How to Effectively Plan for the Future – Probate Discussion with Attorney Emily Bohls

Estimated reading time: 11 minutes

How soon is too soon to start planning for the future? Never! When it comes to making future plans and arrangements, most people seem to forget about potential probate scenarios that may arise. Although, your retirement account might have the potential to bypass probate, it’s important to understand how this process could affect your self-directed retirement plan.

Attorney, Emily Bohls, joins me in this article to help define and explain some of the basic Texas probate laws, which can be difficult to navigate for the common investor. 


Thank you for joining me today. Can you give me a bit of your background? Tell us who you are, what you do, etc.


I am an attorney, and I’ve been practicing for 14 years now. I went to law school in Houston – South Texas College of Law. My first seven years I was actually working for South Texas College of Law as a staff attorney at their legal aid clinic, primarily doing family law and probate. The model of the clinic was evolving, and I eventually became the manager of the clinic and an adjunct professor. In 2013, I decided that it was now or never to start my own practice, and that is what I’ve been focused on since then.


So, that’s what you did next?


I remained an adjunct, teaching the probate clinic. It was a practical course where the students got actual cases, and they were legal aid cases. I think I gave that up in about 2018, because I needed to concentrate fully on my practice. Now, I’ve been focusing on my practice and growing that. I’m primarily a probate practice. I also do guardianships, which is kind of under that umbrella. I’m working on merging/forming with another firm that offers family law, but that’s probably six months away from coming to fruition.


You wear all the hats! Jack of all trades! What made you want to get in to this type of career? I feel like most people aren’t thinking, “let’s do probate”, so what was it that interested you?


I always thought it was interesting. I’ve experienced death in my family, and we had to go through these processes. Some experiences were good, some were bad. When I was working at the legal clinic, since it was one of the things that we did, I gravitated towards it. I find it so fascinating because you have to know something about everything, since it really depends on what people die with. In some ways, it’s formulaic and very code driven. I appreciate how well organized the area of law is, especially in Harris County. The courts are great; they have a judge, associate judge, and a staff attorney that make sure everything’s perfect all the time.


Having a good system always makes things a little bit easier. If you’re already having to deal with something that’s complicated, you don’t want to have a complicated system, as well!  I’ll jump right into my first question. For those here that are familiar with probate but are reading to get a better understanding, can you define probate for us and why it’s important to understand in relation to Self-Directed IRAs?


Probate is the formal process of getting assets out of a deceased person’s name and into that of his/her heirs or beneficiaries’ names. So, as it relates to Self-Directed IRAs, if a deceased person had any asset that listed a designated a beneficiary, then the formal probate process is not necessary and the beneficiary can deal directly with the asset holder. Usually, I’m talking about financial assets, but you can have a piece of property that you’ve acquired in your SDIRA but that account has a beneficiary. If your loved one dies and leaves you as the beneficiary, then you would contact Quest and ask them information and what you need in order to change this account over into your name.


How involved is the custodian when somebody passes away? 


The custodian is mostly passive, waiting for notification and then receiving the notification. They’re not going to find it by looking through the death records or from the obituaries. They’re going to need to be notified by the beneficiary, and the beneficiary needs to contact that institution. Whether it’s a custodian of a Self-Directed IRA, if it’s an insurance company, if it’s a bank, an investment firm – all of those are different entities and the beneficiary needs to reach out to them. If you don’t know you’re a beneficiary, that’s where it gets kind of tricky. Nowadays, no one really has paper statements anymore. In the past, you could rely on looking through the loved ones’ mail, but now you have to look through their computer, passwords, and usernames.


Oh man, I never thought about that. 


Yes, so you can see how tricky that can get. And there’s no harm in digging around!  But, if you contacted Quest because a loved one died and you’re not the beneficiary, Quest is not going to tell you any of the asset holder’s information if you’re not the beneficiary. 


Thanks for answering that. It’s so important that clients understand our role as the self-directed IRA custodian.  


If you’re really lost and have no direction, then it’s possible to open probate and to get an executor/administrator with the authority to act on behalf of the estate and perform the necessary inquiries. Now, if I was an executor/administrator and I inquired, I have authorization. I could potentially find out who the beneficiary was or get them going. But, that would be a lot of work. For planning purposes, you should write your assets and accounts down or print out a statement of account and have a folder to keep everything in one place. Even if you have old stuff in your folder, like a closed account, there’s still no harm. Try to have all of your accounts in one place, so that [your beneficiary] knows who to contact.


It definitely sounds like it could get complicated. Especially if you didn’t know you were a beneficiary! Is it possible to avoid this probate process all together?


It is possible, but it requires planning. I think you need to sit down and write out everything you own as an asset. And don’t say cash! If you have life insurance policies, financial accounts, self-directed IRAs, IRAs, homes, boats, whatever – list it all out! Then go through your goals. If your goal is to avoid probate, then you need to make sure each asset is planned in such a way that that’s what would happen. The first step is listing out everything, so that you know what to do to plan for each asset.


Let’s say a family has done poor planning, and they do have to go through the probate process. Can you explain that process for us? Is it long? Is it complicated? Does it differ for everybody? 


It can be long and difficult, but sometimes it can be quick and straightforward. It really depends on the types of assets the decedent has and how well the heirs/beneficiaries/personal representative get along. An attorney will advise your executor/administrator or interested party as to the proper probate process for your estate, but, generally speaking, an application is filed, all interested parties are notified, a hearing is held and the executor/administrator gets court authority to officially commence his/her role as fiduciary. The executor/administrator then begins collecting assets, paying debts, taxes, etc. After everything is accounted for, debts/taxes paid, then the executor/administrator will distribute the assets according to the will or the laws of descent or distribution.


Okay. Yes. It does sound like a lot of moving parts and a lot of steps there. It’s definitely important to have somebody who knows what they’re doing.


Sometimes it’s not even because you have a complicated estate. It just depends on how long it is. And there are always things that can get jammed up.


Speaking of those jams and things that could get complicated. How does the probate process differ from state to state? Can this hold things up? How do different laws in each state factor into this?


They do differ and every state will have different requirements. It could also require ancillary probate. When I say ancillary probate, it means you’re going to have to do something in that other state to get that asset turned over. It’s the process of transferring property that is located in a state.  That’s why a lot of people who are residents will put their non-Texas assets in a trust. 


Because you mentioned an executor, let’s touch on that. Who should I appoint as my executor?


I would say first and foremost, it should be someone that is trustworthy, somewhat business savvy, resourceful, diligent, and dedicated, because it’s a job. It’s a job, no matter how simple it is. For example, everyone’s going to die with some bills. You’re going to have a Verizon account or a Comcast account, and you’ve got to shut all that down! It may be just trying to get it transferred over to your name, but you know what it’s like to even get on the phone with someone if you have an issue. It may take two hours. And that’s just the preliminary phone call! First, you’re going to call to find out what they need, then there’s a follow-up where you have to send them a death certificate or whatever. Then you maybe pay the final bill, and finally, actually follow up to make sure they did it. You can see, every little thing is going to take time, and it’s a lot of work. So, you could appoint your spouse or child, just as long as they have those attributes.  At the very minimum, your executor needs to have the ability to understand that this is going to be a process and that they could hire a good attorney to guide them through it. 


What would happen if your loved one died without a will? What happens then?


This is called dying intestate. If there is no will, someone needs to step forward to choose a process of getting the loved one’s assets out of their name and into the name(s) of the heir(s). The method of doing this will depend on the assets your loved one leaves behind. The loved one’s heirs are defined under the laws of descent and distribution.


What actually constitutes a valid will?


With this, it’s such a specific question, and you can’t generalize. It’s the law. It’s as follows:

  • Testator was at least 18 years old (or has been married or a member of the armed forces) at the time of execution
  • In writing
  • Signed by the testator or another person on the testator’s behalf in the testator’s presence and at the testator’s direction
  • Attested by 2 or more credible witnesses who are at least 14 years old and who subscribe their names to the will in their own handwriting in the testator’s presence
  • Credible cannot be a beneficiary
  • For holographic will: wholly in the testator’s handwriting


And does that have to be official? Typed up or notarized?


No! It could be on a napkin. As long as it’s all in your handwriting. Just have something that works in a pinch. It could be better than having nothing at all.


Thank you for clarifying! One of my last questions relates to potential complications with large families. If somebody is in a mixed family, how can somebody protect themselves in those types of situations, i.e. stepchildren, new spouses, etc?


First, make sure you know what you have by writing it down and when you acquired it (before or after marriage). Familiarize yourself with the laws of intestacy and where real property vs. separate property goes if you die without a will. Once you do that, picture how you would want your estate to pass once you die. Make sure you have a will. A lot of times people choose to utilize trusts to take care of a surviving spouse while they are alive, but leave the trust assets to their children once their spouse dies. There can be unintended consequences of not doing anything. 


I think there’s a lot about the trusts that people just like. Plus, it’s a good shelter for things. 


I think so, too. 


Well, Emily, I really appreciate you taking the time to dive deep and answer all these questions for me! Before we wrap up, what’s one piece of advice that you would give somebody who is planning and preparing for the future?


I definitely think they need to write lists for what they have. That is a preliminary for figuring it out on your own. If you’re going to go see an attorney, a lot of times they’ll send out a preliminary questionnaire and that’s exactly what the goal of that questionnaire is – to see what you have. Also know, you are never responsible for a deceased person’s debts. Never. If you’re going to pay any expenses of administration or debts of a loved one, just make sure you keep all the receipts and then you can get reimbursed. 


That’s really helpful to know! I’m glad you threw that in! I think I’ve asked all of my questions, and I’ve loved getting to hear your answers and learn a bit more about the probate process. Thank you, again. I’ll include your contact information at the bottom for those that would like to learn more!

When preparing for the future, being proactive ahead of time is the best thing you can do. By following these practices, you can do everything you need in order to set yourself up later in life. To learn more about the probate process in Texas, you can contact Emily Bohls at

If you have questions regarding your benefices or any other Self-Directed account need, we would love to help. You can speak to an IRA Specialist by scheduling a free consultation HERE.

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How the CARES Act Relates to Retirement Accounts

Estimated reading time: 2 minutes

The COVID-19 crisis fundamentally changed society in many ways and spread through the world like a wildfire. While much of the United States stayed home in isolation, the federal government passed the Coronavirus Aid, Relief and Economic Security Act to help relieve the burden on families, businesses, and local governments.

The CARES Act is expansive and contains many provisions, but what does that mean for the financial wellbeing of your family? We’ll examine some aspects of the Act that impact your family finances and the pros and cons of taking advantage of these temporary measures.

You’ll be able to make educated decisions and determine which are best for you.

CARES Act and Individual Retirement Accounts

With the country in isolation, many people were left with jobs temporarily suspended or laid off from work. The CARES Act allows people having a hardship to remove up to $100,000 from their IRA without the usual 10 percent penalty.

The money is considered taxable for that year. You can pay the amount back into the account over the next three years. If you have a 401(k), then you can take an increased loan amount of $100,000 or all your 401(k) if the amount is less than that. Before the legislation, the maximum loan amount was $50,000.

Federal Tax Deadline Extended

Coronavirus hit the country in the prime of tax season, leaving many people either unable to have their taxes done or without the income to pay off their tax debts. Many of the accountants and tax preparation companies shut down because of the coronavirus.

The government understood that this would be a problem and extended the tax filing deadline from April 15 to July 15, 2020. It allows an extension of an IRA holder to contribute for the 2019 tax year.

Take Advantage if You Can

If your family is financially disrupted because of the COVID-19 epidemic, then take advantage of the CARES Act stipulations. You don’t need to take the full amount from your 401(k) or IRA unless it is needed.

These are still designed for your retirement, so if you do take money out try to have it repaid so it doesn’t negatively impact your portfolio or your retirement plans. You’ve spent years building it up, so keep your future safe.If you want more information on the CARES Act or IRAs, then contact a Quest IRA specialist.

3 tips for reducing taxes on your retirement income

Estimated reading time: 2 minutes

Minimizing taxes for future retirement income is not always easy, but it is very important for putting together an effective retirement plan. For example, although many retirees expect to pay lower tax rates on their IRA or Individual 401k after they have left the workforce, their tax rates may still go up due to social security taxes and medicare taxes. 

Follow these three steps to reduce taxes on your retirement income and get the most out of retirement savings:

1. Learn about income tax advantages

Despite what many people think, certain types of income are taxed differently from others. A few examples include:

  • Capital gains
  • Real Estate investments
  • Earned income
  • Unearned income

If you buy a physical asset such as gold or an investment property, your tax rates for capital gains will be much lower than it would be for an ordinary earned income. 

Also, if you sell a home you’ve lived in for the past five years, you may qualify to have a large portion of your capital gains excluded from your taxes (double the amount if you are filing jointly as a married couple) by completing a 1031 exchange.

2. Create a budget to keep your expenses low

In order to reduce your taxes, you will want to stay in low tax brackets as much as you possibly can. One of the best ways to do this is to keep your expenses low so you won’t have to withdraw much from your retirement accounts. 

Create a budget to manage your annual spending and withdrawal habits, and if possible, move to a region with lower taxes and a lower cost of living.

3. Convert your traditional IRA or 401k into a Roth IRA

Another strategy is to convert your current retirement account into a Roth IRA. By doing this and paying taxes up-front when your marginal tax bracket is still low, you will reduce the amount of tax you will eventually pay in the future and you will be eligible for tax-free distributions after retirement.

Contact a Quest IRA Specialist today to learn more ways you can reduce taxes on your retirement or register for one of our events.

Questions you should ask before opening multiple IRA accounts

Estimated reading time: 2 minutes

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Many people wonder if you can open multiple IRA accounts, and the short answer is yes, it is something that is legally allowed. However, just because it is legal doesn’t necessarily mean that it’s something you should do.

There are many important things to take into consideration when opening multiple IRA accounts. Here are the key questions you should ask yourself before setting up multiple IRAs.

Do you need the tax benefits of both a traditional and Roth IRA account?

  • This is the main reason why people opt to open multiple IRA accounts. Traditional IRA accounts give you tax breaks for deposits during the year, but Roth IRAs give you tax breaks in the year that you withdraw them. 
  • There are advantages and disadvantages to using both types of IRAs. You might opt to use a traditional IRA for a personal benefit today (such as a tax deduction). 
  • On the other hand, use a Roth IRA for a long-term investments to capture the benefit when you truly retire and withdraw tax free money. 

Are you willing to manage the paperwork for two IRAs?

  • While multiple IRAs can come with tax benefits, they can also come with a lot of extra paperwork. 
  • This means higher chances of making mistakes with your paperwork or taxes, or missing important deadlines that could negatively affect your account’s growth. 
  • Before you get set up with multiple IRAs, be realistic with yourself and decide if you are willing to spend the extra time and energy to manage two accounts.

Do you have a good financial institution on your side?

When opening any financial account, it’s important to work with providers who are going to meet your needs.

Is their staff friendly, knowledgeable, and available to help when you have problems? Do they offer the investment options that you need? Doing your research before choosing an account provider is crucial.

After pondering all the pros and cons of opening multiple IRA accounts vs. one IRA account, you will be ready to make the best choice for you and your financial future. 

If you are interested in opening an IRA account, contact Quest Trust Company today! QTC offers completely self-directed IRAs with flexible investment options and fast processing times. This gives you more control over the way you manage your money and plan for the future.

Self Employed Retirement Plans

Estimated reading time: 3 minutesWhile owning your own business has many benefits, it isn’t always easy. There are many things to consider when you open a business, and one of the most important factors to think about is your long-term plan. Because you are working for yourself, many of the retirement plans that are normally available to those working for a company are not available to you. This can often times make saving up for retirement a little more difficult because you don’t have an employer making contributions to your account on your behalf. Any money contributed is out of your own pocket. There are many other options available for the self-employed. Below are some of the most common retirement plans for those who are self-employed.

Individual Retirement Accounts


The most common way to save for retirement when you are self-employed is to open an individual retirement account (IRA). IRAs offer certain tax benefits that are comparable to the benefits you would receive in a traditional 401(k) you would get through an employer. In a traditional IRA, the contributions that you make towards your account are tax deductible, but in a Roth IRA the earnings and withdrawals are tax-free because you pay tax on the contributions. With both of these accounts there are certain contribution caveats and income limits that you should be aware of if this is the route you decide to take. The IRAs do have penalties for early withdraws as a way to keep your retirement funds in tact until they are needed.

Self-directed IRAs

While IRAs are a good option for more traditional retirement funding, self-directed IRAs are good if you want to use a wider variety of investment options. Some of these investments can include things like real estate and precious metals as well as the more traditional things like stocks and bonds. This method also allows you to invest in other small businesses although you cannot invest in your own business. The tax advantages of self-directed IRAs are fairly similar to those of the traditional IRAs otherwise. The IRS does have more restrictions on these accounts because of the wider array of possible investments.

Self-Employed 401(k)


Another option for people who are employed by themselves and have no additional employees is the self-employed 401(k). In this retirement account the paperwork is more straight forward and less expensive. In these accounts, because only you and a spouse can be working for yourselves, your contributions can be higher towards your account. If you have a broker that helps with your account, they can also invest in alternate assets for you to diversify your portfolio. This account is a good option until you decide you want to expand your business because you have to change accounts when expanding.

Although there are other investment options for self-employed people, these are some of the most common accounts that people choose to invest in for retirement. It is important to make well-informed decisions as this could determine the comfortability at which you live after retirement.

Retirement Plans for Teachers

Estimated reading time: 2 minutesTypically, when thinking about retirement plans most people think of the 401(k) plan, and while this is one of the mostly widely used plans, some people do not have that as an available option. Teachers, for example, use a different plan called the 403(b). While these plans are fairly similar, there a few key differences that should be addressed as these differences may result in monetary losses. Below we will cover a variety of options that teachers have to explore in order to maximize their retirement funds.

One of the main differences between a 401(k) and 403(b) is the investment options that are available. When making investments within the 403(b) plan there is a limited number of mutual fund options available, most of the investment opportunities are annuities offered by insurance companies. While annuities may seem like a good investment, they may end up having fees that could end up costing you a lot of money so make sure to research before investing. Because teachers often don’t have the same investing options that others would normally get with a 401(k), it is important to understand how to invest your money in order to get the best amount from your retirement plan.

When talking about retirement, it is important to address the two different kinds of Independent Retirement Accounts (IRAs): Traditional IRAs and Roth IRAs. Both of these offer tax advantages for retirees depending on where they stand financially. For Traditional IRAs, you may be able to receive a tax deduction that is equal to your contribution with some possible limitations and the amount is taxed after withdrawal, whereas a Roth IRA is funded with contributions that are after-tax. However, with Roth IRAs your income must be under a certain amount in order to contribute. For teachers, it would most likely be more beneficial to invest in a Roth IRA in order to get the most from their investment.

Another option that teachers have is the ability to add to their maximum allowable contribution after a certain amount of time working. This works to the advantage of teachers because they are able to contribute more to the retirement plan in addition to catch-up provisions that are allowed. It is important to make sure that your employer included this in your retirement plan if that is an option that you want available. This generally will only apply after the employee has been working for 15 years with the same employer.

As a teacher, there are many options available in order to customize your retirement plan and make it the most beneficial to you. Because pensions for teachers are no longer a reliable source for retirement, being aware of all your options is imperative to maximizing your retirement fund, and knowing where and how to invest your money will make retiring an easy transition for when the time comes.

Types of Small Business Retirement Plans

Estimated reading time: 3 minutesIt seems as though a new era is emerging; small businesses are growing more and more popular and soon they are going to be the staple of modern culture. As more and more people move away from large companies it becomes increasingly more important to educate yourself on the steps you should be taking in order to ensure a comfortable future for yourself and, if you’re a business owner, a comfortable future for your employees. Below are a few retirement options to compare that are best suited to small businesses.

One option for a small business, more specifically in-home businesses that consist solely of the owner and possibly a spouse, would be the Solo 401K Plan. Similar to other retirement plans both the employer and the employee contribute however, because you are self-employed you hold both titles. Salary deferrals up to a certain amount are available as well as up to 25% of compensation of the annual maximum.

Another good option for small business is the Simplified Employee Pension Plan (SEP). While SEP’s can be used by any businesses, it is recommended for small businesses. This plan is different than some of the other traditional ones in the fact that it is fully funded by the employer and they contribute up to 25% of an employee’s eligible compensation a year. Each eligible employee must have an individual SEP account and will receive the same percentage of compensation as all other eligible employees.

Many small business that have 100 employees or less will often have a Savings Incentive Match Plan for Employees (Simple IRA). In order to be eligible for this plan the employer must have earned at least $5000 in the previous year, and any employees must have earned at least $5000 from the employer for the two prior years and have an expected $5000 income in the upcoming year. This plan is funded by employer and employee. Employers have a mandatory matching contribution and employees can potentially have 100% compensation if the amount is less than the set total.

One of the most well-known retirement plans is the 401K Plan. This plan allows for the employee to make personal contributions up to a certain amount per year however, one of the main advantage of this plan is that there are many investment options open such as mutual funds. Employers are also required to make a certain percentage of matching contributions. This plan is more popular with some of the bigger companies and corporations.

If you are considering getting involved with a small business or opening up your own, it is important to stay informed and know all your options. These are some of the more established retirement plans in place currently, but if none of these seem like the right fit for you, don’t be discouraged, there are still other viable options. There may be some other slight variations of the plans covered above that are more catered towards what you want. Prepare for your future and decide what you’re looking for now so that when the time comes for you to retire, you’ll be able to transition with ease.

What Is a Self-Directed Retirement Plan?

Estimated reading time: 3 minutesYou know that you should be saving money for the future. Part of that savings should be in the form of a retirement account that should be large enough to support you after you’re no longer able to work. However, with the number of retirement accounts that are available, it can be hard to figure out just what each type entails. Today, we’re going to evaluate what a self-directed retirement plan is and the benefits it offers to you. Let’s get started below.

What Is It? 

A self-directed retirement plan is a unique form of savings that allows the account owner the ability to direct their investments in many different areas that they prefer. With traditional forms of retirement accounts, the account owner doesn’t make the investing decisions. Rather, there is a custodian who invests the account owner’s savings. These are typically in stocks, bonds, CDs, and mutual funds.

What Are The Advantages? 

The first major advantage of the self-directed retirement plan is that the owner has full control over all the investments. There is no restriction on what type of investments are allowed. With self-directed IRA accounts, investments can be made in private businesses, gold, tax liens, real estate, and just about anything else you can think of. The traditional IRA accounts don’t allow for these various types of investments as they only offer Wall Street investments.

The second advantage is that you can use your own knowledge to invest in areas that you are comfortable with. With traditional retirement plans you are relying on another individual to manage your investment and many don’t have in-depth knowledge about the investments they’re using. This can be quite risky. When you’re in charge of your own investments, you can stick to investing in areas that you know very well so that you can make as many gains as possible.

The third benefit of self-directed retirement plans is that you can diversify your portfolio even more than with traditional plans. Market volatility and harsh inflation rates can put a damper on your investments. With traditional plans, the only diversification you get is with stocks, CDs, mutual funds, and bonds. With these options, you’re playing the Wall Street game. With a self-directed retirement account, you can invest in a wide variety of sectors, such as real estate, gold, and others. This wider availability of diversification can allow you to better cushion yourself from financial downturns in the future.

The fourth advantage is that you don’t have to pay brokerage fees. When you let your traditional retirement account up to the direction of a trustee, you have to pay them for managing the account. These are in the form of brokerage fees and they’re ongoing for as long as you have that trustee in charge of managing your account. When you opt for a self-directed retirement plan you don’t have to pay brokerage fees as you are the one managing your account.

Hopefully, at this point, you have a full understanding of what a self-directed retirement account is and the many benefits that it will provide for you. It’s important that you take the time to fully understand what these accounts entail. This will allow you to take a more hands-on approach to your future financial health.

Three Major Costs of Retiring Early

Estimated reading time: 3 minutesFor most, retiring early is, at best, a fun fantasy to help them survive yet another work week. Free time for traveling, spending time with loved ones, or just working on projects around the house sound like enough reasons to walk out of the office today and never look back. Despite the fact that the loss of income would be a huge blow to the monthly budget, most Americans would also find themselves struggling to afford all of the benefits their current jobs supply—making early retirement more of a pipe dream than a reality. Retiring before 65 doesn’t just equate to a loss of income at an earlier age. Take a look below at the three major categories affected by early retirement.

  1. Retirement savings. Not only will you lose the ability to contribute to your retirement accounts without that taxable income, but you will most likely need to pull from your accounts to pay for bills and other expenses. This means that your accounts will dwindle quicker and you will lose out on years of growth those funds would have had if they stayed put. Depending on how early you retire, this could equate to hundreds of thousands of dollars lost in the end. If your current employer offers matching for your 401(k), you should factor in the loss of those funds and growth potential as well.

For those lucky enough with a spouse at work, you will still be able to contribute to your IRA using their income thanks to a little caveat called “Spousal IRAs”. With a Spousal IRA, you can still keep a separate account with your name on it, but your contributions will come from your spouse’s income. The same contribution limits, distribution rules, and taxes as a regular IRA will apply.

  1. Social Security. There are advantages to postponing social security benefits as long as financially possible. If you collect on social security at the earliest age allowable, 62, then the checks you receive will be quite a bit lower than if you waited a few more years to start collecting. This is because the funds allocated to you would be forced to cover you for a longer period of time, thus dividing them further. The difference in yearly income you could expect from social security between beginning collections at age 62 opposed to age 70 (the latest you can start collecting), is nearly double. If you retire early, you may need to prematurely take social security in order to afford expenses on an already tight budget.
  2. Healthcare is arguably the single largest expense affecting retirees in the United States. Most companies don’t offer health insurance to non-employees, and you won’t be eligible for Medicare until age 65. You could continue health insurance through your current plan using COBRA if your plan allows and if you had a qualifying event to activate this option. Otherwise, you will need to figure out another way to pay for your health coverage. Even for retirees on Medicare, health costs should always be one of the first factors in deciding whether or not you have enough money to retire when you want.

Savers Credit Eligibility and Income Restrictions

Estimated reading time: 3 minutesAlthough saving for retirement isn’t always easy with a low income, there are benefits to help ease the burden for those who can swing the yearly contributions. Eligible savers can enjoy the reward of a Savers Credit to reduce the amount they owe on their taxes next year. Most low-income savers don’t take advantage of this benefit either because they don’t know it exists or don’t know they qualify. Take a look at the eligibility requirements and income limit restrictions that are currently in place for the Retirement Savings Contributions Credit, or Saver’s Credit, below.


  1. Only workers 18-years-old and older may use the Savers Credit. Anyone can contribute to an IRA at any age as long as they have taxable income, but young savers will still need to wait until at least 18 to use the tax benefit.
  2. Student status. Even people who are 18-years-old will still disqualify if they are full-time students.
  3. Savers will also be disqualified if they are listed as a dependant on someone else’s tax form.
  4. Retirement accounts. To use the Savers Credit, workers must contribute to a qualified retirement plan, which include any of the following: IRA, Roth IRA, SIMPLE IRA, SEP IRA, 401(k), 403(b), 501(c)(18), and/or 457(b).

Income Restrictions and Credit Percentages

The percentage of your contribution returned as credit is either set at 10%, 20%, or 50% and is tiered base on income. The maximum credit you can qualify for is $2,000 for a single person and $4,000 for a married couple filing jointly. It is important to note that the Savers Credit is non-refundable, meaning that the credited amount can only be used to lower an owed tax balance. If you don’t owe on your taxes or the amount credited is more than what you owe, you will not be refunded the extra money. Rollover contributions from one plan to another also don’t qualify as eligible contributions for the Savers Credit. Refer to the categories below to see if you qualify. Please note that all numbers are based on the limits for the 2017 year.**

  1. Married Filing Jointly. For this group, the maximum return of 50% of their retirement contribution is activated at an adjusted gross income of no more than $37,000. Workers earning between $37,001 and $40,000 will have 20% of their contribution returned as credit. Workers earning between $40,001 and $62,000 will only have 10% of their contribution returned as a credit. AGI over $62,000 disqualifies this group for the Savers Credit.
  2. Head of Household. To qualify for a 50% return as credit, savers who are heads of household must earn no more than $27,750. For a 20% return, this group must earn between $27,751 and $30,000. Workers earning between $30,001 and $46,500 qualify for a 10% return, and more than $46,500 disqualifies this group from the Savers Credit altogether.
  3. All Other Filers. This group may include single filers, qualified widowers, or married filing separately. For a 50% return, workers must earn no more than $18,500. For a 20% return, the income level must be between $18,501 and $20,000. For a 10% return, earners can make between $20,001 and $31,000. More than $31,000 disqualifies this group from the Savers Credit.