What can you do before ringing in the New Year?</b> Talk with a financial or tax professional now rather than in February or March. Little year-end moves might help you improve your short-term and long-term financial situation.
Denver, CO -- Angel B McCall, CFP® will be featured in a special section of 5280 Magazine's November issue as a winner of the 2017 Five Star Professional Wealth Management Award. Angel has received the Five Star Professional Award for more than 5 years; an accomplishment less than .5% of Denver wealth managers have achieved.
The 2017 Five Star Wealth Manager award winners have been carefully selected for their commitment to providing quality services to their clients. The award is based on an in-depth research process incorporating peer and firm feedback with objective criteria such as client retention rates, client assets administered, industry experience, and regulatory and complaint history.
It used to be enough for financial planners to help clients minimize losses by making them aware of the risks inherent in various financial assets—even securities backed by the U.S. Treasury—and by steering them away from imprudent asset allocation and unsuitable investments.
Charitable gift accounts are popping up at major mutual fund companies and may be a good idea for individuals looking for a tax-advantaged way to support their favorite charities, improve their estate tax situation or bring more order to their gift-giving strategy. These are not necessarily inventions for the rich – some of these funds can start with an initial contribution of $10,000 and allow additional contributions of as little as $1,000.
True, it may seem unromantic. But couples who plan to exchange marriage vows ought to consider a prenuptial agreement long before saying “I do.”
Yes, there was a time when only the wealthy executed such agreements. But now more and more couples, especially those who have been married before or who have a blended family structure, need to evaluate the pros and cons of a prenuptial agreement as part of their wedding plans.
Social Security will soon give seniors their largest “raise” since 2012. In view of inflation, the Social Security Administration has authorized a 2.8% increase for retirement benefits in 2019.
This is especially welcome, as annual Social Security cost-of-living adjustments, or COLAs, have been irregular in recent years. There were no COLAs at all in 2010, 2011, and 2016, and the 2017 COLA was 0.3%. This marks the second year in a row in which the COLA has been at least 2%.
That truth must always be recognized.
Provided by Angel McCall CFP®
When financial markets have a bad day, week, or month, discomforting headlines and data can swiftly communicate a message to retirees and retirement savers alike: equity investments are risky things, and Wall Street is a risky place.
All true. If you want to accumulate significant retirement savings or try and grow your wealth through the opportunities in the markets, this is a reality you cannot avoid.
Regularly, your investments contend with assorted market risks.
They never go away. At times, they may seem dangerous to your net worth or your retirement savings, so much so that you think about getting out of equities entirely.
If you are having such thoughts, think about this: in the big picture, the real danger to your retirement could be being too risk averse.
Is it possible to hold too much in cash?
Yes. Some pre-retirees do. (Even some retirees, in fact.) They have six-figure savings accounts, built up since the Great Recession and the last bear market. It is a prudent move. A dollar will always be worth a dollar in America, and that money is out of the market and backed by deposit insurance.
This is all well and good, but the problem is what that money is earning. Even with interest rates rising, many high-balance savings accounts are currently yielding less than 0.5% a year. The latest inflation data shows consumer prices advancing 2.3% a year. That money in the bank is not outrunning inflation, not even close. It will lose purchasing power over time.1,2
Consider some of the recent yearly advances of the S&P 500.
In 2016, it gained 9.54%; in 2017, it gained 19.42%. Those were the price returns; the 2016 and 2017 total returns (with dividends reinvested) were a respective 11.96% and 21.83%.3,4
Yes, the broad benchmark for U.S. equities has bad years as well. Historically, it has had about one negative year for every three positive years. Looking through relatively recent historical windows, the positives have mostly outweighed the negatives for investors. From 1973-2016, for example, the S&P gained an average of 11.69% per year. (The last 3-year losing streak the S&P had was in 2000-02.)5
Your portfolio may not return as well as the S&P does in a given year, but when equities rally, your household may see its invested assets grow noticeably. When you bring in equity investment account factors like compounding and tax deferral, the growth of those invested assets over decades may dwarf the growth that could result from mere checking or savings account interest.
At some point, putting too little into investments and too much in the bank may become a risk – a risk to your retirement savings potential. At today’s interest rates, the money you are saving may end up growing faster if it is invested in some vehicle offering potentially greater reward and comparatively greater degrees of risk to tolerate.
Having a big emergency fund is good.
You can dip into that liquid pool of cash to address sudden financial issues that pose risks to your financial equilibrium in the present.
Having a big retirement fund is even better.
When you have one of those, you may confidently address the biggest financial risk you will ever face: the risk of outliving your money in the future.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
1 - valuepenguin.com/average-savings-account-interest-rates [10/4/18]
2 - investing.com/economic-calendar/ [10/11/18]
3 - money.cnn.com/data/markets/sandp/ [10/11/18]
4 - ycharts.com/indicators/sandp_500_total_return_annual [10/11/18]
5 - thebalance.com/stock-market-returns-by-year-2388543 [6/23/18]
Turning 70 is a big milestone in anyone's life, and gives reason to celebrate a lifetime of experiences, changes, and most likely a long career now giving way for retirement. The IRS, however, is more concerned about your turning 70 ½. This is the age when you are required to begin withdrawing from your 401k, IRA, or other tax-deferred retirement plan.
Required Minimum Distributions, or RMDs, are amounts of money you are required to withdraw annually. If you miss the minimum distribution, you may be required to pay a fee of up to 50% of the amount that should have been withdrawn. It’s easy to make errors when figuring out the timing of RMDs, That’s why I’ve put together this helpful guide to ensure you can avoid these 10 common mistakes.
A successful retirement is not merely measured in financial terms. Even those who retire with small fortunes can face boredom or depression and the fear of drawing down their savings too fast. How can new retirees try to calm these worries?
Two factors may help: a gradual retirement transition and some guidance from a financial professional.
The Tax Cuts & Jobs Act has nearly doubled the standard deduction and as a result, the vast majority of taxpayers will no longer benefit from itemized deductions.
For many, this is a welcomed change, as it simplifies filing and may even reduce your tax bill, as long as your itemized deductions are less than $12,000 (single) or $24,000 (married filing jointly). Seniors qualify for an additional deduction of $1,300 (single) or $2,600 (married filing jointly).
How much does eldercare cost, and how do you arrange it when it is needed? The average person might have difficulty answering those two questions, for the answers are not widely known. For clarification, here are some facts to dispel some myths.
True or false: Medicare will pay for your mom or dad’s nursing home care.
FALSE, because Medicare is not long-term care insurance.
Just how many older adults have memory disorders? Well, here are two recent estimates. The Chicago Health and Aging Project figures that nearly a third of Americans 85 and older have Alzheimer’s disease. The National Institute on Aging sponsored a study, which concluded that 14% of Americans age 71 and older have dementia to some degree.
Older women may be the most vulnerable to all this.A new Merrill Lynch and Age Wave study notes that after age 65, women have twice the projected risk of Alzheimer’s that men do.
What actions can be taken to try and shield your parents from such abuse? As a first step, you and your parents can meet with an estate planning attorney to put a signed financial power of attorney in place (if one is absent). Should your mom or dad lose the capacity to make financial decisions on their own, this document can authorize you (or another family member) to make worthy decisions on their behalf.