A few years ago, the Treasury Dept. issued a ruling that may give rise to some interesting retirement planning strategies. Owners of IRA and 401k accounts are now permitted to use as much as 25% of their account balances up to $125,000 to purchase so-called "longevity annuities".
Discerning consumers are becoming aware that there is an alternative to conflict-laden, commission-based and fee-based financial "advice". It comes as no surprise, then, that many financial advisors are now misrepresenting themselves (whether out of ignorance or out of something even less savory) as being "Fee-Only".
As we begin to prepare for tax season, IRA contributions are on the minds of many taxpayers. This should be no surprise since not only do tax-deductible IRA contributions reduce current tax bills, but non-tax-deductible IRA contributions have the potential to reduce future tax bills as well. With these tax benefits in mind, here are three ways to effectively increase your household's IRA contributions that often fly under the radar:
The Tax Policy Center estimates that recent changes to the tax code in the form of last year's Tax Cuts and Jobs Act (TCJA) "... will cut individual income taxes for 65 percent of households overall, but raise taxes for about 6 percent of households." Even so, why not resolve to improve your financial situation even more in the New Year. Depending on your circumstances, there may be a variety of moves to make to reduce your tax bills (or to offset them by saving money in other ways).
457(b) plans are retirement plans for government workers and for highly-compensated employees of non-profit organizations. As such, 457's are offered by some of Utah's largest employers, including Intermountain Healthcare and the University of Utah. These plans are analogous to 401(k)'s and 403(b)'s, but they differ in one critical way.
The "Fee-Only" business model of delivering financial advisory services has garnered a lot of positive press in recent years. In response to this groundswell of accolades for "Fee- Only" financial advice, commission-based advisors and their employers have devised a number of ways to protect their turf. Most of these are meant to confuse the consumer.
One of the investment universes that Five Seasons Financial Planning monitors in an ongoing search for value to exploit for the benefit of client portfolios is that of closed-end mutual funds. At this time of year, when tax-loss selling is prevalent, there are often compelling values to be found, and this year is no different. Since you may be somewhat less familiar with the concept of closed-end mutual funds than with other types of mutual funds, here's a quick primer:
Getting good grades can dramatically reduce total college expenses in a number of ways. Beyond bribing your kids and grandchildren in return for academic performance, here are some other tips and tools to keep college expenses under control:
With the bond universe ranging from " ... obscenely overpriced to somewhere on the expensive side of fair value", and with most major U.S. stock indices within shouting distance of all-time highs, the current market environment is presenting a quandary not just to financial advisors but to investors as well. The investing public with cash on the sidelines seem torn between the fear of missing out on a further rally in stocks and the fear of committing capital at valuations that have often presaged middling returns, if not nasty bear markets. Consequently, a question clients have been posing recently is: Is it better to commit new money to the markets as fast as possible, or is it better to dollar-cost average our way into the markets over time?
As different asset classes, and different investments within those asset classes, generate disparate returns through time, you will find that your portfolio asset allocation will stray from its target. "Portfolio rebalancing" is the process of correcting this, of bringing your investment portfolio back into alignment with your target asset allocation.