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LGBT Couples Need New Financial Advice!

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James Lange, CPA/Attorney, highlights potential financial benefits available to LGBT couples who marry

Pittsburgh – April 28, 2015 –The United States Supreme Court is hearing arguments today on the issue of marriage equality. This historic case should be decided by June.

The two likely possibilities of the decision are:

  1. Supreme Court says all states have to offer same-sex couples the right to marry.
  2. Supreme Court says all states have to recognize marriages performed outside their state.

In either case, all states will likely have to recognize same-sex marriage, even if the couple has to travel to get married in a state that does recognize same-sex couples and then return home.

WHAT ARE THE FINANCIAL BENEFITS OF MARRIAGE?

Retire Secure! For Same-Sex Couples Cover 7x10-2According to James Lange, a best-selling author, Certified Public Accountant, attorney and president of Pittsburgh-based Lange Financial Group, there are potential benefits that many people know about including the “marriage bonus” when preparing tax returns and health benefits being extended to new spouses. But what many people do not consider are 2 enormous financial benefits of marriage for couples who are 60 and over:

1. Marriage can increase your Social Security benefits: There are options to increase your total household Social Security benefits when you are married. Spousal benefit rules impact a couple while both are alive, and the survivor benefit available is impactful after one spouse passes. Over time, the difference can be hundreds of thousands of dollars or even millions of dollars. This could be even more important if one spouse has a strong earnings record and the other spouse does not.

The graph below shows the difference between a couple not getting married and taking their Social Security benefits at age 62, versus getting married and utilizing a technique called Apply & Suspend for their Social Security. The difference is going broke in your 90s versus having more than $2 million. Image1

 

2. For purpose of inheriting money, most states and the federal government impose less inheritance and income taxes on assets left to a spouse than on assets left to a non-spouse. After Windsor (a previous case), however, the IRS will recognize same-sex marriages for federal income and estate tax purposes as long as the couple was married in a state that recognizes same-sex marriages. This makes transfer of assets between a married LGBT couple much easier than between a non-married couple.

Lange warns, however, that there could be some drawbacks including the potential health care liability of getting married, and the so called “marriage penalty” that may affect some taxpayers. He encourages same-sex couples that are currently marriage or weighing the benefits of marriage to read his book, Retire Secure for Same-Sex Couples: Live Gay, Retire Rich, in which he details recommendations for the issues mentioned herein and so many more.

Lange’s book lays recommendations in a convincingly detailed yet surprisingly easy-to-follow fashion and is available to purchase through www.outestateplanning.com.

About James Lange

James LangeJames Lange, CPA/Attorney started the first exclusive LGBT estate planning website in Pittsburgh, in 2002. Jim is a nationally-known Roth IRA and retirement plan distribution expert. He’s also the best-selling author of the first and second edition of Retire Secure! and Retire Secure! for Same-Sex Couples. With over 30 years of experience, Jim and his team have drafted over 1,995 wills and trusts with a focus on flexibility and meeting the unique needs of each client.

Jim’s recommendations have appeared 35 times in The Wall Street Journal, as well as the Pittsburgh Post-Gazette, The New York Times, Newsweek, Money magazine, Smart Money and Reader’s Digest. His articles have appeared in Trusts and Estates magazine, The Journal of Retirement Planning, Financial Planning, The Tax Adviser (AICPA), and other top publications.

To learn more, or sign up for their newsletter, visit www.outestateplanning.com

The Essence of Retire Secure For Same-Sex Couples – Part 1

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In this 9 part blog post series I will discuss along with graphs the essence of my book Retire Secure! For Same-Sex Couples: Live Gay, Retire Rich.

Retire Secure! for Same Sex Couples: Live Gay, Retire Rich quantitatively compares various courses of action. For those who don’t want to read through the explanation and detail, just looking at the 9 graphs could provide critical information with a minimum of reading effort. Please be aware that the recommendations beneath each figure will be advantageous in most situations, but not for everyone.

Taking Advantage of Retirement Plans Rather than Saving Outside Retirement Plans
It’s better to save in IRAs and retirement plans versus saving in after-tax accounts (regular investments outside IRAs or retirement plans).

This graph shows the total net assets* for two identically situated people, except one contributes to his retirement plan at work and the other saves outside the retirement plan. They each have the same earnings, invest the same out of pocket amount at the same rate, have the same tax bracket, spend the same, etc. The difference is dramatic. The lesson: Don’t pay taxes now, pay taxes later—during the accumulation stage while you are working.

Please see page 30 in my book Retire Secure! For Same-Sex Couples: Live Gay, Retire Rich for further details.

* We measure $100 in an IRA as $75 net assets because there is a $25 income tax associated with the $100 IRA. This applies to this and the following graph.


Stay tuned next week where I’ll touch on the Benefits of Spending After-Tax Savings before IRAs and other Retirement Assets.  If you are interested in seeing if you qualify for a free consultation please fill out the form on this page https://outestateplanning.com/what-we-do/ or give us a call at 412-521-2732.

– James Lange

Celebrate New Legal Rulings with a Free Same-Sex eBook!

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LGBT Ally James Lange, an author and CPA/Attorney, Celebrates New Legal Rulings by Offering a Free E-Book for Same-Sex Couples Across the Nation.  

Retire Secure! for Same-Sex Couples: Live Gay, Retire Rich is endorsed by the top IRA, Social Security, and legal experts in the country and available as a FREE download for a limited time at www.samesex-equalrights.com

PITTSBURGH, October 13, 2014 – Last week was a historic week of victories for same-sex couples across the nation as 8 more states, West Virginia, Alaska, Utah, Virginia, Oklahoma, Wisconsin, North Carolina, and Indiana won the right to marry. The courts struck down the bans to marry in these states, expanding the rights for same-sex couples to marry in over half of the country. Within hours, county clerks in those states were issuing marriage licenses to couples who had been waiting for a decision to come down. Additionally, 4 more states in the 10th circuit and 4th circuit are on the verge of marriage equality as well. Colorado, Kansas, South Carolina, and Wyoming have cases pending verdicts and are expected to overturn their marriage bans in the near future. To celebrate these rulings attorney and CPA, James Lange is offering Retire Secure! for Same-Sex Couples: Live Gay, Retire Rich for free for a limited time on his web site, www.samesex-equalrights.com.

Pittsburgh LGBT Ally James Lange of Lange Financial Group, LLC has been working to help same-sex couples understand and take advantage of the tax and Social Security laws since 2002, but his campaign was re-energized when the Windsor case was decided in 2013. The laws and regulations for estate planning, tax planning, and Social Security planning have changed so significantly for same-sex couples over the last year that Jim has dedicated a large portion of his firm’s time and funds toward writing a book on gay retirement planning. Retire Secure! for Same Sex Couples: Live Gay, Retire Rich can be downloaded for FREE by going to www.samesex-equalrights.com before October 31st.

Along with the ability to get married, Lange suggests that there are many other points couples in states with marriage rights or on the verge of those rights should consider. “Married same-sex couples who live in states that recognize same-marriages will now be able to enjoy significant Social Security marital benefits and estate planning benefits, particularly if one member of the couples has a significant IRA or retirement plan,” says Lange, author of the book, Retire Secure! for Same-Sex Couples: Live Gay, Retire Rich. Mr. Lange offers four tips for same-sex couples:

  1. Go Into Marriage with Your Financial Eyes Wide Open. The couples who will benefit the most financially will likely be same-sex couples in their 60s or older where at least one person of the couple has a significant IRA or retirement plan. Some other couples will actually do worse financially. Finances are an important, though not exclusive, reason to get married or stay unmarried. If you are already married, speak to a tax advisor to take advantage of all the marital benefits.
  2. Consider How Marriage Affects Social Security Benefits. For many couples, one result of marriage is the opportunity to collect a much higher Social Security benefit. If you qualify and it is appropriate in your situation, apply for Social Security spousal benefits. There is a fantastic technique called “apply and suspend,” which is newly available to many same-sex couples in states that have recently changed their laws and to many residents of states that already afforded marriage rights. Most Social Security recipients, however, do not understand all of the possible spousal benefits of Social Security. There are significant advantages while both spouses are alive and after the first spouse dies.       Find out the enormous financial benefits for free by going to www.samesex-equalrights.com before October 31st.
  3. Marriage and IRA and Retirement Planning. Regardless of your state of residence, as long as you were married in a state that recognizes same-sex marriages, you and your spouse will enjoy significant tax benefits on inheriting an IRA or a retirement plan.
  4. Seek Professional Advice. As with all important financial decisions, Lange suggests that couples speak with a qualified retirement and estate advisor, preferably a CPA, as well as an attorney who works with same-sex couples. “Couples need to be sure they have all the knowledge they can to prepare for their financial lives as a married couple,” says Lange. For more information about how to get a FREE copy of Retire Secure! for Same-Sex Couples: Live Gay, Retire Rich or for information on how to schedule a meeting or media interview with James Lange visit www.samesex-equalrights.comor call 412-521-2732.

About Jim Lange

James Lange, CPA/Attorney has been helping same-sex couples since 2002. He is a nationally recognized Roth IRA and retirement plan distribution expert and understands the best techniques for married couples to get the most out of Social Security. The combination of his financial expertise as well as an understanding of the changing legal status of same-sex marriage makes Jim the logical person to write and now offer for free Retire Secure! for Same-Sex Couples: Live Gay, Retire Rich which can be downloaded at www.samesex-equalrights.com before October 31st.

He’s also the best-selling author of the first and second edition of Retire Secure! with dozens of testimonials from the nation’s top IRA, investment, and estate planning experts and The Roth Revolution: Pay Taxes Once and Never Again.

Jim’s recommendations have appeared 32 times in The Wall Street Journal, 23 times in the Pittsburgh Post Gazette, The New York Times, Newsweek, Money magazine, Smart Money and Reader’s Digest. His articles have appeared in The Journal of Retirement Planning, Financial Planning, The Tax Adviser (AICPA), and other top publications. His article, Optimizing Social Security Benefits for Unmarried Couples, was just published in Trusts & Estates magazine this August.

Media Contact: Amanda Cassady-Schweinsberg, 412-521-2732

SOURCE: James Lange, CPA/Attorney

 

The Impact of Same-Sex Marriage on the Accumulation Years

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While you are still working, you shouldn’t pass up the opportunity to contribute the maximum allowable to your retirement plans. Same-sex marriage may afford you additional possibilities to contribute that may not be available to you as an unmarried individual; on the other hand, marriage might also eliminate possibilities to contribute.

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One advantage of marriage comes into play if one member of the couple is not working. This is relevant because you must have earned income to contribute to any IRA, including a Roth IRA. If a couple is not married, and one partner is not working, that non-working partner will not be allowed to contribute to an IRA or a Roth IRA. However, if the couple marries, the nonworking spouse would be able to contribute to an IRA or Roth IRA based upon their working spouse’s income. Marriage makes it possible for the couple to put more money in the tax-deferred or tax-free environment. For example, consider the couple Anne and Susan. In 2014, Anne earns $150,000 per year and is not covered by a retirement plan at work. Susan is not working outside the home. If they are unmarried, Anne can contribute to an IRA, but Susan has no earned income and cannot. If they marry, then both Anne and Susan can each contribute $5,500 ($6,500 if they are age 50 or older) to their respective IRAs.

 

When it comes to Roth IRAs, there is a potential benefit if your income is too high for you to be eligible to make a full Roth IRA contribution. These income limits are different for married and unmarried individuals (refer to table below). You may find that your income is too high for you to make a Roth IRA contribution as an unmarried taxpayer, but you are able to make a contribution as a married taxpayer. For example, consider Anne and Susan again. In 2014, if they are unmarried, neither Anne nor Susan can contribute to their Roth IRAs. Anne earns above the maximum of $129,000 for a single taxpayer and Susan has no earned income. If Anne and Susan marry, then their combined income of $150,000 is under the $181,000 limit for married couples, so they are both permitted to make the maximum allowable contributions to their Roth IRAs.

 

In other cases, marriage may suddenly make you ineligible to contribute to a Roth IRA. You may find that both you and your partner, as an unmarried couple, are both near the upper income limit for single taxpayers and are able to contribute to Roth IRAs; however, if you were to marry and combine your salaries, you may find yourselves above the Roth IRA limits. Consider a different situation for Anne and Susan. In this case, Anne and Susan each earn $100,000 in 2014. As an unmarried couple, they are each eligible to contribute fully to a Roth IRA, because they are each below the $114,000 limit. If they marry, their combined income would be $200,000, putting them above the $191,000 phase-out limit and preventing both of them from making any Roth IRA contributions at all.

 

Gay Marriage, James Lange, Retire Secure For Same-Sex CouplesGay Marriage, James Lange, Retire Secure For Same-Sex Couples, Pittsburgh, PAGay Marriage, James Lange, Retire Secure For Same-Sex Couples, Western Pennsylvania

Finally, if your income exceeds the limitations for a Roth IRA, consider contributing to a nondeductible IRA. You can convert the nondeductible IRA to a Roth IRA the minute after you make the nondeductible IRA contribution. That is exactly what I do personally, in addition to my 401(k) contribution. So, in January, 2014 I made my 2013 and 2014 nondeductible IRA contributions for me and my wife Cindy (even though she doesn’t work outside the home). We immediately made Roth IRA conversions of the nondeductible IRAs. So, we put away a quick $26,000 tax-free into Roth IRAs ($6,500 each for 2013 and 2014), not including what I contributed to my 401(k). Please note this conversion of nondeductible IRA to a Roth without incurring taxable income only works if you don’t have any traditional IRAs. In effect, after the monkey business, it is just like making a Roth IRA contribution, but you have to do the monkey business first to get around the limitation.

 

Because retirement plans allow your money to grow tax-deferred or tax-free, and we have already seen the enormous power of retirement plans, you may want to consider the impact that marriage will have on your ability to contribute to an IRA or a Roth IRA.

 
Retire Secure! For Same-Sex Couples – James Lange, (pages 61-65) www.outestateplanning.com/contact-us 412-521-2732
 

Same-Sex Couples Nearing Retirement: Get Married

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If you're a same-sex couple in a long term committed relationship and are nearing retirement, get married.

Yalman Onaran of Bloomberg News discussed this issue with James Lange of the Lange Financial Group, LLC and had this to say:

“That's the simple advice that emerges from a new book by James Lange, a certified public accountant and attorney who specializes in retirement and estate planning. Of course love and feelings should dictate your decision first, but if you're looking at the financial side of things, then the balance has shifted in favor of marriage since the Supreme Court decision a year ago abolishing the Defense of Marriage Act, Lange argues.”

The chart below shows why marriage would benefit an aging same-sex couple.  A gay or lesbian couple could have higher Social Security benefits, more room to shelter income in IRAs all while avoiding inheritance taxes. 

Same-Sex, Gay, Lesbian, LGBT Couples Nearing Retirement - Get Married

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In this article Yalman Onaran touches on some of the caveats to same-sex marriage for financial reasons including whether you live in a state that still doesn’t recognize gay marriage as well as how far you and your partner are from retirement.  He shares his own experience with marriage and the financial benefits that resulted from getting married and how the landscape has changed post the repeal of DOMA.

To read the rest of this article in Bloomberg News, please click on the link below.

Click this link to read the article

Source: Yalman Onaran, Bloomberg News

Married vs. Unmarried for Retirement Years

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Introduction

There were two identically situated same-sex couples: they had the same amount of money, invested identically, and spent identically too.  There was only one big difference: the first couple did not read Retire Secure! For Same-Sex Couples and plan for their future using our advice, but the second couple did.


The first couple’s plan:

  1. don’t get married
  2. take Social Security at age 62
  3. don’t make Roth IRA conversions
  4. don’t use our IRA and estate planning strategies (they can’t without marrying)

The second couple’s plan

  1. get married (in a state that recognizes same-sex marriage)*
  2. use the “Apply and Suspend” strategy at age 66 for Social Security
  3. make a series of Roth IRA conversions
  4. use our recommended IRA and estate planning strategies for married couples

Here is the difference in their future finances using reasonable assumptions.**

 

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Using the proactive strategies explained in this book, our legally married same-sex couple (the blue line) enjoys a comfortable retirement, and still has $1,427,275 at age 90. The unmarried same-sex couple, who didn’t take our advice, runs out of money at age 90.
 

There are fantastic opportunities for same-sex couples to increase their wealth, cut their taxes, and dramatically increase their financial security and the financial security of their surviving spouse/partner. These opportunities are only available because of the new laws on same-sex marriage that were passed in 2013. This is new territory for same-sex couples—finally, you can take advantage of some of the same long-term planning strategies that have always been available to straight couples.  But, this also means that you can now make the same mistakes that straight couples frequently make, and some of those mistakes could have disastrous consequences for your surviving partner/spouse.
 

Retire Secure! For Same-Sex Couples – James Lange, (pages 9-11) www.outestateplanning.com/contact-us 412-521-2732