Tax Planning Strategies for People in Their Sixties
There are some unique tax planning considerations for people in the phase between retirement from full-time work and age 70. In this blogpost I discuss some of those strategies. In working with my financial planning clients I have discovered over time that many end up in a phase where their income (and thus their tax rate) is lower than when they were working full time and lower than what it will be after age 70, when they will be collecting Social Security and taking required minimum distributions from their IRAs and 401(k)s. In addition,...
read moreHow Well Are You and Your Portfolio Weathering the Recent Stock Market Volatility?
During 2018 and into the early part of 2019, volatility has returned to the stock market. Daily swings of 300 to 400 points have not been unusual and are unsettling investors. Is this volatility normal? How are you and your investment portfolio weathering this volatility? What should you be doing to protect your investments? For long-term investors, having a well-diversified portfolio and an historical perspective of the market may provide some comfort. In 2018, volatility returned to the stock market. On February 5, 2018 after an epic...
read moreWhy I Believe in Investing in Treasury Bonds and Not Corporate Bonds
In this blog I explain why I typically recommend Treasury Bonds and not Corporate Bonds when developing an asset allocation recommendation for my clients. For those who are not familiar with bonds and how they work, bonds reflect money that a company or governmental entity borrows to finance some activity. The lender (investor) provides a lump sum of cash to the borrower and in return receives semi-annual interest payments for the term of the bond. The lump sum is returned to the investor when the bond expires. The rate of return is fixed,...
read moreOptions to Ease the Burden of Repaying Student Loans
A mortgage loan, a car loan, and credit card debt are all obligations that young people traditionally encounter as they start their new careers after earning a college degree. Now, more than ever, young people are having to manage another form of debt—student loans. The numbers are staggering: there are over $1.5 trillion in outstanding student loans nationwide, nearly 70% of students graduate with debt, and the average student loan balance is over $30,000. Given these balances, it is not surprising that 25% of borrowers are delinquent on...
read moreHow the Shift to 401(k)s Changes Your Retirement Equation
Over the last twenty-five years there has been a major shift by employers away from defined benefit pension plans and towards 401(k)s. This shift has major implications for preparing for retirement. In this blog I discuss some of the philosophical and practical implications of this shift. One profound change is that individuals now shoulder the responsibility of saving for retirement. With a defined benefit pension plan the employer typically decided on the amount contributed by both the employer and the employee to the plan. Employees...
read moreWhat Is the Real Cost of a College Education?
One of the significant decisions a young adult makes is what they will do once they graduate from high school. For many, the decision is to attend a four-year college. Likewise, many parents envision their child moving on to get a quality education that leads to a good paying job which sets the graduate on a path to financial independence. Years ago, the college decision involved, which colleges or universities accepted a student based upon their grades and test scores. From there, the student would make their choice based upon which school...
read moreThinking About a Career Change? Know Someone Who Is?
My business is growing, and I am looking for others to join me who want to help people with their financial future. The purpose of this blog is to reach out to my network to see if you or someone you know might be interested in taking a path similar to my own. Many of you who receive this blog know my story, but for those who don’t here is a brief recap. About a decade ago my wife and I sought out a financial planner and really struggled to find someone who we felt had our best interests at heart and charged a reasonable fee. I realized then...
read moreDid You Know That Your Income Can Impact Your Medicare Premium?
Medicare Part A and Part B are the primary insurance coverage for many retirees. While people pay Medicare taxes during their working years based on their earned income, Medicare Part B insurance is not free during retirement years. In fact, the cost of Medicare Part B can even increase if you enroll in Part B late or if your earnings reach certain income levels. As you look ahead to Medicare Part B enrollment, be aware of the enrollment deadlines and consider how your income will compare to the income levels that trigger premium adjustments....
read moreWhy Most People Should Delay Collecting Social Security until Age 70 Even if They Retire Earlier Than That
The decision on when to begin collecting Social Security is one where I find the greatest divide between what is in the best financial interest for most people and what they are inclined to do. Lately I have seen articles in the press arguing for taking Social Security early — and ignoring the conventional wisdom that it is better to wait. But as I read through the articles I don’t find any math that supports the argument for early withdrawal. My sense is that these articles are appealing to what many people want to hear, not what the actual...
read moreThe “Tax Cut and Jobs Act”: Tax Reform and What It Means to You
As the year winds down, Congress has been feverishly working to pass its final tax bill, the “Tax Cut and Jobs Act.” With the passage of the bill in both the House and Senate this week, the signing of the bill by the President will enact into law the most significant reform of the individual and corporate tax structures since 1986. The changes will undoubtedly impact every individual taxpayer in 2018. So what are the major changes that taxpayers need to know? This blog outlines these changes to assist you in preparing for 2018, and, as...
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