by Lakeland Ledger

If your investment pile of assets is not sufficient to replace the income stream of the bread winner in the family then life insurance is an inexpensive way to replace that lost income.    However, the amount of life insurance may not be just to replace your annual salary but also the potential earnings of the non-working spouse who chooses to stay home and care for the children.  In large estates, life insurance is often used to pay for estate taxes.  Each person or family has certain goals in mind where life insurance can play an important role.


Life insurance provides payment at death, but does not provide a benefit for the insured while alive, except peace of mind.    Because life insurance is typically paid for with after tax dollars, benefits received from a policy are usually free of income taxes to the beneficiary.  (more…)


Excerpts Published Thursday, October 23, 2014 by Lakeland Ledger

Most investors don’t realize that certain advisors, including bank associates, insurance agents, and brokers are not required to give objective investment recommendations.  In fact, a large insurance company is in the process of having all of their Certified Financial Planner professionals remove themselves from the CFP Board of Standards as their obligation to the insurance company is, by Florida law, more important, than their obligation to clients.  Which means that some products sold, such as annuities, were not in the best interest of clients.  The lesson here is not that insurance company advisors are bad by any means, but rather some advisors have other goals to meet.


At most brokerage firms, advisors are compensated to bring in new money and their firms pay those brokers anywhere from 40-60% of the fees and commissions they generate.  Not only that, if they meet other goals, extra benefits to the top performers are given for things like vacations, prime parking, private club memberships, and other fringe benefits designed to keep the sales competitive. (more…)


Excerpts Published Thursday, October 9, 2014 by Lakeland Ledger

A recent academic study done by Morningstar reviewed the 2,846 mutual funds tradable in the U.S. from 1996-2008.  It showed that less than a quarter of the funds outperformed the overall market after the first five years.  Only 195 funds (7% of the total) outperformed the market after 10 years.  What are the chances that the average investor is smarter, or knows more information than that of a multi-fund manager overseeing billions in investor assets?


The efficient market theory tells us that all information is known and that no one person can predict short-term rises or falls based on fundamental or technical analysis.  Furthermore, fund managers find out about public information at the same time as individual investors, which proves that a security’s news has already been built into the price by the time an investor decides to buy or sell the position.  This makes it very difficult to outperform the benchmark on information or analysis alone.  Luck, as it seems, is the one true determinant of the market timer.  What is an investor to do given these dismal odds of beating the index? (more…)

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