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  • The title of Zina Kumok’s Business Insider column says a lot, “I relied on my dad’s investment advice for years until a casual conversation with a friend showed me a better way.” It shows that even when you grow up in a household where money management is taught and discussed, you may still have a [] ©Bring Clarity to Your Finances™. Women: Take Time to Learn More About Investing is a post from Bring Clarity to Your Finances™
  • Valentine’s Day is over and many people have gone into stores to take advantage of discounts on merchandise that did not sell before February 14. CNN Business even wrote about “What happens to the Valentine’s Day flowers that don’t get sold?” in case you ever wondered what happens to surplus flowers. Unlike candy, which may [] ©Bring Clarity to Your Finances™. Planting New Seeds for Financial Freedom is a post from Bring Clarity to Your Finances™
  • Unless you’ve given up on your career or feel that you have plateaued, the idea of getting promoted remains a driving force behind your day-to-day performance. Conventional wisdom and some empirical data suggest that the first ninety days in a new job are critical in determining if you are going to experience a ‘hard or soft landing’. One arrives at a new place without the benefit of what I call ‘relationship equity’. Relationship equity is the value that comes from knowing and working with others. The problem is that ‘relationship equity’ does not transfer to your next company–you earn it. Again, per research, you have 90 days to start building this type of equity with your new colleagues. In addition to building relationship equity, figuring out how to efficiently transition from the old job to the new one is critical. Regardless of whether the promotion is internal or to another company, the crucial question is “Whose job are you working on?” Unless you’ve given up on your career or feel that you have plateaued, the idea of getting promoted remains a driving force behind your day-to-day performance. Conventional wisdom and some empirical data suggest that the first ninety days in a new job are critical in determining if you are going to experience a ‘hard or soft landing’. One arrives at a new place without the benefit of what I call ‘relationship equity’. Relationship equity is the value that comes from knowing and working with others. The problem is that ‘relationship equity’ does not transfer to your next company–you earn it. Again, per research, you have 90 days to start building this type of equity with your new colleagues. In addition to building relationship equity, figuring out how to efficiently transition from the old job to the new one is critical. Regardless of whether the promotion is internal or to another company, the crucial question is “Whose job are you working on?”
  • Sweeping legislative tax or retirement reforms typically happen every 10 years or so, but December of 2019 brought us the 2nd major piece of congressional action in 2 years! Just two years ago, we were busy deciphering the TCJA (Tax Cuts and Jobs Act) passed in December 2017. Congress must have hired a new CAO []
  • A Case For A Bull Market In 2020 What if the optimists are right? What if the glass is half full? Although no one can predict the next move in stocks, and you don’t want to bet your retirement on it, it’s not hard to see the case for a bull market in 2020 — even after a spectacular year for stocks in 2019. The Standard & Poor’s 500 index historically trades at a market multiple of 16 to 18 times its expected earnings. Put another way, the average share in the S&P 500 historically is priced at between 16 and 18 times every dollar of profit per share it’s expected to earn in the next year. Lately the price of the S&P 500 has been trading above the normal valuation band, at about 19 times expected earnings. Normally that would be a sign of overvaluation, but what if the market multiple continues to expand? The Standard & Poor’s 500 index historically trades at a market multiple of 16 to 18 times its expected earnings. Put another way, the average share in the S&P 500 historically is priced at between 16 and 18 times every dollar of profit per share it’s expected to earn in the next year. Lately the price of the S&P 500 has been trading above the normal valuation band, at about 19 times expected earnings. Normally that would be a sign of overvaluation, but what if the market multiple continues to expand? The latest economic data from The Conference Board on the leading economic indicators, the Census Bureau on housing starts, and the Bureau of Economic Analysis on real disposable income all confirmed The Wall Street Journal’s most recent consensus forecast of economists for an expected growth rate of just under 2% for the next five quarters and the S&P 500 index once again broke all-time high price records on the news. While you never make financial plans based on things going right, sometimes the glass indeed is half-full. Please contact us with any questions fulbrightteam@moneyful.com or to set up a meeting, and don't hesitate to share this video with people who might benefit from our work.
  • Retirement saving is an important and integral component of your financial plan. While there are many ways to save for retirement, one of the most popular and ubiquitous vehicles is a 401(k). Your 401(k) has allowed you, and your employer in the case of a match program, to facilitate and manage your retirement savings. But what happens to that money should you decide to change jobs? There are many options for securing the funds in your 401(k) to keep you on track to maintain your retirement timeline. Keep in mind that some of these options are more beneficial than others, but it is important to understand the full scope of your options. Let’s dive into the world of 401(k) plans. 1. Take a lump-sumAfter you leave a job, you always have the option to cash out the funds in your 401(k), but many advisors instill a great deal of caution around this choice. While you would have access to all of the funds immediately, it could lead to serious tax consequences that cut into your nest egg in a significant way. You are able to take qualified distributions from your 401(k) after you turn 59 ½ at which point you would avoid the 10% early-withdrawal fee. If you are younger than 59 ½, you would likely be charged the 10% penalty along with ordinary income tax on the full sum of the account, causing a windfall of tax burdens. The only time you wouldn’t face the 10% penalty is if you retire between the ages of 55 and 59 ½ at which point you could withdraw any funds from your 401(k). You will, however, still need to pay income tax on all distributions unless the money is in a Roth 401(k). Besides the tax considerations , a lump sum is often much too large of an amount of money for people to successfully invest and manage on their own, causing them to lose more money over time. 2. Leave it with your former employerMany people might be surprised to learn that your 401(k) could still be housed in a company that you have moved on from. Some employers will allow you to retain your 401(k) even after you leave which is excellent for people who are happy with their portfolio and investment options. If you have more than $5,000 in your account, most plans allow you to leave it in the account regardless of your employer. On the smaller end, if you have $1,000 or under in the account the employer may be able to force you to take the money elsewhere. Any account balance between $1,000 and $4,000 would force the company to help you set up an IRA to house the money. Retaining your plan with your former employer may make a lot of sense if you have a lot of money accrued in the account and you are pleased with the portfolio management. But if you are likely to forget about it or are unimpressed with your options, taking a different course of action may be best. 3. Rollover into your new company’s 401(k)Should you move to another company that also sponsors a 401(k) retirement plan, you can make arrangements to have the funds transferred from your previous account to your current account. Be sure that you work directly with the custodians of both your old and new plans to make a direct transfer from the accounts. By ensuring that the money goes from one provider directly to another, you avoid a tax consequence or missing a crucial deadline. You can also elect to receive the money from your old account in the form of a check and deposit that check into your new 401(k). If you do this, be sure to make that transfer within 60 days to avoid income tax on the full balance of the check. Most new companies require the employee to put in a set amount of time before they are eligible for retirement benefits. In this case, be sure that you know what that timeline is so that you don’t liquidate your old account without having access to your new plan. 4. Rollover into an IRAOne of the most lucrative options for your old 401(k) is to roll the funds over into an individual retirement account (IRA). An IRA offers a much wider and more flexible range of investment opportunities than a 401(k) which gives investors the opportunity to allocate their funds in the way that they see fit. IRAs are a flexible form of investing and gives you more opportunities to invest in. A 401(k) plan is more restrictive in terms of what you can invest in and the structure of your portfolio, so if you are looking for more flexibility an IRA is a great choice. This option makes a lot of sense particularly if you aren’t impressed by the investment options at your new company or if they don’t offer a good match program. Retirement & YouYour retirement savings plan is an important step on the path to living your ideal retirement lifestyle. Contributing to employer-sponsored plans like a 401(k) is an excellent tool to help you get there. But as you know, things change and it is important to be prepared for that change when it happens. If a new job opportunity will help you live a more fulfilling life then it is important that the hard-earned savings you have accrued will continue to work for you and support the life you deserve in retirement. Here at Step by Step, it is our goal to help you make your money work for you, empowering you to live a life that is true to your goals, priorities, and values . Are you ready to take another look at your retirement savings strategy? Give us a call . We would love to speak with you.
  • A good long-term care insurance policy is simply part of the answer to the question: “How can I afford long term care?” Long term care insurance (like everything else related to long term care) is not cheap, and it’s not for everyone. And the difference between a good policy and a bad policy is hidden in the details. (Feed generated with FetchRSS )
  • Massive computer hacks and data breaches are now common occurrences — an unfortunate consequence of living in a digital world. Once identity thieves have your information, they can use it to gain access to your bank and credit card accounts, make unauthorized transactions in your name, and subsequently ruin your credit.
  • Is there overlap between psychology and financial planning? Perhaps. While your Fee-only financial planner is not qualified to diagnose psychological issues and a psychologist will not be able to manage your finances, both experts may suggest that you have a talk with a romantic partner before you combine finances. In “3 Questions to Ask Before [] ©Bring Clarity to Your Finances™. Ask Questions Before Merging Finances is a post from Bring Clarity to Your Finances™
  • Yes, we all know the rules about paying off a mortgage: if she had a low interest rate mortgage she could take the extra cash and earn more in the market. At the time she still received a tax break for having mortgage interest. She wouldn’t want to be house rich and cash poor, and a mortgage is a hedge against inflation. (Feed generated with FetchRSS )
  • February 5, 2020 Between two professional credentials that each need a lot of continuing education, plus family vacation time, Im on the road a lot when its not tax season.  Most of the time Ill be able to get a voicemail/text/email and answer within a reasonable time frame, except for a week or two when [] The post Wendys Vacation Conference Schedule for 2020 appeared first on Wendy Marsden, CPA, CFP® .
  • If your employer offers a retirement plan, invest at least enough to get the employer match, if available. Most young adults can maximize their retirement funds by investing in the Roth option.
  • Tonight, the President of the United States will deliver a State of the Union address. This practice was first referenced in the Constitution, which states that the President will inform Congress “from time to time”. Over the years, the format has changed: our first two presidents addressed congress personally; Thomas Jefferson sent written messages and [] ©Bring Clarity to Your Finances™. Your Financial State of the Union is a post from Bring Clarity to Your Finances™
  • When we talk with families, we usually see one spouse who is responsible for the family finances. Even in households where there is a relatively equal distribution of child-raising, chores, and other tasks, it’s very rare for me to see such an equal arrangement with the family finances. More often, I see that one spouse handles ALL of the finances, and the other spouse is pretty aloof. (Feed generated with FetchRSS )
  • Investments are important tools to help you reach your financial goals. There are many pieces that comprise your investment strategy and today we are going to talk about one that doesn’t receive a ton of attention but can have a big impact on your net gain: asset location. I like to think of asset location like a house. Your house provides shelter and keeps you safe and warm. It is a place to rest your head and find comfort and security. Asset location seeks to provide that same idea of security for your investments. Asset location is a strategy to help maximize your return by housing your investments in accounts that will receive more favorable tax treatment. It is a way to maximize your return by coupling the right securities with their corresponding accounts. Today, we are going to take a closer look at this investment strategy and demonstrate how it could change your approach to investing. Breaking down asset locationAsset location aims to include tax-efficiency into your investment strategy by housing different securities (stocks, bonds, mutual funds, etc.) in accounts that will provide the most favorable tax treatment (tax-deferred, tax-exempt, or taxable). This tactic differs from its neighbor, asset allocation in key ways. Asset allocation is concerned with the type of securities that make up your portfolio and how they align with your goals, priorities, and risk tolerance. Once you have a portfolio that best reflects your goals as an investor, you can then start to think about putting those securities in a place to give them the best chance for success. Think about it this way, you probably don’t want to order a burger at a sushi restaurant. Not because the food would be terrible, but it isn’t what they are known for so it wouldn’t be nearly as good as the one at the steak house. This example illustrates that the same item (in this case the burger) can be housed in different places, but one place will ultimately be better and more profitable for you, the customer. Now, let’s take a look at how this idea translates to your investments. Housing your securitiesJust like you have many different choices for housing (apartment, condo, townhouse, single-family, etc.) you also have choices for where to house your investments namely in either a tax-deferred, tax-exempt, or taxable account. Let’s take a look at each of these a little more in-depth. A tax-deferred account is an account in which the securities contributed accumulate tax-free and are only taxed upon distribution. Key examples of tax-deferred accounts are a traditional IRA, 401(k) or another workplace account, and deferred annuities. A tax-exempt account doesn’t offer a tax benefit on contribution, rather, all contributions are made with after-tax dollars and the distributions remain tax-free. The two most common tax-exempt accounts are Roth IRA and Roth 401(k). A taxable account simply means that the investor must pay taxes on any investment income in the year it was received. Prime examples are investment accounts, brokerage accounts, high-interest savings account, and other bank accounts. While taxable accounts come with some flexibility, most interest and dividends are taxable immediately and gains are taxable at capital gains rates when the assets are sold. The first step is to have an understanding of how these accounts are taxed in order to give a better indication of where your different securities can best thrive. The next step is to have an idea for the tax-efficiency of each security. Securities through the eye of taxesThe tax-efficiency of each security will help reveal how the security will be taxed and which type of account will help give it the best return over time. This is just a general overview of securities, please make an appointment to discuss your particular situation. We are going to discuss three of the main assets you will come across along with their relative tax-efficiency. The first being individual stocks. In general, these assets are often quite tax-efficient, especially when held for at least one year because this allows for long-term capital gains tax whose tax percentage is lower than most ordinary income tax rates. Your particular tax bracket is indicative of the percentage of capital gains tax you will pay. Bonds, on the other hand, often fall into the tax-inefficient category namely due to the fact that the interest payments they accrue are taxed at the ordinary income rate. As a rule of thumb, the more tax-inefficient an asset is, the more money you will pay on it each year if it is held in a taxable account. The last types of accounts we are going to look at today are mutual funds and ETFs which can be both tax-efficient and inefficient. ETFs are often tax-efficient but their downfall can be the turnover rate, delivering short-term capital gains which are taxed at a higher rate. Volatility is the main factor that can contribute to making mutual funds and ETFs fall back and forth on the efficiency scale. Remember, these are generalizations to help you think about the way that your assets are viewed from a tax perspective. It is important to work with a professional to develop a unique strategy for your investment goals. Which security goes where?Now that you have an idea of the type of accounts available to you and the general tax-efficiency level of each security, it is time to get to the fun part: determining which securities to put in each account. Today, we are going to talk about a couple of strategies that could help. The first is to place the most tax-efficient assets in taxable accounts. This could include municipal securities and municipal mutual funds, ETFs, as well as tax-managed mutual funds and other managed accounts. The second strategy is to place the most tax-inefficient assets in tax-deferred or tax-exempt accounts. High turnover stock, for example, would be best suited in a 401(k) or IRA since they don’t trigger taxes while housed inside the account. The same holds true for taxable bonds and corporate bonds. Real Estate Investment Trusts are another asset that makes sense in this type of account. The bottom lineAsset location can be an important part of your investment strategy. Understanding how your investments are taxed can help maximize your return. Each person’s investing needs will be different. Be sure that you work with your financial advisor to help create a plan that will work best for you and your goals. Here at Step by Step, proactive tax planning is an integral component of what we do. Taxes impact your financial strategy in an important way and we want to ensure that you are empowered to make smart, confident choices with your financial future. Give us a call to learn more. We can’t wait to hear from you!
  • Senior tax strategies, Durham NC,Retirement Savings
  • What do you do when your life takes an unexpected turn for the worse? Where can you turn when everything you have worked for comes crashing down and your title no longer serves as your identity? You find your reputation that you have built over a couple decades being damage by false accusations by the legal and licensing systems. Joining us for our discussion Sudden Career Change is Dr. Jarret R. Patton who is calling in from his PA office. Jarret R. Patton better known as Dr. Jarret. He is a pediatrician with nearly 20 years of experience, spent his clinical career taking care of children in an urban clinic and his administrative career as a top physician executive in eastern Pennsylvania.
  • Selecting where to live later in retirement is a big decision that involves one new major consideration: our health care. The big question is: Will we each make the last housing decision on our own and ahead of time; or will we have a non-choice thrust upon us when a health crisis hits?
  • Next week (February 3-7, 2020)  is Tax Identity Theft Awareness Week and you need to know that you can fall prey to scammers whether they contact you directly or find some behind-the-scenes way to operate. A scammer can obtain your Social Security number illegally and file a tax return without your knowledge, The thieves will make [] ©Bring Clarity to Your Finances™. Arm Yourself with Information to Stop Tax Identity Theft is a post from Bring Clarity to Your Finances™
  • At my first opportunity, I tried to research smart home technology and its impact on personal finance. I couldn’t find a single article out there. Smart home technology has been around for a little while, but while everyone is caught up in the functionality of it, it doesn’t appear that many people have considered its effects financially. (Feed generated with FetchRSS )
  • Having prepared taxes for almost a decade, I have learned what our best clients do to get ready for tax preparation.  US Income Tax law is quite complicated and can be intimidating if not overwhelming.  Before entering the financial planning profession,  I used outside preparers for my increasingly complex personal return.  At that time, I… [Continue] (Feed generated with FetchRSS )
  • Can You Spot The Hidden Trend? Can you spot the hidden trend? A major demographic trend that is driving the U.S. economy and financial markets is right here in front of your eyes, but it’s not so easy to see without a trained eye. If you knew what to look for, you’d see that China, Japan, Germany, and other major economies are grappling with a decline in their working-age population in the decades ahead, while the U.S. working-age population is expected to grow. Since growth in the size of the labor force is one of the two determinants in economic growth, it’s a key fundamental factor that will shape the future of financial markets. With the working age population stalling, Europe’s economic growth is sluggish. To stimulate the economy, Germany’s central bank has pushed lending rates into negative territory, which is unprecedented. Germany is the world’s second largest issuer of government-backed bonds and its action has depressed interest rates on U.S. Treasury Bonds. While the demographic trend is hidden in plain sight, it’s set to shape growth in major economies across the globe for the decades ahead, and it means low interest rate conditions could persist for years. No one can predict the next move in the stock market, but demographics are fairly stable and predictable. This is an important trend. Be sure your strategic investment plan — especially, your portfolio’s allocation to bonds — is in sync with this key fundamental. Please contact us with any questions fulbrightteam@moneyful.com or to set up a meeting, and don't hesitate to share this video with people who might benefit from our work.
  • “With backgrounds in design thinking and software engineering, the founders of Airbnb (Brian Chesky, Joe Gebbia, and Nathan Blecharczyk) leveraged technologyto develop a web based user interface that made finding, selecting, and booking travel easier. In the process, they also made it easy for homeowners to earn extra income, whether that be through renting a second home or simply listing a spare bedroom. In one decade, Airbnb transformed what it means to go on vacation. The homeshare juggernaut turns homeowners into hosts, guest rooms into cash cows, and overnight stays into dynamic encounters and lasting friendships. Its very name has become synonymous with finding unique short-term stays anywhere in theworld, enjoying great services and hospitality, and having amazing experiences. Airbnb is a noun, a verb, an adjective, and a movement — and the rest of the industry simply can’t keep up. But competition isn’t what defines this phenom of the sharing economy, community does. Its leaders blended innovative digital tools and a global village spirit to build unprecedented brand loyalty — at a time when most brands struggle to just stay visible.
  • After an initial sense of freedom, many retirees experience anxiety, fear and boredom. If you don’t replace your career with something meaningful you may miss the sense of accomplishment and achievement that comes from completing projects, getting raises, promotions, bonuses or landing a new account.
  • Recent changes signed into law at the end of 2019 through the Secure Act regarding 401(k) and IRA distributions may not only affect your retirement planning, these changes may create a need to review your estate planning as well. Barron’s (New Rules for Stretch IRAs and RMDs Have Raised Many Questions. Barron’s’ Found Answers) and [] ©Bring Clarity to Your Finances™. The Secure Act May Alter Your Retirement and Estate Planning is a post from Bring Clarity to Your Finances™
  • Vision proves that all things are possible. Thousands of concepts that are common today were once considered utterly impossible, completely absurd, and unattainable. Imagine the laughter and mockery that you would have experienced 150 years ago if you discussed the idea of carrying multitudes of people across the globe in a metal shell with wings, traveling thousands of miles in only hours, or talking to someone from a great distance with a handheld wireless device. There are so many great discoveries and inventions that are not that impressive today, because we have learned to look beyond. Those are just glimpses of what vision is capable of achieving. Clearly the successes that are going to exist tomorrow are not seen today, but someone’s vision will bring them into play. Why not yours? Joining us for our discussion You Can Achieve Anything is Thomas W. Jones who is calling in from his Stamford, CT office. Thomas W. Jones is founder and senior partner of venture capital investment firm TWJ Capital LLC. He previously served as Chief Executive Officer of Global Investment Management at Citigroup; Vice Chairman, President and Chief Operating Officer at TIAA-CREF; and Senior Vice President and Treasurer at John Hancock Insurance Company. Jones received masters degrees from Cornell University and Boston University, and holds honorary doctoral degrees from Howard University, Pepperdine University, and College of New Rochelle. His latest book is From Willard Straight to Wall Street: A Memoir Welcome to Mastering Your Money, is Thomas W. Jones
  • Essential Financial Strategies is pleased to announce a new service–The Strategic College Plan.   This service helps families figure out how to pay for college while minimizing  the future burden of college student loans.   Using a sophisticated knowledge base, Rorik Larson assists families to predict their Expected Family Contribution.  Then they can select colleges that fit… [Continue] (Feed generated with FetchRSS )
  • Evaluate your current situation and determine how well prepared you are for retirement. Calculate the value of your retirement nest egg and develop a retirement budget.
  • There are so many things that change when someone retires and one of the factors that new retirees have a tough time managing is their changing cash flow. For so many years, they have been dedicated to putting money into their retirement accounts, but what happens when they have to take it out? Today we are going to look at required minimum distributions: what they are, how they work, and the many ways they can impact you. Let’s dive in. Understanding RMDsRequired minimum distributions are annual IRS mandated withdraws from qualifying retirement accounts. This system was created so that the IRS can collect taxes from your accounts that have previously remained tax-free. RMDs apply to accounts that have been contributed to and growing tax-free for many years and act as a way to get those taxes back. An RMD, in essence, is an amount of money you have to take out of your retirement accounts, on or before December 31, each year once you turn 72. Your first RMD is the only time when you don’t have to withdraw the funds by December 31. The first year you begin your RMDs, you can wait until April 1 of the following year to take them. Say, for example, your 72nd birthday was in March 2019, by September 2019 you will have turned 72. According to the rules, you don’t have to take your first RMD until April 1st of 2020. By waiting until April, you would then have to take a second RMD at the end of December to account for both the current and previous years. Since waiting would cause two distributions in the same year, many people choose to take their first RMD in the year that they turn 72. All distributions from your qualifying retirement accounts are taxed as ordinary income, which can play an important part in your tax planning strategy. By taking two distributions in one year, you could raise your income enough to bump you into a higher tax bracket that comes with a heftier tax bill. Be sure you work with your financial planner and tax professional to help you make smart, tax-efficient choices with your RMDs. Should you forget or not withdraw enough money from your qualified accounts, the IRS will issue a 50% penalty on the money that was supposed to have been withdrawn, making RMDs a crucial part of your financial plan in retirement. Knowing your qualified accountsEarlier we said that RMDs were tied to qualified retirement accounts so it is important to know which accounts you’ll need to be aware of. Here are the accounts that have an RMD from the IRS: 401(k) 403(b) 457(b) Traditional IRA SEP IRA SIMPLE IRA SARSAP IRA Roth 401(k) For RMDs it is important to note that each account is viewed independently. So if you have two IRAs and a 401(k), you will need to take a separate RMD for each account to avoid the penalty. The only account that does not have an RMD is a Roth IRA. A Roth IRA is free from RMDs because Roth IRAs are funded with after-tax dollars. Since you paid taxes on the money upon contribution, you don’t need to pay taxes at distribution. It is important to note that a Roth IRA remains free from RMDs as long as the account owner is alive. If the account owner passes away, the beneficiary who inherited the IRA will have to take RMDs. The IRS has a table to help you determine how to handle your inherited IRA. Calculating your RMDsYour RMD will change each year and is determined by two factors Your account balance Your age Calculating your RMD may seem daunting, but the process is really simple. First, you start with your account balance on the previous December 31. Next, you will use the IRS table detailing a life expectancy factor based on your age. You then divide those two numbers (account balance from prior Dec. 31 and life expectancy number) to get your RMD. In order to plan for your future RMDs, use an online calculator to help you estimate your RMDs from your qualified accounts. Remember, you have to take out the required amount by December 31 to avoid the penalty. It is also important to note that if you withdraw more money than you need to, that extra money isn’t credited for future RMDs. Each RMD is separate year to year and no money can be rolled over. Using your RMDsRMDs are attached to many of the saving vehicles you have used for most of your working career. Many retirees rely on those distributions to help fund their living expenses or retirement lifestyle. But there are other options such as donating some or all of your RMDs to charity though a process called qualified charitable distributions (QCDs). RMDs can be difficult to get used to, especially for new retirees. But by understanding the process and working with a detailed professional at your side, you can make the most of them and use them to enhance your life in retirement. Are you interested in exploring new options for your RMDs this year? Give us a call and we would love to help you.
  • The Motley Fool tries to answer a question many people may have in “Am I Too Broke to Invest?” If you are employed and have an emergency fund, you are in a position to invest. And investing doesn’t mean throwing tons of money into the stock market. If you are not ready to get into [] ©Bring Clarity to Your Finances™. People Wonder if They Can Afford to InvestWe Say Can You Afford Not to Invest is a post from Bring Clarity to Your Finances™
  • This broad ranging bill was primarily designed to improve the access and ability for Americans to save money for retirement and to increase withdrawal options during their retirement years. While some provisions in the law are clearly intended to raise revenue, the vast majority are designed to help workers reach their retirement goals.
  • All reports point to a 100% mortality rate for humans. Talking about death is uncomfortable for many. It’s difficult to contemplate your own death, and difficult to think about others living on for decades without you. It is a tough topic, but here are the stats: 80% of men die married. 80% of women die []
  • Retirement is hard. It is emotionally hard even if you are fully financially prepared for retirement. It can be jarring for many new retirees to go from an environment of structure, deadlines, and meetings to...well, pretty much none of that. With days no longer occupied with these responsibilities, retirement is like a blank canvas. While this can be liberating, it can also be intimidating as you first gaze upon the pure white canvas—especially if you have no idea what you want to “paint”!
  • To successfully live below your means, identify a clear picture of what you want to achieve. Set financial goals to provide you a sense of purpose and motivation to save money. Spending less than you earn doesn’t mean you can’t enjoy life and have nice things.
  • The practice of offering consumers the chance to take a vehicle they might buy on a test-drive has been in place for a long time. And a few years ago, realtors got into letting people “test-drive” homes by spending the night in them. And in “Test-Drive Your Retirement,” Kiplinger.com suggests that instead of just outlining [] ©Bring Clarity to Your Finances™. Yes, You Can Practice Being Retired is a post from Bring Clarity to Your Finances™
  • First Time Homebuyer?

    Are you thinking of buying your first home? Before you hire a real estate agent or start house hunting, you need to take the time to prepare yourself financially.
  • The SECURE Act has been passed by the House, Senate, and signed into law by the President last week. SECURE stands for Setting Every Community Up for Retirement Enhancement. While some provisions are intended to raise revenue, most of the changes are designed to boost retirement savings. While there are many tax changes, I will briefly (i.e., not detailing all of the nuances) describe just the three biggest changes affecting clients in this blog post.
  • It’s hard to believe that a new year is upon us. But this January marks more than just a new year, it brings a new decade as well! The allure of a fresh start gets many people excited and ready to make healthier choices for themselves and the people around them. This often leads to creating a laundry list of resolutions—things we want to change or alter about ourselves to help us reach a certain end-goal. But as you know, either by proxy or first-hand experience, resolutions don’t always work. In fact, nearly 80% of people who make new year’s resolutions break them by mid-February. So why do we start each year with a statement, wish, or promise that will most likely not get us through winter? Resolutions come from a place of positivity and introspection. They are a catalyst for change but perhaps aren’t the most efficient vehicles to help us get there. This year, you can do something different. You can change your resolution into something that can help you make the change you wish to see: a goal. Turn a resolution into a goalA resolution is simple. It is a decision to either do or not do something. A goal, on the other hand, is more complex. A goal is the object of a person’s ambition, it is their aim or desired result. A resolution is something you do (well, for only 8% of the year at least) and a goal establishes a pattern of behavior to help you reach a result. When you start to set new goals for yourself, you are working toward a larger purpose. This ideal helps you set big-picture goals knowing that it will take time, dedication, and attention to get there. This is what sets goals apart. By nature, they are something to be worked toward. They aren’t a quick fix, rather they ask more from you. This difference can make a huge impact on the way you think about your finances. For example, some people make a resolution to spend less in a given year. This is an arbitrary statement, one that doesn’t have a purpose behind it. Instead, ask yourself some questions to help get at the root of the problematic behavior you wish to change. What areas in your life are you overspending? Do you know of any large expenses coming up? How can you plan for your spending in a more comprehensive way? Making a resolution like the one above doesn’t work because it fails to answer these and other questions about the larger implications. If you decided to create a goal, however, to revamp your budget by saving an extra $50 each month for gifts so you don’t overspend during the holidays, you are establishing a healthy pattern for you and your finances. Creating financial goals is an important part of your financial plan. As you work to create your goals for the new year, think about the things that are coming up in your life. What do you want to work toward this year? What financial resources will be needed to help you reach your goals? Are there any changes you’ll need to implement to help you get there? The most important thing is that you don’t create your goals in a vacuum. They need meaning, value, and purpose. Give your goals a purposeCreating a goal for yourself isn’t enough to help you establish healthy patterns with your finances. When you create your financial goals, it is important to give them meaning and intention . Your goals should be specific and particular to your life. As you create your goals, take some time to think through how they answer the following questions: What are your core values? How are your goals aligned with those values? What areas of your financial life could be improved by refocusing them on the people, places, and things that mean the most to you? In what ways will reaching these goals enrich your life and the lives of others? By creating goals that answer these questions, you are bringing an added level of intention into your financial life. When your financial habits are aligned with your values, you will be more likely to make smart, positive choices that help lead you to your goals. When talking about setting new goals, many people are concerned about sticking with them and one of the best ways to stick with your goals is by creating them with the intention behind them. That intention will help give you the motivation you need to make the choices that will help you reach them. Create your goals togetherRemember, your financial goals shouldn’t be created in isolation. Include your spouse or your loved ones as you set and work toward your goals. When you work together, you will each be able to help and support each other throughout the journey. Along with your spouse, you can also make your goals with your financial planner. As you think about what this new year will bring, you may realize that working with a professional is the right move to help you get your finances where you want them to be. Just like someone who wanted to get in shape but didn’t know where to start may hire a fitness coach, someone who wants to get their finances in order but doesn’t have a clear direction would really benefit from working with a planner. A planner can help give you the tools you didn’t even know were there and can provide you with the resources and support to set, reach, and stick to your financial goals. Here at Step by Step, we believe that cultivating good financial habits will help you reach your goals. We would love to work with you to help you discover your goals and carve a path to reach them. Set up a time to talk to us, we can’t wait to hear from you!
  • Are you feeling a little remorse about the money you spent over the holidays? There is an online meme where a parentjokes about taking all of the holiday presents back because the children are behaving. Isn’t that how it is with the things we buy sometimes? They don’t produce the expected result or function quite [] ©Bring Clarity to Your Finances™. Dont Let Holiday Spending Guilt Trip You Up is a post from Bring Clarity to Your Finances™
  • I have noticed over the years that clients that have financial peace of mind also have is to sufficient liquidity or cash on hand/emergency funds.   Having these funds available helps me and others feel a greater sense of abundance.  It helps cover the financial chaos of life and the ability to pay for life… [Continue] (Feed generated with FetchRSS )
  • A new movie version of the classic novel Little Women will be in theaters during the holiday season. The book’s author, Louisa May Alcott, wrote a book about young women that was suitable enough to sell but also included some of her own unconventional ideas in the text however she could and offered various illustrations [] ©Bring Clarity to Your Finances™. Amys Will: Estate Planning in Little Women is a post from Bring Clarity to Your Finances™
  • Spend time working on your finances and approach it as an opportunity. Wealthy people devote at least 2 hours a week thinking about and managing their money. If you don’t understand finances, educate yourself.
  • IRMAA stands for Income-Related Monthly Adjustment Amount, and it applies to Medicare Part B and Part D premiums. In layman’s terms, if your modified adjusted gross income is above a certain level, there is an additional surcharge to your Medicare Part B and Part D premiums. Unless you like paying more for Medicare, IRMAA is something you would want to avoid, if possible. (Feed generated with FetchRSS )
  • What is your favorite combination? There are so many incredible pairs out there: chocolate and peanut butter, salt and pepper, pen and paper, the list goes on and on. But one dynamic duo that you may have left off the list and go just as well (if not better) together is tax preparation and financial planning. Now, you may be thinking that this combination isn’t nearly as enticing as the Reeses cup brownie you’ve been trying not to snack on, but tax preparation and financial planning complement each other in many vital ways. Today, I am excited to dive into the relationship between these two tools and how they truly are better together. What is tax preparation?Tax preparation is an annual process where you prepare your financial documents (and checkbooks) to send to the IRS. Many people are intimidated by tax preparation because of the nuances and intricacies of the process including deductions and ever-changing tax law. The IRS has various rules and regulations and if not filed correctly can lead to bigger headaches and costly penalties which leads people to seek help when filing season comes around. Traditionally, you would need to seek out this service separate from your traditional financial planner. Why is that? Well, tax preparation and financial planning require two different types of work. Financial planning looks at your comprehensive financial strategy and helps you make smart choices to build your wealth and live the life you want. Tax preparation, on the other hand, is a process that happens once per year. Often people assume that their financial planner will also help them prepare and file their yearly taxes, but that often is not the case. The two are quite different in terms of process and function which leads them looking for a different tax professional. But we believe that the two should go hand-in-hand, and we build in tax preparation services into each offering for our clients. Tax prep requires strong knowledge in tax law, IRS rules and regulations, and fluency in the proper paperwork, timing, and other procedures. We find that tax preparation is a pain point for our clients and have decided to do things differently: combine planning and tax preparation together. How they work togetherIn financial planning, we talk about taxes all the time. Tax planning is another facet of our business and something that we believe is integral to helping clients reach their goals. Tax planning is different from tax preparation because tax planning is a comprehensive strategy that promotes healthy, tax-efficient fiscal habits that will help you build wealth over time. Tax planning is woven into so many aspects of your financial plan that you may not even realize such as: Contributing to retirement accounts Charitable giving strategies Tax bracket considerations Diversification in asset management Using various savings channels We focused on so many tax-efficient strategies for giving to charities over the past couple of months from donor-advised funds to qualified charitable distributions , to legacy planning all of which are done in a way to be as tax-efficient as possible. Once we have implemented these tax-friendly strategies into your financial plan, it doesn’t stop there. We help you actually navigate the results of those moves and ensure they are accurately reflected on your tax return. By combining financial planning, tax planning, and tax preparation, you are able to feel confident knowing that you have a comprehensive strategy in place and that each piece of this puzzle is taken care of. The Step by Step wayHere at Step by Step, we believe that strong financial planning and precise tax preparation go hand in hand. Each has its own place in your overall financial strategy and with us, you know that both of them are getting done right. We know our clients: their goals, values, and priorities which gives us the wonderful opportunity of being able to assist them in a personal way. We incorporate tax preparation into each service that we offer so that you don’t have to stress when tax time comes. Tax preparation is never an added cost, it is simply just part of who we are and how we believe in serving our clients. Your financial readiness and confidence are so important and by offering both services, we set you up for greater financial success. Taxes can be confusing and stressful for many people, and we want to do what we can to alleviate that stress. We are passionate about the role that strong financial planning and accurate tax preparation play in your financial landscape and would love to see what these services can do for your finances. If you would like to learn more or figure out how this process could work for you, give us a call . We can’t wait to hear from you.
  • 2019 Year in Review

    The kids are growing fast and exploring new activities. Carsyn “retired” from both karate & gymnastics and is now heavily involved in a dance program that includes ballet, jazz, tap, and hip hop. Meanwhile Brody continues to enjoy gymnastics and is excited to start ski lessons in January.
  • 2020 is nearly upon us and with it comes higher employee contribution limits for 401k plans. Of course, not everybody is in a position to contribute the max. But no matter how much you are contributing now, I encourage you to increase it for 2020. If you are contributing nothing right now – start with []
  • Navigating the transition into retirement can be difficult because so many things change! From where you live to how you spend your time to planning for your future, your life is seen from a new vantage point. A topic I see many retirees struggle with is incorporating their charitable efforts into their estate plans. Your charitable ambitions have helped guide your life from the organizations you support to all of the wonderful relationships you have sustained along the way and your passion for giving can also shine through as you plan for your legacy. Let’s explore a few simple action items that you can do to help make your legacy a charitable-focused one. 1. Understand your charitable goalsYour goals are the bedrock for your financial strategy—they inspire your decisions and motivate you to give your life a purpose. So many people find fulfillment and greater meaning in life through the charitable efforts they support through both using their time and financial resources. For you, this effort could be focused on your church community, one where you nurture the financial as well as relational components, a place where you develop a community. Since your community has been so instrumental throughout your life, it only makes sense that you wish to build-in that continued support into your legacy. The first step is understanding what your charitable goals are. Let’s start with a simple question: What does a charitable legacy look like to you? This is a question that only you can answer and it will look different for everyone. For you, it may be that you want to donate a percentage of your estate to your church or charity or perhaps you want to set up a scholarship fund for kids in your community with similar charitable drives as you, or you might even want to set up your own charity or foundation. No matter your goal, start by defining it and working through what your ideal situation would be. With prudent planning and adequate savings, you will be able to incorporate the things that matter most to you in your legacy. Because, after all, your legacy is yours. It should be specific to you and your goals and dreams for the future. If you are struggling to think through how this could take shape, take a step back and evaluate your current charitable efforts. What are you doing now? Is there a way that you can use your current work and build it into part of your legacy? Who can help you attain that? It will be more helpful for you to create a plan when you have a clear understanding of your goals. 2. Amend your estate planYour estate plan comprises of so many documents that outline the plan for your assets. When you are looking to include charitable efforts into your legacy, it is important to focus on the documents that can help you achieve that goal. Once you understand your goals, you will be able to work through the best strategy to implement those goals. That will also help determine the type of assets that will best serve your goals whether that be cash, assets, real estate, or other possessions such as fine art or antiques. You can make this happen by stipulating these wishes in your will. Keep in mind though that your will most likely will need to go through probate, a legal process of authenticating a will and ensuring all assets are distributed properly, which can trigger additional taxes and expenses. There are other vehicles for supporting charitable efforts in your estate plan including a charitable gift annuity, donor-advised fund , family foundation, and appreciated assets. Not every option will be the right fit for you, but with the help of your financial and legal team, you will be able to create an estate plan that is as generous as you. Estate plans aren’t set in stone. You can alter them as you go along and make edits if a significant change occurs in your life. Estate planning is a process and one that is custom to your goals, values, and priorities . 3. Include your loved onesYour loved ones are an important piece of your legacy. How will they impact your legacy? Will you also be leaving assets for your loved ones? Figuring out how you want to include your loved ones in your estate plan can be tricky but be sure you are encouraging an honest dialogue with them. When you are mapping out your plan for your charitable efforts, invite them to join you in these conversations. Spending this time together will allow you to openly express your wishes and get their input on the plan. Open, honest communication is especially important with tough subjects such as these. Legacy planning is a complex process. Take some time to evaluate your value set and uncover how your charitable efforts fit into that. You can incorporate charitable efforts into your legacy in many ways, it is just about finding the way that stays true to you and the people you love most. We are so passionate about extending our hands to help people hone in their charitable efforts. If you would like to discuss your ideas for including charitable giving into your legacy, give us a call . We can’t wait to hear from you!