Perspectives Blog

Ahead of the trends – Washington update on retirement savings initiatives

Columbia Management Learning Center , | July 31, 2014

Various federal government initiatives, including tax reform, will impact the way Americans save for retirement. Trends to watch include enforcement, pension de-risking and participant empowerment measures. Staying current on changes can help you identify critical retirement savings decision points. Retirement security is the financial issue that is most disconcerting to Americans.* Likewise, the current administration has concluded the U.S. i…

Retirement plan design for the new tax regime

Abram Claude, Vice President, Columbia Management Learning Center | November 12, 2014

…n potentially mitigate the effect of the new 3.8% net investment income tax (NIIT) by establishing or updating a retirement plan for their business. Strategic use of tax-advantaged retirement plans may prevent one from breaking through the MAGI income threshold for the NIIT strategy. The Columbia Management Learning Center is dedicating a series of blog articles to this important and timely “Navigating the New Tax Regime” topic. According to 201…

Maximizing workplace retirement plans to reduce or eliminate the net investment income tax

Abram Claude, Vice President, Columbia Management Learning Center | November 6, 2014

…unt can help. Let’s say Tina and Terry, a married couple, max out their pre-tax contributions in their workplace retirement plans in order to keep their combined income below a tax threshold. Let’s also assume Terry’s workplace retirement plan has an after-tax contribution account. It happens that the combination of Terry’s salary deferrals and the company’s match that he receives does not cause Terry to reach his overall plan contribution limit…

The role of asset location

Abram Claude, Vice President, Columbia Management Learning Center | November 18, 2014

…e benefit of tax-deferred growth while in the IRA may be attractive. Plus, distributions from IRAs and qualified retirement plans are not included under net investment income, and since the net investment income tax applies to the lesser of the amount over a triggering threshold and the amount of net investment income, this could be a tax-savings factor during the distribution years. Note that taxable distributions from retirement plans do increa…

Millennials, are you ready to take the next steps?

October 9, 2014

…d invest regularly The younger you are, the longer you have until you retire and need to start tapping into your retirement savings. Starting to save for retirement in early adulthood ensures a longer time horizon for investments to grow. Given the number of wage-earning years Millennials still have ahead of them, they are well-suited to tolerate the roller coaster — the highs and lows of the stock market. And because of their longer time horizon…

The new tax regime and stock compensation

Abram Claude, Vice President, Columbia Management Learning Center | November 21, 2014

For many employees in corporate America, a portion of compensation comes from one or more forms of stock plans or stock option plans. Compensation income from stock incentives contributes to adjusted gross income, but not net investment income for purposes of calculating the new 3.8% tax on net investment income. The Columbia Management Learning Center

Strategies for business owners to reduce net investment income tax

Abram Claude, Vice President, Columbia Management Learning Center | November 12, 2014

…tax advisors and/or legal counsel before making any investment or financial planning decisions. Related reading: Retirement plan design for the new tax regime Next in this series: Trust accounts and net investment income tax What you may have missed: Maximizing workplace retirement plans to reduce or eliminate the net investment income tax, including our “Power of the workplace” podcast What is the net investment income tax? The three tax thre…