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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
A Constellation Of Facts Squarely Aligns With 2020 Roth IRA Conversions
Published Wednesday, June 24, 9 p.m. EST
(Wednesday, June 24, 9 p.m. EST) An unusual confluence of financial, tax and investment events make converting traditional retirement account assets to Roth IRAs compelling in 2020 to retirees and those about to retire.
At a time when retirement income planning has never been so important to so many Americans, or as complex, retirees and those about to retire have a significant tax opportunity. A constellation of factors have aligned to make converting assets in traditional retirement accounts and IRAs to Roth IRAs suddenly more appealing.
Background. Tax laws affecting retirement income were reformed massively and frequently just before the virus crisis.
On January 1, 2020, just before the Covid-19 outbreak hit the U.S., a sweeping law correcting inequities in 401(k), 403(b), and other federal retirement accounts, became effective. SECURE Act was a bipartisan tax reform law correcting inequities in retirement accounts qualified for favorable tax treatment under federal tax law. To complicate things, two years before SECURE Act, the Tax Cuts & Jobs Act, a total rewrite of federal tax laws, became effective January 1, 2018.
Amid the unprecedented flurry of tax reform laws, and while those laws were still being digested, the pandemic hit. Responding to the Covid crisis, the U.S. Government once more enacted new tax laws for individuals and businesses, in a massive $2.2 trillion emergency aid package.
The Nub
Coincident with multiple layers of tax changes, pandemic economics forced yields to plunge to a low unprecedented in modern U.S. history, which, along with high stock volatility, drastically changed the math around Roth IRA conversions.
Retirees and those about to retire who have faithfully saved and are in strong financial condition have an extraordinary opportunity to plan strategically for the long run.
The unusual confluence of financial, tax and investment fundamentals conspiring to make Roth conversions more compelling presents an important financial planning decision that harbors some risk and requires personal advice beyond the scope of this article. If you have questions about your personal situation, please contact us.
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