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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 62F Refund Alert

An obscure law in Massachusetts called Chapter 62F, enacted by voters in 1986 and only used once since then, allows for taxpayers to receive a credit if total tax revenues in a given year exceed an annual cap tied to wage and salary growth in Massachusetts. For tax year 2021, this amount was $2.941 billion, and this entire sum will be returned to Massachusetts taxpayers. Massachusetts estimates that more than three million Massachusetts taxpayers will be eligible for this special refund.

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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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Lions and Tigers and Electric Rates -- Oh My!

Increases in electricity rates today are as scary as dangerous beasts. In past years, increases in the cost of electricity have tended to match the US’s modest inflation rates of 2% to 3%, but this year, electricity rates are seeing dramatic increases. California residents are looking at a potential increase of 27%, and on the other side of the US, New Hampshire rates are increasing by as much as 50%.

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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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Series I bonds really are yielding over 9% right now. Should I buy them?

Series I bonds (the I stands for inflation) are all the rage right now because of their currently high yields in an otherwise low-yielding savings environment. But before you tap into your home equity line of credit to max out your I bond purchases, you need to understand the mechanics of how I bonds work. What is an I bond? An I bond is a bond issued by the US government on which you earn interest at a rate tied to inflation and guaranteed by the federal government. If you buy an I bond today (June 2022), you will earn 9.62% interest, which is tied to the Consumer Price Index (CPI-U). The bond earns interest for up to 30 years. You can also defer paying federal tax on the interest until you redeem (cash in) the bond, and there is no state or local tax on the interest.

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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 to Do if You Contribute Too Much to an HSA, Roth IRA or 401(k)

It is common for individuals to make excess contributions to health savings accounts, Roth IRAs, 401(k)s, 403(b)s and 457(b)s. So common, in fact, that the IRS has a lenient policy for removing these excess contributions to avoid most penalties. So, if you discover that you’ve made an excess contribution to any of these account types, don’t worry, because there is a way to fix it. Note: For purposes of this article the tax filing deadlines are noted as April 15th and October 15th even though the exact days in these two months may vary from year to year.

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