In this month's issue of INSIGHTS, you will read two articles dealing with retirement, Retirement Plan Limits Bumped Up For 2019 and Three Questions To Ask Yourself Before You Retire. The Three Questions article is what motivated me to write this.
I would imagine as we near the end of 2018 many of you or your family or friends of retirement age are thinking about retiring in 2019. Aside from money matters, the scariest thought about retiring is what am I going to do with all of the time I would have spent at work? Retirement does not signal the end of your being productive.

Years ago, when I was working at Bankers Trust Company, I would take the NYC Subway from Continental Avenue in Queens to the Rector Street in Lower Manhattan I would buy the Wall Street Journal each morning. I always looked forward to reading the musings of Harry Gray, then CEO of United Technologies who would buy an entire back page. Here is one of his thoughts on Retirement,

Retirement doesn't have to be a red light.
It can be a green light.
Othmar Ammann would agree.
After he "retired" at age 60, he designed, among other things, the Connecticut and New Jersey Turnpikes; the Pittsburgh Civic Arena; Dulles Airport; the Throgs Neck Bridge; and the Verrazano Narrows Bridge.
Paul Gauguin "retired" as a successful stockbroker and became a world-famous artist.
Heinrich Schliemann "retired" from business to look for Homer's legendary city of Troy. He found it.
After Churchill made his mark as a world statesman, he picked up his pen and won the Nobel Prize for Literature at age 79.
Don't just go fishing when you retire.
Go hunting.
Hunt for the chance to do what you've always wanted to do.
Then go do it!

After I was "retired" I did, I founded Garden State Trust Company. Good hunting to those of you that are considering retirement.

During November, we give special thanks to our courageous armed forces and our beloved veterans for placing service above self so that all of us may continue to enjoy the freedoms we so often take for granted as citizens of this wonderful country.

And, Thanksgiving provides us an opportunity to give thanks for those who helped to make 2018 another successful year for Garden State Trust Company. From all of us we extend to all of you and your loved ones our best wishes for a warm and enjoyable Thanksgiving filled with family and friends.

Ira J. Brower, Founder
To make it possible for voluntary retirement savings to keep up with inflation, the various numerical limits embedded within qualified retirement plans are indexed for inflation. The big news is that the IRA contribution limit goes from $5,500 to $6,000 in 2019, the first increase since 2013. The limits for 401(k) plans also get a $500 bump up, as shown in the following table:
Catch-up contributions are permitted by those employees who are 50 years of age or older during the calendar year.
Personal saving for retirement never has been more important. These tax benefits make saving a bit less painful.

(November 2018)
© 2018 M.A. Co. All rights reserved.
As you near the end of the final lap of your working years, and begin scanning the retirement horizon, you are likely to be seeking the information that you need to ensure a secure financial future. Here, we touch on three of the most important questions that you should be asking yourself as you transition to retirement.

1. Do I understand all of my Social Security benefits options?

When do you want to begin receiving Social Security benefits? Apply at least three months ahead of the time that you wish to begin. You can receive a reduced benefit once you reach age 62. The full benefit shown on the Social Security estimate statement that you receive each year can be yours when you reach “normal retirement age” (no longer automatically age 65, but dependent upon your date of birth). Or do you want to wait until later, to increase the amount of your benefit? You may want to run the numbers. If you plan a “working retirement,” find out if your benefits will be reduced, and by how much..

Benefits aren’t automatic. You can apply for benefits by: filling out an application online (; calling 1-800-772-1213; or visiting your local Social Security office.

2. Do I have all my health insurance coverage in place?

There are three avenues to explore here:

First, Medicare. If you’re already receiving Social Security benefits at age 65, your Medicare (Part A) starts automatically.

If you’re not receiving Social Security, you should sign up for Medicare close to your 65th birthday, even if you have not reached your full retirement age, or you aren’t yet ready to retire. Part A is called hospital insurance and covers most hospital stay costs, as well as some follow-up costs. Part B, for which you must enroll, pays some doctor and outpatient medical care costs. The rules for prescription drug coverage are complicated, so you will want to familiarize yourself with them before you need to make any decisions. Plan providers, AARP and the Medicare Web site ( can offer guidance.

Second, Medigap (and other) policies. About two-thirds of all Medicare recipients aged 65 or over buy this kind of supplemental private health insurance, designed to deal with some of the holes in Medicare coverage. Before buying Medigap, HMO or other managed care insurance, you’ll need to do a thorough review of the kinds of policies available and their costs.

Third, retiree health insurance. Find out if you can obtain retiree health insurance from your or your spouse’s company or union. You may find that the cost is less than that for a Medigap policy and provides more benefits. Make sure that you read the policy’s fine print. Especially important: Will premiums rise with inflation? If you are a veteran, find out if you are entitled to medical or prescription drug coverage from the government.

3. Do I know how I want to manage my company retirement plan payout?

Your 401(k) or other qualified retirement plan may offer several kinds of distribution choices. One option may be to receive your benefits as periodic payments (an annuity). For pension plans there are choices within choices: Your payments might be fixed or variable, paid out over your lifetime or that of you and your spouse.

Or you may be entitled to receive a lump sum payout of your account balance. In that case you will need to make a decision as to whether you should: (1) take the money in hand, pay tax on it and invest what’s left; or (2) arrange to roll over all or part of your payout into an IRA, avoiding all tax as long as the money remains there. At age 70 1/2 you are required to begin making withdrawals.

If you are planning an IRA rollover, tread carefully, for there may be tax traps. For example, arrange for a direct rollover of your account from the company plan to a Rollover IRA. If you don’t, your employer is required by law to withhold 20% for income taxes.

© 2018 M.A. Co. All rights reserved.
Any developments occurring after January 1, 2018, are not reflected in this article.
Estate planners and trust officers often hear the question: “How can I keep my money out of the hands of my child’s spouse?” There can be many motivations for this attitude—perhaps the son-in-law or daughter-in-law lacks financial maturity, or has a substance abuse problem, or the parent thinks that the marriage itself might not last. In the event of a divorce, there could be a question about whether an inheritance has become marital property, which could compromise the value of the financial resource.

Here is a true story about how one father resolved this problem. Joseph and Terry were married in 1985. During the course of the marriage, Terry’s father established six different irrevocable trusts for his descendants. Terry and her four sisters were co-trustees of all six trusts. The sisters and their children were discretionary beneficiaries of the trusts. No beneficiary could force a trust distribution, and any distributions required a majority vote of the trustees. In 2013, 2014, and 2015 each co-trustee took a $50,000 distribution, including Terry.

Joseph sued for divorce in October 2015. In June 2016 he petitioned to include Terry’s trust interests in the marital assets so that he could share in any trust distributions. Terry counter-sued for divorce in July 2016, and she argued that her interest in the trusts was too remote to be touched by the divorce proceedings.

The trial court agreed that because there was no provision for mandatory distributions, and because no distributions could be made without a majority vote of the trustees, Terry’s trust interest was too speculative to be considered marital property. Joseph’s attempt to claim part of the trust or its distributions was rejected. The Indiana Court of Appeals recently affirmed that decision.

Decisions on matters such as these are governed by state law, and so may vary from state to state. The precise terms of the trust also may be a factor. To learn more, consult with your estate planning attorney.

(November 2018)
© 2018 M.A. Co. All rights reserved.
Changes to the Rules of Golf taking effect January 1, 2019 that are expected to have the most impact on the game and to be of most interest to golfers. read more...

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Because of the rapidly changing nature of tax, legal or accounting rules and our reliance on outside sources, Garden State Trust Company makes no warranty or guarantee of the accuracy or reliability of information contained herein nor do we take responsibility for any decision made or action taken by you in reliance upon information provided here or at other sites to which we link. ©2017. All rights reserved.