Who has time to really understand their investments? After all isn’t that the reason most investors outsource their investment decisions to a financial advisor? Taking the time to learn the market is a vocation in itself. But if time is money, then knowing why you bought what you bought is a good part-time job to pursue. After a market correction, there always seem to be a few brave investors that dig deep into their portfolios to examine what they own. Often-too often-they are surprised to discover after educating themselves that they should never have invested in the financial product they bought for their portfolios and retirement plans. Content: Many investors may have complex mutual and electronic traded funds allocated in their retirement holdings that are too risky based on their risk tolerance. Undergoing a risk-assessment test can be a first step in building a financial profile. If your psychological profile just can’t handle the wild swings of the market, a 20-year time horizon may not be able to bring solace to your frayed emotions. You may have to seek out lower beta-risk products. Sometimes it’s not a matter of risk, it’s a matter of costs. Some investors have no idea   Read more…

According to a Wall Street Journal article in October of 2014, life expectancy has increased to an average of age 65 for males and age 86.6 -88.8 for females.  It is estimated that women survive their husbands 87% of the time and average around age 93 at death. But that’s the average, which means half will live longer! In 2014 it was estimated that over 72,000 American seniors were age 100 or older, worldwide the number was about 450,000.  By 2050 there may be 3,676,000 seniors living on the planet.  So even without any significant medical advancement, the numbers of senior centenarians could become dramatically higher. In light of this great mortality revolution, should you start planning to live to age 100?  You may need to prepare yourself for age 100 if your family tree already contains longevity and/or you exercise religiously and are committed to a healthy diet. There also seems to be a gender advantage towards women in life expectancy stats. Preparing for geriatric living starts with guaranteed income you can’t outlive via lifetime annuities with a cost of living rider.  Preparing for elder years should include retrofitting your home for single level living with stairs turned into   Read more…

There are basically three things that can mitigate your tax bill: tax deductions, tax exemptions and tax credits. You need to use every legal tax deduction under the IRS rules. A variety of tax software exists to escort you through the list of legitimate tax deductions.  Keep in mind that your income may play a significant role in phasing out some deductions. You need to use your exemptions for yourself, your spouse and dependent children or qualifying seniors that live in your home. Tax credits may be available at lower income thresholds that could offset any taxes due. The IRS has categories that you can select to use with your tax filing like individual, head of household, married filing jointly or married filing separately. Sometimes the last two categories should be calculated to determine which way saves you more in taxes. Adjusted gross income may not be the number to look for at the bottom of page one on your 1040 form. It may be modified adjusted gross income on the second page that could really matter. If you are a Social Security recipient, you have to also consider the impact of earnings, retirement distributions and any non-qualified monies that   Read more…

There is a variety of budgeting software available online, some of which is free. But in today’s modern family, the best way to construct your budget is to simply look at the things you purchase or pay for with checks and charge cards. It’s not the best way to begin creating a budget, but for many it’s the best place to start. Most budgetary items are monthly, some quarterly and others semi-annually. Most income is bi-monthly, so the goal is to split your monthly expenses evenly between the first and latter half of the month.  Hopefully this will create less pressure on your cash flow. Many graduates from high school and college are shell shocked when they receive their first paycheck and notice their net proceeds are far less than they anticipated, so a budget is determinate on the net proceeds not the gross. You may want to consider increasing your exemptions to a point that you have no refund, but you do have increased cash flow. There are basically three budget categories: Essentials, Savings, and Discretionary. Essentials Expenses are the obligations of life: housing, utilities, food, medical, transportation, clothing and basic education costs from kindergarten to senior year in   Read more…

Don’t be thinking about your bucket list until you’ve completed your life event checklist. There are so many life events common to most people that effect income needs, such as the birth of a new child or grandchild and their subsequent education.  At the opposite end of the spectrum, preparing for the death of a breadwinner or family member can have a dramatic monetary effect on income needs and estate planning. Future inheritance should be part of the planning process as well, including how the money should be used. A change in marital status can have a huge financial impact whether you’re going from being single to married or experiencing a divorce. When most people receive a raise they haven’t considered what to do with the extra money, or when securing a new job how the income will be distributed to meet their budgetary obligations and savings. Protecting assets and human capital resides in the purview of insurance coverage that should include life, health, disability income, and auto, home and personal property insurance (including specific assets like jewelry, musical equipment and recreational vehicles). The sale of your home or other assets may have tax consequences to be considered, so it’s   Read more…