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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
2020 Year End Tax Planning For Retirees, Business Owners, And Families
Published Tuesday, Sept. 22, 2020; 10:30 PM EST
(Tuesday, Sept. 22, 2020; 10:30 PM EST) Covid has suddenly imposed tax and financial obstacles that can make year-end tax planning more challenging in certain situations. Business owners, families with more than $5.8 million in assets in stocks, bonds and real estate, and retirees who take required minimum distributions (RMDs) from an IRA, 401(k), or other qualified retirement account are at risk of missing these major opportunities to reduce their taxes by acting before the end of the year.
Say “No” To RMDs. Individuals who take required distributions from retirement accounts, or who are about to start taking RMDs, may choose to defer their RMD in 2020. With the epidemic keeping you at home, your expenses may be lower in 2020. Deferring all or part of your annual required distribution leaves more invested in a tax advantaged account. This is a strategy for the long term and carries risk but tax-free compounding may make a compelling difference in the terminal value of your account.
Roth Conversion For 59½-Plus. The federal deficit is soaring this year, due to U.S. government payments of $1200 to qualified individuals, forgivable or subsidized loans to businesses, and $600 monthly additional compensation to the unemployed. This stimulus is widely believed to have saved the economy from a depression but had a cost. To control the rising debt of the U.S., higher taxes should be anticipated. Converting assets in a traditional IRA or qualified retirement account to a Roth IRA makes those assets tax-free for the rest of your life, and benefits your heirs, too. With the stock market falling more than 7% three times in the last six months, now's the time to consider converting assets in traditional IRAs or retirement accounts on the next big stock selloff between now and the end of the year, which acts to reduce the taxes that would be owed on the withdrawal from the traditional IRA later on. The tax- free compounding may make a big difference in your after-tax outcome.
Family Plans. No matter which party wins the election, the estate tax is likely to be increased. Currently, 11.58 million dollars of an individual's estate is not subject to estate tax. While the Trump Administration has not outlined a plan to reduce the soaring deficit, Joe Biden's plan would cut the estate tax exemption in half to $5.8 million. Which makes this an opportune moment for families to consider selling property – like real estate, securities, or interests in private companies – on an installment-loan basis to children or grandchildren. With interest rates low, the minimum rate on intrafamily loans is low and structuring transactions to give parents (or grandparents) annual income from the sale proceeds for many years can be a smart family plan. Moreover, structuring the sale would maximize lifetime exemption from gift and estate taxes, which can save families from paying estate taxes. You can prepare the documents and you have until October 15, 2021 to decide whether to consummate the transaction , depending on whether the estate tax exemption remains in place after the November 3, 2020 election.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. It does not take into account your investment objectives, financial or tax situation, or particular needs. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences.
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