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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
Covid-19 Tax Break Suspends Required Minimum Distributions
Published June 16, 2020; 10 p.m. EST
(June 16, 2020; 10 p.m. EST) Federal emergency aid legislation suspends required minimum distributions (RMD) for 2020. If you do not need the income from your IRA or retirement plan, here are tips to maximize the benefit and build your retirement income portfolio.
Background: Before 2020, individuals were required to take withdrawals annually from federally qualified retirement accounts at age 70½. The amount of your distribution is based on an actuarial calculation of life expectancy published by the Internal Revenue Service.
What’s New. CARES Act, which became effective March 27, 2020, waives RMDs for 2020. If you don’t need the distribution to pay expenses or debt, you may elect to skip your distribution for 2020.
Roll It Over. Rolling over the distribution into your plan defers the taxes and extends effectively tax-free compounding of a distribution that otherwise would have been taxable income. But there is a better idea.
Roth It! Use the distribution you expected to be your RMD to fund a Roth IRA. You maximize tax savings by directing the amount you had expected to withdraw into a Roth IRA. Effectively, you convert those RMD assets into a tax free income stream. This can benefit you, your spouse and your IRA beneficiaries. Distributions taken as RMDs are taxable, distributions taken from a Roth IRA are not!
Complications. If you already took a required distribution in 2020, it's not too late to act.
In this period of social distancing, many individuals 65 and older are staying home and their expenses are lower than expected. Optimizing the 2020 waiver on RMDs from IRAs and qualified plans, such as 401(k)s, 403(b)s, and defined benefit (DB) plans, may require planning beyond the scope of this article. We welcome your questions about how to evaluate your personal situation.
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