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Information provided on this page is informational only. Nothing posted here should be considered investment advice. Please review your financial situation with a qualified financial professional before taking action. For more information please see our disclosure.

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Massachusetts Millionaire Tax – Will This New Tax Impact Your State Tax Return?

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.

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Big Social Security Jump in 2023 — How This Impacts Retiree Tax Planning

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.

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Building a Solid Financial Foundation: A Pyramid for Resource Allocation

One of the most challenging parts of personal finance is figuring out what to do with our limited resources. If you're working, you're earning a certain amount each paycheck and need to decide how to allocate that money. How much goes toward necessities? How much to discretionary expenses? How much should you save for short-term goals? How much for longer-term goals and retirement? The list goes on and on. When managing your limited resources, it's important that you set up a solid foundation. When thinking of foundations, what often comes to mind is the shape of a pyramid. The long, wide base needs to be started first before moving upward to the peak. If you start building out of order—if you flip the pyramid on its head—instead of having a strong, steady structure, you're building a top that may spin precariously out of control. In the example of the food pyramid, if the foundational building block of your diet is processed foods instead of whole grains, fruits, and vegetables, you're setting yourself up for health problems down the road.

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Inflation on Your Taxes? How Inflation May Increase Your Taxes in 2022 and Beyond

Death, taxes, and inflation: three financial topics people generally like to bury their head in the sand about and pretend don’t exist. As financial planners, much of our job is helping our clients handle these tough topics, and luckily (or unluckily) for anyone reading this post, we’ll be touching on all three. Inflation has been top of mind for most people these days. It’s hard to look at prices anywhere and not see the impact of inflation. But one place where we may not see the effects of inflation directly is in our taxes paid. The perception of many working individuals is that taxes paid from their paycheck go into some void, and when they file their taxes in the spring, they either receive a refund or owe some money. There is little thought or analysis as to how or why the numbers end up as they do.

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Should You Pay Off Your Mortgage Early? With Rates Rising, the Answer Gets More Complicated

A common question we get asked as financial planners is whether homeowners should put extra money toward their mortgage to pay it off early. Of course, the exact answer will depend on your goals, but with previous mortgage interest rates being near historic lows, it often didn’t mathematically make sense to pay down the mortgage. While past performance does not guarantee future results, over the long term, the return from the stock market has been higher than the interest rate paid on these mortgages. However, with interest rates on mortgages rising, the math part of the equation gets a little more fuzzy if you’ve taken out a mortgage recently, or may in the near future. Here are some things you should consider before deciding whether to allocate extra money toward paying off your mortgage.

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The Levels of Risk for Stock Investments – Why Diversification Is Key to Prudent Investment Management

Anyone who has heard anything about the stock market knows it’s volatile. There will be swings up and down. But, although past performance does not guarantee future results, historically over the long term, it has rewarded investors who have stayed the course. However, when referring to the stock market, most people mean a broad-based benchmark (like the S&P 500) that invests in lots of different companies. Long-term returns are not the same for someone holding individual stock or a group of stocks that differ from the given benchmark.

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Gargantuan Gas Prices — Working from Home Gets Even More Appealing

Everywhere we go we see inflation. At the grocery store. When shopping on Amazon. At the gas pump. The insidious increase of inflation is sneakily eating away at people’s paychecks, putting a strain on us when purchasing the things we need to get by. Most companies review pay annually, and with a steep jump in prices continuing early this year, the pay raise you received in January may be eaten away by inflation before it’s reviewed again at the end of the year. Because of this, more companies are at least considering reviewing pay more often, although this is still uncommon.

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Flight From Fixed Income – Why the Bond Market Has Been Down Recently

When investors refer to the bond market, it is usually described as being “safer” than the stock market. Bonds are generally stable and pay a fixed income. While it is true that bonds tend to be less volatile than stocks because of the fixed payments, it does not mean that they are completely immune to volatility. There are certain factors that can impact bonds fairly significantly: inflation and interest rate changes. Unfortunately for bonds, when inflation is rising, that is often also a time when interest rates are adjusted. These two factors are the main reasons bonds have been performing poorly recently. Here’s what you should know about how inflation and interest rates impact bonds and what you should do about it.

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What Are the Risks to Your Investments, and What Should You Do About Them?

The world is riddled with uncertainty right now. A glance at news headlines shows that. Inflation has not been this high in decades. There are mounting geopolitical risks from the largest land war in Europe since WWII. There are still remnants of a global pandemic. All these crises have led to ballooning US debt during a time when interest rates are poised to rise. Risks abound, and this has been reflected in the stock market, both globally and domestically, with recent drops from all-time highs. With risks coming from all sides, what is an investor to do? Like anything in life, investing comes with trade-offs. In this post, we will discuss some of the biggest risks to investing, and the trade-offs of hedging against them.

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2021 Is No Normal Tax Year – Some Changes That May Impact You When Filing Your Return

It’s that time of year again when CPAs are locked in dark rooms crunching numbers on a laundry list of IRS forms and ordinary citizens scramble to gather their appropriate tax forms before the ever-looming tax deadline. Tax time tends to be exceptionally stressful for most people. To complicate things further, since the pandemic began in 2020, like everything else, we really haven’t had a “normal” tax season. While tax laws are always changing, there have been numerous special temporary tax provisions to try and alleviate some of the financial burdens of the pandemic. Like 2020, there are a variety of special tax rules for filing your taxes for 2021. Here’s what you should know about your 2021 tax return so that you don’t overpay your taxes this year.

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Interest Rates Going Up? Should You Be Worried?

Inflation has remained persistently high longer than the Federal Reserve anticipated. This is due to a confluence of factors, including labor shortages, supply disruptions, insatiable consumer demand, and low interest rates, among other things. One of the weapons in the Federal Reserve’s arsenal to combat inflation is the power to raise interest rates. Although interest rates have not increased yet, analysts are expecting multiple rate increases in 2022. If interest rates do go up, what does that mean for you?

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Should You Increase Your Home Insurance? — Why the Recent Housing Market Warrants a Review

The largest asset most Americans own is their home. That’s why it’s crucial to have adequate insurance to cover the physical dwelling. Home insurance, though, can be somewhat complex because not only does homeowners insurance cover the home itself, but it also usually covers other aspects such as the property inside the home and personal liability, and may even tag on some umbrella coverage as well. To complicate things further, homeowners and homebuyers alike have seen home prices skyrocket in recent years. Residing in New England, we can personally attest to the rapid increase of home prices in the New Hampshire and Massachusetts area. But just because home prices are increasing, does that mean you need to up your insurance coverage as well

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