I worked for a Virginia law firm that did foreclosures for a bank. If the bank sells the property for more than the amount owed, she would receive her remaining equity less any expenses associated with the foreclosure (lawyer fees, advertising expense, etc.). One would think she would be better off selling the property or filing for bankruptcy protection.
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Reverse mortgage?
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This is a case where the elderly homeowner really can’t keep up with the house.
GOOD NEWS - she has found some short term help and is putting the house on the market. (She should have done it a few years ago, but her darned sickly cat lived to be 21, just died.)
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Opinions please - late last year (sometime in early Dec I believe) I sent my financial advisor a question indicating I wanted to know if there was anything I should be aware of with my account such that I should pay taxed before the end of the year, so I wouldn’t wind up owing a fair amount and being penalized when we did our taxes. He sent me back an email indicating no, there were no realized gains, so there was nothing I needed to worry about.
Well, when we did our taxes, I wound up owing because I get a bunch of dividends that are taxed (and re-invested). So, I owe a bunch of tax on those dividends. According to him, those “final dividend totals” are typically reported after the close of the year.
Should he have been able to tell me I would get dividends reported after the close of the year when I asked him in early December?
I’m very frustrated by this and it may be what I need to actually disengage from this advisor. (I have been thinking I should do it for years - he’s not a bad guy, but I simply don’t need what he offers - and I pay him a % plus whatever the cost or whatever of the Fidelity investments he has me in).
Thanks in advance for any thoughts
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This isn’t a great solution, I have fidelity also.
I’m not great about keeping track of everything and panic come December
I take a withdrawal (for me $5000) at the end of the year. When I do my taxes, if I’ve calculated correctly, that $5000 goes back as my tax refund. If I do owe, then I made sure I don’t owe any penalty.
Two months or so of my money not making any works for my piece of mind.
Like I say it’s not very sophisticated lol
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Are you talking about capital gains distributions that are reported on the 1099 DIV and treated as long term capital gains? I got surprised by a large amount on one fund (inherited from parent) a few years ago. It was the first time it was substantial, so I read up about them. (I am a very passive investor.) These trades that create the gains seem to be generally done in mid December so the number might not be known until then. I discovered that I could get a good idea of the amounts by checking that account’s December statement at the start of January and look for the reinvestment from that fund in particular, and any others. Then if necessary, increase 4th quarter estimated taxes payment on January 15 to avoid penalties. The additional tax will basically depend on what bracket you’re in for long term capital gains, which is different (less) than regular income.
I realized that I didn’t make sense.
Fidelity has the option to withhold a custom percentage of any withdrawal to go towards taxes.
I will withdraw $5000 with 99% to go towards taxes.
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Absolutely. (assuming he understood your question, but if he didn’t it’s on him to ask you to clarify)
Vanguard, for example, publishes a planned distribution schedule early in the year and by Q4, will publish an estimated distribution number by fund for Dec so folks can tax plan and/or do a Roth conversion or other financial move to remain in their choses tax bracket.
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Does your FA work for Fidelity? Can you go directly to Fidelity without him because Fidelity will give you an assigned FA without a separate commission.
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Yes - I was basically saying “should I pay some extra taxes to cover anything I will need to pay based on investments I have with you…”
And he told me no, I should be fine, because there hadn’t been much adjustment to my account over the last year (my words, not his).
THEN, when I kind of complained after doing taxes, he said it was because they hadn’t done the distributions/dividends or whatever yet at the time I asked the question.
BUT, I feel like for the maybe 1 question I ask him a year, he should have figured out what WOULD happen, in addition to what had ALREADY HAPPENED, for the year.
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No he doesn’t and yes they will. That may very well be the way I go when I figure out how to extract myself, which is seeming more and more like what I will do.
I was asking him if there was ANYTHING I should be concerned about, so I feel like he should have asked more questions if he needed more information from me.
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Without knowing what you’re invested in, by and large it’s predictable that there are going to typically be quarterly distributions, with the more significant amounts landing in March and December.
Glancing at your account and looking at the historical distributions from the prior years? Yes, IMO, it’s not hard to ballpark what’s coming.
Editing to add:
IMO - yes, he should have given you more complete info based on your question!
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Yes, he should have been able to tell you the dividends. I guess he could have misunderstood the question and was answering specifically about capital gains (distributions) but any broker should have a reporting option for estimated income - and most dividends are recurring and, if not, get included when announced. I too would be frustrated. Whether I would leave would depend on my estimation of his value but it sounds like you were already questioning that. Good luck!
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If he told me I was likely to owe money, I would have just taken whatever amount from a savings account I have to pay the likely amount, and I’d rather be over-paid on taxed, not under (I know lots of people disagree with me, but I’ve always managed that way). I think it’s the same result you’re talking about - just making sure we’re “good” with the IRS 
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I agree that if you own funds that were likely to pay capital gain distributions based on history, he should have mentioned it. The companies don’t calculate those until after November and post on the statements sometime in December.
If you’re talking about reinvested dividends, that should routinely occur quarterly so should not be a surprise. I do think it’s confusing to include capital gain distributions on the 1099-DIV since they are not dividends.
The amount of estimated/withheld taxes needed to avoid penalties is called “safe harbor”. I’ve been drilling that term into husband’s head, along with “tax burden” and taxes due in April. All different amounts, for us, anyway.
I learned here on CC about having taxes withheld when taking distributions from IRA’s and 401(K)’s and it’s been a wonderful thing to know. Since we’re in RMD years, we can wait until December to take the distributions and have as much withheld as needed to cover safe harbor. It’s deemed to have been paid evenly through the year so no more quarterly estimated payments, yay! The State of California works the same way as Federal so we will fit that into planning. Then there’s still the opportunity to pay a 4th quarter estimate if we discover after December that we should add a bit more to protect us.
I’ve also been reminding husband that if necessary, we can take more than the RMD if we need to cover the safe harbor. It’s minimum, not maximum 
.
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I completely recognize that your advisor who you are paying should have done this for you, but if you ever want to check on your Fidelity holdings in the future, click each position in your taxable account to expand the ‘box’. You will see Purchase History and Research. Click Research, and then click the green Research button at the bottom of the box.
This will launch a new page, look for Distributions & Expenses or Fees & Distributions. This area will show the historical distributions. No guarantee that the next distribution will equal the last, but you can kind of get a feel for the range. Many pay in December.
Alternatively, if you are within the last ten days of the year, you can click on the pull down for YTD Tax Info and you will see complete details on all taxable income to date. YTD Tax Info is under the More button on my layout.
Schwab does not offer this feature. There may be another workaround, but to capture December transactions I just pull down all December activity and then add it to the income figure reported on the November statement.
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Since you asked….i would be troubled if i asked that question and capital gains distributions and/or dividends were not part of the answer.
We self manage using the Fidelity platform and have for decades. We also have some small load Fidelity funds in addition to the standard no- load funds. We are assigned a rep at our closest Fidelity office at no charge and meet with him a couple times a year and can always ask questions, but he does not provide (nor do we want him to) all that a financial planner would. He also does not know of our other holdings, our spending, income, home value.
Starting in November I make a spreadsheet of our investment earnings (and other income)to date, using online monthly statements. Then each week in December when the fund distributions are coming in I update the spreadsheet using the “activity” link. I then have a pretty accurate idea of income. I also have a section on that spreadsheet of estimated taxes paid plus taxes withheld over the year.
We also use the safe harbor estimated and withholding numbers based on the prior year tax return to make sure we are not in a penalty situation. Our 4th estimated tax payment due two weeks into the new year is usually a bit larger than the others.
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Wondering if anyone had stopped paying mortgage (interest only) on a home for a few years prior to retiring/relocating?
H & I are looking at downsizing/moving in maybe 2 years. But H is telling me I should continue to work full time until we ready to move & buy (in HCOL/high tax state now). But we have a ways to go–researching where we might live & making a few house updates. Can’t see it taking less than 18 mon./2 yrs.
A friend suggested I could go part-time, pay interest-only on our mortgage, and still manage to stay in our house for a few years while we figure things out (lowering our monthly expenses). Have enough equity now that if sold house could buy the next (downsized) in cash.
I’m a cautious researcher so want to evaluate places before moving. But working a demanding job full-time is going to limit reconnaissance travel opportunities and shorten the total ‘active retirement years.’
Retirement software says I could go part time now (not sure if I trust it fully though!). Talking to a mortgage broker today about details of refi.
Just trying to figure if this is a remotely reasonable expense mitigation option (or if missing something!). Appreciate any thoughts!
Are you set up on an interest only loan? Otherwise your payments, which include both principal and interest, would remain. So short of a refi, I’m not sure how you can go interest only ?
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