Good Afternoon Legacy Wealth Alliance Family,
It is Pattie again writing to you. Can you all believe how fast this year is going by?
Fall is my favorite time of year and what better way to enjoy it than to go to Flagstaff. I have been hiking in Flagstaff almost every weekend. I say almost every weekend because I did spend a week visiting my family in Minnesota. The colors of the trees are just breathtaking… both in Flagstaff and in Minnesota! Fall is the season I miss the most from the Midwest so I am happy I can go to Flagstaff to enjoy when I cannot make it to the Midwest.
Spending time in Minnesota with my family was so much fun! We visited Pipestone National Monument where native tribes quarry Pipestone by hand. Pipestone is a soft red stone that is used to make pipes. The pipe is sacred to many American Indians who use it for prayer, important rites and to conduct both civil and religious ceremonies.(1) We went to see the Arc of Dreams Art Exhibit which is along the Big Sioux River in Sioux Falls. We also walked along the river to see the majestic falls! Though the falls were not roaring as they are in the springtime from the melting snow and rain, they were still quite magnificent. However, the biggest highlight of my trip was riding in a combine with my cousin as he was harvesting soybeans. What a process and how it has changed from years gone by. I was able to climb on the silo that will be used to store corn after the soybeans are harvested. And of course, me being who I am had to venture inside the silo too. It was fun… as I listed to my voice… as it sounded like I was talking into a fan. My Dad shut the door so I could see how dark it was inside. I would not want to be caught inside when the corn is being loaded because once the double steel door is sealed the only way out is to get to the top of the silo… perhaps by swimming upward? Needless to say, I do not want to find out.
When I told you all last time that my daughter married her best friend, I thought that was my biggest news of the year to share. Well guess what, it was not even close to my biggest news of 2020… and no, it has nothing to do with C-19 or the election. But it has everything to do with a chia seed. A chia seed, how is that you ask? Well I received a special gift. My gift was a note from my daughter with a chia seed taped to it. I was puzzled by this chia seed. Actually, I did not even realize it was a chia seed at the time, I thought it was a dot on the note. As I was contemplating this note with a chia seed taped to it, I had to be told what it represented. I found out it represented the size of my unborn grandchild. My chia seed is my biggest news of 2020. The baby is due in May of 2021. Though I want to run out and buy so much for my grandchild, I wanted to give a gift that would make a difference and truly help baby, mommy, and daddy. Then, it came to me… something I could never do for my own children. I started a 529 Plan for them. Where I did not have two nickels to rub together raising my own children, I can manage the fund minimum amount each month.
Enough about what is going on with me…
Here is an important notice for all clients with retirement (IRA, Rollover, Roth IRA, SIMPLE IRA, SEP IRA’s etc.) brokerage accounts with Lincoln Financial Securities with National Financial Securities as the custodian. There was a “message and alerts” in your most recent September 30, 2020 statement (somewhere in the middle of the statement).
“The 2020 retirement account annual maintenance fee is due on 10/31/20. This fee covers the costs associated with the recordkeeping of your account and reporting required by the IRS. If you would like to pay the fee from your bank account or your nonretirement brokerage account, contact your broker/dealer. If you do not provide payment instructions, the fee will be deducted from your retirement account on 11/16/20. If funds are not available to cover the fee, your account may receive an unpaid fee posting. Your broker/dealer may sell any or all of your retirement assets to satisfy the fee and any associated expenses such as brokerage commissions and/or liquidation charges. For information about the annual fee, refer to the Retirement Account Customer Agreement or contact your broker/dealer.”
Please keep in mind this message only applies to retirement account numbers with a prefix starting with “AAU.”
To avoid the unpaid fee posting, we have been working hard with our clients to get this fee of $35 per retirement account set up to be drafted directly from your linked bank account. This fee is scheduled to be drafted from your bank account on 11/16/2020. Please keep in mind if you have an IRA account and a Roth IRA account you will see two fees of $35 each or $70. If you have a spouse or partner, you may see the fee being deducted for their accounts as well.
To verify if your account has been set up to have these fee EFT’s directly from your bank account you can go to the website https://investor.wealthscape.com/access/ . If you have not registered previously you will need to. Under “PROFILE/FEATURES” click on “Retirement/HSA Fees.” If you see your bank listed, that means the EFT link to pay the $35 annual maintenance fee is active. If you do not see it, please call me to discuss how your fee’s will be paid or to set up the EFT bank link feature to avoid the unpaid fee posting.
The other notice to be aware of is: “The Coronavirus Aid, Relief, and Economic Security Act or CARES Act, waives required minimum distributions for calendar year 2020. In some cases, the CARES Act also allows for certain coronavirus -related distributions in 2020 for those who meet eligibility requirements. Eligible coronavirus-related distributions are limited to an aggregate of $100,000 per individual and would not be subject to the usual 10 percent early withdrawal penalty for those under age 59.5. In addition, income tax due on the taxable portion of a qualifying distribution may be spread evenly over 3 years and a qualifying distribution may be repaid to an eligible retirement plan within 3 years. Please discuss options available to you with your financial representative or tax advisor.”
Lastly, for those who are working. Are you saving enough for retirement? The employee benefits limits for 2020 and 2021 are as follows:
| 2020 | 2021 | |
| Maximum annual benefit earned under a defined benefit plan [IRC Section 415 limit] |
$230,000 |
$230,000 |
| Maximum contribution to a participant’s account in one or more defined contribution plans
[IRC Section 415 limit] |
$57,000 |
$58,000 |
| Maximum salary deferral
401(k)/403(b) plans [IRC Section 402(g) limit] and most 457 plans |
$19,500 |
$19,500 |
| Maximum salary deferral SIMPLE 401(k) plans |
$13,500 |
$13,500 |
| Minimum compensation amount SEPs |
$600 |
$650 |
| Maximum compensation amount 401(a) plans, 403(b) plans, and SEPs |
$285,000 |
$290,000 |
| Age 50 catch-up contribution
401(k) plans, 403(b) plans, and 457(b) governmental plans |
$6,500 |
$6,500 |
| Catch-up contribution SIMPLE 401(k) plans |
$3,000 |
$3,000 |
| Highly compensated employee salary definition | $130,000 | $130,000 |
| Key employee in top-heavy plan salary definition | $185,000 | $185,000 |
| Social Security taxable wage base | $137,700 | $142,800 |
Source: Internal Revenue Service, irs.gov, October 26, 2020, and Social Security Administration, ssa.gov, October 13, 2020.
Please let us know if you have any questions.
Wishing you all the best,
Pattie Gradl
This information does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may view this information. Statements, opinions, and forecasts made represent a particular observation and assessment of the market environment at a specific point in time and are not intended to be a forecast of future events or a guarantee of future results. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended. Statements regarding future prospects
may not be realized and may differ materially from actual events or results. Past performance is not indicative of future performance.
Pattie Gradl
LFS-3304246-102720
