Spring Cleaning Time

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Spring is finally here! You know that what means…Spring Cleaning! Some people love it, some hate it, but either way it is a great way to say “out with the old and in with the new.” Spring Cleaning is basically just trimming away the excess, updating, and even evolving. It’s a great idea to do this with many areas of your life, not just your home. Here are the three simple steps to spring into action and Spring Clean anything you want…especially your finances!

The Three “R”s

1. Review

The first step to any good plan is kind of self-explanatory…make a plan! For a home you want to look around at everything you have and decide what can be kept, what needs to be fixed, and what just needs to be thrown away. Your finances work the same way. Review your accounts. Some people do this on a regular basis and have spreadsheets they update weekly.  Others, and you know who you are, have scattered pieces all over. Now is a good time to do this since you should have gotten first quarter statements on any investment accounts, and can also go online.  I recommend segregating by type of account: non-qualified personal or joint account, IRA, Roth IRA, retirement plan (401k, TSP, 403b, etc.), inherited IRA, and trust accounts.  List each account by type and then by asset.  Do you have an emergency savings account?  Rule of thumb is to have 6 months of your salary available in a safe liquid account.  If you have significantly more, especially in this low interest rate environment, consider other alternatives.  Alternatives need to be matched with your comfort level and timeframe.  For example if you want safety and liquidity, don’t lock up your funds in a single 10 year annuity.  Conversely, if you need liquidity but are adverse to risk, mutual funds or a brokerage account of stocks, would also not be a good match.  A fiduciary financial advisor can help you explore and evaluate investment options. Read more

March Madness – Final Four Tax Tips!

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March Madness is here! The NCAA college basketball tournament is the second largest grossing sports event in America, slightly behind the Super Bowl. Though the tournament is set to begin on Tuesday March 17th, the real March Madness has already begun: tax preparation and planning!

Proactive tax planning means more than completing your tax return by April 15th. As our country tackles it’s massive debt and entitlement program obligations, additional taxes, including tax on retirement accounts, college saving accounts and the so called “Fair Share Taxes” leads for concern about where taxes will be 10, 15, or 20 years from now. Today we have choices: (1) we can choose to ignore the pending threat of higher taxes, and cross our fingers that they do not go up, or (2) we can implement some strategies to insulate and buffer ourselves against higher taxes. It’s time to lace up your shoes, get on the courts, and win yourself a financially secure future. Remember, we also still have a free TV to give away: just let us know what you are doing today to add more tax efficiency and shelter yourself from higher taxes, and you’ll be entered in the raffle. To help you with the process here’s our Final Four Tips!

rising taxes.

  1. Create a financial plan

Working with a professional to get an overall financial plan done can help to identify opportunities for more tax efficiency. Some people like to do things on their own, and that is perfectly okay, but the value that a financial professional can bring cannot be overlooked. There are many things that can be accomplished through hard work and learning from your mistakes but your finances should not be one of them. Read more

8 Threats for Retirement Accounts

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While supporters of President Obama’s 2016 Fiscal Budget say the budget will make it easier to save for retirement, the proposal is giving mixed messages when it comes to retirement planning.  I have identified eight budget provisions that would have a negative impact to many retirement accounts. Read more

Turn Your Taxable Portfolio Into A Tax-Free Retirement Account

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Long-time federal workers have a unique opportunity for tax-free retirement income…but

immediate action is vital. Under President Obama’s proposed budget, aftertax rollovers to Roth IRAs will end next year. Throughout 2015, Civil Service Retirement System (CSRS) and CSRS Offset employees can still lock in the benefits.

THE REWARDS OF ROTH IRAs

Savvy investors understand the advantages of Roth IRAs. Contributions arn’t tax-deductible,
but all withdrawals can be tax-free. So you don’t have to share your investment earnings with
the IRS.

However, contributions to Roth IRAs are limited to modest amounts. Besides making
contributions, you can convert a traditional IRA of any size to a Roth IRA—but that could mean paying a huge tax bill. Some federal employees can overcome those obstacles. If you are in the CSRS, you can contribute to the little-known Voluntary Contribution Program. Read more

The Need for Proactive Tax Planning – And a Chance to Win a FREE TV!

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The debt crisis that the US Government and individuals face is a pressing issue.   This crisis needs to be confronted for the financial health of the United States.  We complain about taxes now… they could get a whole lot worse.

David Walker, President and CEO of the Peter G. Peterson Foundation and former comptroller general of the United States, believes that by 2030, without significant reforms to our government programs and policies, federal taxes could double from current levels.

The Congressional Budget Office (CBO) projects that, as the economy recovers, revenues under current law will increase over the next couple of years, reaching about 18 percent of GDP in 2024. Individual income taxes and social insurance taxes (largely social security payroll taxes) account for most of federal government revenue.

In its latest long-term budget outlook (July 2014), the Congressional Budget Office (CBO) projects that, within 25 years, federal debt held by the public would rise under current law to 106 percent of GDP and to 183 percent of GDP under less optimistic assumptions. Debt at those levels would put our economic future at risk. Read more