Monthly Archives: April 2017

What’s the Difference between an IRA and a 401(k)?

When you hear about retirement accounts, you’ll often catch the terms IRA (individual retirement account) and 401(k) – a qualified retirement plan offered through an employer. Even though there are other types of accounts available for retirement savings, we’re going to focus on IRAs and 401(k)s and the differences between them. Hopefully, this helps you choose the right type of savings for your situation.

Contribution Limits

Both the IRA and the 401(k) retirement savings accounts have separate annual contribution limits. They are as follows:

  •      IRA: Up to $5,500 or 100% of your compensation, whichever is lesser, or up to $6,500 if you are age 50 or older.
  •      401(k): Up to $18,000, or up to $24,000 for ages 50 and older, along with a 25% match of the contributions.

Income Limitations

When it comes to limitations on your income, the difference between an IRA and a 401(k) is big. With an IRA, if you make too much money, you may not be able to make contributions. The traditional and Roth IRA have different limitations for income.  In a 401(k) retirement savings account, however, there are no income limitations. Whether you have a traditional or Roth 401(k), you are allowed to put as much savings as you want in that account.


You may have heard you can borrow money from your retirement accounts. When it comes to IRAs and 401(k)s, the rules couldn’t be more different. In an IRA, you can take the money out for 60 days and, as long as you put it back within those 60 days, there is no penalty or taxes. The 401(k) does not offer this 60-day program; however, if the plan allows there are borrowing provisions that allow you to withdraw $50,000 or up to 50% of your balance. Note: upon separation from the employer any remaining loan balance may become taxable including penalty taxes if under the age of 59.5.



Both the IRA and 401(k) are tax-advantaged retirement savings vehicles, but the ways in which they are taxed can vary. For example, contributions to a traditional IRA and a 401(k) account are made with pre-tax dollars, meaning the money is not taxed before going into the account. Contributions to Roth IRAs, on the other hand, are taxed before going into the account. It’s good to know the differences between an IRA and 401(k) in regards to taxes because it can affect your finances when you take distributions later on.

To determine which account is right for you, we recommend speaking with an attorney, CPA or your financial advisor. It’s important to understand all the pros and cons associated with each retirement savings account before moving forward.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Guidant Wealth Advisors and LPL Financial do not provide legal advice or services.

The Challenges of Financial Planning When Your Child Has Autism

Young Boy Standing by the Water

Families with Autistic children face special challenges in financial planning.

April is National Autism Awareness Month, so we wanted to shed some light on the challenges of financial planning for parents who have Autistic children. We hope this overview clarifies some of the options available to you as your child grows, so that you can move forward with confidence for your family.

From Two Incomes to One

Sometimes, parents who have children with Autism decide to quit their jobs in order to stay home with the child. This obviously reduces the amount of household income, but it also eliminates the expense of daycare. However, one thing to keep in mind is that Autistic children often require therapy or other in-home services, which may or may not be covered under your health insurance plan. Studies by Psychiatry Online revealed that 36 percent of private health insurance plans completely exclude Autism-related expenses.

If you are considering leaving your job to stay at home, then be sure you look at all of the expenses first. The last thing you want is to be in a financial bind as you are working through the emotions of raising an Autistic child.

Special Educational Costs

For many parents, early intervention is key. Many districts develop what’s called an Individualized Education Program (IEP) to customize the child’s learning from beginning to end. However, you may need to fill the gaps with private services, and that may or may not be covered under federal programs. The IDEA Act ensures access to some educational services, but be sure you know what you’re responsible for outside of the program.

Planning for the Future

When you die, you’ll want to be sure your child is taken care of financially. This is one of the biggest challenges of financial planning when you have Autistic children. You must plan for your own retirement, but that includes planning for your child as he or she graduates high school, potentially goes to college, becomes employed, and perhaps lives on their own.

For many parents, this involves setting up a special needs trust, or supplemental trust. Instead of leaving assets directly to your child, you leave it to the trust. This way, they don’t lose out on the benefits of Supplemental Security Income (SSI) and Medicaid. When you have a trust, you assign a trustee who will be in charge of spending money on the child’s behalf.

If you want to to plan for the impact of Autism on your finances, then be sure to speak with a financial planner as well as an attorney. You’ll want to know the best strategy for taking care of your child – and yourselves – as you grow older.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Guidant Wealth Advisors and LPL Financial do not provide legal advice or services.

Widows Should File Carefully for Social Security Survivor Benefits

Widow Signing Social Security Survivor Benefits Paperwork

Widows can maximize Social Security benefits with the right guidance.

Social Security can be complicated and frustrating for anyone. When you’re a recent widow, Social Security survivor benefits can seem especially overwhelming. You’re not only sorting through rules and paperwork; you’re also sorting through new emotions and situations.

It’s a tough time to have to figure out how to apply, so we wanted to share some key ideas to keep in mind once you decide to file for your and/or your spouse’s monthly benefits. It may just help you generate more income over your lifetime.

Are You Eligible for Widow’s Social Security Survivor Benefits?

Depending on your situation, you may not know which benefits you are eligible for or which ones to take and when. For starters, you may be eligible for widow’s survivor benefits* as long as you meet these conditions:

  •      You were married for at least 9 months (waived if caring for child of deceased spouse who is under the age of 16)
  •      You are at least 60 years old (age 50 if you are disabled, or at any age if caring for child of deceased spouse who is under the age of 16)

You may also be able collect an immediate one-time death benefit* payment of $255 at any age.

In general, the longer you wait to collect survivor benefits, the more you may receive. As with traditional social security benefits, there is a survivor full retirement age (FRA)*; however, it may be different than the FRA for your own benefits, so it’s important to check both.

If you decide to collect right away and you are not at your FRA, then you may receive a reduced amount* each month.

Of course, you may not be eligible for widow’s Social Security survivor benefits if you’re already collecting your own Social Security. More on that below.

Other Eligibility Requirements for Widow’s Survivor Benefits*

Whether or not you qualify to receive survivor benefits also depends on a few more factors. For example:

  •      If You Both Started Claiming – If you and your spouse had already been receiving your benefits before the death occurred, then the higher benefit amount becomes the survivor benefit. The lower of the two amounts will be stopped.
  •      If Your Deceased Spouse Had Begun Benefits, But You Had Not – You may be able to claim the survivor benefit and then stop when you claim your own social security benefits at a later age. However, this situation can be tricky, so we recommend speaking with a qualified financial advisor about your specific situation.
  •      If Neither of You Had Started Claiming – This situation can also be tough to navigate on your own. In general, to maximize your benefits, you may want to delay applying for social security benefits for the higher of the two incomes. For example, if you have the lower of the two incomes, then you may be able to maximize your benefits by filing for your own social security now – and then filing for the spousal benefit at the FRA in the chart above, in which case you may receive the full amount your spouse would have received if he or she were alive.

Again, social security is tremendously complicated. If you file for survivor or social security benefits, then you may not be able to collect other benefits later on. We highly recommend speaking with a financial advisor, tax professional and the Social Security Administration to gain a well-rounded view of your financial options.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
*   criteria for benefits mentioned are according to the Social Security Administration at the time of this blog being published. Conditions can change at any time, please consult the Social Security Administration website at, or speak with a qualified financial advisor.