Estate Planning
Income Tax Planning and 529 Plans
The income tax benefits offered by 529 plans make these plans attractive to parents (and others) who are saving for college or K-12 tuition. Qualified withdrawals from a 529 plan are tax free at the federal level, and some states also offer tax breaks to their residents. It's important to evaluate the federal and state tax consequences of plan withdrawals and contributions before you invest in a 529 plan. Read More
Understanding Probate
When you die, you leave behind your estate. Your estate consists of your assets — all of your money, real estate, and worldly belongings. Your estate also includes your debts, expenses, and unpaid taxes. After you die, somebody must take charge of your estate and settle your affairs. This person will take your estate through probate, a court-supervised process that winds up your financial affairs after your death. Read More
Conducting a Periodic Review of Your Estate Plan
With your estate plan successfully implemented, one final but critical step remains: carrying out a periodic review and update. Imagine this: since you implemented your estate plan five years ago, you got divorced and remarried, sold your house and bought a boat to live on, sold your legal practice and invested the money that provides you with enough income so you no longer have to work, and reconciled with your estranged daughter. This scenario may look more like fantasy than reality, but imagine how these major changes over a five-year period may affect your estate. Read More
Investment Planning Throughout Retirement
Investment planning during retirement is not the same as investing for retirement and, in many ways, is more complicated. Your working years are your saving years. With luck, your income increases from year to year as you receive promotions and/or pay raises; those increases offer some protection against rising costs caused by inflation. Read More
Common Factors Affecting Retirement Income
When it comes to planning for your retirement income, it's easy to overlook some of the common factors that can affect how much you'll have available to spend. If you don't consider how your retirement income can be impacted by investment risk, inflation risk, catastrophic illness or long-term care, and taxes, you may not be able to enjoy the retirement you envision. Read More
Risk Management and Your Retirement Savings Plan
By investing for retirement through your employer-sponsored plan, you are helping to manage a critically important financial risk: the chance that you will outlive your money. But choosing to participate is just one step in your financial risk management strategy. You also need to manage risk within your account to help it stay on track. Read More
Wealth Due To Inheritance
If you're the beneficiary of a large inheritance, you may find yourself suddenly wealthy. Even if you expected the inheritance, you may be surprised by the size of the bequest or the diverse assets you've inherited. You'll need to evaluate your new financial position, learn to manage your sizable assets, and consider the tax consequences of your inheritance, among other issues. Read More
Socially Responsible Investing
Investing with an eye toward promoting social, political, or environmental concerns (or at least not supporting activities you feel are harmful) doesn't mean you have to forgo pursuing a return on your money. Socially responsible investing may allow you to further both your own economic interests and a greater good, in whatever way you define that term. Read More
Charitable Giving
Charitable giving can play an important role in many estate plans. Philanthropy cannot only give you great personal satisfaction, it can also give you a current income tax deduction, let you avoid capital gains tax, and reduce the amount of taxes your estate may owe when you die. There are many ways to give to charity. You can make gifts during your lifetime or at your death. You can make gifts outright or use a trust. You can name a charity as a beneficiary in your will, or designate a charity as a beneficiary of your retirement plan or life insurance policy. Or, if your gift is substantial, you can establish a private foundation, community foundation, or donor-advised fund. Read More
Managing a Concentrated Stock Position
A large holding of a single stock that dominates your portfolio carries unique challenges. On the one hand, it may represent a large portion of your portfolio because it has done well in the past. On the other hand, you may feel you need more diversification. You may have new financial goals that require a shift in strategy; for example, you may hold a growth stock, but now want your assets to produce additional income. Or, your investing focus may simply have shifted from growing your net worth to protecting what you've accumulated. Read More
Evaluating Volatility
Figures that show an average return on an investment are only part of the story. They don't tell how that return was achieved. Is the investment a volatile one, with a lot of ups and downs in price or returns that varied dramatically? Or was its performance relatively steady, with prices and returns that were very similar month to month or year after year? Understanding volatility measures can help you evaluate whether a particular investment is suited to your own investing style. Read More
Monitoring Your Portfolio
You probably already know you need to monitor your investment portfolio and update it periodically. Even if you've chosen an asset allocation, market forces may quickly begin to tweak it. For example, if stock prices go up, you may eventually find yourself with a greater percentage of stocks in your portfolio than you want. If stock prices go down, you might worry that you won't be able to reach your financial goals. Read More
Exchange-Traded Funds: Do They Belong in Your Portfolio?
Exchange-traded funds (ETFs) have become increasingly popular since they were introduced in the United States in the mid-1990s. Their tax efficiencies and relatively low investing costs have attracted investors who like the idea of combining the diversification of mutual funds with the trading flexibility of stocks. The proliferation of ETF choices means they can now be used to create a broad portfolio of core investments, to target narrower sectors, or to gain market exposure that might otherwise be too difficult or costly to access. Read More
2021 Key Numbers For Individual Income Tax Planning
'Tis the season to start thinking about income tax planning. What are the 2021 Federal Income Tax Schedules? Has the threshold for the Alternative Minimum Tax (AMT) changed? What about charitable deductions or the child tax credit? Read More
Isn’t Estate Planning Only For The Rich?
In a word, no. Estate planning allows you or anyone to implement certain tools now to ensure that your concerns and goals are fulfilled after you die. Your objective may be to simply make sure that your loved ones are provided for. Or you may have more complex goals, such as avoiding probate or reducing estate taxes. Read More
IRA and Retirement Plan Limits for 2021
Many IRA and retirement plan limits are indexed for inflation each year. While some of the limits remain unchanged for 2021, other key numbers have increased. The maximum amount you can contribute to a traditional IRA or a Roth IRA in 2021 is $6,000 (or 100% of your earned income, if less), unchanged from 2020. The maximum catch-up contribution for those age 50 or older remains $1,000. You can contribute to both a traditional IRA and a Roth IRA in 2021, but your total contributions cannot exceed these annual limits. Read More
Nonqualified Stock Options
A stock option is a written offer from an employer to sell stock to an employee at a specified price within a specific time period. A stock option can be a valuable form of additional compensation to your employees, because it provides your employees with the benefits of company ownership along with potential tax benefits. Read More
Reaching Retirement: Now What?
You've worked hard your whole life anticipating the day you could finally retire. Well, that day has arrived! But with it comes the realization that you'll need to carefully manage your assets to give them lasting potential. Read More
Converting Savings to Retirement Income
During your working years, you've probably set aside funds in retirement accounts such as IRAs, 401(k)s, or other workplace savings plans, as well as in taxable accounts. Your challenge during retirement is to convert those savings into an ongoing income stream that will provide adequate income throughout your retirement years. Read More
Employee Stock Purchase Plans
An employee stock purchase plan allows your employees to purchase a specific amount of stock at a specific price (usually at a discount from the stock's fair market value (FMV)). The employee usually purchases the stock through a salary deduction program. Funds are withheld from your employee's after-tax salary and accumulate in an account. The employee can then make stock purchases from the account. Read More
New Spending Package Includes Sweeping Retirement Plan Changes (SECURE Act)
The $1.4 trillion spending package enacted on December 20, 2019, included the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which had overwhelmingly passed the House of Representatives in the spring of 2019, but then subsequently stalled in the Senate. The SECURE Act represents the most sweeping set of changes to retirement legislation in more than a decade. Read More
Sudden Wealth
What would you do with an extra $10,000? Maybe you'd pay off some debt, get rid of some college loans, or take a much-needed vacation. What if you suddenly had an extra million or 10 million or more? Now that you've come into a windfall, you have some issues to deal with. You'll need to evaluate your new financial position and consider how your sudden wealth will affect your financial goals. Read More
Estate Planning: An Introduction
By definition, estate planning is a process designed to help you manage and preserve your assets while you are alive, and to conserve and control their distribution after your death according to your goals and objectives. But what estate planning means to you specifically depends on who you are. Your age, health, wealth, lifestyle, life stage, goals, and many other factors determine your particular estate planning needs. Read More