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Slick TV ads often make financial planning and wealth management sound simple, but it’s usually not. Managing wealth requires knowing a lot about highly technical topics, like taxes, government regulations, and finance as well as history, psychology and how to communicate with loved ones about sensitive issues. This article highlights some of the knowledge needed to manage wealth and why it’s often so daunting without the help of an independent personal financial advisor who is familiar with your situation.
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Understanding The Federal Reserve Mandate To End Inflation
The Federal Reserve System, the nation’s central bank, has a dual mandate to pursue maximum employment and maintain price stability. These two priorities are currently treated equally, but that was not always the case. In fact, the Fed’s bias toward maximizing employment was a critical driver of the stagflation that plagued the U.S. in the late 1960s and 1970s. Recognizing the need to balance price stability and maximum employment, in 1977, Congress revised the Federal Reserve Act.
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Fed Governor Kugler Details Inflation And Economic Outlook
The 12-month inflation rate, as measured by the personal consumption expenditures (PCE) index, was 2.6% in December, down from its peak of 7.1% in June 2022, and the six-month rate for PCE inflation was even lower, at 2%, which is the target rate set by the Federal Reserve.
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Why Rates May Not Be Cut Until June
The cost of a loan to buy a home, car, college education, and achieve the American Dream is staying the same for now. As expected, Federal Reserve Chairman Jerome Powell said the central bank did not lower loan rates following the Fed’s Wednesday, Jan. 31, 2024, policy meeting.
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Practical Suggestions For Achieving Your 2024 Resolutions
New Year’s resolutions usually fail because they‘re often too hard to achieve. After six months, only 10% of people who make resolutions achieve them or remain committed to them, , according to a study by Dr. Mark Griffiths, a Chartered Psychologist and Distinguished Professor of Behavioral Addiction at the Nottingham Trent University. What can you do to make financial, medical, or other personal resolutions more likely to be achieved?
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A Sign Of Progress In Solving U.S. Economic Problems
The Federal Reserve appears to be pulling off a feat most experts did not believe it could: ending its aggressive inflation-fighting campaign of 11 interest rate hikes without tipping the U.S. economy into a recession.
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Fed Keeps Rates Unchanged; Expects Easing In 2024
To promote transparency and free markets, the Federal Reserve System began publishing the opinions of the 19 U.S. central bankers that decide interest rate policy.
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Have You Logged Into Your Social Security Account?
Have you logged in to your Social Security account? Creating an online account at SSA.gov is an important first step in understanding your retirement income situation. However, only about 60 million of the 160 million individuals in the U.S. labor force who have Social Security accounts have created a way to access the Social Security Administration’s website.
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The Great Fake Out Of 2023 Is Poised To Extend Into 2024
All year long, the economy and stock prices have fooled experts and consumers, outperforming expectations month after month.
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Test Your Financial Planning IQ
The five questions below are a challenge meant to allow you to assess your knowledge of investing, tax and financial planning. If you have been following our news stream, this quiz draws on familiar ground. The answers are below.
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Planning Briefs
Coronavirus Tax-Breaks For Individuals; Details Emerge From IRS
Published Tuesday, May 26, 2020 at: 7:00 AM EDT
The new Coronavirus federal aid package, the CARES Act, expands options for distributions from IRAs and qualified retirement plans.
If you've been harmed by the pandemic , and need income right now, the early withdrawal penalty on those under age 59½ is waived.
The maximum amount you can withdraw penalty-free is $100,000, but you still will be required to pay income taxes on the withdrawal. Fortunately, you have the option to spread out those tax payments over the next three years. Alternatively, you have the option to report the entire withdrawal on your 2020 federal income tax return, which may aid individuals with large capital losses.
Another special rule to help those harmed during the Coronavirus pandemic expands your ability to borrow money from your IRA or retirement plan. The amount you can borrow has been doubled from $50,000 to $100,000.
Taking a loan from an IRA, 401(k), 403(b) or other qualified retirement plan before you retire is a bad idea. Withdrawals that are never paid back are an even worse idea. It's a giant financial step backward. However, if you have no other choice, tapping your retirement savings under the new law requires careful planning and forethought. Planning to pay back a 401(k) loan requires special attention.
The favorable tax treatment is empowered under Section 2202 of the Coronavirus Aid Relief & Economic Security (CARES) Act on March 27, 2020. To qualify for a waiver of the early withdrawal penalty, according to the IRS, you must meet the following requirements:
- diagnosed with SARS-CoV-2 or COVID-19,
- spouse or dependent is diagnosed with SARS-CoV-2 or COVID-19,
- experienced adverse financial consequences as a result of being:
- quarantined
- Furloughed
- laid off or having work hours reduced
- being unable to work due to lack of childcare
- closing or reducing hours of a business owned or operated
- other factors determined by the Secretary (of the Treasury)
This is a new tax law and more IRS pronouncements are anticipated interpreting these special tax rules. Making an early withdrawal or taking a loan from your IRA or retirement plan requires detailed information about your personal situation and is beyond the scope of this article. Please contact our office about how this affects you.
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