While we usually discuss investing in the context of retirement planning in 401(k)s and IRAs, I was recently asked by a young mother about investing $50k in her 1 year old child’s name. (Since it’s in the child’s name, the money has to be used for his benefit but since he’s a minor, the mother has control over how the money will be invested and spent on his behalf.) Here are some things to consider. Continue reading “How to Invest for Your Child”
You’ve probably seen the commercial with pallets of money being dropped from above, representing a billion dollars of missed tax deductions and credits from taxpayers who do their own taxes. You don’t have to go to a tax pro to get your fair share, however. Just make sure you don’t overlook some of the following items that could increase your tax refund: Continue reading “Don’t Overlook These Commonly Missed Tax Breaks”
When I worked as a 401(k) enroller, my regional sales manager (who happened to be my step-dad) used to demonstrate the tax advantages of the 401(k) by ripping a dollar bill into two pieces to show the effect of taxes on income. He would then go on to say that trying to save for retirement with after-tax money was the equivalent of saving only a portion of every dollar we earned and by putting that money in the 401(k), we got the benefit of the whole dollar instead.
Not only did this grab my attention—unless they are a magician you rarely expect someone to voluntarily rip dollar bills in half—but it drove home the idea that tax-deferred saving was better than saving after taxes. There was only one problem: that money would eventually get ripped, figuratively speaking, when it was withdrawn in retirement. Continue reading “Why I Max Out My Health Savings Account (And You Should Too)”
Last week, I discussed some of the advantages of investing in direct real estate for retirement. Of course, there are downsides to it too. Here are some of the challenges would-be real estate investors will face:
Continue reading “The Challenges of Real Estate Investing”
One of the things that always astounds me is the behavior of people when there is money on the table. The bigger the pile, the more interesting the behavior gets at times. In my days working with clients of substantial means, sometimes their decision making would particularly puzzle me. Continue reading “What Risks Are You Willing to Take?”
I recently got a question in one of my retirement workshops about investing in rental properties for retirement. This can be a great idea for some investors. In fact, I just closed on my own first investment property. Here are some of the unique benefits to supplementing your other retirement investments with direct real estate: Continue reading “Why I’m Investing in Real Estate”
One of the most common questions I get asked is how to divide your money between different types of investments. You’ve probably heard that 90% of investment returns can be explained by your asset allocation or how you divide your money between stocks, bonds, and cash. The problem is that asset allocation guidelines can vary dramatically based on where you look. So how do you decide? Continue reading “The 5 Things That Really Matter When It Comes to Investing”
It’s that time of year again. The IRS will begin accepting electronically filed federal returns on January 31st, kicking off the 2013 tax filing season. But instead of paying hundreds of dollars to have your taxes professionally prepared, you may be eligible for free tax preparation and e-filing through the IRS Free File program, a public-private partnership between the IRS and commercial tax software companies. Continue reading “Do You Qualify for Free File?”
I hope you’re having a great holiday season! But in-between various parties and celebrations, there are some last minute financial moves to save you money that you might want to make before the end of the year. Here are a few to be aware of: Continue reading “7 Last Minute Financial Steps to Take Before the End of the Year”
Every year, the Ward family gathers around the table to share a traditional Thanksgiving meal together. Each of us takes turns sharing what we are thankful for and before long, the whole dining room is alive with laughter and joyous conversation. After the kids are excused, the adults sit closer together to talk about more serious issues, and inevitably the subject of money enters the discourse. Fortunately, there is a financial planner among them, so everyone knows who to ask when financial questions arise. Continue reading “How to Avoid a 50% Mistake”
‘Tis the season to be jolly, and what better way to express your jolliness than to share it with others. Friends and family may be the first on your list, but don’t forget the less fortunate. My friend and colleague, Diane, and her daughter are starting a new tradition this year: They have adopted a family for the holidays so Diane and her daughter have chosen to sacrifice part of their Christmas so that others can enjoy theirs. Continue reading “A Tax Tip for a Jolly Old Elf”
I began my career in 1994 as an enroller for a large 401(k) provider. From the moment I started, I was indoctrinated in the virtues of this particular savings vehicle. Things like “tax-deductible savings” and “payroll deduction” became everyday vernacular, and before you knew it, I was out there evangelizing the masses on the greatness of this extremely important part of the tax code. So imagine my chagrin when I learned that my beloved 401(k) has come under attack recently by some who are calling for its demise. Continue reading “In Defense of the 401(k)”
Did you try to put that cute winter sweater on for the first time this year, only to find that eating way too much turkey, mashed potatoes, and stuffing is resulting in your unsuccessful attempt to stuff yourself into clothes that are now too tight? Well, I don’t have a magical dieting solution, but I’m sure someone else might just find that sweater a perfect fit. Whether some of your clothes are now too tight, too loose (I wish!), or just simply out of style, the solution is to donate these items to someone who CAN wear them. Not only can someone else make good use of your castoffs, you might even be able to take a tax deduction. Continue reading “Clothes Too Tight After Turkey Stuffing?”
We may have evolved to focus on the bad things in life (our more cautious ancestors were more likely to survive and reproduce) but today is a time to give thanks for the good things that we too often take for granted. This applies to our financial life too. Here are 5 financial blessings we can be thankful for this Thanksgiving and some steps you can take to make the most of them: Continue reading “5 Financial Blessings to Be Thankful For Today”
Thanksgiving is right around the corner, and if you are like most traditional American families, you’ll probably eat too much, watch a game or two on the TV, and simply enjoy spending some quality time with each other. For some families, spending quality time together happens regularly, but for many, including my own, it usually only happens around the holidays. If that is the case for your family, one thing you may want to do this holiday season is discuss long-term financial goals. It may not seem like the most enjoyable topic of conversation around the dinner table, but with more and more uncertainty about the future, it may be one of the more important conversations you will ever have in your life. Continue reading “What You May Want to Discuss Around the Thanksgiving Table”
Burping can relieve more than just stomach discomfort. It can actually relieve the pressure of the new 3.8% Medicare surtax, according to Steve Parrish, a Forbes contributor. His idea of “burping income” is that if a taxpayer can discharge some income at certain levels, it avoids an accelerated build-up of further taxes. This analogy can apply to various triggers in the tax code but is particularly appropriate to the Medicare surtax. Continue reading “Can You “Burp” Away the Medicare Surtaxes?”
No, I am not asking you to pass me the pepper. PEP stands for personal exemption phaseout, a potential reduction or even elimination of the $3,900 per person exemption on your 2013 tax return. For single filers with adjusted gross income (AGI) in excess of $250,000 or couples who are married filing jointly and have AGI in excess of $300,000 the exemption will be reduced by 2% for every $2,500 of AGI (or portion thereof) above $250,000 ($300,000 for married couples filing jointly). For married couples, personal exemptions will be fully phased out once their AGI exceeds $422,500, or for single filers if AGI exceeds $372,500 according to Internal Revenue Bulletin 2013-5. Continue reading “Pass the PEP, Pease?”
I recently had the opportunity to speak with a wonderful young lady who considered herself very lucky to have won a “Dream Wedding” from a bridal magazine contest. Having a daughter in college, it sometimes crosses my mind that I’ve seen her go from preschool through entering college and her next milestones could be getting her first job in the “real world,” getting married (hopefully not any time soon!) and becoming a mother (hopefully VERY far down the road….). So when talking with this “bride to be” and hearing that she won a $100,000 dream wedding, I was incredibly happy for her. Continue reading “A Dream Wedding or Tax Nightmare?”
I’ve just returned from a girl’s weekend vacation with a group of 5 friends who I have known for ages, a few going back as far as elementary school. Now we share pictures of grandkids who are about the same age as when some of us first met. Since I’m the number cruncher, I got the task of tallying up the tip and dividing the bill when we went out for a meal, and when the conversation turned to buying new homes or college costs, I was always asked to weigh in with my “professional opinion.” Continue reading “Yes, I’m A Finance Geek”
Will Social Security be around when we need it the most…and if so when should we take it and how will it be taxed? These days, those are some of the biggest retirement planning concerns among anyone that’s not currently retired. It’s no secret that Social Security is in need of some significant changes to strengthen the ability of future generations to receive Social Security benefits. The reality is that without any changes to the system only 75-80% of projected benefits would be able to be paid. Continue reading “How Much Will You Really Get From Social Security?”
