Since 2008, stocks have rewarded investors with solid returns. Can equity investors count on a repeat of recent history? Well, precise predictions about the market are notoriously difficult to distinguish from luck, and very easy to justify in retrospect.

Risk Factors
This bull market started in 2009 and although it is an adage that “bull markets don’t die of old age”, it is also a bit foolish to assume things will go well simply because they have gone well.

Another factor to consider is industrial activity, often taken as a benchmark of economic health. Industry requires a healthy investment in capital as well as labor, it moves commodities and responds to widespread demand. Copper, being a widely used and necessary metal, provides another hint that things won’t go well for long with this stock market. As this reference shows, bouts of high copper prices sometimes correlate with recessions shortly afterward. This pattern held in the 2001 and 2008 recessions. Note how copper prices have hovered at around $3.15/pound since fall of 2017 and have fallen sharply to $2.66/pound in July 2018.  This sharp drop may be due to lax demand that hints at slowing construction and related business activity which heralds a stock market drop.

On the international stage, Chinese and European growth is becoming less and less impressive. Never-mind the tariff issue. Even without it there would be cause for concern as Chinese demand wavers in the face of ever-rising debt and inefficient use of capital by state-controlled agencies that are motivated by politics far more than by market-based rationality.

Lastly, note the low and flattening unemployment rate curve. Over time, one sees a pattern of a flattening dip that precedes recessions. The short and sweet explanation for this recurring phenomenon is that business costs are made of fundamental components: commodities or “parts” and labor. As more people are employed and job applicants have more bargaining power for wages and benefits, businesses, especially those operating on tight margins, have to either absorb the cost of rising wages, pass on the cost to consumers that are then dissuaded by rising prices, or forego the hire and skill sets/benefits that come with it. Every option is basically bad for profits, so, again, earnings and business activity slows down.

While stock markets don’t necessarily “die of old age”, prolonged economic expansions such as this one lower risk avoidance and encourage speculation by lenders and consumers who are assured that the good times will continue at least long enough for their purposes. The flattening yield curve, correlation with a copper peak and subsequent recessions, rising interest rates, and growing hiccups in the international markets could be enough to continue market volatility or tip the stock market down in 2019.  No one has a crystal ball to predict the future but it may be wise for some investors to plan for capital preservation as a priority over and above prospective gains.

Tax season comes quickly after the year comes to a close. In 2018, a few changes have occurred due to legislation that was created by the Tax Cuts and Jobs Act of 2017. One of the main changes was a lowering of tax rates and a near doubling of the standard deduction. Also, a number of expenses that were allowed as itemized deductions in previous years have been severely restricted or eliminated. It helps to understand which changes were made so that you can get ahead of preparing your return. Here are some of the changes that were made that may affect you in 2018:

Changes To Itemized Deductions

In 2018, tax bracket numbers stayed the same. However, rates were reduced. The tax rate at the top of the scale was lowered to 37 percent. While the standard deduction increased, other changes to allowable itemized deductions may mean that you will actually have a higher tax bill to pay.

Tax prep fees, investment expenses, foreign real estate taxes paid, home equity loan interest that wasn’t used for home improvement and personal exemptions are no longer allowable as itemized deductions. Alimony payments for any divorce that is finalized in 2019 or after will also be added to that list and be applicable in 2019.

A Change To Charitable Donations

Charitable donations can only be used as a deduction if you decide to itemize. However, if you do itemize and have any cash contributions that were made to public charities, those can be deducted by as much as 60 percent of their AGI, which is up 10 percent from the previous limit which was 50 percent.

Tax Reform Only Offers A Few New Opportunities

There was a change in 529 plans. You now have the ability to use as much as $10,000 per year from the plan to pay for tuition related to kindergarten through 12th grade. The advantage of using a 529 plan is that it provides tax-free withdrawals and tax-free growth at the federal level for all qualified expenses.

Another change involves S corporations, partnerships and sole proprietorships. If you own one of these businesses, you may be eligible for a 20 percent deduction. However, this deduction does have some contingencies related to the type of business and the amount of income received.

Changes To The Alternative Minimum Tax For Individuals

There were also changes made to the Alternative Minimum Tax (AMT) for individuals. If you are married and filing jointly, exemptions have been raised to $109,400. If you’re single your exemption has been raised to $70,300. These start to phase out at the $1 million level if you are a couple and $500,000 if you’re single.

What Is The Best Way To Prepare

It’s always a good idea to get stared as soon as possible before the end of the year to understand how any changes in the tax reform will affect your filing. It also helps to use a professional tax advisor or CPA who understands the nuances of the new tax act. You want to make sure that you pay the appropriate amount for estimated taxes or for your withholding tax for the year.

You have until December 31 to do a qualified charitable distribution (QCD) for 2018. This is an effective tax strategy that many individuals are overlooking. A QCD is worth considering if you are donating to charitable organizations and taking required minimum distributions (RMDs) this year.  With the increase in the Standard Deduction, many people (specifically Retirees) won’t be itemizing. If you plan to give to charity and you’re over 70 & ½ , using a QCD can be an efficient way to accomplish your charitable giving goals while being tax efficient.
If you are an owner or beneficiary of an IRA and you are at least 70 ½ years old, you can make a QCD, unless you intend to distribute funds from a Roth IRA. Read on to learn about the advantages and stipulations of QCDs.

Tax Break on Giving Back

Thanks to tax reforms, QCDs are more beneficial than ever for the 2018 tax year. If you take the standard deduction, you would be eliminating your tax deduction for gifts to charity since you would not be itemizing deductions. You can get a tax break for this year’s charitable contributions with a QCD.

Lower AGI

You can add a QCD to the standard deductions. It lowers your AGI by allowing you to deduct charitable donations disbursed from your IRA from your income.

QCD Limits

The annual limit is $100,000 per individual. Married couples can both quality, each contributing a QCD of $100,000 each year. However, you will not be able to take a tax deduction for the charitable gift.

How to Make a QCD

You must make your QCD as a direct transfer from the IRA to the nonprofit of your choice. You could also have the IRA issue a check made payable to the your preferred organization. If you receive a distribution, you are not allowed to forward those funds to your charity.

You can make a QCD from IRA, Roth IRA, SIMPLE IRA, or inactive SEP. However, you are not allowed to do a QCD from any employer plan. QCDs can only apply to taxable amounts in your retirement account. Because of this exception to the pro-rata rule that typically applies to traditional IRA distributions, Roth IRA QCDs are not common.

What about RMDs?

The amount you transfer from your IRA to your nonprofit as a QCD will count toward your RMD for 2018. Your QCD may help you meet all or a portion of your RMD. For instance, if your 2018 RMD is $20,000, you can withdraw $10,000 and do a $10,000 QCD.

How to Report on Tax Return

To report a QCD on your tax return, report the total amount of the donation on the line for IRA distributions. Enter “zero” on the line for the taxable amount if the entire amount was a QCD, and enter “QCD” next to the line. You can find more information in the Form 1040 instructions.

You will be required to file Form 8606, Nondeductible IRAs if:

-the QCD is disbursed from a Roth IRA; or

-you make the QCD from a traditional IRA in which you have basis and receive an IRA distribution during 2018.

Words of Caution

You must not receive any remuneration of any kind — financial, gift, or otherwise –for the donation. QCDs do not include gifts to private foundations or donor advised funds.

If you plan to do a QCD for this year, inform your tax preparer. The 2018 Form 1099-R that you will receive from the IRA custodian will not likely have any information regarding a QCD if the donation is made close to the end of the year. Make them aware of the the disbursement to prevent any oversight.

Failing to take your RMD exposes you to penalties of up to half of the amount you were supposed to have taken. QCDs allow you to donate to your favorite causes tax-free, help you meet your RMD, and avoid the stiff and unnecessary cost of not using your money. You still have time to tap into this tremendous opportunity.

Yes, saving for retirement and planning for income is important but so is planning for the unexpected.  It is incredibly easy to get caught up in the present and not think about how much one needs to take care of themselves in the future.  This is why retirement planning is more about planning for all aspects of your retirement years and now just about income.

As one ages, the amount that they have to spend to take care of themselves will likely increase. For those entering the old age, these payments tend to be significantly more. Medical bills and housing costs increase with time. In short, everything becomes more expensive over time, and your earnings in the present need to be able to take care of your needs in the future.

Doing the math and figuring just how much you can save for the future is essential, even as one starts their career. People who are in well-paying jobs and who are more than well situated for their futures to decide to start planning early to take care of their lives in advance. To understand the importance of planning early, here are some of the prominent statistics that have been derived after a thorough analysis of the earnings that people have and the costs associated with them as a result of their savings.

1. 52% of the total population above the age of 65 are in need of specific resources that can aid them with their medical bills and additional care. As a person ages, they tend to encounter a lot more health problems than those who are younger and healthier. This means that when planning for one’s future, they have to take into account certain costs that are associated with medical bills and care costs.

2. 14% of the total population need long-term care for more than five years. This again is because of the prevalent health issues that people within this category tend to face. Persistent health issues and conditions often need a lot more tending to, especially in the later stages of one’s life, and planning for this future is incredibly important for anyone who wants to get treated for their conditions.

3. 10% of Americans over the age of 65 have developed some form of neurological disorders, or have been diagnosed with Alzheimer’s or Parkinson’s. These are disorders in which individuals need round-the-clock care, and a lot of treatments to get better. Since these aren’t cheap by any means, paying for them can burn one’s pocket rather easily.

4. 57.5% of the population who are above the age of 65 years tend to spend around $250,000 on long-term care. As the number of disorders that people face tends to increase, the expenditure on medical costs also tends to go up. Americans generally spend incredible amounts on health care, and these costs are only going to grow over the next few years.

5. 3.8% is the amount of inflation that nursing rooms tend to experience every five years. This means that over the years, the amount that one is going to need to spend on a simple room to take care of themselves is only going to increase. Since these become a necessity in many instances, it becomes important for an individual to plan properly for the future.

We are here to help you plan for the road ahead.  Contact us, today.

You’ve spent the better part of your working years planning for your comfortable retirement. As you celebrated your last official day of work, you already had a pretty good idea of the value of your financial investment portfolio and personal worth. And, you probably had a plan for how much money you would need on a yearly basis to maintain the comforts of life that you were accustomed to. You either would have more than enough for a comfortable retirement or you would have to be careful with spending to maintain your lifestyle. Either way, a budget is always a good idea to make your money last as long as possible.

When budgeting, there’s very little difference in living expenses from month to month with the exception of the holidays. You’ll want to make sure that you consider this extra expense when completing and following your budget. Whether you set aside a certain dollar amount each month or have the amount of money you will need available, you will want to make sure that the money you need is available to avoid adding any credit card debt to your future budget.

Last Friday, many woke up early to catch the “Black-Friday” deals at local stores and just yesterday, “Cyber-Monday” had many spending money online… yes, the season is upon us. Here are some tips to help you have a great holiday without causing you any undue financial stress.

At Least, Have A Basic Plan

Take the time to write down everything you need to have a happy holiday season. While the gifts may big the largest part of your budget, there are many other things that can add extra expenses. Make sure to account for decorating, traveling, food, liquor, as well as any added expenses of having any family and friends spending time with you for a few days. Once you know exactly how much money you will need, you can decide whether to break it down into your monthly budget or plan for it every holiday season.

Think About Trimming Your Budget

As you get older and wiser, you find ways to save money. Retirement is certainly the time to keep honing those skills. You can always find different ways to save money on holiday spending. One way is to watch for sales throughout the year for the things that you know you will need for the holidays and buy them early. If you already know you will spend the money, why not save a little? Even if you have enough money to comfortably retire on, you may want to leave a substantial estate to your friends and loved ones.

Don’t Overspend

Once you’ve decided what your budget is for the holidays, don’t be tempted to overspend. If you see a gift that you know would be perfect for someone, but it’s more than you budgeted, you could think about spending a little less on another gift to compensate for buying it. It’s not always about how much money you spend for a gift. It’s really about the inspiration behind what made you want to give the gift in the first place.

Planning for a successful holiday season while enjoying your retirement is a time of the year to look forward to. You get to see all of your friends and family and celebrate the joy of the season together. There’s no reason why the added expense of the holiday season should cause you any stress as long as you have a budget and keep your spending within that budget.

Planning for retirement will be easier for those contributing to in 2019!  Recent changes to a list of savings accounts are going to yield higher returns for savers in the new year. 

You will be able to take advantage of “Employee-Sponsored Account“, including 401(k) and 403(b)plans. The current limit for contribution is a little over $18,000. In the new year, the contributions are going to exceed more than $19,000. The plan also includes catch-up contributions around $6,000. You need to be 50 years of age or older to qualify. Those whose birthday fall on December 31st of that year also qualify. You should check with your employer to get more information, especially if you plan on leaving the company at some point. There are terms and conditions that apply, but that should make your life a little easier.

If you are self-employed, you can look into a “Self-Employed 401(k) Plan”.   The only difference between this plan and the traditional 401 (k) plan is that you set it up instead of an employer.  The contributions you make will reduce your gross income, but can help you when it comes to tax time.  Keep in mind that this starts next year.

IRA plans are getting a boost, too. The contribution limit was $5,500 but will increase to $6,000.  This plan applies to any IRA plan you have.  You could be making some considerable tax savings with this new increased limit if you are 50 years or older.

The IRS also announced that it increased all income limits used in determining eligibility to make deductible contributions to traditional IRAs, Roth IRAs and even for claiming the Savers Credit.

Finally, there is also a “Health Savings Plan” that can help your financial picture when it comes to medical expenses.  The 2019 annual HSA contribution limit for individuals with single medical coverage is $3,500, an increase of $50 from 2018. The limit is $7,000 for those covered under qualifying family plans (up from $6,900 in 2018). But if you’re 55 or older in 2019, you can contribute an additional $1,000 annually, or $4,500 total to an HSA for singles and $8,000 for families.

If you’re enrolled in a high-deductible health plan, you really should take advantage of this special savings opportunity. Make it a point to set aside pretax money into an HSA because you don’t pay taxes on the earnings, which can also be withdrawn tax-free in retirement when used to reimburse yourself for qualified medical expenses.

Look forward to 2019 and take advantage of the changes to prepare for the retirement road ahead!

Time is almost up for this years Medicare Open Enrollment period.  You have until the 7^th of December to modify your existing Medicare plans. In this period you can enroll in a Medicare Advantage Plan or a Part D drug plan.

Any modification made during this period is effective from January 1st of the following year. Generally, this is the only time of the year when one can opt for a new plan or switch from Advantage plans to Original Medicare plans. A tweak not known to many is to purchase a Medigap policy which compensates for Medicare costs to some extent. The availability of a Medigap Policy completely depends on the place of residence.

Medicare coverage and costs are revised every year. It is recommended to compare the existing package with the new ones for better understanding before making any possible modifications. The members of Medicare Advantage Plans of Part D receive notice of changes and the current evidence of coverage which are to be compared to see if any modification will result in cost and coverage benefits.

Medicare has rolled out a Plan Finder tool for locating the best plans in Part D drug coverage policies. The tool is designed to understand the requirement of drugs, cost of those drugs and the availability in pharmacies often visited based on which it runs extensive comparisons with other plans and end up displaying the best plan to opt for if there is any.

Joining an Advantage Plan is a very simple process. Calling their national toll free number may be the quickest way to know about the plans in that area following which one can choose to opt for a particular package best suited for the requirements. Calling the State Health Insurance Assistance Program can help you understand the available options and is recommended for changes if necessary. After shortlisting a plan, it is a must to check that the doctors and hospitals are included in the network. Speaking to the representative should be followed by noting down the date, the conversation and a cross-check with the current plans for transparency.

Though there are different ways to enroll during the fall open enrollment period, the most hassle-free way of enrolling and protecting yourself is to directly call their toll free number which is 1-800-MEDICARE. One last check to confirm all the details before making payment is suggested.

In case that you are not satisfied with any Advantage Plan opted for during the Fall Open Enrollment period, you can modify the plan in the next window which is called the Medicare Advantage Open Enrollment Period abbreviated as MA OEP. This period starts from 1st January and ends on 31st March of every year. This is the final window for making any sort of changes wished for in the Medicare Advantage Plans and the Part D drug coverage plans.

There lies a distinct difference between Open Enrollment for Federal Marketplaces and the Fall Open Enrollment period. The federal marketplaces are meant to annually offer enrollment periods for American citizens who are not insured or underinsured according to the standards set by the law. Though the duration of both the windows may coincide, the federal marketplaces or exchanges is not recommended citizens with existing membership with Medicare or are eligible for Medicare. For people who can afford and are eligible for Medicare and are looking to modify their current plans or opt for the new membership with the organization, the Fall Open Enrollment Period starting from October and ending on December is the correct time of the year.

Halloween may be an appropriate time for a good scare, we should limit unwanted surprises in retirement!  Generalizations may not necessarily reflect your individual circumstance although there are fact-based reasons why the average woman faces greater hurdles than the average man does in securing her retirement. However, an awareness of the negatives and a proactive plan to take full advantage of some positives should demonstrate that retirement should not scare women.

More years of retirement and with fewer assets

The deck is stacked against some women before they even think about enjoying their first day of retirement. Some of the factors include:

• Longer life expectancy
• Greater likelihood of being the surviving spouse
• Wage gap as compared to male counterparts
• Less working years due to child rearing and caring for aging parents

One factor that may be interpreted as either a positive or negative is risk tolerance. Women tend to invest more conservatively than men, which can lead to lower potential returns. Conversely, conservative investors tend to move money around less often and continuity can lead to more consistent growth in the long term.

Take control

Where one starts is seldom as important as where one ends up. Consider these strategic goals to level the retirement playing field:

• Save – Start early, continue to save and save as much as possible. 20 percent of income is a nice goal but maximizing what is practical is the ultimate goal.

• Know what is needed – In our sunset years, we tend to fear dying less than outliving our retirement money. One way to prevent that is to begin with knowledge of what it costs to live. Be realistic about expenses that are fixed and what will no longer be needed once work is no longer in the picture. Ideally, the fixed expenses of one year of retirement living is generated annually by retirement income.

• Invest the savings – This comes with one caveat – invest savings once an emergency fund for unexpected expenses is established. Most experts recommend six months of living expenses in cash assets as a minimum. Once that is accomplished, an asset allocation plan should be devised based primarily on age and ultimate financial goals.

• Keep working – Other than the satisfaction work can provide as wells as a longer timeline to save, extending work past age 65 pays dividends in social security benefits. Although many women are concerned social security may one day fail, experts predict its pending demise is over exaggerated. One thing that is certain is that the longer a worker waits before taking benefits, the better. Consider that at age 62 a worker receives 70 percent her full retirement benefits, but that number rises to 132 percent at age 70.

Include an estate plan

Careful planning includes what-if scenarios. Take the time to set up a will and more preferably a trust, as well as a financial power of attorney and durable power of attorney for healthcare.

There’s no reason any woman should fear retirement. A realistic analysis, a well-crafted plan and disciplined execution will go a long way towards a secure and serene future.  We are here to help, give us a call, today.

You have worked hard for your money, because you have a bigger goal than just paying the monthly expenses. You have a long term goal that is important to you. For some, that goal is to be able to retire comfortably, while others have other dreams that they are putting away money to be able to achieve. Whatever your goal, your savings are being set aside for a reason.

Savings Are Not Enough

However, if you are just putting your money into savings, you are really not getting the biggest bang for your buck, so to speak. Although rising, interest rates are at very low rates; therefore, having your money in a savings account is really not going to accomplish anything other than having a place to hold your money. Wouldn’t you rather that money WORK for you to reach your goals faster or reach higher goals?

Failing to Plan is Planning to Fail

The market can be a highly effective place for income growth, but it can also be a very scary place for your money. While we all like a good scare in October, your money should not be where you get scared. Unfortunately, that is often the reality.

If you just throw your money into investments without a strategy for that money, it could be hit and miss and full of risk. At the vest best, you could simply be missing the best opportunities out there for you.

As of a Gallup goal in 2015, the reality that they discovered was that a mere 38% of investors like you had a financial plan, while only 18% said they didn’t find financial plans useful. The rest wanted to but didn’t create one. Of those that created a plan, 74% said they created the plan with the help of an experienced investment professional.

Getting Qualified Help

This is where it is important to take time to create an investment plan that will guide your investment growth to reach your goals, but how do you know where those best opportunities lie for you. You spent a lot of time learning your craft and becoming experienced at what you do, and others trust you to do your job. The same peace of trusting a qualified individual can be found in an experienced Financial Advisor that knows the best investments and the risks that can hinder your growth.

National Financial Planning Month

This month is National Financial Planning Month, and it is a good time to meet with a skilled Advisor to communicate your short term and long term goals that you desire to reach. After hearing your dreams and your timeline, they will be able to translate those into options for you to consider.

So, this month is a great time to face the scary market by creating an investment plan with an investor’s steady hand and vision to be able to reach the dreams that have inspired your work for so long. Then, you can rest in knowing you have given your dream the best potential to be what you will need when needed.   We are here to start that conversation with you or take a second look at your current plan.