Plan carefully and communicate clearly for a smoother transition of assets
Monday, 26 July 2021
Regardless of how, when, or what amount of money changes hands through inheritance, the wealth transfer process can bring a host of concerns for both parties - benefactors and beneficiaries. Those passing on their wealth and assets may have specific plans on how the inheritance should be managed, while those on the receiving end likely have their own opinions on the subject.
Wealth transfers come with some common pitfalls, many of which stem from communication failures within the family. Whether the issue is a family member with a sense of entitlement or outdated assumptions about roles related to the inheritance, clear communication plays a critical role in removing those barriers to a successful wealth transfer.
Put Your Finances to the Test to Discover Whether You’re Ready for the Unexpected
Monday, 28 June 2021
No matter how financially stable you may be, none of us can predict what the future will hold. The COVID-19 pandemic has been an important reminder of this fact because it showed many of us how money difficulties – even a financial emergency – can appear seemingly out of nowhere. To survive any unexpected financial scenarios that come your way, it’s important to have a plan. Once you strategize your financial emergency plan, you can test it by running a “financial fire drill.”
A financial fire drill is something you’ll want to do now rather than later down the road when something happens. Creating a financial emergency plan ahead of time, without the added stress and emotion of an actual event, will be exponentially helpful. The drill will help you clarify your necessary cost of living expenses and how you’ll be able to cover them. If this kind of financial preparedness is important to you, read on to learn how you can run your own financial fire drill.
What the Biden Tax Plan May Mean for You
Wednesday, 26 May 2021
The first year of a new president’s administration usually brings quite a few changes. After first focusing on COVID-19 economic assistance, the Biden administration has begun to talk more about tax policy, introducing both the American Jobs Plan and the American Families Plan. President Biden’s tax proposals are starting points for congressional debate, and they lack details that will be required for final legislation. Still, they provide a window into the administration’s priorities and give us insight into proposed changes. Below, we will review proposals that could impact high-income earners, as well as discuss strategies that may be beneficial for high-net-worth individuals to pursue.
How to Successfully Pass Down Your Company to Your Heirs
Monday, 26 April 2021
It’s not just a euphemism that small businesses are the backbone of America. They employ about half of private-sector workers and create two-thirds of net new jobs, according to the data. What’s more, most of these businesses are family businesses that get passed down through the years, tying generations together through the dedication and hard work it takes to keep a business running.
While family businesses tend to perform better than non-family companies during economic crises, most are still incredibly vulnerable from a financial standpoint. This becomes especially true when owners decide to retire, and it becomes time to hand over the reins to a new generation. The process of passing on a business is complex and challenging, but these tips can help make it a bit more manageable.
Coronavirus Stimulus Laws Passed in 2020 May Lower Your Taxes
Wednesday, 17 March 2021
It’s not an overstatement to say that COVID-19 has impacted nearly every aspect of our lives, so it makes sense to expect that it is also going to leave its mark on our taxes this year, too. In response to the pandemic, the government instituted new laws such as the Coronavirus Aid, Relief, and Economic Security Act (CARES ACT) and the Families First Coronavirus Response ACT (FFCRA), in the hopes of providing citizens with some economic relief in these hard times.
If you took advantage of any of these stimulus programs, then your 2020 individual tax return and/or business tax return may look different this year.
Four Steps for Starting Your Kids on Their Investment Journey
Monday, 08 February 2021
In many families, kids are granted an allowance or earn money for doing chores, plus they’re likely to amass a bit of savings from birthdays and lost teeth, too. While most start out with a piggy bank and eventually move to a savings account with mom and dad’s help, consider the option of investing for kids. Opening an investment account in their name can be exciting, and it’s a great way to begin teaching them more about personal finance from a young age.
Now, the rules for minors surrounding investing are a bit different than they are for adults, but it’s relatively simple to get your kids started. They may only make a little bit of money, but it’s the education and experience that comes with early investing that is truly beneficial. After all, it’s young adults who begin investing for retirement with their very first paycheck who end up with a tidy nest egg that keeps them set for life.
Plan Ahead to Overcome the Emotional Reactions that can skew prudent Investment Strategy
Wednesday, 13 January 2021
As humans, we are emotional creatures, and our feelings can have a tremendous impact on our behavior. When it comes to investing, this can inhibit our ability to make sound financial judgments. In fact, many poor investment decisions have been made by investors who became too emotional and let their behavioral biases overrun their rational thoughts.
For this reason, it’s crucial to understand how emotion can interfere with your investment success. We all go through life with various ups and downs and hiccups along the way. This can cause fear and uncertainty – both fertile fields for emotional financial decision-making.
Below we will discuss three emotional biases in particular that can wreak havoc on your investment strategy – if you let them.
Savings Considerations for Your Early Earning Years
Monday, 21 December 2020
When it comes to investing, an earlier start means your retirement savings will have more time to grow and you can take full advantage of the magic of compounding. However, many young investors find it challenging to truly focus on saving for retirement, let alone get choosy about the different savings vehicles like Roth IRAs or Traditional IRAs. After all, life is often full of hectic changes and transitions, both at work and personally. If you’re a young investor, you’re in your early earning years when potential job mobility is high, and you’re probably focused on things like buying a home, getting married, and having children. Even if you do find the time and resources to put a bit away for retirement in the midst of all this, you may not believe it’s enough to require a meaningful tax strategy.
Of course, the opposite is true. It is during those early earning years when the true impact of your savings is strongest. The sooner you begin saving – any amount at all – the better off you’ll be in the future when you become much more focused on building your nest egg for retirement.
How Planning Ahead Can Help to Minimize Your Tax Burden in Retirement
Friday, 30 October 2020
Are you saving for retirement with a traditional 401(k) or IRA? If so, you’re probably enjoying the fact that these investment vehicles are tax-deferred, meaning you haven’t had to pay any taxes on your contributions yet. That won’t happen until you take withdrawals from your accounts once you retire.
Most people assume this is advantageous because their income tax rate will be lower in retirement than it is while they’re working, and that’s certainly true for some people. So, for these folks, it’s savvy to save tax-deferred and then pay taxes on their savings later when the tax rate will be reduced. This is the ideal scenario.
So, what happens if your retirement tax scenario is… less than ideal? What if you tap into your accumulated wealth when you retire and, combined with Social Security and Required Minimum Distributions from your 401(k) or IRA, you end up in the same or higher tax bracket? Fortunately, there are a few strategies you can use to minimize the impact of your RMDs in order to reduce taxes, and we’ll discuss each of them below. First, though, let’s review RMD basics.
How to Choose the Tax-Advantaged Account That's Right for You
Monday, 28 September 2020
There’s been a lot of buzz in recent years about Health Savings Accounts and Flexible Spending Accounts – HSAs and FSAs respectively. Both are tax-advantaged accounts that let you save for medical costs, and many companies offer them as options in employee benefits packages. There are good reasons to take advantage of both HSAs and FSAs, but there are key details that differentiate them. Since you typically cannot have both, it’s important to determine which is the better option for you.
When to Use Leverage as a Means for Growth
Wednesday, 02 September 2020
For many people, doctors included, the word “debt” has only negative connotations. After all, most of us took out considerable student loans to finance our educations. However, debt can also be used to your advantage when you leverage it for growth.
Investing for Growth Versus Paying Down Debt
Some doctors are quite comfortable with excessive debt, choosing to invest more of their income in tax-advantaged accounts, while others eschew investing at all in order to throw every available dollar toward erasing their debt. Most doctors, though, fall somewhere in the middle and are constantly asking themselves how to best balance investing in tax-advantaged accounts versus paying down debt.
If you find yourself in this middle ground, here are a few basic recommendations, in order of financial importance:
How to Move Smoothly into Your Next Chapter of Life
Wednesday, 19 August 2020
Many people find that their 50s are an eventful decade, full of milestones like children leaving the nest and mortgage loan amounts finally dwindling to zero. It can also be the time in life when you find yourself earning more than ever, while also seeing your retirement looming close on the horizon.
All of these things make this decade of life a great time to make financial tweaks to ensure you’ll be on track for the retirement you’ve always dreamed of. Here are five tips to take in your 50s to help you achieve your retirement goals:
1. Give Your Savings More Attention
Once you hit your fifties, it pays to boost your savings. That’s because the IRS allows you to take advantage of “catch-up” contributions to your tax-advantaged accounts. Even if you’ve already been maxing out your 401(k) contributions, you can contribute an additional $6,500 once you turn 50. You can also begin contributing an extra $1,000 per year to your Roth IRA.
If you’re interested in going above and beyond catch-up contributions, you may find benefits in a deferred annuity, too.
Here’s How to Get Your Road Map in Place Right Now
Tuesday, 21 July 2020
If you own your own business, you have most certainly considered that someday you will leave the company, whether to retire or for another professional pursuit. If you were working for someone else, it would be as easy as announcing your retirement or giving two weeks’ notice, but it’s much more complex for business owners. You’ll need a road map for the continued success and financial viability of your company, and one that provides a sense of certainty for your employees and your clients or customers. This road map is called a business succession plan.
Your business succession plan should plot out everything from leadership transition, to how ownership will be transferred, to the price and terms, to how to avoid disputes during this process. It should also be a means to ensure you will have enough money to retire. It is meant to be an all-encompassing plan that will allow you to make your exit confidently, knowing that you have prepared everything necessary for the business to continue to thrive, and for you to take your next step.
Naturally, a plan of this magnitude requires thoughtful strategy. If you’re just beginning to build your business succession plan, this is how to begin.
Here’s a little reminder from the year 2020: anything can happen.
Monday, 22 June 2020
If you’re like most people, you never envisioned that this year would bring a global pandemic, economic uncertainty, or monumental transitions in the way people live and work. However, this is where we find ourselves and, though there is much to be anxious about, there’s a silver lining, too. We’re all facing challenges that remind us just how important it is to prepare for the unexpected and to avoid complacency and procrastination when it comes to our priorities in life.
One of the most important aspects of financial advising – and the most fulfilling one – is helping people determine how to protect their families in the event of an unexpected life change like death or disability. These aren’t comfortable topics to discuss, which causes too many people to put off planning for another day. For most people, though, protecting family is their number one priority and recent world events provide the important perspective that we need to be prepared for whatever might lie ahead.
Here are a few steps you should consider taking now if you haven’t already:
This is the decade that sets the stage for your long-term goals.
Tuesday, 02 June 2020
Your forties can feel like a momentous decade for several reasons, one of which is that it may be the time in your life when you truly begin to feel financial pressure. Your retirement could be looming in the distance, you may be sending children to college soon, and you might begin focusing more on building your net worth. With the economic fallout and market volatility caused by the novel Coronavirus, you may be feeling the pressure even more than expected.
As you navigate this consequential decade, here are six steps to take that are designed to help you prepare for your financial future.