Why Save for Retirement in a 401(k)? - 61

Joe Anderson, CFP® and Big Al Clopine CPA answer your burning financial questions in episode 61 of the YMYW podcast, ranging from how to avoid gift taxes to why it’s worth it to invest in a 401(k). Original publish date September 3, 2016 (hour 1). Note that content may be outdated as rules and regulations have changed. 

00:00 - Intro 

04:17 - “When we talk about long-term care planning, a lot of people assume we mean you have to buy insurance and that’s one way to solve an issue, but not the only way.”

06:20 - “Medicare covers skilled care; they don’t necessarily cover custodial care. Custodial care means you’re not necessarily going to get better. Skilled care can patch you up and get you out the door.”

11:20 - “What type of loan should I use to buy out my sibling for inherited property?”

16:59 - “You may have a will or a trust and that will spell out how the assets will be divvied up, but a letter of instructions and meeting beforehand goes a long way.”

20:24 - “Can I avoid paying gift tax? Can a grandparent gift a grandchild money for college and not have to pay a gift tax? Would the grandchild have to pay taxes on it too?”

27:55 - “I think it’s really important to take advantage of the tax laws that are given to us. If you are a business owner, you can pay your child do something for your business and it becomes a deduction for you.”

28:20 - “If you really understand what the rules and opportunities are, you can take some control over your taxes.”

30:45 - “I recently opened an LLC and landed my first client. Is there a limitation to how much income I can make off a single client?”

31:51 - “I withdrew $8,000 from my 401(k). I have retired at 59 and have not cashed the check. If I send it back, what happens? Will I still be penalized?”

34:56 - “How much capital gains tax will I pay on a home I sold after living in it for only 13 months?”