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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
Business Owner Alert: Covid-19 Retirement Loans
Published Tuesday, June 2, 2020, 9:07 p.m. EST
Business owners are in a tight spot: Federal tax rules have eased restrictions to allow those harmed by the epidemic to borrow from their IRA or federally qualified retirement plan; but without careful planning, business owners taking a loan from your retirement savings to support your business could land you in an even worse personal financial position if you are unable to repay it. . Here's what business owners facing challenges need to know now.
Emergency legislation passed on March 27, 2020 -- specifically, Section 2202 of the Coronavirus Aid, Relief & Economic Security (CARES) Act -- eased restrictions on borrowing from 401(k), 403(b) and other federally qualified retirement plans and IRAs. If you've been harmed by the Covid-19 epidemic, the maximum amount you can borrow was doubled to $100,000, and you will not face the usual 10% early-withdrawal penalty.
IRAs and employer-sponsored retirement plans normally impose a 10% penalty on withdrawals made by individuals before age 59 . The CARES Act broadly waives the early withdrawal penalty for individuals hurt by the epidemic. The waiver is extended if you have been diagnosed with SARS-CoV-2 or Covid-19, or if your spouse or dependent is diagnosed with SARS-CoV-2 or Covid-19. Waiver of the early-withdrawal penalty is also extended if you experienced adverse financial consequences as a result of being quarantined, furloughed, or laid off or if your work hours were reduced, or you are unable to work due to lack of childcare.
The CARES Act gives you three years to pay back the loan, which must be made in 2020. Repayment must be completed over three installments in each of the next three tax-years, but you can pay it sooner. However, business owners, especially those nearing retirement, need to weigh the risk carefully.
Assets in your personal federally qualified plan or IRA are beyond the reach of business creditors. If your business fails and must file for bankruptcy, your creditors generally cannot lay claim to your personal retirement accounts. Forfeiting that protection from creditors by investing retirement dollars in your business when you are near retirement may not be worth the risk.
Taking a loan from your retirement savings to boost your business, under the new Coronavirus tax rules in the CARES Act, is not just a business decision. It's a family and financial planning decision.
Nothing contained herein is to be considered a solicitation or research material. It is subject to change without notice. Strategies referenced herein do not take into account your personal objectives, financial situation or particular needs of any specific person. The material represents an assessment of financial, economic and tax law at a specific point in time. The sources are thought to be reliable but could be wrong about important facts.
The U.S. Government's response to the Coronavirus crisis implements new regulations and their precise impact may not be available at the time this was written or could be subject to change by U.S. Government agencies, such as the Internal Revenue Service or Small Business Administration.
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