Estate planning is a crucial part of any financial plan. One of the first discussions we have with new clients is about whom they want to oversee their financial and health decisions if they are unable to do so themselves. It is crucial to have primary and contingent people identified for each role. There is a lot of confusion about the various estate terms, so we have put together this primer.
Considering the multiple security breaches recently disclosed by LastPass, we thought we would dust off and repost a prior blog regarding online security. While some people are calling for users to ditch LastPass entirely, a password manager is often much more secure than other methods of storing sensitive data. In addition, if your account is protected by 2-factor authentication and password best practices, your data is much less likely to be compromised.
For many, the new year is a time for fresh starts and new beginnings. It’s quite common for people to set new goals and resolutions at the start of a year. Behind exercising more and losing weight are almost always goals around money. Often these goals include saving more and spending less this coming year. As we all know, the problem with most New Year’s resolutions is that the vast majority fail. While we all know the statistics, there are certain things you can do to improve your odds of sticking to your resolutions in 2023.
It seems like yesterday, but in the pre-COVID-19 calm before the storm of December 2019, Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The Act had many provisions, but the most important were increasing the beginning age for taking[MKS1] RMDs from age 70.5 to 72 and a new set of guidelines that effectively ended the Stretch IRA [MKS2] for most non-spouse beneficiaries of IRAs. Well, three years later, on December 23, 2022, Congress tucked SECURE 2.0 into the Consolidated Appropriations Act of 2023, and here we go again. SECURE 2.0 has a bonanza of changes related to retirement plans. Some have broad effects and others apply to small groups of people. Implementation of the new rules is spread out over the next 10 years, but most are effective in 2023, 2024 and 2025.
Recently citizens in Massachusetts were asked to vote on an amendment to the state constitution to levy a surtax on certain high-earning individuals. After a tight vote, the amendment passed, and starting in 2023 the Mass. Millionaire Tax will begin to take effect. In this post we’ll explore some of the details of this new tax, whom it may impact, and potential tax-planning implications.
New Hampshire residents recently saw a huge increase in their electric bill, for example, a 50% increase in electric rates for Eversource customers. Unfortunately, things may get worse with the next scheduled rate change (December 6 decision). For example, Eversource has said it is “worried there might not be enough bidders to fulfill all of the power it needs to supply. And even if there are enough bidders, the prices those bidders offer could be extraordinarily high.”
If you’re 65 or older, by now you should have received your annual installment of the official U.S. government Medicare handbook, Medicare & You 2023. Your mailbox is also probably full of Medicare-related flyers from insurance companies trying to win your business. The annual open enrollment period for Medicare started on October 15 and goes until December 7. It is the one time every year that Medicare beneficiaries have an opportunity to modify their Medicare coverage. During the open enrollment period, you can switch or add a Medicare Advantage plan, switch, or add a Part D prescription drug plan and, in some states, like Massachusetts, switch or add a Medigap plan. Any changes you make take effect January 1 of next year.
If you use Venmo, Cash App, PayPal, eBay, etc., to send or receive payments, this may apply to you! U.S. tax law states that “gross income is ALL income received from whatever source derived.” Some people are under the false impression that if you do not receive a Form 1099 or federal W-2 form, you do not need to report the income. That is a dangerous perception, considering the severity of tax penalties for knowingly underreporting your income to the Internal Revenue Service (IRS). The “tax gap” in the U.S., defined as the difference in the taxes owed versus the taxes that were paid, was estimated at over $600 billion in 2020. The IRS has taken steps to reduce the tax gap, and one way is by reducing the threshold at which businesses and individuals must file Form 1099-K to report payments.
One topic that has continually come up this year is inflation. Even though the Federal Reserve has been aggressively raising interest rates, so far, doing so has not produced much of an impact on this painfully persistent rise in prices. Inflation has been challenging for working individuals, but it has been especially burdensome for many retirees who live off a fixed income. One of the primary sources of income for many retirees is Social Security. A major benefit of Social Security compared to many other pensions is that it comes with a built-in yearly cost-of-living adjustment. This is one of the main reasons why we are generally proponents of delaying Social Security as long as possible—to the maximum of age 70. This is because the increased benefit for delaying is included in the inflation adjustment when it is calculated.
If you have paid attention to the news over the past few months, you’ve likely heard of the Biden Administration's plan for student loan debt relief announced on August 24th. The application is live, making now the time to act for eligible borrowers. While debt relief received much of the headlines of late, another debt relief program, the Limited Public Service Loan Forgiveness (PSLF) Waiver is set to expire at the end of the month. Eligible borrowers that have yet to opt in must do so very soon or lose out on the opportunity to do so.
Stock and bond markets are falling, inflation is persistent, and the media keeps talking about a recession…what portfolio changes should you make? Should I Sell My Stocks? The current volatility in the stock market has many people asking the same question. The answer is no, you should not sell your stocks. Let’s remember that the average intra-year decline (drop at some point during one calendar year) is about 14%. We simply forget about this after the markets have recovered again. When your portfolio falls steeply, it is normal to have an emotional response. Do not react to it! By far the most powerful emotion in investing is long-term regret, and if you sell now, you will certainly regret it later.
On September 27, 2022, the Centers for Medicare & Medicaid Services (CMS) released the 2023 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs, and the 2023 Medicare Part D income-related monthly adjustment amounts.