Duell Wealth Preservation
Owner and Founder
Gary Duell is the Owner and Founder of Duell Wealth Preservation, an Oregon Registered Investment Adviser firm. Gary and his team know Health and Life Insurance is more than protection and risk reduction, it is a financial tool that helps secure the future of their clients retirement and gives them the freedom to experiment with new ideas and realize the passions that they put on hold while they are building a career and raising a family. That is why they specialize in insurance and financial products that help provide financial security such as Life Insurance, Annuities, and Long Term Care.
Gary provides comprehensive financial plans and the appropriate insurance and investments to implement them, continuing ethics education classes for insurance agents, as well as public seminars. He is currently on the faculty of Portland Community College’s Community Education department to provide retirement education to pre & current retirees.
Gary was born in Garden City Kansas, moving with his family to Salem, Oregon at the age of 5. He graduated from Willamette University in 1974 with a double major in psychology and philosophy. There being a scarcity of philosophy jobs, Gary took a harrowing nine-month stint at Oregon State Hospital as a psychiatric security aide on the women’s maximum security unit. “One Flew Over the Cuckoo’s Nest” was filmed there during that time, which only added to the chaos. The experience prompted Gary to change careers. He graduated from Willamette U. again, in 1977, with an MBA. After 18 years with Farmers Insurance, first as an underwriter, then supervisor, and then as an agent, Gary left in 1996 due to the purchase of Farmers by British American Tobacco. In 1997 he completed the last series of courses and exams to get the Chartered Financial Consultant (ChFC) designation from The American College at Bryn Mawr PA.
Gary served a three year term on the Clackamas County Economic Development Commission and was chair of the Surface Water Management advisory committee. He was Treasurer on the Clackamas Community Land Trust board of directors and helped merge the CCLT with Proud Ground, their Portland counterpart. He is also a charter member, past President and current Treasurer of the Happy Valley Business Alliance. Gary loves what he does mostly because of the people he gets to work with. Many clients and friends have been made over the years.
B.S. in Philosophy & Psychology 1974, Willamette University
MBA 1977, Willamette University
Chartered Financial Consultant (ChFC) 1997, The American College
Gary Duell interviewed by Investopedia
Yes and yes! But replacing lower earning years by continuing to work may not have the impact you would expect. This is especially important to understand if you hate your work or your work is physically and/or psychologically wearing you down. Here's how SS calculates your monthly benefit:
- First, they pick the highest 35 earning years. If you haven't worked 35 years, then they'll include zero earnings for enough years to total 35.
- Then, they bring each one of those years forward into today's wages. For example, suppose you earned $20,000 in 1990 and you make $40,000/yr now. Guess what the multiplier is for 1990 wages, about 200% or $40,000. So working another year would not eliminate 1990 from your top 35!
- Then they total all 35 years' earnings and divide by 35 years of months or 420 to get your AIME (average income monthly earnings).
- Finally, they subject your AIME to three calculations. The first $885 of your AIME is multiplied times 90%. $886 through $5,336 wages are multiplied by 32%. Everything above $5,337 is multiplied by 15%. The results are added together to get your PIA (primary insurance amount which is the same as your full retirement age benefit). If your PIA is higher than $2,639, then $2,639 is your maximum PIA in 2017.
Whew! As you can see, the idea is to skew benefits toward lower earning participants, which is appropriate since the program was designed to primarily benefit the elderly poor.
I know this is more than just a financial puzzle. But I think you should stop beating yourself up to prove you're a good person, swallow your pride and take advantage of all the programs and laws that were written just for this kind of situation. New Jersey's Division of Disabilily Services has great resources on their website. For example you may qualify for assistance base on the specific condition for which you were hospitalized.
Since our current president has no qualms about declaring bankruptcy over and over, perhaps you should consider doing it just this once. At least you have good reasons.
Whoa, I don't know who you've been talking to but let's take this one step at a time. First of all is closing out a "guaranteed [not sure what you mean by that] annuity". This could be a huge mistake for a number of reaons:
1. In addition to taxes there may be significant surrender charges too. You need to verify that there will be no surrender charges.
2. It may have relatively high minimum interest rates locked in that you wouldn't want to give up
3. It may have a more generous guaranteed income table than is available today. Companies have adjusted down their payout factors as longevity increases.
4. It could make more sense to do a 1035 exchange into another annuity with higher lifetime income payout factors, turn on the income, and use that to make the payments on a loan. When the loan for the mobile home is paid off, your income would continue.
There's no way to spread out the income taxes on the gain in a surrendered annuity contract. There's also no deduction for buying real estate, other than mortage interest. And there's no way to transfer the annuity to an IRA unless it already is an IRA, or, you have equivalent earned income for the year (subject to limitations, based on age). Both the annuity and IRA are tax deferred. But the annuity doesn't have required distributions at age 70.5 like the IRA would. Not sure what you hoped to gain by that transaction.
Without knowing the details about the annuity, in general I think it makes more sense to take out a loan on the mobile home and annuitize the annuity to make the payments if the math works. Find a licensed fiduciary financial adviser to analyze your situation. You have the potential to make a very expensive mistake here.
Congratulations! You're getting started at least. But if you fixate on costs and not benefits, you could make some serious mistakes. Find a flat-fee planner. We're worth every penny.
There is a sequence of priorities or "buckets" that you should fund.
1. The first and most important bucket is an Emergency Fund, which needs to be 3-6 months living expenses. This needs to be very liquid so you won't earn much on it. I favor the virtual banks for this function. This fund is important because if you lose your job, have health issues or other unexpected expenses you don't want to have to liquidate- and pay taxes on -your IRA portfolio when the market might be down. So, unless you have a matched savings program through work, you have no business investing until this emergency fund is filled.
2. If you haven't already, defer at least enough into your employer sponsored retirement plan to get the maximum match. If you have no employer plan, work with your tax person to figure out if you qualify for the Saver's Credit. This tax credit can be up to $1000 or half your retirement contribution. If you make too much to qualify, then you should be able to afford maximum IRA contributions of $458/mo. Remember that these contributions reduce your taxable income. Most of the fund families make it very easy to set up IRAs and determine how to allocate.
3. If you still have money left in your budget, then you might toy with individual stocks, preferrably with dividend reinvestment programs (DRIPS).
You don't mention whether she is now working or where the $6500 would come from. If she has no earned income she can't contribute to any type of IRA. However, if she inherited a Traditional spousal IRA she may want to do annual Roth conversions up to the standard deduction & exemption limit of $10,400 (2017) (You'll need advice from whoever does her taxes to determine the maximum amount she can convert each year.) A substantial IRA could cause her to have taxable income at age 70.5 so it would be sweet to make it all tax free before then. If she inherited the IRA from a parent, then Roth conversions aren't available.