An integral component of a financial plan is making sure that you have adequate cash reserves set aside. But exactly how much is enough? Cash in the bank has several purposes: (1) to fund living expenses; (2) to fund short-term planned expenses (upcoming trips, home improvements, new car, etc.); and (3) to fund unanticipated expenses.…
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We all know that risk and return go hand-in-hand. As investors, we are encouraged to think about how much risk we can/want to assume and then build a portfolio that reflects our risk tolerance and objectives. But, investment risk is not a straightforward concept. There are two, broadly different kinds of investment risks: avoidable, concentrated…
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Through a Donor Advised Fund (DAF), a donor can make a charitable contribution, get an upfront tax deduction, and then recommend what charities to support and when. Funds can be distributed immediately or over time. In addition to the upfront tax deduction, DAFs also offer an added tax advantage when a donor makes a gift…
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In the past, when it came to income taxes, people who were charitably inclined could make charitable gifts to reduce their taxable income. While that opportunity is still available under the new tax law, the standard deduction is now much higher ($12,200 for single and $24,400 for couples under 65 in 2019) and, as a…
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As a financial planner, I am always intrigued by the behaviors regarding money that I routinely witness during this time of the year. As soon as the Thanksgiving dinner is cleared from the table (sometimes even before), conversations center around the holidays – the perfect gift for your spouse, tokens to remember colleagues and teachers, the…
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Annual contribution limits for retirement savings accounts for 2018 and 2019, as established by the IRS, are listed below. Please keep in mind that contributions to Traditional IRAs, Roth IRAs, and SEP IRAs can be made up until the time your tax return is due, including extensions. 2018 2019 Maximum Annual Traditional IRA contribution (under…
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When you deposit money into a bank account, the bank uses those funds to make loans. In the unlikely event that too many loans go bad or the banks become insolvent, the FDIC (Federal Deposit Insurance Corporation) will make account holders whole up to $250,000 per account. That is why you may have heard that…
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As a financial planner, one of the topics that I always bring up with my clients, although most of them don’t like to discuss it, is estate planning. Estate planning is relevant for everyone, no matter how much money you have or how old you are. Typically, people think of Wills when it comes to…
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We all know that to receive a return on your investment, first you must invest and then, you must stay invested. Investing 101 teaches us that risk and return are related – to earn returns, you must put your assets at risk in ventures that are expected to compensate you for your faith that they…
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When saving for retirement, ROTH accounts are becoming increasingly popular. Unlike traditional IRAs or 401k plans, while contributions to ROTH IRAs and ROTH 401k plans are not tax deductible, distributions are tax-free (so long as certain requirements are met). If you have ROTH accounts, it is important to understand Minimum Distribution Requirements as they differ from those of traditional IRAs/401ks.
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