It’s almost Election Day in the US once again. While the outcomes of the elections are uncertain, one thing we can count on is that plenty of opinions and prognostications will be floated in the days to come. In financial circles, this will almost assuredly include any potential for perceived impact on markets. But should long-term investors focus on midterm elections?
Market Pulse Second Quarter 2018
This article examines relevant investment and economic data for the second quarter of 2018.
Understanding Required Minimum Distribution (RMD) Rules
Required Minimum Distribution (RMD) Fast Facts: Required Minimum Distributions (RMDs) are based on: December 31st account values and… A person’s life expectancy There is currently no annual RMD requirement on Roth IRAs Neglecting to take a RMD can result in a penalty of 50% on the amount of the required to be withdrawn Required Minimum Distributions: A Deeper Look Those …
Special Needs Planning: An Introduction to ABLE Accounts
Families of those with special needs have historically had limited options when accumulating funds for their loved one’s future. Especially, without jeopardizing their continued eligibility to Medicaid and other support programs. As surprising as it may seem, accumulating as little as $2,000 in a disabled person’s name could potentially render them ineligible to receive much needed assistance and access to …
Planning for Life in a Retirement Community—Things To Consider
There is no doubt that people are living longer and enjoying a higher quality of life in their retirement years. Given the high demand of retirement communities, which can include independent living and assisted living alternatives, many are taking a proactive approach in evaluating and moving into these communities—prior to health changes that could warrant the necessity to move in. …
Education Savings: 529 Plans or Coverdell Education Savings?
This article discusses differences between 529 College Savings Plans and Coverdell Education Savings Plans
Tax-Efficient Investing and the Importance of Asset “Location”
Asset “location” – which types of investments should be held in which accounts -is different based on your stage in life. An accumulator and a retiree should have a different investment strategy.
A Look Back on Black Monday: October 19, 1987
It’s hard to believe that it’s been 30 years since “Black Monday,” the day the stock market declined a whopping 22.6%! Although I was merely a sophomore in high school, I remember the day quite well. Having my first real job and being a “saver” by nature, I had just become interested in investing. I had recently invested in a …
You are Never Too Old (or too Young) for a Roth IRA!
The ability to contribute to Roth IRAs can represent one of the most beneficial financial planning decisions that people can make for their future. Roth IRAs were established by the Taxpayer Relief Act of 1997 and while most people are aware of the name, they may not be fully aware of all of the benefits. A Roth IRA is an …
Estate Tax Planning: Be Proactive and Know Your Options
The federal estate tax generally only applies to those who die with assets that exceed $5,490,000 (in 2017). While only about 0.2% of the population is subject to the estate tax, those who are impacted can be faced with a significant estate tax liability as the estate tax rate quickly exceeds the 40% mark! Here is a simple example of …
Sequence of Returns Risk: Considerations for New Retirees
Research has shown that the timing of one’s retirement can be important – especially as it relates to investment returns in the early years of retirement. Someone who retired just prior to the “Great Recession” could have experienced significantly larger portfolio “drawdowns” than someone who retired during a period of economic expansion and higher investment returns.
The Fear of Missing Out
In a recent BARRON’S, it was reported that the American Psychiatric Association recognizes more than 100 different types of phobias. But what’s causing widespread anxiety in the markets now is one that might not make that list of fears. That would be “The Fear of Missing Out.” While the Standard & Poor’s 500 index was mostly flat since March 1, …
Donor Advised Fund Comparison
In our article, Charitable Gifting Using Donor Advised Funds, we provided some insight into donor advised funds and listed some of the many benefits that the charitably-minded could garner from using donor advised funds as a component of their charitable gifting strategy. As a follow up to that article, we wanted to provide some information that could be helpful when vetting custodians who offer donor advised funds.
Teaching Your Grandchildren Money Values
If you’re a grandparent, you likely already offer support in a lot of ways including financial and emotional. But you can also provide practical help. A frequently overlooked area where you can definitely make a difference is with your grandchildren’s personal financial education. Some of us were lucky enough to have a grandparent who we considered a great friend. We …
2017 Tax Law Changes
Happy 2017! As we begin a new year, it’s always important to re-examine certain elements of your financial plan – especially things that relate to tax planning. Here are a few of the more common items that may impact your financial situation this year. Social Security & Medicare Part B For those receiving Social Security, there is a cost of living …
Part 2: 10 Years from Retirement, What is Your Financial Focus?
In Part 1, we discussed the importance of tracking and managing your living expenses, as well as, making projections around how much you will spend in retirement. We also stressed the importance of making strategic Social Security decisions. In this article, we wanted to spend some time addressing pension decisions, ideas for strengthening your personal balance sheet and helping you think through how much money you will likely need during retirement.
Republican or Democrat: A Historical Perspective on Stock Performance
Many of our clients have asked how what will happen to the stock market if Candidate(X) wins the election. Get a historical perspective of the impact an election may have on the stock market.
Charitable Gifting Using Donor Advised Funds
Donor advised funds can be a great tool in your charitable gifting strategy. This article discusses attributes and unique features of donor advised funds.
Should You Consider a Revocable Living Trust?
Revocable Living Trusts can serve an important role in your estate plan, but they aren’t for everyone. Find out more..
Tax Free IRA Gifts To Charities Are Now Allowed
For those of you who are charitably inclined and over the age of 70 ½, we have great news that could impact your charitable gifting strategy! In December 2015, Congress made permanent the ability for taxpayers to divert their required minimum distribution directly to a qualified charity. The ability to make this charitable election, technically called a Qualified Charitable Distribution …
Have You Reviewed Your Beneficiary Designations Recently?
Have you confirmed the beneficiary designations of your 401k, IRA, or life insurance policies recently? If not, you should! Find out why.
Common Social Security Questions
Here are answers to a number of common questions regarding your Social Security benefits.
2015 Market Review
U.S. blue chip stocks managed to squeak out a small gain in 2015, but required nearly a 7% advance in the fourth quarter to do so. Stock prices of smaller companies, on average, fell by about 4.5% for the year.
2016 Tax Planning Opportunities
Congress has given the gift of a new tax bill at the very end of the year. This article highlights several provisions included in the 2015 tax bill that could impact you.
2016 Contribution Limits for 401(k) plans, IRAs and Roth IRAs
Find out the maximum contribution limits that can be made to most retirement savings accounts including 401(k) plans, 403(b) plans, traditional and Roth IRAs for 2016.
Social Security and Medicare Changes for 2016
On November 2, 2015, President Obama signed into law the Bipartisan Budget Act of 2015, legislation that raises the federal debt limit and establishes the framework for a two-year budget deal. The legislation, necessary to avoid an impending default on U.S. debt, also contains multiple unrelated provisions, including an elimination of two Social Security retirement benefit claiming strategies and a …
Understanding Risk—Capacity, Tolerance, Perception & Risk Required
This article explores four elements of an investor’s risk profile – risk capacity, risk required, risk tolerance and risk perception. Understanding each type of risk is an essential element of building an investment portfolio that can both meet your specific investment needs, while allowing you to sleep easy during times of personal and financial stress.
Snow Day with CNBC
This winter was brutal—especially by North Carolina standards. Being snowbound for a couple of days, I found myself being drawn to CNBC (the business news network), where economist, portfolio managers and market pundits discussed the financial markets, the economy and a host of other financial topics.
Dementia – Do You Have a Game Plan?
Increasingly, families have to figure out how to best deal with dementia and other memory-related impairments that naturally happen as people age. This is especially true when navigating the complex and often times confusing area of personal finances. So, what can you do to prepare yourself should you, or a member of your immediate family develop dementia? Here are a few ideas that you may find helpful.
Pension Decisions – Consider Your Options
There is no doubt that pensions are an extremely important asset and making decisions regarding these plans can be daunting and stressful. This is especially true since pension decisions are irrevocable! This article addresses common questions that should be considered when making decisions about your pension.
Preparing Your 2014 Tax Return
Tax season is upon us. Find out what you need to know to make this tax season painless and worry free!
Investor Beware of Year-End Capital Gain Distributions!
It looks like 2014 is going to be a huge year for mutual funds making capital gain distributions. While on the surface capital gains sounds like a good deal, but in reality they can pose a tax nightmare for some investors – especially people who invest in mutual funds in non-retirement (taxable) accounts. This article explains the problem with mutual fund distributions and provides a resource for those performing year-end tax planning.
Considerations for End of Year Tax Planning
Are you seeking ideas to reduce your tax burden this year? This article provides insight into a number of financial planning strategies that could prove effective at reducing your taxes in 2014.
Strategic Methods for Charitable Gifting
This article provides insight into a number of strategies and methods for making charitable gifts.
Before Your Meeting with an Estate Attorney…Ask Yourself
In order to make your meeting with the estate planning attorney more efficient and productive, here are few items that you need to think about or decide on.
Surviving the Financial Stress Test
When making financial planning and investment decisions, we believe that it is important to consider the probability of negative outcomes. We call this “stress-testing” a financial plan. By stress-testing financial planning assumptions, we are able to help our clients identify and protect against financial risks that could derail their financial plans.
Long Term Care Insurance—Is it time to consider a hybrid?
Normally, when someone mentions hybrids they are referring to fuel-efficient, money-saving cars. Like hybrid cars, the intention of hybrid long term care insurance policies is to provide cost-saving insurance coverage by combining both life insurance (or an annuity) with long term care coverage.
Common Questions about Social Security
Many people have questions regarding their Social Security retirement benefits. This article addresses several of the more common questions that people often ask us.
Considerations for Retirees: Which Account?
When it comes to taking account distributions in retirement, which account is best – IRAs, Roth IRAs, Brokerage accounts or 401k plans? Also, are there tax strategies that could be employed now to minimize taxes in the future?
Has Investor Complacency Arrived?
With over 20 years in the investment industry, we have helped clients navigate through a number of economic and market cycles. Through the years, we have developed our own set of descriptive names that are used as an indication of where we are in the market cycle. These names are generally based on client emotions and range from “malaise” to “exuberance”. Currently, we are in what we call the “investor complacency” phase.
Chip Hymiller, CFP® Interviewed about Financial Wellness
Chip Hymiller, CFP® was recently interviewed on the show Community Matters with host, Bill LuMaye. The topic for the show was financial wellness. Chip’s segment of the show highlighted the need to prioritize financial goals, manage debt and develop a strategic long term plan.
An Estate Planning Review Checklist
When it comes to financial planning, one of the easiest and most important things to accomplish is an overall review of your estate plan. We suggest that you review your estate plan every couple of years or when there are changes in your family that may impact your estate planning. Here is a checklist of estate planning items to review that may be helpful.
2014 Tax Law Changes
There are a number of important tax law changes that may impact your financial planning decisions this year. Here are several of the most common changes that you need to be aware of.
401k, IRA and Other Retirement Plan Contribution Limits for 2014
With the changing of the year, it is important to review your retirement savings strategy. Here are the 2014 contribution limits for the most common types of retirement plans.
Intra-Family Planning: 5 Wealth Transfer Strategies to Consider
Through hard work and sound financial planning, some find themselves in situations in which they are contemplating intra-family financial planning. That is, identifying financial planning techniques that can be used to financially strengthen the next generation—children and grandchildren.
Understanding Investor Biases: A Key to Sound Long Term Investing
Emotions can play a major role when it comes to investing. Understanding common investor biases can help prevent costly investment mistakes.
Headwinds or Head Fake?
Is the economy strengthening, or will economic growth stall with the discontinuation of quantitative easing? Here are some thoughtsto consider.
What You Need To Know about the Affordable Care Act
The Affordable Care Act (also known as “Obamacare”) was signed into law in 2010, but many of the provisions do not commence until 2013 and beyond. So, what does that mean for you? In this article, we will explore the new health insurance mandate and specifically, how it may impact your income taxes.
Managing Taxes During Retirement: An Ongoing Concern
When taking withdrawals from your investment portfolio during retirement, making tax-efficient decisions can save you thousands. Find out how…
Retirement Planning and the Cost of Long Term Care
When planning for retirement, it is important to consider the possibility of an extended need for long term care. Can your assets withstand the cost of long term care? Under what circumstances should long term care insurance be considered?
What are the benefits of tax planning?
This video discusses several important reasons why tax planning is such an integral component of the financial planning process.
Be Proactive When Helping Aging Parents with Their Finances
Let’s face it, in today’s world, managing your personal financial affairs can be complex. There are many decisions that need to be made on a weekly or even daily basis. For a large and growing segment of the population, who are trying to help (often unwilling) aging parents with their finances, this can be incredibly frustrating, stressful and burdensome.
Education Saving: Know Your Options
With nationwide college costs continuing to rise, it has never been more important for parents to develop a savings strategy to help cover these costs.
Highlights of the Taxpayer Relief Act of 2012
For the last several weeks, the media spent a great deal of time covering the fiscal cliff and the upcoming changes in the tax code. At the eleventh hour, Congress passed the American Taxpayer Relief Act of 2012 that seeks to solve some of the tax questions that have been hanging over our heads for the last several months.
Seven Essential Elements of a Sound Estate Plan
An adequately planned and properly executed estate plan can ensure that your assets will pass directly to your intended heirs with the least amount of cost and hassle. Here are seven essential elements when establishing a sound estate plan:
2013 Contribution Limits for IRAs, 401(k) Plans and Other Retirement Plans
Contribution limits to IRAs and other employer-sponsored retirement plans have changed for 2013. Here are the most recent deferral limitations:
Chip Hymiller Interviewed by N&O About Fiscal Cliff
The News & Observer recently interviewed Chip Hymiller, CFP® to ask his opinion about the Fiscal Cliff and what it could mean for investors. Click here to read his response.
Confidently Confronting Uncertainty
Do you want to take control of your finances? If so, find out what you need to do now to begin making progress toward your financial goals.
Retirement Plans for Small Business Owners
Small business owners have a number of alternatives to choose from when it comes to establishing retirement plans for their business. Each plan type can vary in their contribution level and matching requirements, as well as their ongoing regulatory and administrative burden.
Economic Indicators – What do they tell us?
As investment advisers it is important to have an understanding of the economy and its direction. Here are descriptions of several common economic indicators and what they can tell us about the economy.
Which Portfolio Accounting Method is Best?
How do you track the cost basis on investments held in your taxable portfolio? What portfolio accounting method does your broker, custodian or advisor report to you or your CPA? This is a decision that, for some investors, can save thousands of dollars in taxes and ultimately make a significant difference in a portfolio’s after-tax rate of return.
Mutual Fund Share Classes Defined
Many investors are confused by the myriad of choices when it comes to mutual fund “share classes.” This article explains key differences in the various mutual fund shares classes.
Is Your Financial Advisor a Butcher or Dietician?
This whiteboard sketch video from HighTower Advisors is a great video that beautifully illustrates the difference between fiduciary advisors and brokers.
The Importance of Beneficiary Designations
When we begin new client engagements, one of the first things we review is whom our clients have chosen as their primary and contingent beneficiaries on life insurance policies, qualified plans and IRAs. There have been many occasions that we discover a serious mistake or oversight during this process.
Should You Payoff Your Mortgage?
One of the major goals that most people have is to, at some point, be debt free. This is a goal that we (Chip and Erin) strive for in our personal lives and we highly encourage our clients to prudently consider as well. In fact, research has consistently shown that people with manageable debt levels tend to be happier than …
Coverdell Education Savings Accounts vs. 529 Plans
Parents have many different options when it comes to saving for their children’s educations. There are UTMAs, savings bonds, Roth IRAs, Coverdell Education Savings accounts and 529 Plans, just to name a few. Each person’s savings strategy is different depending on how the money will be used, the income of the parents, the future cost of the education and the …
Financial Planning for Children with Special Needs
Parents with special needs children can face a unique set of financial challenges. However, like all financial challenges, it is important to take measures early to financially prepare for the future. Here are a number of financial planning ideas and considerations for those parents who have special needs children:
Spring Cleaning Your Financial Files
We often receive questions about how long certain financial records should be retained. The IRS, through Publication 552, offers some guidance with regard to recordkeeping for individuals. Their recommendations are based on the following deadlines:
Beat Inflation With I Bonds
In a prior article, we discussed the importance of maintaining an emergency fund. We offered our insight into how much is appropriate to keep in cash or savings, as well as emergency fund targets. As a result of that article, we were asked the question: “Where can I invest my emergency fund, such that it earns an interest rate that …
Establishing An Emergency Fund Target
Do you know the factors to consider when establishing an emergency savings account? This article discusses things to consider when establishing and maintaining an emergency savings fund.
Alternatives for Avoiding Probate
Many people would prefer that their estates avoid the probate process. While the probate process is not overly costly in most states, it is generally considered a hassle to those who have experienced it. The following is a discussion on several alternatives for avoiding probate.
Planning for Retirement and Increasing Life Expectancies
Let’s face it, seniors today are healthier, more active and are likely to have longer lives. So what are the financial implications for retirees who will likely live well into their 80s and possibly their 90s? We believe that from a financial standpoint, retirees need to make financial planning decisions that reflect the high probability that they will live longer. Here are a few recommendations to consider.
Should You Delay Collecting Social Security Benefits?
On the surface, it would seem that the decision to begin collecting Social Security retirement benefits is a straight-forward one – take the money as soon as possible. However, for many people, taking their Social Security retirement benefit as soon as they become eligible may not be the best alternative.
Increasing Your Odds
As we help clients make long-term financial decisions, we also like to consider the probability of various negative outcomes. While we consider ourselves generally optimistic people, we believe that it is both important and helpful to also think about “worst case scenarios” – those financial uncertainties that have the potential to derail financial goals.
529 College Savings Plans FAQ
I can tell you from experience that children grow up fast! It is very hard for me to believe that my sweet daughter, Abbey, will be starting kindergarten soon. Five years have passed in the blink of an eye!
Section 529 College Savings Plans can be an excellent tool when saving for college. While there are many benefits when using the 529 Plan, there are also a number of drawbacks. Here are a number of frequently asked questions:
Should You Consider a Roth Conversion?
With the belief that tax rates are likely to rise over time, many people are considering the merits of converting their traditional IRAs into Roth IRAs. Here are a number of considerations that may impact your decision.
PBS Interviews Beacon Financial Strategies’ Erin Campbell
Erin Campbell is interviewed by Mitchell Lewis, host of the PBS series NC Now. In Erin’s segment (starting at the 5:05 mark in the video), she discusses ways to prepare financially for disasters.
Retirement Distribution Planning – Which Account?
During retirement, is it best to take distributions from IRAs, Roth IRAs or personal brokerage or savings accounts? The decision of “Which account?” is an important one with many factors to consider.
Social Security Retirement Benefits
Social Security was originally intended to provide older Americans with continuing income after retirement. As people approach retirement, they generally have questions about Social Security and the benefit it provides.
Headline Risk
In our office, we talk quite a bit about risk. Financial risk, and more importantly, identifying strategies to help our clients mitigate or manage those risks is a very real and important component of the financial planning process.
The Basics of Long Term Care Insurance
Long term care costs are expensive and rising every year. For many, a two or three year stay in a skilled nursing facility could cost several hundred thousand dollars and potentially wipe out a retirement nest egg.
Do you need a Trust for your children?
Most parents take certain steps to protect their children in the event of their premature death. Drafting a will or other estate documents, designating a guardian, obtaining life insurance and naming appropriate beneficiary designations on IRAs and 401k plans are all important components of an effective estate plan that serve the purpose of protecting your children. However, most parents should take additional measures to provide guidance on how their financial assets are managed for their children’s benefit.
Common Types of Trusts Used in Estate Planning
Many financial planning objectives can be accomplished through the utilization of trusts. Here are several of the most common types of trusts and a brief overview of their purpose:
Common Estate Planning Mistakes
An effective estate plan can ensure that assets pass directly to the intended heirs according to the deceased wishes and with the least amount of cost. Without a properly executed estate plan, heirs can be left with a big mess and lots of hassle. Here are a number of estate planning mistakes that, if avoided, can ensure an efficient distribution …
Now Is the Time!
Is there another crisis looming? We have been getting this question quite a bit recently from clients, as well as from other professionals in our network. This is a good question. After all, many things can go wrong.
Ease the Estate Settlement Burden
This article discusses several simple items that can help ease the estate settlement burden on your heirs.
Tax Relief and Job Creation Act of 2010
Well, Congress finally enacted the tax reform bill that many have been anticipating for some time. In general, the new law extends the Bush-era tax cuts for two years and provides taxpayers with some certainty during this period. While this comprehensive piece of legislation covers many aspects within the tax code, here is a summary of some of the major points.
What is YOUR Number?
We are often asked the question, “How much money do I need to retire?” While it is impossible to answer this question definitively as every situation varies, we do maintain mental benchmarks that are based on a number academic studies as well as our overall experience conducting Retirement Feasibility Analyses for clients.
2010 Tax Planning – Uncertainty Abounds
As the year winds down, it is always a good idea to review your tax situation to determine if there are ways to reduce your tax liability. However, the uncertainty surrounding many tax changes is proving to make 2010 a very difficult year for tax planning. Here are several items that may warrant consideration prior to the end of the year:
Strategic Social Security Decisions To Consider
One of the most important financial decisions people face with regard to retirement planning is when to start taking their Social Security retirement benefit. Making the most of this decision requires careful consideration of a number of variables including tax, cash flow and even elder care issues. The economic downturn has forced many families to consider taking Social Security earlier than expected. With that in mind, here are some ideas to consider, when making this important decision.
Complete These Financial Action Items in Two Hours!
I have learned that one of the most effective ways to get things done is to work from a “To Do” list. In that spirit, here are a number of very important items that, upon completion, will certainly strengthen your financial situation. The best part…the entire list can be completed in 2 hours!
Try Your Hand at Timing The Market
Vanguard has an interactive tool on their website that allows visitors to compare the results when attempting to time the market based on certain investment rules.
Is that type of insurance necessary?
A key component of our one-time financial planning engagements involve assessing how much insurance coverage our clients need while also reviewing the insurance policies that clients have in order to determine if they are adequate or necessary. In doing so, we often find that people have purchased insurance products that are either not necessary or entirely too costly.
Taxation of Exchange Traded Funds Can Be Tricky
With more than $80 billion invested in exchange traded funds (ETFs), they have become a very popular investment for both retail and institutional investors. While ETFs can be an integral component of a sound investment strategy, investors should understand the tax treatment of these investments in order to avoid unexpected tax consequences.
Market Corrections are not Unusual
he financial markets have experienced continued volatility since the end of April. In fact, with stocks having declined in excess of 10%, the markets have officially entered a period of “correction.” Although corrections are normal (and actually healthy for the markets), many investors may be a bit uneasy, especially with the wounds of the “Great Recession” still fresh in everyone’s mind.
Thoughts on Recent Market Turbulence
Given the turbulence in the financial markets during the week of May 3rd, we would like to provide our blog followers with a few thoughts and insights.
Spring Cleaning Your Financial Files
We often receive questions about how long certain financial records should be retained. The IRS, through Publication 552, offers some guidance with regard to recordkeeping for individuals. Their recommendations are based on the following deadlines:
When it Comes to Life Insurance – Know Your Options
The idea is simple—get enough life insurance to protect your family from the potentially devastating impact of a death. While the concept is straight-forward, as with many components of financial planning, deciding on the appropriate type and coverage level of life insurance is not quite that easy.
The Millionaire Next Door
I recently had lunch with a friend of mine who told me that he had recently read The Millionaire Next Door (published in 1996) written by Thomas Stanley and William Danko. For those of you who have not had a chance to read the book, the authors surveyed over a thousand millionaires to try and identify common attributes that made …
What Grade Does Your 401(k) Get?
Have you ever wondered how your company-sponsored retirement plan compares to other companies? If so, you are in luck – there is a website called BrightScope that has done just that. BrightScope has compiled a massive database of 401(k) plans, providing key information on many 401(k) plans. Rankings are based on the design of the plan and performance of the …
Introducing New Service on the Financial Feasibility of entering a Retirement Community
“Deciding on a retirement community is very difficult from many standpoints, including a financial standpoint,” said Hymiller. “From affordability and financing issues to how the costs may impact other financial goals such as estate distribution wishes or charitable bequests.”