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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
Three Strategic Mid-Year Tax Tips
Published Wednesday, July 10, 2019 at: 7:00 AM EDT
With summer 2019 now underway, here are three strategic mid-year tax planning tips.
Itemizing Strategically Is A Thing. In 2018, for the first time, the Tax Cut and Jobs Act (TCJA) nearly doubled the standard deduction to $12,000 for single filers and $24,000 for married couples filing jointly. The number of taxpayers eligible to itemize was slashed by 60% by the TCJA. Only about 12% of taxpayers are still eligible to itemize expenses for medical, dental, home-mortgage and other loan interest, charitable contributions and miscellaneous fees, including those for tax preparation and investment advice. With just a bit of forethought, you can plan to bunch deductions once every three years, or maybe two. Itemizing strategically may materially reduce your income tax bill. If you did not itemize deductions in 2018, bunching itemized deductions in 2019 may boost your total itemized deductions well beyond your standard deduction. If not, you may want to plan on bunching and itemizing next year. The near-doubling of the standard deduction was intended to simplify federal taxation but has actually complicated it. Millions of the nearly 20 million taxpayers no longer eligible for itemizing now must strategically plan to itemize every two or three years.
Donor Advised Funds. One of the ways to boost your deductions this year is by giving to charity, and one of the easy ways is to give through a donor advised fund (DAF). With a DAF, you can split gifts among different charities. You contribute securities or cash and claim the deduction that same year. If you know you will be taking a taxable capital gain on an investment before the end of 2019, it's wise to consider donating appreciated securities to a DAF. You receive a deduction on the amount you contribute and avoid paying a capital gains tax. In addition, the charity receives the full amount of your largesse. If you donate cash or securities to a DAF in 2019, you can take a deduction on your 2019 return but wait to grant the money to a charity next year, or in 2021, and can take the deduction. Brokerages offer with DAFs. They invest your donations but charge an investment management fee and administrative expenses. We offer strategic guidance and can answer your questions about this.
Large IRAs. If you live in a state with an income tax, you might want to consider setting up a non-grantor trust in a state with no income tax. Why? Say you have a $1 million IRA. Placing it in a non-grantor trust in a state with no income tax avoids state income taxes. That's big! At your death, under the SECURE Act bill expected to be enacted before the end of 2019, your heirs would be required to distribute the IRA you leave them within 10 years. According to Financial Advisor News Service, which we are licensed to distribute, placing your IRA in a non-grantor trust in a state with no income tax allows your beneficiaries to avoid paying state income tax on the distributions from the IRA. To be clear, capital appreciation and dividend income on your IRA can be free of state income tax by applying this strategy! A recent U.S. Supreme Court decision upheld the legal concept behind this strategy and out-of-state trusts are likely a device that retirees will hear about in the mainstream financial press in the months ahead.
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