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The NASDAQ and Dow Jones Industrial Average both entered correction territory (a 10% or greater decline from the previous all-time high) recently. The S&P 500, the broader gauge of the market, is not yet down 10% from his all-time high...

The Medicare Income Related Monthly Adjustment Amount (IRMAA) is a means-testing program that applies an additional Medicare surcharge to Medicare Part B and Part D premiums for higher income individuals and couples.The surcharge is...

The amount of money that can be allocated to a Flexible Spending Account (FSA) to pay for childcare expenses increased from $5,000 per year to $7,500 per year in 2026.

With the new temporary below-the-line deductions enacted by the OBBBA, taxpayers may now have more planning considerations for Roth conversions. The deduction of focus being the additional below-the-line deduction for seniors (Age 65+)...

The housing market became a strong seller’s-market during the COVID years. Now data suggests that the market is transitioning into a buyer’s-market with buyers able to demand price reductions and better terms from sellers.

Starting 2026, families will be able to establish and fund section 530A accounts (Trump accounts), which are a tax advantaged account designed specifically for children.Parents can open Trump Accounts for eligible children, those with...

Gambling typically does not pay. Unlike investments such as stocks and bonds, which have a positive bias, gambling has a negative bias. This means that the longer one gambles the more likely they will lose money as the odds or...

Health Savings Accounts (HSAs) are often referred to as a “triple tax advantaged” type of account. The HSA benefits from tax-deductible contributions, tax-free growth on investments, and tax-free withdrawals for qualified medical...

New tax law provisions offer tax benefits for some employees who receive tip income and/or who work overtime. However, the reporting requirements for this income does not go into effect until the 2026 tax year.

Tax season is not just a time to look backward to the prior tax year, but also a good opportunity to look forward to planning for the current tax year. This may include changing tax withholdings for 2026.

Warren Buffett officially stepped down as the leader of Berkshire Hathaway at the end of 2025. In doing so he solidified his legacy as one of the greatest investors of all time. More importantly, his Midwest common sense approach to...

Estate planning is an area where many financial plans are lacking. This is an area where failure to plan can lead to large costs in terms of both time and money as a lack of estate planning often leads to court proceedings.

Artificial Intelligence (AI) is the ability for a computer system to perform tasks that are more human-like, such as reasoning, generalizing, learning, image recognition, and motion. Common AI features with these characteristics...

The IRS Standard Deduction for 2026 will increase by $700 for Married Couples to $32,200, by $350 for Single filers to $15,750, and by $525 for Head of Household filers to $24,150. The increases are based on the new OBBB values that...

The use of private fiduciaries has become more and more common in recent years. Too often people put off creating an estate plan because they do not know who to task with the important jobs of managing their finances if they become...

Medicare Open Enrollment, from October 15, 2025, to December 7, 2025, is here again. Open enrollment is the annual period that allows individuals and families to review and change their Medicare health and drug plans. The reasons for...

The Department of the Treasury and the IRS recently issued final regulations addressing the Secure ACT 2.0 provision that changes the rules for 401k catch-up contributions that apply to those age 50 and older. The proposed IRS...

Successful financial planning often requires making small changes to long-term financial strategies and then implementing those changes consistently over many years. In the end, these incremental changes can add up and compound to...

One of the key but often overlooked sources of retirement savings is the 401k plan. These accounts, along with their counterparts the 403(b) plan for non-profits, and 457 deferred compensation plans among others, are often provided by...

The One Big Beautiful Bill, enacted on July 4, 2025, made some significant changes to the charitable contribution tax deductions that can impact individuals (and corporations) for 2025 and beyond. Beginning 2026, non-itemizers can...

The State and Local Tax Deduction, known as the SALT deduction, provides a federal income tax deduction for state and local income taxes and property taxes as an itemized deduction reported on Schedule A of the tax return. Prior to the...

One of the common dilemmas of personal finance is whether a household should focus on paying down debt or saving money for the future. Unfortunately, there is no easy one-size-fits-all answer to this question but rather there are a...

A Power of Attorney (POA) is a legal document that gives one person the power to act for another. The scope of the authority can vary, including the type of authority, when it is in effect, and how long it lasts. The main POA documents...

The American Opportunity Tax Credit is an income tax credit for qualified college or university education expenses for the first four years of higher education per dependent. The maximum credit is $2,500 per year per eligible student...

Buying a house is a long-term commitment given the high transaction costs and related costs of moving and relocating. But a mortgage may be a short-term commitment as the average homeowner typically refinances their mortgage several...

Tax related identity theft has become an increasingly large problem for the IRS and state tax agencies. Generally, these scams involve someone using a stolen identity to file a fraudulent tax return claiming someone else’s tax refund...

There may be ways to incorporate tax planning to find ways to use funds that will be tax advantaged. For example, there are a number of favorable tax credits out there as well as 529 savings accounts.

As high school graduation season nears, many families will be facing the financial reality of paying for the high cost of college tuition, fees, materials, and housing. For many, there will be no getting around the high costs of higher...

Target Date Funds can be a useful investment strategy during one’s retirement accumulation phase when they are saving for their retirement needs. The general objective of a Target Date Fund is to match the investor’s retirement date...

It is best practice to add the trust to the homeowner’s insurance policy to ensure a smoother process should there be an insurance claim.

Health Savings Accounts (HSAs) which are medical savings accounts that allow those with high-deductible health insurance plans to save for future out-of-pocket medical expenses, have become more and more popular over time.

IRAs allow qualified owners to make Qualified Charitable Distributions (QCDs) in which an individual transfers funds from an IRA directly to a qualified charity. The benefit of this transaction is that the IRA distribution is not...

Upcoming Important Dates and Milestones The end of one year and the beginning of another marks the time to review some transitionary dates and milestones. We have summarized a few key dates and milestones below that may be worth...

The US presidential election was recently decided, causing many Americans and political pundits to examine the result and its potential causes.

Some employer sponsored 401k plans allow participants who have reached age 59.5 to access to their 401k funds through an in-service distribution.

The Social Security system can be very complex. Yet, Social Security often represents a large percentage of the average retiree’s income in retirement. Therefore, it is important to understand how Social Security benefits work.

When it comes to home improvements there may be some tax implications that homeowners should be aware of. Some of the benefits can be substantial while others are fairly minor, so it is important to understand the cost/benefit beforehand.

Unfortunately, many people continue to get notices from their homeowners insurance carrier that their policy will be cancelled or will not be renewed. This creates a new risk for many homeowners.

Individual income tax returns have a three-year statute of limitations. This means the IRS has three years to audit a taxpayer’s income tax returns.

It is important to monitor and manage your cash and CD maturity dates to make sure you are earning the best interest rate based on your needs.

It is important to review estate plans (wills, trusts, financial powers of attorney, and health care powers of attorney) every few years to make sure they are still valid.

In this real-life case study, we explore just one way that a financial advisor can use strategic timing along with the integration of investment and tax planning to increase the long-term financial benefits.

The IRS charitable contribution rules are complex. Given the rules around charitable donations, it is advisable that taxpayers consult a tax expert before making charitable donations to make sure they are able to claim the maximum benefit.

Mortgage rates have declined recently from very high levels. While a lower interest rate is certainly attractive, there are other factors that should be considered as well before deciding to refinance.

The new electric vehicle tax credits offer taxpayers up to $7,500 in tax savings. However, this credit is very complicated when it comes to determining which vehicles will qualify for the credit.

The Health Savings Account (HSA) contribution limits will increase from $3,850 to $4,150 for self-only coverage and from $7,750 to $8,300 for family coverage in 2024.

The amount that an individual can gift to another individual in a given tax year without owing gift taxes, or being required to file a gift tax return, will increase from $17,000 to $18,000 in 2024.

Contributions to traditional 401k type plans will now provide a benefit on the Free Application for Federal Student Aid (FAFSA).

In our modern subscription-based economy, many services have switched from an annual or one-time payment model to a monthly subscription payment model, which can sometimes be friendlier on the budget but may end up costing the consumer...

Planning for Social Security can be complex and depends on each individual or couple’s circumstances. It is important to assess each unique situation and to understand the options available.

The Personal Residence Exemption allows a taxpayer to exclude up to $250,000 of gain on the sale of their personal residence. A married couple may combine their exemptions to exclude a total of $500,000 in gain.

Student loan payments and interest charges are set to start once again on September 1st. The new SAVE Plan has expanded the rules for income-based student loan payments to reduce the payment amount for many borrowers.

Starting in the 2024-2025 school year, distributions from a 529 plan owned by a relative other than a parent will not be considered income of the student for federal financial aid purposes.

A new rule takes effect in 2024 that will allow unused funds in a 529 college savings plan to be transferred to a Roth IRA in the name of the 529 plan beneficiary.

All money market accounts are not equivalent to each other. This is especially true when comparing bank money market deposit accounts to investment money market funds.

Summer jobs for teens are often low level and low paying. However, they can be an important springboard that can be used to start a career on the right track and jumpstart a financial plan.

The tax code offers several small tax credits for certain energy efficient home improvements. However, these credits can be complicated in terms of which projects qualify for the tax credits.

Taxpayers often focus on income taxes, but there are other types of tax that can be just as important when it comes to tax planning and tax savings.

One of the key decisions when creating a trust is who should be named as the successor trustee.

It is common for retirement account owners to list their minor children as beneficiaries of their retirement accounts. However, there can be some drawbacks to this which should be explored before doing so.

With interest rates significantly higher than they were last year, this is a good time for savers to review their cash management strategies to ensure that they are maximizing the interest rates they are earning on their savings.

The Secure Act 2.0 made several changes to retirement plan catch-up contributions, including increasing the amount of the catch-up contribution for some savers.

The electric vehicle tax credit has been expanded to include more makes and models. However, the new rules also come with some significant restrictions that may make many taxpayers ineligible.

The Secure Act 2.0 has expanded access to Roth accounts for many retirement savers.

With home electricity prices having increased and Congress extending the 30% tax credit for solar panels, many people are once again considering investing in solar.

The passing of the Secure Act 2.0 has made several changes to the rules governing retirement accounts. Among these changes are the change in the Required Minimum Distribution (RMD) rules.

The amount that an individual can give to another individual in a year without having to file a gift tax return will increase from $16,000 in 2022 to $17,000 in 2023.

The six-month rate of interest paid on Series I Bonds declined from a rate in excess of 9% for the six months from May 1st to October 31st to less than 7% for the period from November 1st, 2022, to April 30th, 2023.

Social Security benefits will increase by 8.7% in 2023. In addition, unlike past years where increases in Medicare premiums offset a large percentage of the Social Security COLA, in 2023 Medicare premiums will decrease slightly.

It is common for families to want to help their children with major purchases such as cars, weddings, and the down payment to purchase a home. 

Interest rates have been increasing which is a bad thing for conventional mortgages. However, it may benefit borrowers to take out a reverse mortgage with a line of credit.

Individuals who participate in a non-covered pension need to be aware of the Government Pension Offset rules. Under the rules an individual who receives a non-covered pension may have their Social Security widow or widower benefit reduced.

The IRS has extended and increased the tax deduction allowed for K-12 educators who spend their own money on classroom supplies. The deduction was increased from $250 per educator per year to $300 starting in 2022.

Those who own an inherited IRA and are subject to the 10-year distribution rules may benefit from accelerating distributions when investment values are down and then reinvest the money in an after-tax investment account.

The IRS has increased the amount that businesses may deduct for business miles driven during the second half of the year to reflect the increase in gas prices. Businesses may be able to deduct a larger amount of business miles after June 30

Charitable Remainder Trusts can be a valuable tax planning tool for individuals who own appreciated assets outside of a retirement plan and have a desire to donate funds to charity after their passing.

There are several options for account holders when 529 plan funds are leftover after higher education expenses have been met.

There are certain circumstances where an individual may end up having a tax basis in their IRA. It is very important to maintain accurate records of this tax basis to determine the amount of any future IRA distributions.

The stock market has taken a hit to start 2022. However, not all areas of the market have suffered equally as the investment themes continue to show signs of shifting.

Taxpayers who received the Advanced Child Tax Credit during 2021 will be required to reconcile, or true-up, their payments with the IRS when they file their tax returns.

The Federal Government has updated the life expectancies used to calculate Required Minimum Distributions (RMDs). The changes reflect the increase in life expectancies that has occurred in recent decades.

For taxpayers over age 72, Required Minimum Dist-ributions add a layer of complexity to managing their retirement accounts. This is especially true if the taxpayer is still working.

It is increasingly common for investors to lose track of small retirement accounts. Employers may transfer small 401k account balances to IRAs rather than leaving the money invested in the plan, this can lead to complications.

When someone passes after setting up a trust to handle their financial affairs there are a series of actions that are required by law to protect the interests of all parties involved.

Many people are leaving corporate life for the freedom and flexibility that may come from being self-employed. However, working as an independent contractor rather than as an employee may come with some additional taxes and expenses.

Inflation continues to be a concern for many Americans as the year-over-year inflation rate has increased to over 5% for several months this year. The primary causes of inflation are believed to be the dysfunctional labor market and...

It is no secret that inflation has been elevated in 2021. Supply chain constraints along with labor shortages have pushed up prices on a variety of goods and services as the combination of supply scarcity and high demand caused many...

529 Plans allow you to invest after-tax dollars for long-term tax-free growth in order to for pay qualified educational distributions. Recent changes to the tax law now allow 529 Plans to be used for certain K-12 expenses in addition...

When an individual or family is in the market to buy a home, it often causes them to increase their focus on their credit score. A borrower’s credit score is still a major determinant of whether they will qualify for a loan and...

We typically utilize life insurance to mitigate a variety of risks ranging from loss of income to estate liquidity. For the latter, permanent policies tend to be more effective so that the insurance lasts through one’s whole life...

The current market for new and used cars is what they call a seller’s market due to high demand and low inventory as a result of disrupted supply chains. In the past, customers would be able to haggle and negotiate a lower sales...

Housing prices surged during the pandemic and currently show little signs of slowing as the mismatch between supply and demand continues to support prices. It is estimated that the nation needs 5.5 million more homes to bring supply...

The American Rescue Plan Act of 2021 (ARPA) allows eligible taxpayers to exclude from taxation up to $10,200 in Unemployment Benefits for the 2020 tax year. Under normal circumstances, Unemployment Benefits are taxable at the federal...

Proper estate planning can help ensure assets are transferred effectively and efficiently upon one’s passing. In addition, a well-drafted estate plan will include Power of Attorney documents for healthcare and finances to ensure...

Social Security provides dis-ability and retirement benefits for eligible workers. However, many people are surprised to find out that there is also a small Social Security death benefit. A surviving spouse or child may receive a...

CA Proposition 19 is a constitutional amendment that passed in November 2020. This Proposition significantly changed the way children inherit real property from their parents. As a result, some California residents have changed their...

There has been a recent surge in RV sales as consumers are creatively finding ways to vacation amid economic restrictions due to the COVID pandemic. Some may not realize that their recreational purchase may also have income tax...

The SECURE Act changed many of the rules for non-spouse beneficiaries of retirement accounts. Prior to the SECURE Act, most non-spouse beneficiaries were subject to Required Minimum Distributions each year but were able to...

There are a lot of misunderstandings about what qualifies as a tax-deductible charitable contribution. The IRS has strict guidelines as to what deductions are allowed and the documentation that is required to substantiate a charitable...

Employer sponsored retirement plan limits remain unchanged at $19,500 plus an additional $6,500 catch up for those Age 50 and older for tax years 2020 and 2021. Often a plan’s administrator will monitor contributions and notify...

The IRS recently announced that the 2021 IRS tax filing season begins February 12, 2021. This is the first date taxpayers can submit their Federal tax returns. The IRS recommends taxpayers file electronically AND enroll for direct...

There have been a number of anomalies in the stock market during 2020 which appear to have carried forward to 2021. Small traders have become more active in the market often causing the prices of smaller, thinly traded stocks to surge...

While we always strive to ensure your beneficiary designations are current with your wishes, adding a “Per Stirpes” or “Per Capita” distribution option to your existing designated beneficiaries can help ensure...

As part of the CARES Act many taxpayers received a one-time Economic Impact Payment of up to $1,200. This payment was intended to stimulate the economy by getting money to those who were negatively affected by the Coronavirus. It was...

Retirement plan contribution limits are indexed for inflation and can be adjusted in minimum increments of $500. This year inflation was low so many of the retirement plan numbers did not change or changed very little. The contribution...

Deciding who inherits your assets when you’re gone is never an easy decision. While sometimes it may sound as simple as listing your spouse and children equally, there are many other factors to consider including the different...

Many retirees face the question of when they should start drawing their Social Security benefits. The monthly amount paid in Social Security benefits can increase by as much as 8% each year a person delays receiving benefits, up until...

2020 has been a very challenging year in so many ways. Millions of people have been affected directly by the Coronavirus and millions more have been negatively impacted by the economic restrictions that have been in place to limit the...

The CARES Act expanded unemployment benefits by providing for an additional $600 weekly payment through July 25, 2020. These payments are in addition to State unemployment benefits. For some beneficiaries, such as those who are...

The CARES Act of 2020 has suspended RMDs for owners of retirement accounts. The goal is to give investors the option to allow their retirement accounts to remain invested and potentially recover any losses. However, retirement account...

Americans who owe student loans will receive an extended period to defer their student loan payments. President Trump recently signed an executive order that extends the period in which student loan borrowers with federal student loans...

The IRS is experiencing processing delays of tax returns and refunds as a result of limited staffing due to the Coronavirus pandemic. Status of your tax return along with the status of your refunds can be viewed by visiting the IRS...

The CARES Act passed earlier this year allows retirement account owners to suspend their Required Minimum Distributions (RMDs) for the 2020 tax year. However, due to the timing of the CARES Act which passed on March 27, 2020, some...

The US economy has continued to show signs of a strong rebound as many states slowly reduce economic restrictions. There was the record increase in retail sales in May, a moderate bounce back in consumer confidence, and now a surge in...

Incorporating longevity planning in a retirement plan can be daunting. Not only do individuals and families have to plan to not outlive their nest egg, they also must plan for unexpected medical expenses which can include the costs of...

The stock market recovery has caused many economists and professional investors to scratch their collective heads. Many question how the stock market can rally in the face of an economic recession, continued uncertainty about the...

Interest rates have declined but lenders are making it more difficult for most borrowers to get a loan. According to the Federal Reserve Senior Loan Officer Survey, 40% of respondents reported tightening loan standards for consumer and...

The US economy contracted at a 5 annualized pace in the first quarter according to the Bureau of Economic Analysis. The decrease in economic activity came as no surprise as the Coronavirus and the economic restrictions that were put in...

Spring has arrived, which means For Sale signs for homes start to pop up in neighborhoods as sellers try to sell their homes during the warm weather and blossoming flowers. Even during the current environment home prices continue to...

It is possible that “working from home” will continue even after the Stay in Place restrictions are lifted. As businesses take extra precautions to keep employees safe and distanced from others, certain businesses are...

In the past few months there has been a massive fiscal and monetary response to the COVID-19 crisis. The federal government passed a number of COVID-19 relief bills totaling more than $3 trillion mostly funded by government borrowing....

There’s a common misconception that life insurance is only needed if one has dependents. Makes sense, considering if one should die he or she would want to make sure children are taken care of financially. However, life insurance...

The economic and financial data reported over the past month has been bad. In some cases, it has been historically bad. Weekly unemployment claims have been higher than at any other time in US history. The US economy contracted nearly...

Distributions from 529 Plans are generally tax and penalty free if used for qualified educational expenses (tuition, room & board, fees, and supplies). Just like other investment accounts, a tax Form 1099Q is issued to report the...

Many people have already received their Corona-virus tax relief and economic impact payments (stimulus payments) via direct deposit from the IRS. According to the IRS 80 million payments have been processed. However, this is only about...

There is an old saying in Washington: “Don’t let a good crisis go to waste.” The saying refers to the ability to get legislation passed during a time of crisis that would likely die in committee under normal...

The IRS and FTB recently announced an extended deadline for 2019 tax filing and payments. Just days after extending the deadline for tax payments, the IRS has granted an automatic extension for tax filing through July 15, 2020. In the...

Unfortunately, thieves and scammers are an innovative bunch. They have proven adept at altering their tactics to all different environments and ways to separate people from their hard-earned money. The Coronavirus outbreak appears to...

Recent developments are showing that some parts of the government learned valuable lessons from the 2008-09 recession while others are struggling to come to terms with the proper policy response. If history serves as an indicator, they...

Oil prices dropped sharply this week including a one-day decline of nearly 30%. This was not a one-off hit to oil prices. In fact, the price per barrel of oil on global exchanges has been declining since it peaked at over $75 in 2018....

A Donor Advised Fund is a charitable giving vehicle which allows the taxpayer to donate certain assets for an immediate tax deduction while maintaining control of which charities will be allocated the donations in the future. Donor...

Economists have been bracing for the impact of the Coronavirus. News stories about whole cities in China on lockdown, factories closed, and supply chain disruptions have been highlighting the risks that the virus poses. Now global...

Effective for the 2019 tax year, taxpayers are once again allowed to deduct Mortgage Insurance Premiums (PMI). Prior to the Tax Cuts and Jobs Act of 2017, eligible taxpayers were able to deduct premiums paid for Mortgage Insurance...

The US economy grew 2.1% according to the Bureau of Economic Analysis’ first estimate released on January 30th. This matches the growth rate from the third quarter but is below the 2.5% average growth rate over the past three...

Studies show Baby Boomers (those born between 1946-1964) will be the fastest growing generation in the workforce next year. Whether for pleasure or out of necessity, some Baby Boomers will continue to work past age 65, the age at which...

Married couples usually have two filing options: Married Filing Jointly or Married Filing Separately. In most cases Married Filing Jointly provides more tax benefits compared to Married Filing Separately, but the general rule is that...

If you decided to focus on improving your budget and cash flow management as your New Year’s Resolution, some questions you’re probably asking yourself are “where do I start?” and “what are my...

No one likes dealing with the IRS. Opinions of the organization often run from total contempt to mild frustration. For starters, nearly everyone dislikes paying taxes. Add a large and poorly organized bureaucracy, poor customer service...

ROTH Conversions have been gaining popularity over the past few years as a result of lower tax brackets and the Backdoor ROTH strategy for high income earners. The SECURE Act can now be added to that list. One of the main provisions of...

Congress recently passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act and the President is expected to sign it into law. This bill changes a number of laws that impact retirement saving and retirement planning...

When a family member dies, survivors are instructed to notify the Social Security Administration of the death to discuss benefits you may be entitled to. In most cases, the funeral home will report the death to the Social Security...

Identity theft has become a common danger as scammers have become more and more adept at stealing and using their victim’s personal information to steal money, claim benefits, and establish fraudulent credit accounts....

After a loved one passes away the list of tasks that need to be done can be daunting. Most people start by dealing with the immediate priorities of working with medical providers, making funeral arrangements, and notifying friends and...

Medicare open enrollment commenced last month. This gives Medicare beneficiaries an opportunity to review their Medicare supplement insurance plans and possibly make changes to their current Medicare coverage. Therefore, if you are...

Retirement plan contribution limits will increase once again in 2020 as the numbers have been automatically adjusted for inflation. The contribution limits for 401k type plans will increase from $19,000 per year in 2019 to $19,500 for...

The Federal Reserve reversed course this year by lowering their short-term interest rate target three times from 2.25% a year ago to a target of between 1.50% to 1.75% currently. The Fed has described its recent policy as...

The Securities and Exchange Commission (SEC) has issued a warning to investors to avoid falling prey to scammers offering phony Certificates of Deposit (CDs). The SEC has seen a rise of websites that offer CDs or other financial...

The Social Security Administration recently announced the Cost-of-Living Adjustment (COLA) for Social Security benefits in 2020. Starting January 2020 Social Security beneficiaries will receive a 1.6% increase in benefits, which is 1...

We recently attended a “Cash Flow” management seminar which covered many topics including managing cash flow, finding ways to repurpose your money for longer-term goals, prioritizing savings and spending goals, and being...

Almost all retirement plan contribution limits increased for 2019. Many of the employer plans have year-end deadlines to make your employee salary deferral for the year. Therefore, if your goal is to maximize your contributions by...

Mutual Funds are essentially a basket of stocks or bonds managed by an Investment Company. Throughout the course of the year, the Investment Company will continuously monitor the basket of securities based on the investment objective...

Many professional investors will tell you that in the short run a whole variety of factors can impact stock prices but in the long run corporate earnings are the key factor that determines the value of a company’s stock. This is...

Many people who receive health insurance benefits through an employee benefit plan do not realize the actual cost of their coverage. Often the amount of the annual premiums can come as a surprise when an individual loses their job and...

With the increased usage of the Backdoor ROTH Conversion strategy, Reverse Rollovers are becoming more popular. The Backdoor ROTH Conversion strategy allows higher earners (who earn too much to make direct contributions) to fund ROTH...

When we think of Estate Planning, we usually think of how and to whom our assets transfer upon our passing. We may also think of who will care for us and our minor children should we either die or become incapacitated. Very seldom will...

There has been a lot of news about US farmers suffering due to the trade war. Now we can add another profession to that list: truck drivers. Many trucking companies are being squeezed on all sides. Last year freight shipping rates were...

US consumer sentiment declined to 89.8 in August according to the University of Michigan Index of Consumer Sentiment. The August number is an 8.7% decrease from the July level and is down over 10% from the high for the year. The last...

Recent data reported by the manufacturing and services sectors have been diametrically opposed in recent months. Whereas manufacturing data has signaled an economic slowdown in the US and abroad, largely due to the effects of the trade...

The level of investment risk for an account should be a function of the time horizon of the goal that the account is intended to fund. When it comes to the investment risk of educational accounts this is typically linked to the number...

The Stretch IRA is an estate planning strategy that allows non-spouse IRA owners to extend the tax-deferral benefits of IRAs over multiple generations. Under current tax law, spousal beneficiaries can inherit IRA accounts and treat...

Household debt has continued to increase after a decade of US economic growth. Household debt now exceeds $14 trillion, more than $1 trillion more than is was during the last peak in 2008. This has created a debate over the...

The declining mortgage rates continue to present opportunities for homeowners to refinance their mortgage loans to lower the interest rate or cash out equity. Refinancing your loan could provide many financial benefits including access...

Underfunded public and private pension plans has been a major source of concern in recent years. A lot of emphasis has been put on the grossly underfunded public pension plans in states like California and Illinois. However, many...

The stock market responded positively to the US second quarter economic growth rate. According to the Bureau of Economic Analysis, the US economy grew 2.1% in the second quarter of 2019. This has been called the Goldilocks number as it...

As of 2018, the de minimis annual gift limit increased from $14,000 to $15,000 per year. This means that any individual can gift up to $15,000 to as many recipients as they desire without creating any gift tax reporting requirement...

Even with the gridlock in Washington there are some bipartisan bills that are advancing through the process to become law. Among the bills inching forward is the SECURE Act (Setting Every Community Up for Retirement Enhancement). This...

The recent earthquake in Southern California is a reminder of the potential for a natural disaster that many people are not insured against. Fortunately, the earthquake in Southern California occurred in a relatively low population...

Interest rates declined sharply in the first half of 2019 as the bond markets priced in expectations for slower economic growth. The yield on the benchmark 10-year US Treasury bond decreased from over 3% last Fall to just below 2% in...

Fund Managers Grow Increasingly Pessimistic

Dr. Chase Armer

Tuesday, July 2, 2019

The Bank of America Merrill Lynch Fund Manager Survey reported that professional mutual fund managers are the most bearish they have been since the financial crisis. The survey shows that 21% of fund managers are underweight global...

Following the passage of the Tax Cuts and Jobs Act of 2017 many speculated that charitable contributions could decline in 2018. While the bill did not do away with the ability of taxpayers to deduct charitable contributions as an...

Typically, when a retiree reaches age 65 they sign up for Medicare which is the foundation of their health insurance plan. Medicare consists of several parts. Part A, which covers hospital expenses, is no cost. Part B, which covers...

Financial abuse of the elderly is becoming more prevalent as creative scammers continue to prey on a growing demographic. While senior citizens may be the most vulnerable to financial abuse, financial abuse can happen to anybody and it...

Fraudulent calls from the IRS demanding payment for past taxes have become so common that many people have caught on and know to hang up on the callers. So, as they usually do, the scammers have changed their tactics. Now they are...

You can’t leave your money in an IRA forever, nor can you leave it in your 401k plan forever either. Eventually, Uncle Sam will want to collect tax revenue on the money you have deferred into your 401k or IRA by requiring that...

Graduation season is upon us and in only a few months many high school graduates will be off to college. For many, college will be their first time away from home and the first step towards independence. Legally, they will also be...

To insure, or not to insure? When thinking about planning for potential Long-Term Care expenses, many ask if they need insurance and if they do, what the most cost-effective method is. The first task is to determine the estimated...

A report recently issued by the trustees of the nation’s Social Security system offers some dire predictions. The report estimates that Social Security benefits will exceed the income from Social Security taxes in 2020....

No detail is too small. While naming a beneficiary can be as simple as listing the name of an individual or entity, it is often the most overlooked and neglected task in one’s financial plan. The financial and administrative...

Just as the summer driving season is about to begin oil prices have once again become a popular topic of conversation. The higher prices at the gas pump may make a summer road trip more expensive.

Property and Casualty insurance (home, auto, and liability insurance) is one of those things that most people don’t spend much time thinking about. The renewal notice comes in every six months or year, we pay it, and ignore it...

The IRS recently released its “Dirty Dozen” tax scams for 2019. This annual list covers the major areas where the IRS is seeing the largest amount of tax cheating and fraud. This year the IRS chose to focus on the more...

Now that we’re in the second half of tax season, we’re observing that the rumors were indeed correct. While many taxpayers may have benefited from the Tax Cuts and Jobs Act, they unfortunately don’t feel the benefits...

The Bureau of Economic Analysis posted its first estimate of US economic growth in February following a one month delay due to the government shutdown in January. The report shows that the US economy grew 2.6% in the fourth quarter,...

The US trade deficit has been a hot topic in recent years as the US has imposed or increased tariffs on a variety of foreign sourced goods in an effort to reduce the US trade deficit. Yet the result has been the opposite of what many...

This tax season there has been a misconception that the mortgage interest deduction is capped or was eliminated. In fact, following the Tax Cuts and Jobs Act, taxpayers can deduct home mortgage interest on the first $750,000 of home...

Consumer spending makes up approximately two-thirds of US economic output. Therefore, the attitudes of US consumers and their pace of spending is an important indicator of the overall health of the US economy. One of the data points...

One of the primary objectives of tax planning is to reduce an individual’s tax liability. This is often done by finding tax deduct-ions that can be used to offset income that would otherwise be taxable. In some cases an...

Consumer spending is an important driver of US economic growth. Consumer spending represents approximately two-thirds of all US economic output making it a very important determinate of the health of the US economy. Recently, economic...

The Tax Cuts and Jobs Act of 2017 expanded the definition of “qualified higher education expenses.” In the past this definition required enrollment in a qualified post-secondary educational program that qualifies for...

This time of year millions of Americans prepare their income taxes, sign the E-file forms, and then transmit their financial information to the IRS. Where does the information go? What does the IRS do with it? How does this impact the...

The IRS recently announced that it will reduce the underpayment penalty threshold from 90% of the tax owed to 85%. Historically, taxpayers who paid in at least 90% of their total tax liability during the year would not be subject to a...

The IRS expects a significant increase in the number of taxpayers using the new Standard Deduction for tax year 2018. The new Standard Deduction increases to $12,000 for Single Filers and $24,000 for Married Filers, which is nearly...

As many financial analysts expected, part way through the fourth quarter 2018 earnings season the reports have reflected mixed results. Some industries, such as financials, have reported fairly solid earnings compared to...

Tax season is approaching, which means for some taxpayers they will finally receive their tax refunds to replenish their savings or tackle the home improvement project they’ve been saving for. For others, their refunds may be the...

It has only been a couple of weeks since the calendar turned over to 2019. Yet a clear theme has already emerged as the key risk that threatens to define the year when it comes to the economic data and the markets: Political risk in...

Consumer spending represents approximately two-thirds of US economic output. Therefore, economists track consumer activity and sentiment indicators closely when creating economic forecasts. However, in the fourth quarter the consumer...

The trade war between the US and China has drawn on for six months with little progress toward a resolution. The US placed tariffs on a variety of Chinese goods in June. China responded in-kind by increasing tariffs on US exports,...

Taxpayers have just a few weeks left to make their charitable contributions for the 2018 tax year. In order to qualify for the tax deduction, the deduction must be made by the end of the year and must be made to a qualified...

Interest rates have made headlines this year as the Federal Reserve continued to push short-term rates higher. Longer-term interest rates also increased although by less than short-term rates and the yield curve (graphical depiction of...

Market sentiment appears to have shifted abruptly in 2018. For the first part of the year Wall Street seemed quite optimistic following the corporate tax cuts in late 2018 which translated into strong earnings reports and solid...

Tax Loss Harvesting is a strategy that involves selling certain investment positions (stocks, bonds, mutual funds, ETFs, etc.) at a tax loss to offset realized capital gains or other taxable income up to the $3,000 limit. A capital...

One of Warren Buffett’s many notable quotes seems particularly timely at the moment. Buffet once said: “The less prudence with which others conduct their affairs, the more prudence with which we should conduct our own...

The stock market has become increasingly focused on Federal Reserve policy and the future path for interest rates. So much so that the comments from various Federal Reserve Open Market Committee (the committee tasked with setting...

The IRS recently announced an increase in retirement plan contribution limits for 2019. These limits are tied to the rate of inflation and typically have a minimum adjustment amount of $500. The contribution limits for 401k type plans...

The US federal government ran a deficit of over $100 billion in the month of October. This is a 59% increase from October 2017 and puts the deficit on pace total $1 trillion for the year. The combination of the tax cuts passed in late...

The home construction industry has been reeling recently as a combination of factors has caused builders to become more cautious. The National Association of Home Builders added the most recent bad news when they announced that...

Technology stocks led the way for the first seven months of 2018. The relative strength of technology stocks for the first part of the year shows a strong upward trend indicating that technology outperformed the broad market by a large...

The days of sales people fighting for a larger expense account has been changing over the past year. Instead of working out how to leverage an expense account to find new customers and keep existing customers happy, many companies have...

The Social Security Administration recently announced the 2019 Cost-of-Living Adjustment (COLA). Starting January 2019 Social Security beneficiaries will receive a 2.8% increase in benefits, which is 0.8% higher than the 2018 increase...

In the past cash management was a big part of financial planning. The goal was to allocate cash holdings, whether it be money set aside for future expenses, an emergency fund, money to which a goal has not yet been assigned, to an...

IRA owners are required to begin taking Required Minimum Distributions by April 1st the year after they turn 70½ at the latest. The RMD is calculated using the IRA balance as of the end of the prior year and an age factor that...

Longer-term US interest rates may have finally given in to the upward pressure from short-term interest rates. This month the benchmark 10-year Treasury bond yield moved through its long-term trading range to levels that have not been...

The amount of student loan debt outstanding increased substantially following the Great Recession. Student loan debt now represents over $1.5 trillion and continues to increase, partly because borrowers are not aware of their options...

A recent survey of investment managers by Bank of America Merrill Lynch shows that they are becoming more pessimistic. In fact, according to the most recent survey, pessimism is at its highest level since late 2011 with nearly a...

Revocable Living Trusts provide the grantor(s) of the trust (the individuals who create the trust and provide the assets that fund the trust) the flexibility to make changes throughout their lifetime. The assets of a Revocable Living...

US interest rates have increased this year as the Federal Reserve continues to hike short-term rates and investors demand higher returns on longer-term lending. This has pushed the yield on the 10-year US Treasury bond, a key interest...

The US Conference Board announced that consumer confidence reached a cyclical high in August of 133.4. This is the highest reading since October 2000 following the boom years of the late 1990s. This is a strong sign that consumers are...

A Revocable Living Trust is an estate planning document used to transfer one’s property effectively and efficiently upon one’s passing. Many families and individuals establish a Revocable Living Trust to avoid the probate...

It is important to avoid making investment decisions purely on the basis of fees. It is more important to make sure the investment fits the investment objectives, long-term goals, and diversification target for the investment portfolio.

The House Ways and Means committee has released the details of a second tax bill that is largely designed to help Americans save for their future. Naturally, the bill is just a draft and will likely go through a number of changes and...

Many people do not realize that Medicare Part B and Part D premiums are means tested until it is too late.

The US stock market recently set yet another milestone -according to the methodology used by some financial analysts the current bull market is the longest recorded. It has now been 9.5 years since the stock market bottom in March of 2009.

We are often asked how long an individual should keep their income tax records.

Under the new tax law, many taxpayers will not benefit, or benefit very little, form the mortgage interest tax deduction.

One of the tax deductions that can be the most difficult to track is the Vehicle License Fee paid to a state’s Department of Motor Vehicles.

Many taxpayers who engage in a Roth conversion (transferring money from a traditional IRA to a Roth IRA) are unaware of the option to undo the conversion if needed. The process of undoing a Roth IRA conversion is called a Roth IRA recharact

US stocks have outperformed foreign stocks by a wide margin over the past several years. This has led to reduced returns for well-diversified portfolios which typically hold 30-40% of their stock allocation in foreign stocks. However, this

The Trump administration appears to be shifting gears away from health care reform and immigration issues to focus on tax reform. Trump recently announced that his admin-istration will be announcing the broad outline for tax reform this wee

Taxpayers who are not eligible to contribute to a Roth IRA may still be able to invest in a Roth IRA. The process, called a Roth Conversion, involves transferring money from a Traditional IRA into a Roth IRA. However, it is important to not

The first round of the French Presidential election occurred on Sunday. The election narrowed the field to just two candidates, Emmanuel Macron and Marine Le Pen. Macron, who represents the pro-globalization and pro-Euro view, received the

The March Federal Reserve minutes contained several statements expressing concern about the high level of stock prices compared to valuation factors, such as company earnings. This could be a sign that the Fed is becoming concerned about th

The Roth IRA is a valuable tax and retirement planning tool. Contributions to a Roth IRA do not give an income tax deduction but the distributions are tax-free in retirement. In some cases taxpayers can contribute to a Roth IRA directly, wh

The Federal Reserve faces a difficult task in normalizing its interest rate policy. Not only will the Fed need to increase short-term rates at a pace that will not tip the economy into recession, but it will also have to shrink its holdings

The high level of household debts in the US is showing up on the financial statements of deceased individuals. According to a recent study, 73% of Americans carry some form of debt when they pass away. The average amount of debt is $61,554

It is an unfortunate fact that the US tax withholding system is not very effective. This can lead to large refunds or large amounts owed depending on an individual’s situation. In addition, when income changes from year to year, the a

The stock market has posted strong returns since the presidential election. Much of this has been fueled by investor optimism over the prospects for corporate tax reform and reduced regulation on certain industries. However, given the failu

The January inflation date exceeded 2% for the first time in many years. One of the major contributing factors was the year-over-year increase in oil prices from January 2016 to January 2017. However, oil prices have declined by 13% in the

Individual Retirement Arrangements (IRAs) are personal investment accounts that allow individuals to save for retirement in a tax-advantaged manor. There are two types of IRAs, traditional IRAs and Roth IRAs. Each comes with a different set

It is tax time again. This makes it a great time to review where the federal government actually spends our tax dollars. The largest spending categories are Social Security (33%), Medicare (27%), and military (16%). The next in line is inte

We are often asked how long an individual should keep their income tax records. The general answer is that the IRS has three years from the due date of a tax return to review or audit the return. After the three year statute of limitations,

US household debt is once again near its 2008 peak. A rebound in auto debt and student loan debt has led the increase in household debt. Meanwhile, the increase in mortgage debt, the largest segment of household debt, has increased slowly a

Official US data shows a strong increase in both retail sales and inflation in January. This contributed to a year-over-year increase of 5.6% for retail sales and 2.5% for consumer prices. Energy prices were a large contributor to both reta

Housing prices continued to increase in 2016. Prices continued their upward trend despite an increase in interest rates over the past six months of the year. While rising interest rates can be a negative for housing prices, there are others

The average cost of a wedding increased nearly 10% to $35,329 in 2016. When the average cost of the honeymoon of $3,400 is added, the total cost of getting hitched is now nearly $40,000. In addition, the couple (or their parents) are increa

As a reminder, our biweekly newsletter is available via a podcast hosted by Planned Solutions. The podcast is available on the Apple podcast App and on Andriod devices via Google Play.   Search Planned Solutions on your podcast ap

People tend to think in terms of extremes. As our environment changes, our outlook for the future changes, causing us to alter our behavior in response. We tend to ignore the benefits from moderation, which requires a longer-term view and a

One important income tax deduction for many taxpayers is the personal income tax exemption. In 2016 taxpayers can claim a deduction of $4,050 for each taxpayer or dependent listed on their return. However, it is important to make sure that

Federal Reserve Governor John Williams was the keynote speaker at the Sacramento Business Review this year. During his presentation he made a case for the Federal Reserve Open Market Committee, of which he is a voting member, to increase in

The Dow Jones Industrial Average finally broke through the 20,000 level in late January. In anticipation of the event many news outlets have published stories about what large round numbers on major market indices mean. In reality, the 20,0

Individuals who have an IRA and are over age 70 ½ or who inherit an IRA may be subject to Required Minimum Dist-ributions (RMDs). This is a minimum amount that must be withdrawn which is based on the value of the account and an age fac

Chase recently participated in the Sacramento Business Review (SBR) economic forecasting event. The SBR focuses on the factors that are driving the economy of the Sacramento Region including labor market growth, residential and commercial r

In preparation for the upcoming tax season, we mailed out tax organizers to all of our tax preparation clients last week.   If you did not receive a tax organizer but are interested in having Planned Solutions prepare your income

According to the US Department of Agriculture, the cost of raising a child from birth to age 17 increased 3% last year to over $233,000. The increase was largely driven by an increase in housing costs, which can account for nearly one-third

Last year the stock market started the year out on a sour note after the Federal Reserve increased interest rates in December 2015. This year many expected the same reaction following the Fed’s December 2016 rate increase. However, th

The holidays are often a time when people are more motivated to give to charity. In addition to the good feeling that charitable donations can bring, they may also qualify for a tax deduction. However, the IRS rules are complicated. So if a

Mortgage rates are on the rise. Mortgage brokers are now changing their tactics away from emphasizing lower rates to focusing on shortening the term of the mortgage. Often the message is that refinancing to a 15 year mortgage will result in

The IRS recently released the retirement and Social Security contribution limits for 2017. Many of these limits are adjusted for inflation, subject to certain minimum adjustment amounts. Therefore, some of the limits increased this year whi

As a reminder, our biweekly newsletter is available via a podcast hosted by Planned Solutions. The podcast is available on the Apple podcast App, on Andriod devices via Google Play, and on a desktop computer through SoundCloud.com. Just sea

A recent poll by BankRate.com shows that nearly two-thirds of Americans report that they are pulling back on spending. Given that approximately 70% of US economic growth is personal consumption spending, this may be an indication of slow ec

Little about the current economic cycle has conformed to historical norms. The employment recovery proved to be sluggish compared to past cycles. Interest rates have been held at low levels for most of a decade. And many historical economic

The Affordable Care Act, with its broad and diverse set of new regulations, has been a challenge for individuals and business leaders. It has also been a challenge for the IRS, the agency tasked with enforcing the law. This has led to confu

Several central banks around the world have pushed interest rates into negative territory. If they continue to decrease rates, it may cause savers to hoard cash which offers zero return rather than negative returns. This could put a limit o

Fixed Indexed Annuities have gained popularity following the financial crisis. Clients are often drawn to these products for principal protection. Financial advisors often sell them because they pay high commissions. However, many clients w

S&P 500 earnings rebounded slightly in the second quarter. This ended a six quarter (18 month) streak in which the trailing 12 month earnings for the S&P 500 declined. However, despite the small rebound, S&P 500 earning are now

The Congressional Budget Office (CBO), the bipartisan financial research arm of the US Congress, recently announced that the US budget deficit is projected to increase in 2016. This will be the first year since 2009 in which the budget defi

Peer-to-Peer money transfer services in which individuals transfer money to each other without using a traditional bank intermediary are becoming more popular. These services can be a good way to transfer money quickly without incurring hig

The Institute for Supply Management (ISM) reports for both the services and manufacturing sectors of the U.S. economy declined sharply from July to August. The reports showed declines in several sub-indexes including new orders, business ac

One of the themes to watch this earnings season is the reduction in stock buyback announce-ments. So far, stock buyback announcement have totaled just $1.6 billion dollars. This is a four year low and well below the average of $50 billion p

Individuals who utilize a high deductible health insurance plan may be able to make tax deductible contributions to a Health Savings Account (HSA). Health Savings Accounts can be used to fund medical expenses that are not covered by insuran

Many people believe that they are not saving enough to fund their retirement income needs. Of those surveyed, a large portion said they will plan to work into their retirement years to subsidize their income should their savings prove insuf

Some people choose to forgo signing up for Medicare part D when they become eligible for Medicare. Part D covers prescription drugs which may not be a large concern for a healthy 65 year old. However, those who do not sign up for part D whe

Despite expectations that Federal Reserve money creation would lead to hyperinflation, official inflation rates have been below the historical average since the Great Recession.  This is partly due to the deflationary pressure that dec

The Federal Reserve Open Market Committee, which sets short-term interest rates in the US, voted to maintain its target of between 0.25% and 0.50% in July. The committee’s official statement referenced stronger economic data in the US

Housing data has continued to be strong. Home prices as well as new home sales, starts, and permits have all been strong. This is likely the result of a housing shortage which has created a supply-demand imbalance. Even at current rates, th

Low interest rates and below average stock returns have created a challenge for the nation’s pension systems. Many pension systems, including CalPERS, the nation’s largest pension system, are now underfunded by a wide margin. Th

Charles Dow, the creator of the Dow Jones Industrial and Transportation averages is also known for Dow Theory. Dow Theory states that transportation companies often foreshadow changes in the overall economy and therefore should be watched c

Mortgage rates have declined significantly following the Brexit vote. US Treasury bonds rates or are now at a historic low. This decline is evident in mortgage rates, which are now at levels not seen since 2013. If you still have a mortgage

A recent study shows the average IRA account balance by age. It highlights the fact that the average American has not saved enough to maintain their standard of living in retirement. There are a variety of reasons for this shortfall, only o

The ninth key to financial happiness is to have a sufficient emergency fund. Financial emergencies can lead to stress. Not having an emergency fund can lead to feelings of financial instability. Building up and maintaining an emergency fund

The UK is scheduled to vote on Thursday, June 23rd as to whether the UK should leave the European Union (EU). While the vote was primarily triggered due to concerns about EU migration policies, it could have short-term and long-term implica

The eighth key to financial happiness is to save more and avoid using debt for purchases that will not offset future expenses or increase future income. This may require deferring personal consumption expenditures until after saving the mon

According to official data the US economy added just 38,000 jobs in May, well below economist estimates. In addition, the March and April job numbers were revised downward potentially signaling weakness in the labor market. While one month

There has been a lot of talk in the media about the possibility of another Federal Reserve interest rate hike in June. Interest rates are a popular topic in the financial press because they have a large and diverse impact on the economy and

The seventh key to financial happiness is to make sure that you have a plan to fund your financial needs, both now and in retirement, before spending a significant amount of your financial resources on wants. Failing to fund your needs will

Interest rates in Europe and Japan are negative, with bank depositors and bonds investors actually paying institutions to hold their money. In the US, real interest rates (interest rates less the rate of inflation) also turned negative rece

The sixth key to financial happiness is to avoid spending more than you can afford. This may seem simple in theory but can be difficult to do in practice. The key is to calculate the amount that you can afford to spend after funding other f