Author Archives: Jerry Siver

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An umbrella insurance policy is a tool to help protect your family and your assets. It adds an extra layer of protection above your other liability policies like automobile or homeowners. If you are involved in a major accident, having an umbrella policy can save you from costly legal claims and judgments.

All About You

Having an umbrella insurance policy kicks in when your other policies are exhausted. If you’re involved in a serious car accident and you’re sued for injuries that exceed the limits of your car insurance, your umbrella policy will kick in and help cover the costs saving your wages and assets from garnishment or liens. It’s important to note that umbrella policies won’t cover your own injuries or damage. You’ll need to access other insurance policies like your health or car insurance for these costs.

Your Family

Often umbrella policies will extend to cover liability and damages caused by your spouse or children who may not have liability insurance in their name.

Be Alert

Umbrella policies can contain a list of excluded activities that won’t be covered. Common exclusions include breach of contract, boating or other watercraft use, injuries resulting from criminal acts or business activity or losses. If you have a business, consider getting a business-specific policy.

What’s Your Number?

Work with an insurance professional to determine how much coverage you’ll need. Some use net worth as a guide. For example, if your net worth is $1.5 million and your auto insurance has a $300,000 liability cap, you’ll need $1.2 million in umbrella insurance. Most insurers sell umbrella policies in $1 million increments and some will require you to have a minimum amount of coverage from your other policies before you can buy an umbrella policy from them.

Umbrella insurance is generally affordable costing a few hundred dollars a year for a million dollars in coverage. With some policies covering your hobbies and vacation activities like renting jet skis or motor bikes, buying umbrella insurance is an affordable solution for your insurance needs. Consult with your insurance agent to learn more.

Mind the Gap

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If you’re looking for a steady source of income before you start collecting Social Security, consider an annuity* to fill the gap.

Immediate Need

Whether you’re planning to retire soon or recently retired, delaying when you begin collecting Social Security can potentially increase your monthly payout.

To fill this time gap, consider purchasing an immediate annuity. The regular annuity payments can delay the need to draw on your retirement funds for your day-to-day expenses. An immediate annuity begins paying you immediately, as opposed to a deferred annuity which starts paying you at a future date. Depending on your situation, you can purchase annuities that pay over the period of time you need. If you retire at age 62 but want to wait until age 70 to begin collecting Social Security, you can purchase an eight-year annuity that will provide monthly payments until you reach age 70.

Consider Inflation

Work with your financial professional to determine how much monthly income you’ll need to fill the Social Security gap and what type of annuity will work best. Don’t forget to factor in inflation. Consider adding a cost of living rider** to your annuity that will boost your payment in line with changes in the Consumer Price Index.

By locking in income now, you’ll avoid the possibility of having to sell your retirement holdings in a down market.

*Fixed annuity contracts guarantee a minimum credited interest. For immediate fixed annuity contracts, annuitants receive a fixed income stream based, in part, on the interest rate guarantee at the time of purchase. Annuity products are not FDIC-insured, and their contract guarantees are backed solely by the claims-paying ability and strength of the issuing life insurance company. Withdrawals prior to age 59 ½ may result in a 10% federal tax penalty, in addition to any ordinary income tax.

*Riders may incur an additional premium. Rider benefits may not be available in all states. Riders that pay benefits for events other than death will likely reduce the policy’s death benefit and cash value.

Avoid a Spending Hangover

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The holidays are behind you, but chances are paying the bill is not. Starting the New Year with a thoughtful spending plan can help you make progress throughout the year. Include your entire family in the process to help ensure they are on board with this goal.

Plan in Advance

Planning for holiday shopping should be part of your regular budget. Starting with last year’s spending history, document necessary expenses such as mortgage, insurance, transportation, food, utilities, etc. Determine where you might be able to cut expenses. Subscriptions, dining out and convenience purchases, such as coffee should be considered. Then add savings goals and some disposable income. Be sure to save monthly toward holiday spending, so you won’t have to rely on credit.

Track Every Dollar

Now work the plan. The key to successful budgeting is recording all your expenses. Choose a recording system that works best for you. Electronic methods like a spreadsheet or bookkeeping software will allow you to create reports to easily summarize your monthly and yearly progress. There are several online options, that can connect directly to your bank accounts. Choose a system that will be easy for you to stay faithful in updating your spending.

At the end of the day place all receipts in a designated space. Don’t forget to hang on to receipts for cash purchases.

Remember that creating a budget isn’t very helpful if you don’t track how much you spend. So log your receipts regularly to update your spending against your budget. Monitor your savings goals, too. Update your records weekly or monthly and you’ll be grateful for these routine updates at the end of the year when it’s time to prepare next year’s budget.

Get a Checkup

To increase your chances of success, scrutinize your progress each month—not any longer than that—and share what you’ve learned with family members. Together you can review where you could improve and encourage everyone to keep a lid on impulse spending. Staying on track will result in less stress and no spending hangover after the holidays next January!

Temporary License Plates

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UPDATE: New Process for Customer Printing Temporary Docs

Posted by MAIA on November 10, 2020

MAIA issued a Special Bulletin on 11/2/2020 about the RMV’s new central distribution process for certain plates and registrations ordered through the Registration Drop Off Centers. This notice updates and clarifies that information. 

EXCEPTIONS: Please note that the information below does not apply to the following plates, which will NOT get a temporary registration and will still need to be picked up by the customer/runner: Commercial, Livery, Taxi, Bus, and Municipal.

RMV Update of 11/6/2020:
New Process for Customer Printing Temp Docs as of 11/2/20

To eliminate the need for individual customers to return to the RMV Registration Drop Off Centers to complete their registration transaction, eligible customers will be able to print their own temporary plate and/or registration from their myRMV account after payment is received. The permanent plates and/or registrations will be mailed to the customer’s address on record.

Who can print their own temporary plate?

If the customer has a Massachusetts Driver’s License, ID, or Learner’s Permit, their credential that starts with an “S” or “SA” can be used to log into their myRMV account. After payment is made, they can print their own temporary plates and registration. The permanent plates/registrations will be mailed to owners within 7 days.

Customers who do not have a Massachusetts assigned S/SA number will still need to pick up their plates/registrations at the Registration Drop Off Center. This applies both to transactions dropped off by individual customers and by commercial customers (such as agents and runners). For more information visit MAIA https://www2.massagent.com/publications/update-new-process-for-customer-printing-temporary-docs

 

Bunching Deductions

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Bunching Deductions

As the year draws near a close, it is time to see if there are any moves you can make that will help reduce your annual income tax bill. The Tax Cuts and Jobs Act, passed in late 2017, complicated the matter of taking deductions, but there are some helpful options if you plan ahead.

The Obstacle

The Tax Cuts and Jobs Act doubled the standard deduction. For tax year 2020, it’s now $12,400 for single filers and $24,800 for married filers. That affected many people who had few deductions because they are better off taking the standard deduction.

 

A Possible Solution

That’s where bunching deductions comes in. Here’s generally how it works: By paying two years’ worth of qualifying deductible expenditures before year’s end you may be able to exceed the standard deduction and deduct those expenses on your 2020 return. Then next year, take the standard deduction. Alternatively, you can push deductions into next year and take the standard deduction this year.

 

What Deductions Qualify?

Some examples of deductions that you could bunch include:

 

Charitable Giving – Rather than making your usual contribution every year, it may make more sense to make a double contribution every other year – or a triple contribution every third year. That way, you aren’t effectively taxed on your charitable deductions.

Medical Expenses – If your medical expenses are in excess of 10% of your adjusted gross income, you can deduct them. So, it may make sense to schedule that elective surgery you had planned before year’s end—or next year, if you expect higher medical expenses.

Property Taxes – If this year looks to be a high earning year, you could pre-pay property taxes that have actually been assessed, but this deduction is also now capped at $10,000. If moving to a new state, shift deductions to the higher-tax state.

This is a simplified list of potential deductions. Talk to your tax and financial professionals to see how bunching deductions may help you to maximize your tax breaks.

Widowed Parents and Taxes

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Widowed Parents and Taxes

Life can be turned upside down in a minute. A sudden car accident could result in someone becoming a widow(er). That type of event changes everything, including your tax filing status. It is especially difficult for parents of minor children. Here’s a brief overview of what any recently-widowed parent should know.

Filing Status

You may retain the married filing jointly status for the year in which your spouse died, even if you filed separately. This is important, because it lets you keep a much higher standard deduction, which is $24,800 in 2020.

 

After that, you may be able to file as qualifying widow(er) with a dependent child status for up to two years. This would allow you to retain the same standard deduction as married filing jointly.

Who Qualifies?

Here are some general requirements for filing as a qualifying widow(er) with a dependent child:

 

    • You must have qualified for married filing jointly status in the year of your spouse’s death;
    • You have a dependent child, stepchild, or adopted child (not foster child) living with you, or temporarily at school, and you pay over 50% of the costs of your home;
  • You have not remarried. Remarriage in the same year as a death would require the widow(er) to file as either married filing jointly with their new spouse or married filing separately. With either, a married filing separately tax return would need to be filed for the deceased spouse.

Avoid Tax Surprises In Retirement

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Avoid Tax Surprises in Retirement

Too many people underestimate the effect of taxes on their retirement income. And with the national debt expanding, Congress could increase taxes in the future. But with proper planning, there may be ways to help reduce your tax exposure.

Practice Tax Diversification

Tax diversification means dividing your assets into three different buckets:

Taxable – Examples include credit union accounts and brokerage accounts. Gains and income are taxable in the current year. Long-term gains and dividends are taxed at lower rates.

Tax-deferred – These include traditional IRA, 401(k) and 403(b) plans. In these accounts, income and capital gains are generally deferred until you take money out. Withdrawal amounts get taxed as ordinary income and if taken before age 59½ an additional 10% tax penalty may apply.*

 

Tax-advantaged – You can build up your tax-advantaged bucket by contributing to Roth accounts or by converting traditional IRA assets into a Roth IRA. You’ll pay income taxes on the balance you convert, but growth in your Roth account is tax-advantaged from that point.**

One More Surprising Tax

Many retirees are shocked to discover that up to 85% of their Social Security benefits are taxable if their income rises above a certain threshold. This is just one more reason to consider income taxes early on — when investing for retirement.

 

Actionable Steps:
    • Consider contributing to a Roth IRA account and/or convert traditional IRA funds to a Roth IRA;
    • Delay Social Security benefits as long as possible;
  • Meet with your financial and tax professionals who can assist in planning for taxes as you invest for retirement.

 

* The CARES Act suspended the 10% early withdrawal penalty for 2020.

**Converting from a traditional IRA to a Roth IRA is a taxable event. To qualify for tax and penalty-free withdrawals a Roth IRA must be in place for five tax years and the distribution taken after age 59 1/2 or due to death, disability or a first time home purchase (up to a $10,000 lifetime maximum). Roth IRA distributions may be subject to state taxes.

Dealing with Unpredictability

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Practically every class of investments have been volatile this year. The Coronavirus crisis followed by widespread civil unrest caused some of the biggest one-day losses in the history of the stock market. But we also witnessed some of the biggest one-day gains. Investment volatility is a fact of life. At times like this it is important to cling to these well-known basics that can help you to stay the course:

Remain Calm –

Do not get too excited when the market is high, and don’t get too discouraged when it drops. Resist the urge to overcorrect. Selling in a panic means you’ll be less invested in the future to generate dividends or participate in any potential recovery.

Stay Invested –

Even the experts cannot predict when markets may turn. Trying to “time the market” usually leads to poor decisions.

 

Stick to Your Strategy –

When a sailor encounters rough seas, he will keep a steady hand on the tiller and his eyes on the horizon. In investing, the equivalent is to maintain a good, balanced mix of assets aligned with your needs, goals, time horizon and risk tolerance.

 

Diversify* –

By owning a diverse variety of assets, you may be able to create a portfolio that is somewhat shock resistant.

 

Rebalance –

Market fluctuations can throw the mix of investments out of line with your objectives. This means that you may have to buy or sell assets to maintain your desired level of risk. A big market drop can also offer the chance to add investments at sale prices.

 

Be Patient –

While nothing in life is guaranteed, history shows us that major stock market declines are historically followed by recoveries to new highs. Sometimes it takes weeks, and sometimes it takes years. But every major bear market so far, through 2019, eventually recovered and reached new highs.**

 

*Diversification cannot eliminate the risk of investment losses. Past performance won’t guarantee future results. An investment in stocks or mutual funds can result in a loss of principal.

** https://www.morningstar.com/features/what-prior-market-crashes-can-teach-us-in-2020

Protect Yourself From Vehicle Fraud

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The American Association of Motor Vehicles Administrators have created a website for anyone who is thinking of purchasing a used vehicle. Siver Insurance Agency wants you to be safe from vehicle fraud and unsafe vehicles. Don’t purchase a used vehicle until you watch this video and check the vehicle’s title report on https://vehiclehistory.bja.ojp.gov

How NMVTIS helps reduce auto theft https://youtu.be/-P0KBL5IlD0

Getting a vehicle history report https://youtu.be/6hn7DPTY39k

Obtaining a title history report https://youtu.be/tmHTa-oPXg8

What to look for in a title history report https://youtu.be/du0flDYbmJk