Nelson Investment Planning Services: Real Life Solutions

Our Solutions to Real Client Problems

All of the following questions are ones that NIPS has sucessfully answered for its clients. All of the information provided in the answers is general in nature and does not reflect specific client information.

Click on the question to find out the NIPS Solution.

How do I keep my retirement for my family if I am a State of Florida employee?
How do I retire early with an IRA without any penalty?
How do I get a bigger Social Security check?
How can I lower my monthly mortgage payment?
How can I reduce my income taxes?
How can I reduce my estate taxes?
How can I have an IRA trust to take care of my loved ones after I die?
How can I educate the whole family tax free?
How can I work and still receive social security at age 62?
How can I use my non-deductible IRA contributions to reduce my taxes?

Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal.
Results are subject to market fluctuation.
NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives
and our then current understanding of the applicable rules, regulations and laws.

Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses.
Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc.,
a member of FINRA and SIPC.

How do I keep my retirement for my family if I am a State of Florida employee? ^back to top

Al has worked for the State of Florida as a fireman for 25 years and wants to make sure his wife and children have money if he passes away. He also wants to have flexibility in retirement.
Asset:	Al’s Pension Plan with the State of Florida will send him a monthly check once he retires. However, if he wants to obtain his maximum pension benefit of $75,000 per year, he would have to elect Option 1 whereby that income would immediately stop upon his death. If he wants his pension to continue after his death for the rest of his wife’s life, he would have to election Option 3 which reduces his pension benefit by 15% to $63,750.
NIPS Solution:	Al transfers from the Pension Plan to the Investment Plan with the State of Florida. The Investment Plan allows Al to control the entire amount of his pension in one lump sum of about $1,250,000.
Result:	In order to obtain the highest level of income previously available to him under the Pension Plan, Al sets up income of $75,000 from this $1,250,000. When Al dies his wife inherits the remaining balance of this account. In addition, upon his wife’s death, his named beneficiaries – his children – inherit the remaining amount.
Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

How do I retire early with an IRA without any penalty? ^back to top

Bob wants to retire at age 55 with monthly income from his sole asset, an IRA account.
Asset:	$60,000 invested in IRA account in early 2003.
NIPS Solution:	Establish 72(t) distribution and avoid 10% penalty for early withdrawals.
Result:	Bob's taxes reflect the total amount of the withdraws and do not include 10% penalty for early withdraw.
Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC./small>

How do I get a bigger Social Security check? ^back to top

June applied for social security benefits at age 62 on her own work record.
Initial Social Security Benefit:	$397 per month
NIPS Solution:	By applying for benefits under her husband’s work record she was able to collect a family benefit equal to 37% of her husband’s benefit.
Result:	Monthly Social Security Benefits increased by $186 per month to $583 per month
Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

How can I lower my monthly mortgage payment? ^back to top

Phil and Susan were having difficulty making their mortgage payment of $1,191 on their $175,000 mortgage and their monthly credit card payment of $250 on $13,000 of debt.
Mortgage Payment:	$1441 (principal & interest, PMI & credit cards)
NIPS Solution:	Refinance to remove PMI, consolidate credit card debt and pay interest only at a fixed rate of 6% for 10 years.
Result:	Lowered monthly payment to $940, resulting in a savings of over 34% or $500 per month.
Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

How can I reduce my income taxes? ^back to top

Jane earned $32,000 per year and Jim earned $15,000 net as a self-employed salesperson.
Initial Tax Bill:	$5,467 including self-employment tax.
NIPS Solution:	Invest $2,859 in a SEP-IRA for Jim and take advantage of the Retirement Savings Contribution Credit.
Result:	Final Income Tax Bill - $4,838, a decrease of 11.5%.
Past performancePast performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

How can I reduce my estate taxes? ^back to top

Sara and Bob had $6,000,000 in accounts registered joint tenants with rights of survivorship.

Concern:/td> If either Sara oIf either Sara or Bob dies, the surviving spouse will have $6,000,000 solely in their name.

NIPS Solution: By establishing MBy establishing Marital (A) Trusts and Credit Shelter (B) Trusts for each of Bob and Sara, estate taxes were avoided on the entire $6,000,000.

Result: td> $675,000 Savings of Estate Taxes.

Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

How can I have an IRA trust to take care of my loved ones after I die? ^back to top

Shelia is concerned that her children will spend all of her IRA when she dies.

Concern: Sheila’s son has an alcohol dependency problem while her daughter has credit card problems.

NIPS Solution: Establish Stretch IRA Trust that restricts distributions to Sheila’s children to equal only the minimum amount required by the IRS.

Result: Sheila’s children will receive distributions based on their own life expectancy so the money will last over their lifetime. The trustee of the Stretch IRA Trust will take care of the needs of Sheila’s loved ones.

Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

How can I educate the whole family tax free? ^back to top

Beth has four grandchildren and wants to help provide for their education.

Need: Beth wants to be certain that the money is only used for educational purposes and that taxes are kept to a minimum.

NIPS Solution: Establish 529 College Savings Plans for each of the grandchildren which allow for tax-free withdrawals for educational expenses. As the account owner, Beth controls all withdrawals.

Result: Beth’s grandchildren will be educated with tax-free income (and the assets used to fund the 529 Plans are removed from Beth’s estate for estate tax purposes)

Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

How can I work and still receive social security at age 62? ^back to top

Carolyn, age 62, works a part time job and expects to earn $12,000 for the year.

Concern:td> Carolyn needs additional income but is not certain if she should apply for Social Security.

NIPS Solution: Apply for Social Apply for Social Security benefits. No portion of the benefits will be withheld since earned income is less than earned income limitations imposed by social security. Although Carolyn’s benefit will be permanently reduced by 25% because her normal retirement age is 66, Carolyn would have to delay all benefits for another 4 years and it would be another 15 ½ years before she would receive enough benefits to offset not recieving social security income for the four years between the ages 62 and 66.

Result: td> Carolyn receives the needed additional income.

Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

How can I use my non-deductible IRA contributions to reduce my taxes? ^back to top

Joan and Bruce made non-deductible contributions to their IRA accounts during the 1980s.

Need: Joan and Bruce recently retired and need additional income from their various retirement accounts.

NIPS Solution: By not commingling their contributory and rollover accounts, NIPS was able to take advantage of an IRS rule which allows non-deductible contributions to be treated as return of capital and not subject to income tax.

Result: 31.7% of each dollar taken as income from their contributory IRA is not taxable. Joan and Bruce have more money to spend since they don’t have to save for taxes on this portion of their retirement distributions.

Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

Nelson Investment Planning Services, copyright 2002-2012, All Rights Reserved

Sara and Bob had $6,000,000 in accounts registered joint tenants with rights of survivorship.
Concern:/td>	If either Sara oIf either Sara or Bob dies, the surviving spouse will have $6,000,000 solely in their name.
NIPS Solution:	By establishing MBy establishing Marital (A) Trusts and Credit Shelter (B) Trusts for each of Bob and Sara, estate taxes were avoided on the entire $6,000,000.
Result: td>	$675,000 Savings of Estate Taxes.
Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

Shelia is concerned that her children will spend all of her IRA when she dies.
Concern:	Sheila’s son has an alcohol dependency problem while her daughter has credit card problems.
NIPS Solution:	Establish Stretch IRA Trust that restricts distributions to Sheila’s children to equal only the minimum amount required by the IRS.
Result:	Sheila’s children will receive distributions based on their own life expectancy so the money will last over their lifetime. The trustee of the Stretch IRA Trust will take care of the needs of Sheila’s loved ones.
Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

Beth has four grandchildren and wants to help provide for their education.
Need:	Beth wants to be certain that the money is only used for educational purposes and that taxes are kept to a minimum.
NIPS Solution:	Establish 529 College Savings Plans for each of the grandchildren which allow for tax-free withdrawals for educational expenses. As the account owner, Beth controls all withdrawals.
Result:	Beth’s grandchildren will be educated with tax-free income (and the assets used to fund the 529 Plans are removed from Beth’s estate for estate tax purposes)
Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

Carolyn, age 62, works a part time job and expects to earn $12,000 for the year.
Concern:td>	Carolyn needs additional income but is not certain if she should apply for Social Security.
NIPS Solution:	Apply for Social Apply for Social Security benefits. No portion of the benefits will be withheld since earned income is less than earned income limitations imposed by social security. Although Carolyn’s benefit will be permanently reduced by 25% because her normal retirement age is 66, Carolyn would have to delay all benefits for another 4 years and it would be another 15 ½ years before she would receive enough benefits to offset not recieving social security income for the four years between the ages 62 and 66.
Result: td>	Carolyn receives the needed additional income.
Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.

Joan and Bruce made non-deductible contributions to their IRA accounts during the 1980s.
Need:	Joan and Bruce recently retired and need additional income from their various retirement accounts.
NIPS Solution:	By not commingling their contributory and rollover accounts, NIPS was able to take advantage of an IRS rule which allows non-deductible contributions to be treated as return of capital and not subject to income tax.
Result:	31.7% of each dollar taken as income from their contributory IRA is not taxable. Joan and Bruce have more money to spend since they don’t have to save for taxes on this portion of their retirement distributions.
Past performance is not a guarantee of future performance. Investments are subject to risk, including the possible loss of principal. Results and values stated are as of the dates indicated and are subject to market fluctuation. NIPS Solutions vary depending on each individual’s risk tolerance and investment objectives and our then current understanding of the applicable rules, regulations and laws. Please contact Nelson Investment Planning Services, Inc. for additional information and prospectuses. Nelson Investment Planning Services, Inc. offers securities through Nelson Ivest Brokerage Services, Inc., a member of FINRA and SIPC.