Financial Newsletter

grandfather passing down property

Passing Down Property: What to Know

Passing family property down through the generations is a wonderful way to honor all the memories made in your home. Plus, your kids will get to keep making new memories in this well-loved space.  If you want to leave your heirs property — whether a year-round home or a vacation property — you will have some estate planning decisions to make. What should you know about passing down property? Here are a few options you may consider.   Sell your property. You have the option of selling your home to your kids at fair market value. If you decide to discount the house, you …
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making notes about rmd's

4 Questions About RMDs Answered

The rules that apply to required minimum distributions (RMDs) have changed over the last couple of years, and it’s possible they could change again in the future. For example, in 2020 the coronavirus relief bill waived RMDs for many people with tax-deferred retirement accounts. This year, RMDs are back in the picture.  So what should you keep in mind going forward? What kinds of accounts come with RMDs? RMD rules apply to several different retirement plans, including 401(k)s, Roth 401(k)s, 403(b)s, 457(b)s and traditional IRAs.  When do RMDs start? You are required to begin taking RMDs when you reach a specific age. The Setting Every Community …
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father and daughter learning about trusts

A Few Common Questions About Trusts

What do you want to leave behind for your heirs?  Thinking ahead can be a challenge, but you likely want to pass down an inheritance to your children, grandchildren and other loved ones. A trust is one way to do that. Do you want to know more about your options? Here are a few essential questions to explore.  1. What does a trust do? A trust is one of several available estate planning tools. You can place assets and property in a trust. The trust legally protects what it holds and ensures it is distributed according to your wishes. 2. Why would someone need a …
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What to Know About Lending to Family

What to Know About Lending to Family

Financial security brings peace of mind. When you don’t have to worry about paying bills or lagging behind on retirement savings, you have time and energy to focus on other things. And when you’re in this position, it can be tough to see loved ones struggle with money. Are you thinking of loaning money to a family member or friend, or have you ever been approached about a loan? Here’s what to keep in mind. Do consider your financial situation first. Emergencies happen. Maybe a loved one is sick or out of a job. Your first instinct could be to leap in to offer …
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Strategies for Managing Lifestyle Inflation

Strategies for Managing Lifestyle Inflation

More money means more spending power.  When a promotion at work or a lucrative investment puts more money in your pocket, you’re naturally inclined to treat yourself. But are you still finding the right balance between spending and saving for the future? Keep these guidelines in mind if you want to keep lifestyle inflation under control. Recognizing the Trend Lifestyle inflation is also known as lifestyle creep; it can sneak up on you. Some common signs of this trend include: Increased focus on immediate, nonessential purchasesA significant reduction in savingsAn increase in debtPutting your long-term financial goals on the back burner The Risks Being able to afford …
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The new administration has proposed tax changes that could affect estate planning for the wealthy. While these proposals may not pass, they offer an important reminder. No matter what, it’s important to remain alert to how the tax code can affect investments and the assets we want our families to inherit. And while it’s hard to act in the face of uncertainty, keeping tabs on your estate planning can help. Here are a few things to keep in mind. Estate Tax Proposals For 2021, the lifetime federal estate tax exemption is $11.7 million per person. Beyond those thresholds, the estate tax rate on most assets is 40%. In 2026, the exemptions will reset to $5 million if the rules don’t change. But one proposed bill would cut the exemption to $3.5 million and raise the estate tax rate in 2022. Setting Up a Trust An irrevocable trust requires you to give up control over the assets you place in it, but it exempts them from estate taxes. Trust assets also stay out of probate when you die. Avoiding probate will save your heirs money on court fees and keep your finances private. Because some politicians have proposed limiting gifts to irrevocable trusts to $30,000 per donor per year, establishing a trust this year could be an important tax-saving move. Selling Appreciated Assets Another proposal would increase capital gains tax rates. Accordingly, some may consider selling appreciated assets such as stocks or a family business in 2021 to avoid higher capital gains tax rates in 2022 and beyond. Here to Guide You Wealth preservation can be a complex topic, especially when laws are in flux. Please stay in touch and reach out with any questions. We can help you prepare to accommodate any changes the next couple of years may bring.

Estate Planning in 2021 and Beyond

The new administration has proposed tax changes that could affect estate planning for the wealthy.  While these proposals may not pass, they offer an important reminder. No matter what, it’s important to remain alert to how the tax code can affect investments and the assets we want our families to inherit.  And while it’s hard to act in the face of uncertainty, keeping tabs on your estate planning can help. Here are a few things to keep in mind. Estate Tax Proposals For 2021, the lifetime federal estate tax exemption is $11.7 million per person. Beyond those thresholds, the estate tax rate on most …
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Taking a Closer Look at Cryptocurrency

Taking a Closer Look at Cryptocurrency

What do you know about cryptocurrency? Though it’s a hot topic much discussed by some investors, this relatively new digital currency remains potentially confusing.  Gain a clearer understanding of Bitcoin and other types of cryptocurrency with these frequently asked questions.    What is cryptocurrency? Cryptocurrency, often shortened to just “crypto,” is a type of unregulated virtual currency. It works with the help of blockchain technology, a distributed network with immutable records. The data electronically entered into a blockchain database, such as a cryptocurrency transaction, is permanently recorded. Many people value crypto for its secure encryption and decentralized nature. What kinds of cryptocurrency are there? Bitcoin …
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Do you Have Paycheck Protection?

Do you Have Paycheck Protection?

May is Disability Insurance Awareness month You work hard for your income, and it helps you keep a roof over your head, pay your bills and plan for the future. May is Disability Insurance Awareness Month (DIAM*), and it’s the perfect time to pursue protection for your most valuable asset – your paycheck. Disability income insurance (DI) can help you maintain an income if an illness or injury stops you from working to earn a paycheck. As a DIAM supporter, I’d like to explore and evaluate your income protection needs. Please contact me if you have any questions or for a quote. I look forward to …
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How can high earners save for retirement?

How can high earners save for retirement?

How much do you earn each year? The answer to that question can affect how you approach saving for retirement. If you earn above a certain amount, you cannot make direct contributions to a Roth IRA, for example. Are you wondering about the retirement savings options for high earners? Here are a few details to keep in mind. Income Details For 2021, if your modified adjusted gross income (MAGI) is $208,000 or more when you file jointly as a married couple, you cannot directly contribute to a Roth IRA.  The same is true if you make $140,000 or more when you file as single, head …
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What to Know About Custodial Accounts

What to Know About Custodial Accounts

Are you wondering about different ways to invest in your family’s future?  A custodial account can help you give your children (or another young family member, like a niece, nephew or grandchild) financial support for their college education. How Custodial Accounts Work A custodial account is a type of savings account that allows adults to control funds on behalf of a minor. Minors can take control of the account when they come of age, which may be at 18, 21 or older depending on the state and account specifications. Potential Benefits of a Custodial Account Flexibility. Custodial accounts have no contribution limits and no withdrawal penalties.  …
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3 "Additional Tax Changes" That Could Save You Money

3 “Additional Tax Changes” That Could Save You Money

My goal with my newsletters is to share valuable and helpful information. I think you will find the information from local Accountant Falisha Ball very helpful and informative. Please read and share. Good news, the tax filing deadline has been extended to May 17, 2021 for individuals filing form 1040 and self-employed, LLC owners filing form Schedule C. Everything has been changing so quickly and still is. And I know it has been overwhelming to keep up with all the news on top of everything else, so I’m writing this email to give you 3 additional changes (that you may not be …
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Buying a Second Home: What to Consider

Buying a Second Home: What to Consider

At some point, many people consider buying a second home.  This new property might be your vacation getaway or an addition to your investment portfolio. But, just like buying your first home, such a large purchase requires careful consideration.  These four questions can help guide you as you weigh the potential benefits and challenges of purchasing another house. 1. What are the costs associated with owning a second home? When you have the disposable income to buy a second home, it’s still important to carefully calculate all of the costs involved. Will you be buying the home outright or taking out a mortgage? As …
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Did You Retire Recently?

Congratulations on your retirement. Now we have to address the issue most retirees have, which is making sure they do not outlive their money and that their money is safe and secure. IF you are looking for a safe place to roll over your 401k, 403b or TSP, an annuity may be a good option. Annuities are a long-term retirement vehicle offered by insurance companies. The earnings are tax-deferred until they are distributed and are taxed as ordinary income. The wonderful thing about annuities is that they provide a steady stream of income that you cannot outlive. And more important, …
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Retirement Milestones for Your 50s

Retirement Milestones for Your 50s

You may have heard that it’s a good idea to save about five to six times your salary by age 50 and seven times your salary by age 55.  While there are no one-size-fits-all rules to follow, a nest egg of this size, along with Social Security, allows many people to maintain their current lifestyle throughout retirement.  No matter how much you’ve saved or how old you are today, here are a few things to keep in mind. Contributions to Tax-Advantaged Retirement Plans Are you saving at least 15% of your income for retirement? If not, you might aim to gradually increase your contributions …
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Giving and Receiving Wealth: What to Know

Giving and Receiving Wealth: What to Know

As baby boomers move into and through retirement, they will pass on substantial wealth to younger generations.  This financial shift will impact each generation (and each family) differently, but we’re likely to see a few common themes and trends emerge. Are you wondering about the ins and outs of transferring wealth thoughtfully? Here are a few details to keep in mind. Baby Boomer Bequests Older adults’ first priority will likely be their own health and retirement needs. However, if you have more assets than you might use during your lifetime, it’s important to decide what will happen to the rest. One option is to help …
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4 Ideas for Protecting Your Assets

4 Ideas for Protecting Your Assets

What lies ahead? It’s impossible to predict the future, but that doesn’t mean you have to feel caught off guard during times of uncertainty. In particular, when it comes to safeguarding your wealth, there are steps you can take to help protect your assets and find peace of mind.  Here are a few good practices to be aware of. Review your insurance. Having adequate insurance is key when it comes to protecting yourself from the unexpected. Do you have enough health insurance in the case of illness or injury? Does your homeowners insurance cover all of your belongings? Do you have life insurance to help …
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These 3 Expenses Can Surprise Retirees

These 3 Expenses Can Surprise Retirees

Have you thought about the expenses you might have during retirement that weren’t an issue during your working years?  You’ve probably considered whether your overall expenses will be higher, lower or the same, but you may not have dug into the details yet.  Here are a few costs that can sometimes catch retirees off guard. Income Taxes While your 401(k) balance might be $1 million or more, not all of that money may end up in your pocket. Since this money comes from pretax contributions, you will likely owe income tax on your distributions.  Part of your Social Security benefit may be taxable as well. …
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5 Tax Considerations to Keep in Mind

5 Tax Considerations to Keep in Mind

A new year brings new considerations for tax season.  What has changed since last year? What are a few things people often forget about or overlook? While we still have time to get organized, here are a few details to keep in mind as you prepare to file this year. Getting started. Gathering essential documents, such as 1099 forms, relevant receipts and proof of charitable donations, can help to ensure that you’re well-prepared for a smooth filing process. Figuring out deductions. Standard deductions for tax year 2020 have increased to $24,800 for spouses filing jointly and $12,400 for single individuals. If you’re considering itemizing your deductions instead, …
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Looking Ahead: What to Consider for 2021

Looking Ahead: What to Consider for 2021

At the start of a new year, it often feels natural to go into planning mode and make sure your financial house is in order. But, the ongoing pandemic and a changing political landscape may make uncertainty a common theme for 2021. How can you plan ahead no matter what this year may bring? Here are a few evergreen strategies and relevant details to keep in mind.  And, as always, reach out to discuss your questions anytime.  Recession adjustments. Even though we may now see a light at the end of the tunnel, the economy will likely take some time to recover from the pandemic. …
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5 Financial Mistakes Anyone Could Make

5 Financial Mistakes Anyone Could Make

As you know, planning for the future and keeping your finances on track require regular vigilance and fine-tuning.  But when life gets busy, it’s surprisingly easy to forget about the basics. That’s why even the wealthiest among us can end up picking up less-than-ideal habits.  No matter your situation, it’s a good idea to keep these potential missteps in mind. 1. Inconsistent Budgeting  Budgeting is all about keeping track of how much money is coming in, how much you’re spending and how much you want to save. Even wealthy individuals can lose track of these details and end up spending more and saving less …
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4 Types of Legal Documents to Prepare

4 Types of Legal Documents to Prepare

One part of planning your legacy and making your wishes known involves doing some digital and physical organizing.  Do you have all your key legal documents in an easily accessible but secure place? Here’s what to have on hand and what to keep in mind as you put your essential information in order. 1. Records  We manage much of our lives through personal and financial records. Examples of these types of documents include your: Birth certificateMarriage certificateSocial Security cardMedication informationHealth insurance Bank account informationInvestment and debt information Property deeds  2. Beneficiary Designations Keep clear documentation of your designated beneficiaries, the people you decide will inherit various assets. Select beneficiaries …
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Considering Your Social Security Options

Considering Your Social Security Options

When should you start receiving your Social Security benefits and how they will factor into your overall retirement situation? These are two of the biggest considerations attached to this important financial topic.   If you have questions on your mind or want to go over anything in greater detail, start by taking a look at these key points and then reach out anytime to schedule a conversation. Timing  You can become eligible for Social Security as early as age 62, but waiting until your full retirement age (or later) will result in greater monthly benefits. Age  — If you can afford to wait, you might choose to delay …
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