This week I would like to address some of the most commonly asked questions of 2009. So here we go…

Question: I am being forced to tap into my retirement funds prematurely. What do I need to do?

Answer: On the one hand, don’t feel like you are alone. In today’s economy more retirement plan owners are being forced to tap into their retirement plans prematurely. On the other hand, feel like you are alone – or at least act like it – and don’t take advice from a friend, an article you found on the internet or advisor you heard on the radio or television. There is no “one size fits all” answer for this type of life planning decision. Your family situation is unique and you need a plan that is tailored to you. If you are being forced to retire early or take distributions from your retirement account early or especially prior to age 59 ½, get professional help. This is not an area to take lightly. Let me say something that you may have heard me say before: You don’t know what you don’t know. And it is often times what you don’t know that will hurt you-and in this scenario it means real dollars and cents especially tax consequences. Remember today is the first day of the rest of your Life-How do you make your money last as long as you will?

Question: I turned 70 ½ this year. Will I have to take a required minimum distribution by April 1, 2010?

Answer: Required minimum distributions, commonly referred to RMDs, are the annual withdrawals the federal government requires you to take from your IRA or other qualified plan after you turn 70 ½. Normally you would have until April 1^st of the year after you turn 70 ½ to take your first RMD. However, section 201 of the Worker, Retiree, and Employer Recovery Act of 2008 waives any RMD for 2009 including those individuals who are turning or have turned 70 ½ this year and choose not to take their first RMD until April 1, 2010.

Question: How can I get my debt paid off sooner?

Answer: It’s hard to answer this question directly – planning isn’t always about the answers. It is about knowing the right questions that need to be answered. Which is the case here. It’s not always best to pay your debt down as soon as possible: it depends on the type of debt you have, your income, whether or not you are able to write off the interest and how beneficial this is, the interest rate, the rate of return you are receiving on your other investments etc.  A better question might be: What is the best way to approach the debt I have? The key word here is best. This may sound redundant, but the best way is to work with your Life Consultant to establish a liability plan that best fits your unique situation. For some, the best approach may be to pay off your debt as soon as possible. If this is the case, we utilize a software program that helps our clients reduce this time. If not, we help our clients establish a timeline that prioritizes their liabilities.

Question: My son and his wife both lost their jobs and need financial assistance. How can we support them when our own financial situation is tight?

Answer: Unfortunately there is no cookie-cutter answer I can give you, but I can give you a few starting points. As with any significant life change, revisit your Life and financial plans. Work with you planner to find out what you can afford to do. Also, have your Life Planner work with your son and his wife to analyze or build a plan of their own in order to help them look at all possible options. One of the services we provide to our clients is family planning meetings. These meetings are designed to discuss the family’s current and future financial situation in a neutral, professional setting. It is important to explore the available options, discuss the positive and negative outcomes of these options and answer some barrier questions that often become apparent between parent and child. The one thing you don’t want to do is not plan. In today’s current economic and financial environment not planning could put a negative double-digit mark on your retirement account.