Don Dirren Is Helping Small Business Owners Understand the PPP – And What It Means For Their Bank Accounts
Many small business owners have been hit hard by changes in income during the COVID-19 crisis. From struggling to pay employees to having trouble making payments in order to keep rented storefronts open, the changes in the economy have been hard for many businesses to handle.
Luckily, there’s help available. According to Don Dirren, the SBA, or small business administration, is offering several options to businesses that have been struggling financially since the onset of the pandemic.
The PPP, or paycheck protection program, works to help employers continue to pay their employees, without having to take money from other areas of the business. This type of loan can be invaluable, allowing businesses to stay open when they’d have to shut down otherwise, according to Don Dirren.
Some business owners find that even though they’re able to pay their employees with the help of the PPP, they’re struggling to manage their own expenses. Don Dirren is working to help small business owners understand whether they can utilize the PPP to help them cover personal expenses (in addition to business expenses) in the wake of the COVID crisis.
Many small business owners don’t regularly pay themselves int he same way that they pay their employees. Rather, they use a process called an “owner draw” to transfer money from their business to their personal account. For many business owners, this is not a scheduled process, according to Don Dirren.
Unfortunately, owner draws are not covered by the paycheck protection program, according to Don Dirren. If you’re the sole proprietor of your business, your salary will be determined by the net profit of your business, and you may be able to get relief through the PPP.
Don Dirren says that when you apply for the payroll protection plan as a sole proprietor, you’ll be asked to estimate your monthly payroll expense. For this, you’ll take the net profit of your business for 2019 and divide by 12.
Don Dirren recommends applying for the PPP as soon as more funds become available. Many lawmakers are currently pushing for more PPP funds to open up. The application process is easy, but a limited amount of funds are available, according to Don Dirren. The sooner you apply, the more likely it will be that you’ll get the funds you need to stay afloat in both your business and personal expenses with help from the PPP.
Don Dirren gets to the heart of the fixed index annuity so investors can make sound decisions based on the facts.
Smart investors try to diversify their portfolios for two primary reasons. The first helps ensure that their earnings potential stays relatively consistent. The second has more to do with where they are in their lifespan and their comfort level with risk. Over the past few years, the fixed index annuity has gotten more attention — but why? Don Dirren breaks it down here.
What is a Fixed Index Annuity?
Like a traditional fixed annuity, a fixed index annuity guarantees that the investor will have a specific rate of return. This type of annuity — which might also be referred to as an EIA, FIA or equity indexed annuity — also provides some protection of the principal.
A fixed index annuity, according to Don Dirren — who has been a licensed financial advisor for more than 30 years — provides investors with the opportunity to both increase the value of their principal without being concerns with the potential volatility of the stock market. While those who hold a fixed index annuity won’t get the incredible gains that are sometimes a part of stock market investing, there is also the advantage of having an account that won’t lose its value because of the way the stock market is performing, Don Dirren points out.
Fixed Index Annuities: The Good
Don Dirren notes that the above points about the protection offered by holding a fixed index annuity aren’t the only benefits that investors can look forward to. Investors who have already maximized their contributions to their qualified retirement accounts — pensions, 401k and IRAs, for example — can grow their nest egg by contributing to an annuity that defers taxes. In addition, there is no limit to the contributions that can be made.
The advantage of compounded earnings is a point that Don Dirren stresses to his clients. Fixed index annuities are tax-deferred. Income taxes on earnings are only paid once they are withdrawn from the account. This allows investors to enjoy earnings as they compound.
Fixed Index Annuities: The Bad
Of course, Don Dirren notes, fixed index annuities are not the perfect investment vehicle for everyone. This type of annuity is charged a 10 percent penalty by the IRS for premature withdrawals. Because any withdrawals that are made prior to the age of 59.5 are considered to be premature, this type of investment might not be the best choice for younger investors.
Fixed Index Annuities: The Ugly
Holding fixed index annuities also means that the investor is subjected to fees, according to Don Dirren.
For more information about fixed index annuities, contact Don Dirren.
Financial advisor Don Dirren recently offered his expert tips on how to legally pay zero taxes in retirement.
Retirement is a stage in life many people anticipate. It’s a time when stresses about work and money are meant to be minimal. However, that’s not necessarily the way it works for many retirees, as a number of financial surprises can arise. Financial advisor Don Dirren recently discussed unexpected taxes during retirement and how to avoid them legally.
Don Dirren explained that those who have been putting their retirement savings in a retirement account that’s tax-deferred, like a 401(k), 403(b), or IRA, are bound to be shocked when they start withdrawing that money. Don Dirren added that when an account is referred to as tax-deferred, that doesn’t mean you don’t pay taxes on it. That only means you pay taxes on it when you need the money in retirement. Unfortunately, that money is subject to the tax rates at the time you take it out, which means tax rates could increase between now and then.
Don Dirren explained some of his best tips for enjoying a tax-free retirement. One of these ways is to convert traditional retirement accounts to Roth IRA’s. The current IRS regulations allows for conversions at any age, in any amount and any time. The Roth provides tax-free income and passes to your spouse and children tax-free. It also helps to reduce or eliminate taxes on your social security.
Don Dirren also unveiled a little-known tactic associated with life insurance. He explained that life insurance is an important part of any retirement plan, especially if you want to avoid taxes, which most retirees do. Don Dirren stated that this tactic involves using a dividend-paying whole life insurance policy. The goal of this strategy is to use the tax-deferred growth that takes place on earnings in life insurance policies, then use tax-free loans to use your cash when you need it in retirement. Don Dirren explained the retiree must then pay himself with the interest and pay back the loan. While this may sound difficult and time consuming, expert financial advisors like Don Dirren can easily guide you through the process.
Don Dirren explained another way to avoid retirement taxes is to move to one of the seven states that doesn’t have income taxes. Such states include Florida, Alaska, Nevada, South Dakota, Washington, Wyoming, and Texas. Don Dirren added that there’s a reason — in addition to the warm weather — that Florida is such a hotspot for retirees.
Don Dirren finished by stating that paying fewer taxes in retirement means more money saved for enjoying life. He encouraged everyone to speak with a qualified financial advisor about minimizing retirement taxes before it’s too late.
Financial advisor Don Dirren proudly offers a free expert insight into tax planning for those in, or entering, retirement.
Utilizing a two-part approach to educating and advising retirees and soon-to-be retirees on their tax planning needs, veteran financial advisor Don Dirren is celebrated for his illustrations of real-life scenarios in simplifying the topic. Here, Dirren proudly offers details of his approach for free to those looking to find out more.
“It’s becoming increasingly important that each of us understands how to manage our taxes in retirement,” says Social Security planning specialist, licensed financial advisor, and insurance expert Don Dirren. A veteran of the financial services industry and based in the Arizona state capital city of Phoenix, Dirren has now been licensed for more than 30 years.
Proud to offer free tax planning advice for retirees, Don Dirren is keen to focus on the two key areas of tax planning in retirement which he deems most important. “First, everyone needs to fully understand exactly how Social Security is taxed,” says Dirren.
According to licensed financial advisor Don Dirren, this ultimately rests on what’s most widely referred to as provisional income in Social Security terms. “Determining whether an individual’s Social Security is or is not taxable, so-called provisional income is measured by the Internal Revenue Service,” he explains, speaking from his office in Phoenix, Arizona, “to ascertain if you, your spouse, or any other recipient of Social Security benefits is required to pay taxes.”
An after-deductions provisional income total of less than $25,000 MAGI is not taxable, according to Don Dirren. This, he says, is on an individual basis. For couples in the same household, the total is, he reports, then $32,000. “Beyond this after-deductions provisional income threshold, retirement income may be taxed at between 50 and 85 percent,” reveals Dirren.
This, then, Don Dirren says, is why it’s vital that people properly understand exactly how Social Security taxation works. “If you or a family member is in any doubt, connect with a local financial advisor for more information,” suggests the expert, “in order to best safeguard any retirement income and minimixe taxes on your social security.”
Don Dirren‘s second area of focus is tied to investments. “Properly managing your investments both prior to and during retirement is incredibly important,” says Dirren. Understanding tax classifications and managing finances based on these groupings is crucial, he suggests.
“You should have a mixture of both safe, guaranteed funds and more aggressive investments meant to exceed inflation in retirement,” advises Don Dirren. Any retirement account should, however, be actively managed both before and in retirement, according to the expert.
“Tactical money management where most suitable, but look to buy and hold in the longer term, via a trust account,” Don Dirren explains. This is because a trust account receives what’s known as a step-up in cost basis, according to Dirren, when a person dies.
“In this instance, a surviving spouse, for example,” adds Don Dirren, wrapping up, “can typically then sell with little or no taxation which, of course, is an important consideration, particularly in retirement.”
Financial advisor Don Dirren recently discussed his top tips for developing a plan for mitigating risk and maximizing income prior to retirement.
Saving for retirement is not an easy task. It involves assessing and taking into account a number of risks. Simply put, the more money you set aside from retirement, the less risk you have of running out of money. Recently, financial advisor Don Dirren offered his top tips for developing a risk and income plan for retirement.
First, Don Dirren suggested setting two very important goals. The first goal Don Dirren suggests is the amount of money you want to save before retiring. This is the amount of money you absolutely must have to retire. The second goal is a larger amount of money that you’d like to have to fully enjoy your retirement with enjoyable activities, like vacations, restaurant meals and more.
“Consider the first goal the minimum amount of money you need to have to retire,” Don Dirren said. “The second goal is the amount you’d prefer to have beyond your basic needs for fully enjoying the golden years.”
Don Dirren also explained that people are living longer than expected, so it’s important to take into account that you could live well into your 90s. The increasing lifespan of humans can put you at risk of running out of money if you haven’t saved enough. Similarly, Don Dirren explained that inflation must be taken into account and planned for in retirement. As prices increase over time, you’ll need enough money to account for those changes.
“In general, people need a lot more money for retirement than they think,” Don Dirren said. “All of these risks add up to create a need for a much larger sum of money than initially expected.”
Don Dirren explains that declining cognitive abilities are another risk we often don’t want to think about but must take into consideration. He described that we are all at risk of losing cognitive abilities as we age. It’s essential to have someone you trust informed of your retirement strategy, so they can execute the plan for you if needed.
However, Don Dirren also explained that these are just some of the many common risks associated with no longer receiving paychecks and replenishing your bank account. He described that the best way to moderate these risks is to save more money (often more than you initially think), work to receive more return on your savings, and use strategies that protect against inflation.
“You must develop a risk plan for retirement effectively, because many of these decisions don’t come with second chances,” Don Dirren said. “Fortunately, a qualified financial planner can help you navigate the difficulties and risks of retirement, so you can enjoy these years to the fullest.”
A Retirement Income Plan is Easy with the Help of a Trusted Advisor Like Don Dirren
Maintaining a healthy income in retirement can seem like a daunting task. But with a little direction from a licensed financial advisor like Don Dirren, setting up the right plan can be simple. All you need to do is follow a few simple steps with the help of a trusted advisor. Income planning is a critical step in retirement planning as it will set you up for financial success for years to come. Don Dirren explains that without a solid income plan it’s difficult to get a good idea of just how far your money will stretch.
The first step Don Dirren will walk you through is making a guess at how long you (and your spouse if applicable) might live. Good financial advisors like Don Dirren can help you pinpoint the right number of years for your situation. It doesn’t need to be exact, and planning longer is better.
Next you’ll need to list all your fixed sources of retirement income. This should include any income you can count on coming in every month, like social security, pensions, annuities, etc. If you have other earnings include those too. Don Dirren or another financial advisor will make sure you capture everything so that you have an accurate view of your true monthly income.
Once you’ve calculated the income you can count on each month it’s time to calculate expenses. If you have any expenses that will disappear after a certain number of years, such as a mortgage that will be paid off in five years, make sure you note when the expense will no longer exist. A tricky but crucial aspect of calculating expenses is calculating taxes, Don Dirren explains. Taxes can take a big bite out of your budget and can vary greatly depending on the types of income you receive. That’s why it’s best to work with a licensed financial planner to make sure you have a reasonable ballpark estimate of your taxes for each year.
If you end up with a gap between your calculated expenses and projected income, Don Dirren explains that you’ll need a financial planner to help you understand how to draw from savings and retirement accounts to make up the difference without draining your nest egg.
You might have noticed that creating a retirement income plan is not all that different from putting together a typical budget. However expert advice from a financial planner like Don Dirren can help you understand which types of income and expenses to include, how many years you need to plan into the future, and other intricacies that make a retirement income plan unique. With a solid plan from a trusted expert like Don Dirren, you can rest easy knowing exactly how you’ll fund your retirement lifestyle.
Don Dirren is a licensed financial advisor at the Bergen Financial Group in Arizona. He has owned and operated two brokerage firms and has been advising individuals for more than three decades, but it is much more than just a job to him. Don Dirren truly loves working with his clients to help them achieve financial peace of mind and protect their wealth. This passion drives his daily life.
As a very experienced financial advisor, Don Dirren puts a lot of emphasis on planning for retirement. He makes one very important point that everyone should heed: Life teaches us to expect the unexpected. The best thing you can do is prepare for it. If you do not, you can expect unstable golden years and a lack of enjoyment. You will likely also have nothing left to pass on.
Instead, Don Dirren advises that you start your retirement planning as soon as possible. When working with his clients to plan for the future, Don Dirren suggests a multi-focus plan to retirement in order to prevent as many surprises as possible. Some of the most important steps he suggests are:
Plan for social security and minimize social security taxes- The first step Don Dirren points out in minimizing social security taxes is to stay below the taxable threshold, which is currently $26,000 for an individual and $32,000 for a married couple. He also suggests saving in a Roth IRA and managing your retirement income well. And, of course, hire a financial advisor to help you through the process if there is anything you do not understand.
Create and follow an income and a risk plan- A big step in any planning is actually creating and following the plan. You should create an income plan that helps you understand where your money is coming from, where it is going, and so on. Additionally, you need to consider any potential risks that you might face in retirement. You first want to try to avoid these risks completely, if at all possible. If not, Don Dirren says to make the necessary preparations to keep them from ruining your retirement.
Face long term care costs with life insurance products- No one wants to face their own immortality. Not preparing for it does not change the inevitable. Instead of paying out-of-pocket for the care you might need in later years, Don Dirren says to consider life insurance products with long term care coverage.
Planning for retirement is an important step to take as soon as you can, and having someone on your team that has your back can maximize your chances of success. Consider having a financial advisor on your side that will take the time to understand your goals, make an effective plan to get there, and walk with you along the way.
For many, Don Dirren has been this partner. He goes farther than just advising his clients, though. He aims to educate them in the process. Don Dirren is well known for breaking down complex processes with real-world situations, making it easier for his clients to understand. He is the type of partner you want on your financial team.
Financial advisor Don Dirren is helping clients with tax planning strategies in retirement. These strategies are designed to minimize tax liabilities while maximizing retirement income for retirees of all ages. There are multiple variables covered during tax planning sessions.
Don Dirren evaluates clients’ deductions to discern whether the standard or itemized deduction will result in the minimum tax liability. This includes an analysis of available tax write-offs and the impact on clients’ portfolios. Accelerated retirement contributions for those still working in retirement are also examined for feasibility and practicality.
In addition, Don Dirren also reviews the deferment of retirement plan distributions based on the needs of clients and market conditions. The timing of voluntary and required distributions is a critical step in the tax planning process, and it’s important to understand the tax implications of portfolio rebalancing and spending. Don Dirren leverages his industry experience and combines it with illustrations of real-world scenarios to help clients manage their income and tax liabilities.
Don Dirren helps clients coordinate their tax planning with other important retirement financial decisions, such as life insurance products for seniors, long term care needs and social security income. Developing zero risk and zero tax retirement strategies is a right fit for many clients. Don Dirren and his associates work diligently to find the right strategy that is in accordance with the latest provisions of tax law and tax shelters.
Don Dirren is a Top Money Specialist with Bergen Financial Group and has over 30 years of experience as a financial advisor. He focuses on education and helping to protect, preserve and pass on wealth. As the owner and operator of two independent brokerage firms, and an ASU alumnus, he helps to support the community by providing insight gleaned from a long-time financial career.
As a trusted advisor and financial professional, Don Dirren serves his clients upholding industry best practices and ethical standards. Given the importance of tax planning in retirement, it’s critical to work with a professional such as Don Dirren to avoid unnecessary risk.
Tax planning in retirement is critical for maximizing retirees’ savings and their quality of life. Don Dirren helps clients at various stages of retirement assess their liabilities and optimize tax avoidance strategies. These strategies are designed to meet the specific needs of clients and their loved ones.
Insurance expert Don Dirren offers a professional look at the facts surrounding long-term care with life insurance.
A licensed financial advisor for more than 30 years, Don Dirren focuses on retirement planning and educating those seeking to protect, preserve, and pass on their wealth. An expert in insurance, Dirren outlines several important factors to take into consideration when purchasing life insurance with the option for long-term care coverage.
“Often I’m asked, ‘Should I purchase life insurance with long-term care coverage?'” reveals Dirren, an experienced financial advisor from Phoenix, Arizona.
Long-term care insurance, he goes on to explain, is an insurance product that will assist in paying for most of the costs tied to long-term care that aren’t included with—or covered by—standard health insurance, Medicaid, or Medicare.
According to Don Dirren, whether an individual needs, or should rely upon, long-term care coverage, depends on a number of factors. There are, he says, several considerations which should be made. “For example,” Dirren remarks, “depending upon how much an individual is withdrawing, or plans to withdraw, from their savings every year, especially later in life, it may make more financial sense to go without long-term care with life insurance, as long as a plan is in place to deal with any possible expenses tied to such an eventuality.”
There’s also the unpredictability of long-term care – another important consideration according to the expert. “While the figures vary depending on a variety of factors, around 50 percent of those who need long-term care only rely on it for less than 12 months,” reveals Dirren, “and fewer than 15 percent rely on such care for more than five years, according to the Department of Health and Human Services.”
Don Dirren recently spoke about life insurance products for seniors and provided an expert look at some of the best life insurance products available. “Life insurance products for seniors vary wildly, so it’s vital that people choose the policy that’s right for them,” said Dirren.
Dirren ultimately pointed toward fixed indexed universal and guaranteed universal life insurance for seniors, being permanent and flexible, and representing a no-risk form of investment for many.
The expert also briefly discussed long-term care insurance, but was quick to highlight the fact that the cost of this type of coverage is rising. “A hybrid option, then,” he suggested, “may be a better proposition, combining two types of coverage – chiefly long-term care and one other form of life insurance.”
Hybrid life and long-term care coverage is available as a single payment, and often much more cost-effective premium than traditional long-term care insurance, according to Don Dirren.
“With hybrid life and long-term care coverage, an individual’s death benefit amount is available tax-free for care as necessary,” he adds, wrapping up, “either paying for long-term care in later life if needed, or otherwise received tax-free by beneficiaries when the policyholder passes away.”
Social Security planning specialist Don Dirren provides an expert look at tax planning for retirees.
With more than three decades of experience under his belt, financial advisor and Social Security planning specialist Don Dirren says it’s vital that everyone understands how to manage their taxes in retirement. Focusing on two particular areas, and speaking from his office in Phoenix, Arizona, Dirren offers an expert insight into tax planning in retirement.
First, Dirren says it’s vital to understand how Social Security is taxed. “For retirees, it’s vital to understand how their Social Security is taxed,” says the licensed financial advisor.
According to Don Dirren, whether an individual’s Social Security is taxable rests on what’s known as their provisional income. Provisional income is a measure used by the Internal Revenue Service to determine if recipients of Social Security are required to pay taxes on their benefits.
“For those with a provisional income of less than $25,000, their Social Security is not taxable,” Dirren explains. This, however, he goes on, only applies to single individuals. “Married couples filing jointly,” adds the expert, “are not entitled to a tax-free provisional income of $50,000, as you might expect, but rather a reduced, combined total of $32,000.”
Both totals, according to the Social Security planning specialist, are after deductions. “Furthermore, only half of an individual or couple’s Social Security income is included in provisional income calculations,” he adds.
Individuals or couples with incomes above the provisional levels set by the Internal Revenue Service can expect to pay taxes of 50 percent on their social security income. “Those with higher incomes may even be expected to pay up to 85 percent of their social security benefits in tax,” reveals Dirren, “which is why it’s so important to understand exactly how Social Security is taxed.”
Anyone in any doubt, he says, about where they fall on the Social Security tax scale, should consult with an expert for further insight into tax planning in retirement and when to begin drawing social security.
Next, financial advisor Don Dirren turns to investments, and how to manage them into retirement. “When considering tax planning in retirement, it’s important to manage all investments based on their tax classification,” he suggests. For example, it’s largely inadvisable, says Dirren, to have Roth, trust, and individual retirement accounts in the same kinds of investments. “A Roth portfolio grows tax-free, including withdrawals,” he explains, “so this should be an individual or couple’s preferred investment choice and managed in a conservative manner.”
A traditional individual retirement account, meanwhile, should, Dirren says, be used for income while tax rates are low. “With RMD’s now pushed back to age 72, IRA’s should be aggressively converted to Roth IRA’s and used for monthly retirement income at today’s low tax rates” adds the expert.
Buy and hold positions—or managed stocks and bonds—on the other hand, Dirren believes, are more suited to a trust account. “A trust account,” he points out, “receives a so-called step-up in cost basis when a person passes away.”
“For couples, this means that the surviving spouse,” adds Dirren, wrapping up, “may then sell up and be required to pay no or very little capital gains taxes, much like with a Roth portfolio – something which is important to keep in mind when considering tax planning in retirement.”