Independence Planning – July 2018 Video Blog (watch video above)
Executive Education forum at Wharton School for Business
Steve and Chris attended an executive education forum at the Wharton School at Penn University in Philadelphia. The curriculum was designed and taught by world-class professors including Richard Marston, professor of Finance; Olivia S. Mitchell, PhD professor of Business Economics; and Michael Useem, PhD professor of management. This comprehensive forum focused on how to address the fluctuating demands of the financial services industry, including helping to identify and implement competent wealth management solutions for individuals, families and businesses.
Continuing Education for our support staff
Please join us in congratulating Jessica Hawley in completing the requirements to receive the Financial Paraplanner Qualified Professional™ (FPQP™) designation from the College for Financial Planning.
The Barron’s Top Advisors Summit is an invitation-only gathering of elite-tier advisors to share best practices and elevate standards of service. Barron’s hosts a series of invitation-only events to provide an opportunity for top advisors from across the industry to meet and discuss the latest innovations in the wealth services field, developments in the global economy and strategies for financial planning and investment management.
Barron’s is America’s premier financial magazine. It provides in-depth analysis and commentary on the markets, updated every business day online.
On February 7th, 2018, Steve held an impromptu conference call for all clients in light of market volatility during the previous week. We wanted to post it online in case you missed it.
Always remember any questions about your accounts or finances, please reach out the the office and our staff will be happy to help.
Filing taxes can be an extremely difficult task. There are so many rules and regulations that it can make your head spin. Additionally, when you are married and considering how you should file, things can get even more complicated. Discovering if filing together or separately will yield the most benefits is a question which needs to be thoroughly researched. While there is no clean-cut answer and most people opt for filing together due to the tax breaks you can receive, there are some cases where filing separately may actually be of greater benefit to you and your spouse.
1. One of you is self-employed
The rules for those who are self-employed (freelancing, independent contracting, etc.) are very different from those who are working the more traditional 9-5 job. This is due to the fact that you are not only paying income tax, but you are also responsible for covering your own Social Security and Medicare tax. Since this is not coming out of your paycheck, self-employment tax rates for 2015-2016 were 15.3%.
Because of the differences in what you will have to pay, you are generally expected to make estimated quarterly payments to cover your taxes. If you have not been doing this, or you underestimate how much you will need to pay, this could set you back greatly and result in a large sum being taken from your refund. For those who are self-employed, it is sometimes advisable to file separately from your spouse. While you may lose some tax benefits, in the end, you may have to pay fewer taxes. It is important to weigh both sides in order to see which way you and your spouse will come out better in the long run.
2. You’re struggling With student loan debt
Debt deriving from paying for college is something which impacts approximately 70% of Americans. It is said the average debt for college graduates is around $30,000. This high number coupled with the difficulty of finding a job these days often presents young adults with many headaches. If you decide to repay your student loans through an income-dependent plan, this can become a little tricky when you are married.
The reason for this derives from the fact that if you and your spouse file together, your joint income will be considered for this type of repayment plan even if only one of you has debt. Therefore, when you file by yourself, only your income is considered in determining the kind of payments for which you qualify. Once again, in the process of filing separately you may lose specific deductions. However, if you do not have kids and take out standard deductions, the pinch will not be as drastic.
3. You have a lot of itemized deductions
Deductions are a great asset to utilize when doing your taxes as they help to reduce the amount of taxes you will have to pay. However, it is important to note the IRS does have an established limit of how much you can take off based upon your annual income. For this reason, it is important for you and your spouse to examine your deductions to see if separate or joint filing will give you the greater benefits. If you discover you both have numerous deductions you plan to claim, yet there is a substantial gap in what you earn, then filing separately would be the best route.
For example, if in the previous year, you paid a substantial amount of out of pocket medical expenses, you are allowed to deduct any amount which exceeds 10% of your adjusted gross income. If you have only earned around $25,000 within the past year, then you have a good deduction. However, if your spouse makes $150,000 and you decide to file taxes together, you are increasing your income and therefore increasing the 10% bracket. In a case such as this, it is a good idea to consider filing separately, allowing you to increase your deductions and reduce your out of pocket expenses.
In conclusion, these are just a few of the factors which married couples need to consider when filing their taxes. In situations where you are planning to divorce or you are concerned about being liable for your spouse’s tax debt, then it is advisable to file separately. However, in other cases, where the answer is not so clear, it is always a good idea to configure the numbers in order to discover the best way of receiving a good outcome on your taxes.
*This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Tech stocks have become a popular choice among investors. While owning a share of stock in Google or Apple might be out of reach for some people, there are plenty of companies whose stock is more affordable. That doesn’t mean, however, that you can just dive in without doing your homework. Take a look at some common mistakes people make when investing in tech.
1. Investing Without Considering the Long-Term Forecast
Many people these days rush to invest in tech stocks. But if you’re not careful, the wrong move could put your portfolio in jeopardy. Before buying shares of a particular tech company’s stock, it’s a good idea to step back and look at how the company fits within the industry. It’s also wise to find out what experts are saying about its future. That way, you can avoid making an investment that isn’t likely to pay off.
2. Investing in Companies That Are Overvalued
During the recent tech boom, many startups ended up with valuations of $1 billion or more. But once some of those unicorn companies went public, many investors realized that they were overvalued.
If you’re betting on a tech stock solely based on the company’s valuation, you could be setting yourself up for disappointment if the stock’s value takes a dive. You can also run into problems if a company’s stock price is too high and falls rapidly during a market slowdown.
3. Playing It Too Safe
Investing in stocks is risky. Looking for tech stocks with a stable track record can minimize your investment risk, but you don’t want to fall into a rut. If you’ve invested in a company that hasn’t made much progress since you first bought your shares, you might be better off putting your money elsewhere. It might also be a good idea to choose a company that consistently introduces new products and features. When a company like Apple brings out a new iPhone that appeals to the masses, its stock tends to perform well. A company that has more or less flat-lined creatively, on the other hand, may not see much movement in its stock price.
4. Overlooking Dividend Stocks
One pitfall some tech investors fall into is focusing on stocks that they can buy low and sell high for a big return. In the process, they sometimes ignore dividend stocks that can create a sustainable flow of income. Even when a dividend stock loses value, its dividend payouts can remain on an even keel. In some cases, the dividend payout increases incrementally over time. If you’re not taking advantage of the opportunity to invest in dividend stocks from companies like IBM, you could be selling yourself short.
Investing in tech isn’t for amateurs. Keeping up with industry trends and understanding the way that the stock market works can put you in the position to earn greater returns. Avoiding the mistakes we’ve
discussed is a good idea if you want to boost your profit potential the next time you decide to gamble on a tech stock. The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time.
Investing involves risk including loss of principal. No strategy assures success or protects against loss. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
Content written by Rebecca Lake for Smartasset. Click here for the original article.
Full retirement age is now 66 or 67, depending on the year you were born. But a recent survey revealed that one in four workers don’t plan to retire until after their 70th birthday. While some people may choose to work longer out of a desire to stay active, others may have to do so in order to keep up with their expenses. If you’re thinking about putting off your retirement, here’s a look at some of the pros and cons of working until age 70.
Pro: Working Longer May Be Good for Your Health
Getting older takes a toll on you physically. But according to one study, working longer could extend your life span. Researchers at Oregon State University found that putting retirement off for just one year after turning 65 could reduce the risk of dying by 11%.
Sticking with the 9-to-5 until age 70 doesn’t mean you’ll live forever. But it could give you more time to enjoy your golden years.
Pro: You Can Squeeze More Money Out of Social Security
With Social Security, you can get more bang for your buck by waiting until age 70 to begin drawing your benefits. If your normal retirement age is 66 but you wait until you turn 70 to start taking your Social Security benefits, you could receive 132% of the monthly amount you’re eligible for. That’s a nice financial incentive for working a little longer.
Pro: You Can Continue Growing Your Nest Egg
Working until age 70 could be a smart move if you want to add more money to your retirement fund. If you have a 401(k), for example, you could continue making contributions up to the annual limit, along with catch-up contributions while you’re employed. You could also defer triggering required minimum distributions from an employer-sponsored plan.
If you’ve got a traditional IRA, you can make new contributions until age 70 1/2. At that point, the required minimum distribution rule would kick in. With a Roth IRA, however, you have the advantage of being able to save indefinitely.
Con: Your Savings May Still Come Up Short
Continuing to earn a paycheck may help you out if you want to save more for retirement. But it may not do you any good if you end up having to spend a lot of money to counter a rising cost of living. Healthcare expenses in particular can take a big bite out of your savings.
The Bureau of Labor Statistics estimates that the average 65 to 74-year-old spends 12.2% of their income on healthcare each year. By the time they turn 75, medical expenses eat up nearly 16% of their income. At the same time, housing costs also creep up, moving from 32.4% of income in the late 60s and early 70s to almost 37% by age 75 and beyond.
Working longer also doesn’t counter the effects of inflation. When inflation rises, it has the ability to significantly erode retirement savings. According to one report, retirees can lose as much as $94,770 over the course of a 20-year period if the annual inflation rate is 2.5%.
The Bottom Line
If you’re on the fence about whether you should work until you turn 70, weighing the advantages and disadvantages of delaying your retirement can guide you toward making the decision that’s best for you. Remember that while having extra income can certainly be helpful, you’ll have less time to enjoy your retirement.