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Check Fraud Is On The Rise: Protect Yourself

Mon, 16 Oct 2023 14:08:17 GMT

In 2022, banks saw an 84% increase in check fraud

Check fraud is one of the most common types of identity theft, and it has grown significantly in the past few years as trillions of dollars in COVID relief checks were mailed across the country. The Financial Crimes Enforcement Network – a division of the U.S. Treasury Department – reported that banks saw an 84% increase in check fraud in 2022 over 2021, increasing from $350,000 to more than $680,000.1

The type of check fraud that has attracted the most attention during this surge has been check washing, where crooks steal checks left in mailboxes, deposited in U.S. Postal Service collection boxes, or through other means. By using cheap chemicals such as acetone (found in nail polish remover) or bleach, the crooks erase the payee’s name and the amount, keeping the signature intact. When the checks are dry and clear of the payee’s name and the amount, the crooks rewrite them with a higher amount and a fraudulent name – or they sell them to other criminals for their own fraudulent uses.

Ways to avoid or thwart check-washing schemes

By taking a few precautions, you can reduce your chances of becoming a victim of check washing.

Consider making a tax-deductible gift to your library.
Use a pen with blue or black non-erasable gel ink to write your checks. Gel ink soaks
into paper and is harder to remove than ink from ballpoint pens.
Pay your bills online using a private, secure Wi-Fi connection, instead of writing and mailing a check.
Mail your check payments from the post office during business hours, putting it into an outgoing mail slot inside the building or handing it directly to a clerk.
Regularly monitor your bank account online to review account balances and look at images of the checks drawn against them.
Remove delivered mail from your mailbox as quickly as possible. Ask a friend to pick it up for you if you’re away, or have the post office hold it until you return home.
Report any suspicious activity to your bank immediately, and also contact the U.S. Postal Inspection Service and credit reporting agencies. If a scam is reported within 30 days of the date of your bank statement, banks are typically required to replace any funds stolen through fraudulent checks. The Office of the Comptroller of the Currency says that banks are generally required to reimburse customers for forged checks. However, depending on individual circumstances, the bank can investigate to determine if the customer is entitled to a reimbursement.2
Report the crime to your local law enforcement. You may also want to file a report with the Postal Inspection Service.
Notify any creditors immediately if you need a payment extension.

Other types of fraud

Check-washing isn’t the only kind of fraud to be on the lookout for, but its ballooning numbers during the pandemic have pushed it higher in the ranks. If your mail has been stolen, you may also be a higher risk for identity theft. Keep your eyes open for other signs that you – and your identity – may be at risk. Here are some signs that your identity may have been stolen:3

Consider making a tax-deductible gift to your library.
You receive alerts about charges you didn’t make.
New accounts appear under your name.
Your credit card and/or loan applications are denied.
You receive bills for services you didn’t use, such as medical services.
You get calls from debt collectors.
Your credit score changes dramatically and unexpectedly.
Mail arrives at your address, and is addressed to someone who doesn’t live there.
Unbeknownst to you, tax returns are filed under your name.
Your Social Security Statement contains errors.
You learn there’s a warrant for your arrest.
Mail or email that you’re expecting doesn’t arrive.
If you’re lucky, you won’t experience check washing or identity theft. But, it’s always a good idea to be ready in case it happens.

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Playing the Lottery: Risks vs. Rewards

Mon, 02 Oct 2023 13:50:55 GMT

What to do if you get really lucky

The odds of winning the lottery are slim to none, but that doesn’t deter millions of Americans from spending, on average, about $70 billion a year on lottery tickets— approximately $230 per capita, including children.1

In 2022, players across the United States surpassed that average, spending more than $107.8 billion on lotteries, according to the North American Association of State and Provincial Lotteries (NASPL). Florida led the country with $9.3 billion in sales, followed by California with sales of $8.9 billion.2

States benefit from lotteries, but do you?

Occasionally, someone wins big-time, but most people win nothing. The biggest lottery winners may be state governments.3 SmartAsset reported in late 2022 that 11 states received higher revenues from lottery tickets than they did from corporate taxes.

Negative returns on our own lottery “investments” aren’t much of an incentive, but hearing stories about huge prizes and the occasional random winner nudges many of us to buy tickets and test our own luck—usually with little or no results. An example is the widely broadcast story in early 2023 about a formerly homeless woman who won $5 million with a scratch off ticket purchased at a California Walmart.

Cautionary steps – and what to do if you win

You may not win, but you can dream. The first step you should take after you buy your ticket is to sign the back. This will help prevent someone else from claiming to be the winner if you lose your ticket (and they find it) or it’s stolen—and then declared a winner.

If you’re lucky and win a lottery jackpot, take these precautions:

Consider making a tax-deductible gift to your library.
Choose anonymity if your state allows it. If your name makes it into the news, you’re likely to be slammed with financial requests from charities, relatives, friends, potential scammers and more.
Carefully handpick an attorney, certified public accountant, and investment advisor to work with you (and each other) to help you make legal and financial decisions that support your goals and work in your best interest.

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Volunteering Comes With Benefits

Mon, 18 Sep 2023 18:59:01 GMT

Getting involved with community organizations and charities can help you, as well as others

The pandemic increased the number of people seeking help from nonprofits, but decreased the number of volunteers available (or willing) to help out. Now that most mask mandates have been lifted and we’ve adapted to the “new normal,” it’s time to consider volunteering to support your community, the causes and organizations you believe in—and yourself.

That’s right. Volunteering has the potential to bring a lot of benefits to volunteers—in addition to the organizations and people they serve. And not all volunteering is through nonprofits. More than 124 million people—or nearly half of the U.S. population age 16 and older—informally helped their neighbors at the height of the pandemic.1

How volunteering helps volunteers

As the pandemic declines, some people may still be reluctant to start volunteering. If you’re one of them, you may want to consider the many potential benefits volunteering provides that may help you move forward in a post-pandemic world. Some of these benefits include:

Connecting to your community and helping to make it a better place
Making new friends and contacts
Combatting depression, stress, anger and anxiety
Increasing self-confidence
Providing a sense of purpose
Improving your physical health
Advancing your career
Learning valuable job skills
Gaining career experience
Volunteering as a pathway to employment

The need for volunteers is great

While more people are returning to volunteering, there’s still a great need. A newly released study by the Do Good Institute2 at the University of Maryland’s School of Public Policy revealed the following:

64.4% of nonprofits reported and increase in demand for their organizations' services, but nearly 30% are operating with less funding and paid staff than they had before the pandemic
46.8% of the nonprofit leaders surveyed said recruiting sufficient volunteers is a big problem
72.2% of the nonprofit leaders surveyed said they feel volunteers improve the quality of services or programs provided to a great extent, but only 25.2% of funders agreed.

“The gap in funding and staffing makes volunteers even more important for many mission-driven organizations," said Nathan Dietz, Senior Researcher at the Do Good Institute. “Nonprofits will likely face staff burnout or service delivery issues if this continues. Many of these organizations offer critical services and support to some of the most vulnerable people in our society, so this is something we should all be concerned about.”3

The value of volunteering

In April 2022, the Do Good Institute and the Independent Sector announced that the latest value of an hour of volunteer time is estimated to be worth $29.95, which is a 4.9% increase from 2021.4 Despite the value of your time, though, you won’t get a tax break for that. If you keep good records, you can deduct certain out-of-pocket expenses if they are not reimbursed and are spent because of your volunteer services for a qualified 501 (c)(3) nonprofit. Examples include the purchase and cleaning of required uniforms, and volunteer-related travel expenses.

Where to find volunteer opportunities

There is such a great need for volunteers that the opportunities may seem countless. It may be difficult to decide what you want to do -- and where. Fortunately, there are websites with databases designed to help match volunteers with organizations nearby that need their help. These include:

AmeriCorps
VolunteerMatch
Points of Light
Idealist
Volunteer
Peace Corps
American Red Cross

Find time to say thank you

Whether you plan to take on new volunteer opportunities or not, the need for volunteers is a good reason to, at least, say thank you to those who are volunteering their time and experience to help make our communities—and our country—better.

1. United States Census Bureau: “Volunteering in America: New U.S. Census Bureau, AmeriCorps Research.”

2. Do Good Institute at the University of Maryland’s School of Public Policy: “The State of Volunteer Engagement: Insights from Nonprofit Leaders and Funders”
3. Do Good Institute: “New Research Reveals Volunteerism as Critical Driver of Nonprofits’ Success, Highlighting Opportunity for Funders to Build Nonprofit Capacity in the Post-Pandemic World”

4. Independent Sector: Value of Volunteer Time

Important Disclosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL Financial affiliate, please note LPL Financial makes no representation with respect to such entity.

For public use. Member FINRA/SIPC.

Procrastination is the Biggest Barrier to Estate Planning

Tue, 05 Sep 2023 17:56:49 GMT

Putting it off and dying "intestate" may not be the legacy you want to leave your loved ones

The pandemic raised awareness about the importance of having a will, living trust, and other end-of-life documents. Still, only one in three American adults actually have a will or living trust1. According to the Caring.com 2022 survey, the top reasons people gave for not tackling estate planning were:

"I haven't gotten around to it." (40%)
"I don't have enough assets to leave to anyone." (33%)

If you’re among the two-thirds of Americans who haven’t created an estate plan, you might want to get started now. Even if you don’t think you have enough assets to leave to anyone, you’ll gain peace of mind by completing a last will and testament – as well
as a living will stipulating what your end-of-life or care preferences are if you become incapacitated. Also, if you die “intestate” (without a will), a good share of your assets will be spent on attorney and court fees associated with probate.

A checklist for estate planning

By following this estate-planning checklist, you can rest easier, knowing that if you die or become incapacitated, your final wishes will be known.

Create an inventory of your tangible and intangible assets. This should include vehicles, real estate, financial accounts and investments, health savings accounts, life insurance policies, business ownerships, retirement plans, collectibles, and more. Include the estimated worth of each item. Also, list any outstanding liabilities, such as mortgages, lines of credit or other debts that you haven’t paid off yet. This will help the executor of your estate to notify any creditors in the event of your death.
Plan for your loved ones’ needs. This includes writing a will if you don’t already have one. (There are online options for creating a will, if needed.) When you write your will, name a guardian for your children, as well as a backup guardian. Determine if you need life insurance—and how much.
Clarify your legal directives. Executors, trusts, financial power of attorney, and medical care directives are important parts of estate planning. An executor is the person, bank, or trust company named in the will to carry out your wishes and settle the estate. A trust designates where portions of your estate go, eliminating the need for probate. A financial power of attorney designates someone to manage your finances if you become medically unable to carry out those duties yourself. A medical care directive—or living will—details your medical preferences if you become unable to make those decisions. You may want to designate someone to make medical-related decisions for you (if you become incapacitated) by giving them a medical power of attorney. You may benefit from having different people representing your medical and financial interests to avoid potential conflicts of interest, as well as a backup for each.
Review your beneficiaries. Don’t leave beneficiary sections blank in your paperwork— including retirement plans and insurance products. Check older documents and/or accounts to see if your beneficiaries need to be updated. Also, name contingent beneficiaries in case a primary beneficiary dies before you do.
Regularly reassess your estate plan . Circumstances change, whether it’s marriage, divorce, a growing family, the death of a loved one, tax laws, or financial situations. Updating your estate plan may take some time, but will be worth it.
Consider whether you should hire a professional. Will-writing options are available online and through software programs, and may be a good choice for those with smaller estates and uncomplicated plans. They generally account for IRS and state-specific requirements, and use an interview process to walk you through the steps. Make sure you do some research first to ensure they comply with federal and state laws. If you need more peace of mind than a software program can provide, you may benefit from consulting with an estate attorney, who may also recommend a tax advisor.

Start your estate planning sooner, rather than later

If you’ve postponed your estate planning because you’re young or don’t have much for someone to inherit, consider how difficult it may be for your survivors to go through probate, which is an expensive, time-consuming, and intrusive process. You may not have the assets and potential heirs of billionaire Howard Hughes, but he died without a will and it took more than 34 years to settle his estate2. For more incentives to write a will, read the Forbes article “Horror Stories: When You Die Without A Will.”

1Caring.com: 2022 Wills and Estate Planning Study

2PlannedGiving.com: Look at All Those Poor People Who Died Without a Will...

Important Disclosures

This material was prepared by LPL Financial.

For public use. Member FINRA/SIPC.
MC-1353003-1222 Tracking #1-053698

Final Expense Planning

Tue, 22 Aug 2023 13:58:52 GMT

It’s interesting how personal events can provide some of the best inspiration. My grandmother passed a couple of weeks ago, and as my family was making her final arrangements, and I experienced the emotions that my own family was feeling, it occurred to me that these are things that families experience every day. And while I was providing council to my own family, I thought, why not provide similar council on a larger scale to help lift some of the weight from the shoulders of families at large? So, let’s talk about final expense planning.

The big question here is how will your final expenses be paid? There are a few main options: proceeds of your financial accounts, life insurance and pre-need arrangements. Each of these options have a few considerations to keep in mind, so let’s dig a little deeper.

First, proceeds from your financial accounts. A common misnomer is that your Power of Attorney can continue to conduct business on your behalf even after your passing. This is false. Your Power of Attorney expires when you expire. Ergo, when you pass, all your financial accounts will be frozen until such time that proper estate claims can be filed and processed. This can be simplified and expedited by properly naming beneficiaries on your accounts and keeping them current but be aware that there will still be some processing time involved before your next of kin will receive the proceeds of your accounts and have access to the funds that are left to them.

Next, let’s look at life insurance. This is very commonly thought of as the go-to solution for final expenses, however, life insurance often poses an even bigger liquidity issue than using proceeds from your financial accounts. To file the claim with the life insurance company, you will need to obtain a certified copy of the death certificate, which can sometimes take some time and expense to procure. Most life insurance companies still require an original copy of the certified death certificate as part of the claim, which will require you to mail the copy to them via regular mail. Once the insurance company receives the original, certified copy of the death certificate, claims processing can take several weeks before your beneficiaries receive the proceeds of your policy. While life insurance is a great way to provide an income tax free benefit to your heirs, it is often used more effectively in other areas of financial planning, such as survivor income, and business buy-sell agreements than it is in final expense planning due to the delayed liquidity.

So, if not proceeds from financial accounts or life insurance, how are you to provide assets for your loved ones to pay for your final expenses? Enter pre-need arrangements. Pre-need arrangements come in a couple of different forms.

First, let’s talk about the option that my grandmother chose many years ago. My grandmother purchased a pre-paid funeral annuity from the local funeral home. This is a good option because it guarantees that your final expenses are paid through assets that cannot be penetrated by Medicaid. There is one thing that it misses, though. No decisions are made. I watched my dad, uncle, and aunt struggle with decisions of “what would mom have wanted?” and “I don’t even know her favorite color, favorite flower or favorite song” when all there was at the funeral home was a pool of money to spend as they guessed their way through their mother’s final farewell. So, what’s the other choice?

You also have the option to fully pre-plan your arrangements – everything from traditional burial vs. cremation, to the color scheme, to the flowers, to the music, to any religious traditions that you do or do not want to include. Furthermore, these arrangements are paid in today’s dollars, potentially leaving a greater percentage of assets in your estate should inflation raise prices at the time of your passing. Additionally, since this option is also fully pre-paid, you don’t need to worry about Medicaid penetrating these assets, should that need arise for your financial situation. Lastly, it provides you assurance that your final wishes will be honored. Personally, I can tell you, for myself, there are probably 2 people in the world that know my favorite color, flower and song and based on human life expectancies, it is more likely that I will be making their arrangements than that they will be making mine. What a wonderful final gift to give to those you love – to ease their burden in their time of grief by taking away any question of what you would have wanted.

For more information on final expense planning or any financial planning concerns, please feel welcome to reach out to the advisory team at Sound Wealth Management at 941.932.4822 or schedule your no obligation consultation online at www.soundwealth.net . It’s time for you to be heard!

Understanding the Value of Mentorships

Wed, 09 Aug 2023 13:29:24 GMT

The experience often benefits both mentors and mentees -- and their organizations

The mentors in our lives haven’t always gone by that title, but we’ve all had one. Whether it’s been a friend, coach, teacher, sibling, parent, co-worker, or boss, we’ve benefited from the guidance and encouragement they’ve offered.

Mentoring offers a chance to both “give back” and “pay it forward.” We tend to think of a mentor as the “giver” and the mentee as the “receiver,” but most mentorships are a two-way street, with both parties learning and growing. Some mentorships can be a three-way street because of the benefits mentoring often adds to organizations, such as facilitating the growth and development of leaders, and creating a more inclusive and collaborative environment.

Some examples of famous mentorships include:

Steve Jobs (mentor) and Mark Zuckerberg (mentee)
Warren Buffett (mentor) and Bill Gates (mentee)
Maya Angelou (mentor) and Oprah Winfrey (mentee)

The benefits of mentorship

As these examples illustrate, the benefits of mentorships may be difficult to measure— but they can be bountiful. While working together, both mentors and their mentees often realize “It’s not where your start, it’s where you end up.”

From a mentor’s perspective, the potential benefits include:

Gaining a new perspective by looking through the lens of the mentee, with the opportunity for self-reflection
Building confidence by recognizing how much progress they have made
Developing and/or improving leadership and communication skills
Gaining satisfaction from giving back to someone else, and seeing them succeed
Creating a lasting friendship
Expanding connections and networks

From a mentee’s perspective, the potential benefits include:

Gaining insights and practical knowledge from a more experienced person
Avoiding potential mistakes or errors in judgment
Increasing self-confidence and self-awareness
Improving communication skills
Identifying and correcting gaps in skills or knowledge
Creating a lasting friendship
Expanding connections and networks

Consider “giving back” and “paying it forward” by becoming a mentor

For those who want to demonstrate how adept they are at multi-tasking, it’s possible to “give back” and “pay it forward” at the same time by mentoring. To learn about mentoring opportunities near you, The Mentoring Connector offers a national database of mentoring programs.

Important Disclosures

This material was prepared by LPL Financial.

For public use. Member FINRA/SIPC.

Tracking: 1-05353832 Exp: 1/25 LPL.COM MC-1353003-1222

The Quest for Financial Independence

Fri, 28 Jul 2023 12:54:55 GMT

Women face more financial roadblocks, and strive harder to overcome them

Throughout history, the barriers to financial independence for women have been especially tough—if not impossible. For example, it was technically legal for banks to refuse credit and loans to unmarried women—and to require married women to get their husband’s permission for credit and loans—until 1974, when the Equal Credit Opportunity Act was passed.

Fortunately, things are improving. But there are still obstacles to overcome—including

the struggle for equality in finances. For example, the latest earnings comparisons available from the U.S. Bureau of Labor Statistics reveal that full-time female workers earn only 82 percent of what their male counterparts earn.1

Other obstacles to financial independence for women include:

Motherhood. Women are more likely than men to take time away from work or reduce their work hours because of caregiving responsibilities. The American Association of University Women (AAUW) contends that this creates "the Motherhood Penalty," causing mothers to make "only 58 cents for every dollar paid to fathers."2
Financial literacy. Men are twice as likely to take courses that lead to careers in finance.
Life expectancy. According to the U.S. Centers for Disease Control, the average lifespan for an American male is 76, while the average woman in America will live to be 81.

How women define financial independence

Bank of America surveyed more than 3,500 women ages 22 and older about their thoughts on financial independence. The top three indicators of financial independence, based on that survey, included:

Being debt-free: paying down debt provides more financial flexibility.
Having an emergency fund: Being able to access savings when you're in dire need provides peace of mind.
The ability to support yourself without any financial help: Inflation, stagnating wages, and debt can make it tough to keep up with everyday expenses. It's important to cut back on spending, rather than asking family members of friends to help out.

Nevertheless, she persisted

Despite the obstacles women have faced—or maybe because of them—the number of women investors is growing rapidly, and doing well! Based on a 2021 study by Fidelity, 67 percent of women are now investing outside of their retirement accounts, compared to 44 percent in 2019. To top it o, Fidelity’s analysis of more than 5 million customers showed that women outperformed men by an average of 40 basis points annually—or 0.4 percent— over the past ten years.3

In its article about women and investing, Bankrate said that women hold incredible potential, and shared the following predictions:3

By 2030, women in America are expected to control much of the $30 trillion in financial assets that baby boomers possess today.
A 2021 study by BNY Mellon showed there would bean extra $3.22 trillion of assets under management from private individuals if women invested at the same rate as men.
The same BNY Mellon study also found that women are way more likely to make investments that have positive impacts on society and the environment. This would tack on an extra $1.87 trillion of additional inflows into socially responsible investments if women invested at the same rate as men.
The number of female investors is surging. A 2022 global survey from social trading and investment company eToro found that of the 9,500 female investors surveyed, 48 percent of them were new to markets over the past two years.

Based on these predictions, women and their quest for financial independence could be one of the best investments we make!

U.S. Bureau of Labor Statistics, posted September 2021: https://www.bls.gov/opub/reports/womens-earnings/2020/home.htm
AAUW: https://www.aauw.org/issues/equity/motherhood/
Bankrate: https://www.bankrate.com/investing/women-and-investing/

Important Disclosures

This material was prepared by LPL Financial.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates to the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL Financial affiliate, please note LPL Financial makes no representation with respect to such entity.

For public use. Member FINRA/SIPC.

Tracking: 1-05364643 Exp 3/24

"My" Money, - or "Our" Money?

Mon, 10 Jul 2023 13:59:47 GMT

The pros and cons of pooling finances with your significant other

Some couples face a difficult (and sometimes awkward) question when they decide tie the knot: Should they combine their finances, keep them separate, or do a little of both?

What they decide depends on a lot of different factors—including how comfortable
they are comingling their money and whether they have confidence in their partner’s spending habits. Studies have found that couples who combine their credit-card, bank, and investing accounts are happier in the long term.1 Their pooled resources help them achieve traditional goals such as saving for retirement and buying a house—and leads to greater wealth. The Wall Street Journal reports that married couples hold four times as much wealth as unmarried couples who live together, and researchers say combining finances is one reason for that.2

There are also other benefits to pooling finances, according to research published in the Journal of Personality and Social Psychology.3 The study shows that couples who pool all of their money experience greater relationship satisfaction and are less likely to break up. This is especially true for couples with low household income or those experiencing financial distress. Couples who openly talk about money issues are more likely to be on the same page—and more likely to achieve their financial goals, according to the study.

Survey reveals financial secrets

According to a 2022 survey by CreditCards.com, 43% of couples have only joint baking accounts, 34% have a mix of joint and separate accounts, and 23% keep their finances completely separate.4

Some of them admitted to being “financially unfaithful,” according to survey results. For example, 32% of respondents admitted to one—or all—of the following:

Spending more than their partners would be comfortable with
Holding secret debt and/or a secret credit card, checking account, or savings account

Young adults and millennials were more likely to keep financial secrets from their partners, and the reason could be because their relationships are in their earlier stages than respondents who are Gen Xers and baby boomers.5

Tips for strengthening financial compatibility

Money is a common cause of stress in relationships, but the American Institute of CPAs (AICPA) has some tips to help reduce the chances of financial tension between couples6:

Start a conversation early in your relationship. Keep it simple. Talk about debt, any specific financial goals, and your money habits. Your early conversations should also include discussing how your respective families handled money while you were growing up. Also, do you have any money quirks?
Share financial facts. Discuss your income and assets, and avoid being judgmental— because you’re a team. Talk about whether to combine your financial assets, or keep some independent accounts (especially if one of you has kids). If you combine finances, talk about any ground rules, such as limits on how much can be spent for personal items.
Establish a joint spending and saving plan. A simple joint budget that you work on together is a good place to start. Add up your monthly income (after taxes) and your anticipated expenses. Refine it together as needed. Also, check to see if you can save money by combining certain accounts, such as insurance.
Set short-term and long-term priorities. Do you want to buy a new house, wipe out debt, plan your trip of a lifetime? Talk about your priorities and goals—and set
joint goals.
Set dates for goals and checking in with each other. Also, have a conversation about which of you should be the primary bookkeeper, paying bills and ensuring no account is at risk of becoming overdrawn. Keep the conversations going, and review your budget regularly, making adjustments as needed.

Like all plans, some adjustments may be needed. Don’t be afraid to ask for help and advice from your CPA or financial advisor if you need more guidance.

1 The Wall Street Journal, Dec. 4, 2022: Couples Who Combine Finances are Happier, so Why Don’t More Do it?
2 The Wall Street Journal, Nov. 7, 2022: Moving in Together Doesn’t Match the Financial Benefits of Marriage, but Why? 3 APA PsycNet: Pooling Finances and Relationship Satisfaction
4 Creditcards.com, Jan. 27, 2022: 32% of Coupled U.S. Adults Have Cheated on Their Partners Financially
5 Creditcards.com, Jan. 27, 2022: 32% of Coupled U.S. Adults Have Cheated on Their Partners Financially

6 360degrees of Financial Literacy, American Institute of CPAs: Love & Money: 5 Steps to Help Couples Strengthen Financial Compatibility

Important Disclosures

This material was prepared by LPL Financial.

Financial Considerations During a Divorce

Tue, 30 May 2023 18:17:09 GMT

A divorce can have a profound impact on your finances. We outline key considerations for maintaining your financial health as you proceed through the process.

No matter whether your divorce is amicable or contentious, it can have a profound impact on your finances. There are myriad rules and regulations to consider. We outline some of the most significant and how they could impact your assets.

Who Gets What

No matter where you reside, generally any assets or property that you acquired while married will be divided when you divorce.

There are a few exceptions. For instance, if you inherited assets or received gifts individually, the division rule may not apply. Also, you may be able to keep the assets and property that you acquired before you got married.

However, your state law will set out how to divide your assets and property, and it will follow one of two routes:

1. Common law property states include those states where the judge has discretion to listen to individual circumstances before dividing assets and property. Those factors include: earning ability for each spouse; the duration of the marriage; and the amount that each spouse contributed to building the marriage’s assets. All but nine states follow this format.

2. Community property states, on the other hand, are those in which courts generally equally divide assets and property acquired during the marriage. The states that observe this law are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. [1] In addition, residents of Alaska can choose to opt in to a community property agreement. [2]

What About Debt?

Debt survives a divorce, and states differ as to how they allocate which spouse is responsible for which debt.

1. Common law states (see above) assign debt acquired in individual accounts to the account holder, while debt in joint accounts is generally treated the same way as assets and property.

2. Community property states typically divide debt equally between spouses, no matter whether it was from an individual or joint account.

You should close all joint accounts post-divorce to avoid being responsible for debts that your spouse incurs. Once the divorce is finalized, have them reclassified as individual accounts by your creditors.

If you and your spouse have a mortgage for a home that has appreciated in value, consider selling it before the divorce is finalized, as the IRS allows you to take advantage of $500,000 in realized capital gains if you are a married taxpayer, an amount that is cut in half for single filers. We recommend consulting a tax advisor to navigate these rules.

Retirement Assets

If you or your spouse have money in a 401(k) or pension plan, it may also be divided during a divorce. You can seek a share of your spouse’s 401(k) or pension plan benefit if you obtain a Qualified Domestic Relations Order (QDRO) and present it to your spouse’s plan sponsor before distributions have been completed.

If your efforts are successful, you may decide to roll them over into an IRA to defer taxes. Discuss this option with a financial professional who is familiar with the divorce process.

Estate Planning

If you have already drafted a will, make sure that you review it (and if you don’t have one, work with an estate planning attorney to draw one up). The attorney will work within your state’s estate laws to distribute your assets properly.

Review your beneficiary designations for any pensions, 401(k)s, and insurance policies. Note that a spouse is required under federal law to be the sole beneficiary of pension and 401(k) benefits unless that spouse waives such rights.

With so much at stake financially as you proceed through a divorce, don’t do it alone; it’s best to work with an attorney or financial professional who specializes in the process to help protect your assets to the greatest extent possible.

[1] Business Insider, Updated Nov 29, 2022: In 9 US states, a divorce could mean losing half of everything you own

[2] FindLaw: Alaska Marital Property Laws

This material is for general information only and is not intended to provide specific advice or recommendations
for any individual. There is no assurance that the views or strategies discussed are suitable for all investors
or will yield positive outcomes. Investing involves risks including possible loss of principal. This material was
prepared by LPL Financial, LLC.

Member FINRA/SIPC

Minimizing Credit Card Debt When You Retire

Tue, 16 May 2023 12:28:25 GMT

Credit card usage is ubiquitous for Americans. Online purchases are just a click away when paying with a card, while other transactions — car rentals, for instance — require a credit card for both payment and security.

Commensurate with credit card usage is carryover debt that accumulates each month, a financial strain for those entering retirement. There are a few key considerations for using a credit card once you’re relying on a fixed monthly income.

When living on a fixed income, using a credit card as if it is actually income may deliver a short-term benefit — i.e., that big ticket item that looked too good to pass up. However, it comes at a long-term cost: an inability to sustain your standard of living.

Paying for groceries and other necessities may seem convenient with just a swipe or tap at the register. But, unless you can pay off the balance each month, you’ll incur a credit card bill that accumulates finance charges each month, making it an increasingly formidable debt to discharge.

What to Consider When Selecting a Credit Card

Not all credit cards are alike. When assessing whether to sign up for a card, consider your intended use. Cards with enticing rewards programs may be appropriate if you’re paying off the balance each month, though these programs typically come with hefty annual fees. Also, if the cards include a high interest rate, it’s financially prudent to turn down the potential rewards and instead look for a card with a lower interest rate.

Nurture Your Credit

You can receive a lower interest rate on a credit card if your credit score is strong. To improve your rating, pay your bills on time and minimize your debt.

Chipping Away at Debt

While doing away with all credit cards may be impractical, reducing your debt will help keep your finances in order and your fixed income more predictable.

Day Drinking

Wed, 19 Apr 2023 12:40:22 GMT

Start Your Day Off With Water (and Keep the Drinks Coming)

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Drowning Out The Noise...

Thu, 23 Mar 2023 18:32:37 GMT

I t has certainly been a busy couple of weeks in the financial markets with plenty of news to shake even the steadiest of nerves when they look to their financial futures. We want you to know that your advisory team here at Sound Wealth Management is well attuned to recent events as well as forward looking forecasts and we are here to help you to cut through some of the noise surrounding recent global financial news.

We have had the privilege of being on conference calls on both Monday and Wednesday this week with analysts from JPMorgan both in the US and Europe to discuss the recent bank failures, Fed decisions, and Central Bank decisions and how these might impact client portfolios moving forward. To quote JPMorgan Chief Global Strategist, Dr. David Kelly, “in recent decades, monetary policy, when applied to the tasks of boosting and slowing the economy, has seemed like a car with an unresponsive accelerator and unreliable brakes.” We have gone from a period of extraordinary fiscal stimulus leading to asset bubbles – particularly in the bond market, to a period of extreme fiscal tightening from a hawkish Fed that has done little more to curb inflation any faster than would have occurred naturally with the removal of fiscal stimulus. This has led us to a precipice where we face two main financial issues today with opposite solutions.

First, we are still in a period of inflation considerably higher than the Fed’s target of 2%. However, while it may not feel like it at the grocery store, it has been nearly nine months since inflation peaked and has been on a steady downward trajectory. The Fed has made it clear that fighting inflation remains their top priority, having raised rates by 25 basis points this week. While there is speculation that there may be one additional rate hike to come yet this year, it may be time for them to consider a pause to let their previous actions run their course.

Our second issue is banking failures. This issue ultimately boils down to liquidity issues. As interest rates rise, older bonds become less valuable as new bonds issued at higher interest rates become more attractive. As depositors begin to withdraw their funds, the banks are having a difficult time freeing up enough cash to meet the depositors’ demand since they have invested most of it in bonds at the time of deposit. The way to combat this is to cut rates to make new bonds less attractive. We can take comfort in the fact that the US Government has assured us that all depositor assets will be safe from bank failure. However, this will come with additional regulation as to how banks are allowed to invest depositor assets in the future.

So, when the financial world is caught between a rock and a hard place, and the Fed has made it clear where their priority lies, what does this mean for investor portfolios? It means we proceed with caution. Since Russia’s invasion of Ukraine in February 2022, we have erred on the side of caution when allocating client accounts by making a very large move to cash positioning. However, we continue to maintain a position of cautious optimism with the belief that there are opportunities to be found within the market. To discuss what opportunities are appropriate for your goals and your risk tolerance, please reach out to our advisory team at 941.932.4822 or schedule your consultation online at www.soundwealth.net because it’s time for you to be heard!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Top of Mind

Tue, 07 Mar 2023 14:50:07 GMT

Practicing Mindfulness With Money Can Help Boost Your Financial Wellness

Many people practice mindfulness through yoga, tai chi or other forms of mov ement, often incorporating breathing exercises. Others rely on their smart watch or phone to ping them at the same time each day, urging them to practice it for a few minutes. While there are many definitions of mindfulness, this one from mindful.org seems to capture it well:

Mindfulness is the basic human ability to be fully present, aware of where we are and what we’re doing, and not overly reactive or overwhelmed by what’s going on around us.

Practicing mindfulness with your money can be a valuable exercise, too. Here are four ways it can help you boost your financial wellness.

Pay Yourself First

Practicing mindfulness here is about determining a savings amount and considering it a bill, the same as any other bill, like electricity or rent. Whether it’s building up an emergency account or saving for some other financial goal, put away what you can, such as $100 a month, $50 or even just $25. Small amounts add up, and can be incrementally increased over time. The good news here is that you’re already practicing pay-yourself-first mindfulness with your 401(k). Which leads us to…

Increase Your Retirement Account Contribution

You should be looking at your retirement account at least once a year and seeing if you can improve how you’re saving for the future (hint: the start of a new year is a great time to do this). For example, how much are you contributing? Are you contributing enough to get the full employer match? Can you increase the amount you are contributing? The longer you put off increasing your retirement savings, the more you miss out on the mindfulness of compound interest. So don’t wait — even a $50 per month increase in retirement savings has the potential to grow to nearly $75,000 over 30 years, assuming an 8% annual rate of growth, compounded monthly.*

Make a Game Out of Saving

A no-spend challenge is when you don’t spend money for a certain period of time. It could be a weekend, a week or a month. You can set rules to spend only on essentials or other allowances. Doing this forces you to be creative with what you have and learn new skills and possibly open up ideas for more ways to save. Visit https://tinyurl.com/yt6cj5rv for more information on taking on a no-spend challenge.

Leverage Technology Apps

One popular savings app is called Acorn (a subscription-based app). You tie Acorn to your debit card, and it rounds the purchase up to the nearest dollar, effectively allowing you to invest your spare change. For example, if you buy something that costs $5.44, when you use your debit card, $6 will be taken out of your account, with $5.44 going to the store and $0.56 going into your investment account. What could be more money mindful than an app that allows you to save money as you make everyday purchases — without having to even think about it?

* This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing.

All companies noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

©2022 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this newsletter are those of Kmotion. The articles and opinions are for general information only and are not intended to provide specific advice or recommendations for any individual. Nothing in this publication shall be construed as providing investment counseling or directing employees to participate in any investment program in any way. Please consult your financial advisor or other appropriate professional for further assistance with regard to your individual situation.

Pay It Forward

Mon, 20 Feb 2023 13:28:41 GMT

Looking To Teach a Child Some Important Money Lessons? Consider a Roth Custodial IRA.

You started early and have saved hard in your 401(k). You’ve also paid close attention to your investing strategy over the years. And you definitely understand the benefits of tax-deferred compounding over the long term and the potential for growth. Heck, you’ve even remembered to change your account password every 90 days. Maybe now it’s time to pay it forward and pass along some of your retirement savings wisdom!

How a Roth Custodial IRA Works

A Roth individual retirement account (IRA) may be a great way to instill the value of investing for a child or teenager with earned income (or grandchild, niece or nephew for that matter). This income could be from a dog-walking or babysitting job, regularly scheduled household chores or from a job that provides a W-2 form. ¹

The account is managed by a parent or another adult, such as a grandparent or uncle, on behalf of the child. The contribution limit for a Roth IRA in 2023 is the lesser of $6,500 or your child’s total compensation for the year.

Benefits of a Roth Custodial IRA

Once your child has earned income, it doesn’t matter where the IRA contributions come from. You may be able to entice your child to open an account by offering matching contributions from you or a grandparent or by funding the account up to the allowable amount. That way they will still have money left from their paycheck to go shopping or out with friends.

Once the Roth IRA is open for a minor, all assets are managed by the custodian until the child reaches age 18 (or 21 in some states). Given the tax bracket most teens are in, and the length of time they have to invest, a Roth IRA may provide the most potential long-term financial gain. Because of this, it’s important to stress to your child that using the money to help fund their retirement will likely be their most advantageous option. However, contributions are available anytime and withdrawals of earnings can be made penalty-free in some circumstances prior to age 59½. For example:

Your child can withdraw money for college, to open a business or for other expenses.
In addition, your child can withdraw up to $10,000 worth of earnings from the IRA, without a penalty, for the purchase of their first home.

The most powerful benefit of a Roth custodial IRA may be the potential for personal growth for a child or teenager. Getting an early taste of working life, in addition to learning about money and the power of saving, can be invaluable.

¹ Please note that the child’s income may need to be declared as taxable self-employment income in the year it is earned. Be sure to consult with a tax professional.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

Smart Shopper

Mon, 06 Feb 2023 18:28:22 GMT

Keep Your Money Safe With These Online Shopping Security Tips

The 2022 holiday gift season is now in the rear-view mirror. If you’re like many other people, chances are you did a good amount of shopping online. After all, online shopping can be easy and fun. But unfortunately, there are many scammers who want to steal your identity and money.

According to a January 2022 Federal Trade Commission report , more than 95,000 people reported about $770 million in losses to fraud initiated on social media platforms in 2021 (the most recent data available). Reports were up for every age group, but people 18 to 39 were more than twice as likely as older adults to report losing money to these scams.

It’s a new year and full of opportunities to learn and grow. Review the following information for tips on ways you can protect your personal information and finances when shopping online this year.

Verif y the Website

Only shop on secure websites with good reputations. Check for the small, locked padlock icon in the address bar. The address should start with https://. In addition, check the spelling of the URL. Scammers use similar spellings to fool you into thinking that you are on the true retail company’s website. You’ll also want to perform an online search of the seller. Use the seller’s name and the word “scam” to vet them before sending any money.

Trus t Your Instincts

Beware of deals that seem too good to be true. In addition, be vigilant when websites or social media ads link to an unfamiliar website. Look for typos and missing contact information. Other red flags are poorly written or missing sections such as About Us, Privacy Policy and Terms and Conditions. If something just doesn’t feel write, click off the site.

Manag e Risk

Don’t shop online using a public Wi-Fi. Public Wi-Fi is not secure and increases your chance of being hacked. In addition, use a credit card. That way, if you get scammed, you can dispute the charges.

You should also consider checking out as a guest if possible. That way, your data won’t be retained by the company.

Always report scams right away to your bank and the Federal Trade Commission. For information on how to report fraud, go to: https://reportfraud.ftc.gov/#/

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

Cautious Optimism: Sound Wealth Management 2023 Outlook

Wed, 11 Jan 2023 16:46:22 GMT

W e are living in an era of buzz words. We’ve all heard them, some of us have maybe even said them, words like “new normal.” While the pandemic continues to get blamed for the “new normal,” the Jetsons predicted the 21 ^st century to be full of things like telemedicine, video conferencing, robot vacuum cleaners and self-driving cars long before anyone ever heard of COVID-19 making it only a matter of time before what we reference as the “new normal” came to be anyway. If anything, the pandemic gave us a reason to integrate new and old technology into our daily lives in exciting ways.

The optimists in the room might say that despite the toll it took on people’s lives, and the world’s economy, the pandemic was a catalyst for advancement. And optimism is what your Sound Wealth Management advisory team would like to focus on as we enter 2023. We fully recognize that there are challenges to consider in the coming year, but we would be remiss if we didn’t also focus on the solid fundamentals and opportunities that we see before us.

I know we often prefer to get the bad news first, so let’s start with the challenges. The two major issues are geopolitical risks and domestic disturbances. We will touch on each of these separately.

The three main geopolitical risks putting pressure on the markets are:

The war in Ukraine
How long will it last?
What will it take to be resolved?
What will be the process for rebuilding?
Escalating tensions between Israel and Iran
What will happen with Iran’s nuclear program?
How close does the Iranian regime come under the influence of Russia?
What will be the ultimate impact of the internal strife of the regime that Iran is facing?
Potential for Chinese invasion of Taiwan
Will this come to fruition?
What will be the costs?
Can this be peacefully resolved or avoided?

The way we see it, the fundamental issue at play here is human emotion. Unfortunately, there is nothing simple about dealing with the emotions of iron-fisted world leaders in each of these cases. And when we add in the human response of the rest of the world to the shots that these individuals call, it becomes even messier. For example, if we look at the situation with Iran’s nuclear program, the previous treaty required the country to provide disclosure of their nuclear program to other world leaders. Now, in the absence of the treaty, the world is without disclosure. Furthermore, Iran has a track record for supplying weapons to Russia, who has already threatened Ukraine with the use of nuclear weapons. This causes a tremendous fear of the unknown response from the rest of the world as they speculate on the “what-ifs.”

While this hand has dealt us with quite a few wild cards, since the ultimate actions of dictatorial world leaders can be somewhat difficult to predict, research leads us to believe that we will begin to see the situation in Ukraine make a turn towards a resolution in 2023. This of course provides us with some peace of mind as well as some new investment opportunities as the rebuilding process begins.

Now, let’s focus our attention a little closer to home. The overarching domestic issues that we anticipate to impact markets in 2023 are:

Inflation
Interest rates
Employment
Corporate Profits
Political Disruption

We’ll start with everyone’s favorite topic – inflation. The bad news is that inflation has been putting the squeeze on all our wallets in a way we have not seen in decades. The good news is that it seems that the worst of it is behind us with inflation having peaked just shy of 9% in June and sitting currently at 7.1%. Today, the Fed remains focused on two major priorities: employment and fighting inflation. With under 5% unemployment considered full employment, the US remains at full employment and fighting inflation remains the top priority for the Fed. Unfortunately, with only one arrow in their quiver, this likely means that the Fed will continue to raise rate to near 5.25%-5.5% with a goal of bringing inflation down to nearly 4% by year end prior to beginning rate reductions in 2024.

Rising interest rates pose an interesting conundrum. On one hand, this provides an opportunity for fixed income investors to finally begin receiving reasonable returns with minimal risk to principal by seeking investments in categories like treasuries, money markets and investment grade corporates. On the other hand, consumers seeking financing for large purchases will pay considerably larger amounts for the money that they borrow, putting things like new cars and homeownership out of reach for some buyers. The reign of “free money” has come to an end as we make a return to an economic normalcy that has not been seen since prior to the financial crisis of 2008.

On the employment front, jobs have continued to flood the market pushing unemployment numbers to pre-pandemic lows. At the same time, wage growth has grown at a solid 4.6% year over year. However, this is not necessarily cause for celebration. When we factor the 7.1% inflation rate, this 4.6% wage growth ultimately translates into a 2.5% wage reduction for American workers. Despite corporations’ best efforts to incentivize workers to join the workforce through efforts such as higher wages and increases to employee benefits plans, there remains a dramatic worker shortage. This can be attributed primarily to population trends. The post-World War II era saw the largest population boom in US history which was coupled with a large entry of women into the workforce that had not been seen in previous generations. This combination gave us an unprecedented number of workers to supply goods and services. However, this generation is beginning to retire out of the workforce, and the generations that have followed have experienced birth declines which means that the American workforce cannot fully replace those workers. Of course, demand for goods and services continues to grow and with less and less people to provide them, we are seeing the beginning of a long-term issue that countries around the world will need to address.

The next domestic issue is corporate profits. As discussed above, corporations have found themselves in a predicament of needing to find a way to continue to deliver their products and services with fewer workers. In some cases, this has turned into investing in new machines and paying overtime wages, but the fundamental principle remains that companies continue to sell more while paying out less. Add to this the concept of the “new normal” that we mentioned above, and many companies have been able to further reduce expenses by giving up leases on large office spaces while they allow their employees the flexibility to work from home, leading to even greater corporate profits. Despite the volatility that we have all felt in our investment accounts, the companies that we hold in our portfolios are showing strong earnings which build a solid foundation as we look towards the future and beyond some of the outside factors that contribute to market unrest. To further stoke the corporate fire, we are beginning to see some resolution to the supply chain crisis that we have experienced over the last couple of years. Major manufacturers are looking outside of China for their predominant labor forces and centers of industry. This has led to the construction of three major chip manufacturing plants in the US.

It is no secret that our elected officials in Washington D.C. have become much like the Hatfields and the McCoys in recent years with both Republicans and Democrats taking a position of “I’m going to disagree just so I don’t agree with them” without much thought to the ramifications of what this means for the country. Because of this attitude, we find ourselves with looming threats of default on sovereign debt. While the value of the dollar remains at a historic high when compared to many foreign currencies, a failure to raise the debt ceiling will force a default that could potentially devalue the dollar to pennies. While the likelihood of this happening remains slim, the question remains: at what point will the Hatfields and McCoys be able to put aside their differences long enough to save the US monetary system as we know it?

As mentioned above, though, let’s not forget to see good. First, the continued rate hikes provide opportunities for reasonable returns in the fixed income investments including the typical “safe haven” ports such as treasuries and money markets as opposed to the negative returns that we felt across fixed income in 2022. Additionally, corporate earnings continue to be strong as companies adjust to doing business in this new reality. Supply chain issues are beginning to sort themselves out, particularly the chip shortage, with the construction of three new chip manufacturing plants in the US. Also, recent legislation will begin to bear fruit throughout 2023 and 2024 with infrastructure projects such as new roads and bridges, and additional opportunities will begin to present themselves as we start to see geopolitical issues find their way to eventual resolutions. Finally, never underestimate the resiliency of American businesses and consumers and the positive impact they have on the United States economy.

But, perhaps most importantly for you, our clients, the Sound Wealth Management advisory team is tuned in to all of it, keeping a close watch for market signals as we work to provide “sound” guidance to help you in working toward your financial goals. We remain optimistic about the future as we enter this new year, and “new normal” together.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Women and Investing

Fri, 18 Nov 2022 13:27:12 GMT

W omen are stepping on to the trading floor and roaring in a big way. While women were disproportionately impacted by the COVID-19 pandemic with 4.2 percent of women’s employment being eliminated globally as compared to 3% of men’s, a 2021 study by Fidelity found that 67% of women are now investing outside of just their retirement accounts. Moreover, a September 2022 article published by bankrate.com reports that the global share of women’s wealth has increased from $20 trillion in 2018 to $24 trillion in 2020, and a 2021 analysis by Fidelity showed that women investors outperformed men by an average of 40 basis points annually over the past 10 years. Morgan Stanley reports that, aside from achieving higher returns than their male counterparts, today’s female investors also control more investible capital, voting shares of stock and corporate board seats than ever before!

So, let’s break women’s wealth down by the numbers.

Bankrate.com reports that by 2030, women in America are expected to control much of the $30 trillion in financial assets that baby boomers currently possess.
A 2022 global survey from social trading and investment company, eToro, found that out of 9,500 females surveyed, 48 percent of them were new to markets over the past 2 years. A similar 2021 study by Fidelity reports that half of the women surveyed were more interested in investing since the start of the pandemic.
A 2020 report by State Street Global Advisors showed that 60% of women in the United States were solely responsible for making investment decisions and 40% out earned their husbands.
However, Fidelity’s 2021 survey also found that only 33% of women felt confident in their ability to make investment decisions, and only 42% felt confident in their ability to save for the long-term including retirement.
On the other hand, a 2021 investor survey by Wells Fargo found that women tended to have a more disciplined approach to investing that may have helped them to achieve better risk-adjusted returns.

Dolly Parton is credited with saying, “If your actions create a legacy that inspires others to dream more, learn more, do more and become more, then, you are an excellent leader.” Let’s take a moment gain some inspiration from a few legendary female investors.

Geraldine Weiss
After being told that she was better suited for a position as a secretary, Geraldine Weiss went on to become the first woman to launch a successful investment newsletter. The newsletter produced an average stock market gain of 11.8% from 1986 to early 2022, beating the Wilshire 5000 Total Market Index, the broadest measure of the US Stock Market.
Muriel Siebert
The first woman to become a member of the New York Stock Exchange, Muriel Siebert was known as “The First Woman of Finance.” As if this didn’t leave enough of a legacy, Siebert was also the first female superintendent of banking for the State of New York.
Abby Joseph Cohen
A current professor and retired partner for Goldman Sachs, Abby Joseph Cohen remains on of the top market analysts in the country having made a name for herself by predicting the bull run of the 1990’s.
Mellody Hobson
Mellody Hobson joins the list with several contributions, including being named as one of Fortune Magazine’s most influential women. Hobson has served on the board of JPMorgan Chase and Starbucks and currently serves as President and Co-CEO of Ariel Investments where she launched an initiative to invest in Black and Latino-owned companies
Abigail Johnson
Abigail Johnson is the billionaire chair and CEO of Fidelity Investments.

In 2021, Fidelity reported that 64% of women would like to be more active in their finances, including making investment decisions, and that 65% of women would be more likely to invest or invest more if they simply had the clear steps to do so. For a personalized advisory experience with no minimum investment, we invite you to reach out to the advisory team here at Sound Wealth Management by calling 941.932.4822 or scheduling your no obligation consultation online at www.soundwealth.net where Sound Wealth Management is more than just our name.

Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.

Debunking "Medicare Myths"

Tue, 18 Oct 2022 12:20:41 GMT

T he rising cost of healthcare is one of the biggest factors that can make or break your retirement, so it’s important to understand how your healthcare needs will be covered in retirement. While a wonderful benefit, Medicare has a lot of moving pieces that are confusing for many people and often lead to misunderstandings in how the benefits truly work. In this piece, we are going to “debunk” some of the most common “Medicare Myths” to help you in understanding your retiree healthcare benefits.

Myth #1: Everyone is eligible for Me dicare.

It is true that most seniors in the US are eligible for Medicare, however, according to Health and Human Services, Medicare is available for people age 65 and older, younger people with disabilities and people with End Stage Renal Disease (permanent kidney failure requiring dialysis or transplant).

Myth #2: Medic are is free.

While Myth #1 answered the Medicare eligibility question, there is another layer. Medicare has four main parts – Part A (hospital Insurance), Part B (Medical Insurance), Part C (Medicare Advantage) and Part D (Prescription Drug Coverage). No part of Medicare is completely free, however, you may be eligible for premium-free Part A if you meet the following qualifications:

You are age 65 or older and you or your spouse worked and paid Medicare taxes for at least 10 years
You are receiving retirement benefits from Social Security or the Railroad Retirement Board
You are eligible to receive Social Security or Railroad benefits but you have not yet filed for them
You or your spouse had Medicare-covered government employment

You can verify your eligibility and your expected premium by vis iting www.medicare.gov/eligibilitypremiumcalc .

Myth #3: Medicare costs the same amount f or everyone.

There is a lot to unpack to properly answer this question. We already know that most Americans become eligible for premium-free Part A when they turn age 65. If you do not qualify for premium-free Part A, the cost for this portion is either $278 or $506 for 2023 depending upon how long you or your spouse worked and paid Medicare taxes.

Now, let’s talk Part B. The base premium for Part B is $164.90 for 2023. There are a couple of caveats to this, however. First, this number is subject to change every year. Additionally, you may be subject to additional Part B premium charges if your tax return from 2 years ago reflected an income of more than $97,000 for single filers or more than $194,000 for married filers. (Note: These are the income limits for 2023 premium calculation and are subject to change annually.)

Furthermore, you may also have to pay an additional amount (sometimes called Part-D IRMAA) over and above your Part D plan premium if your income is above certain limits. For more information on these calculations, visit www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/monthly .

Myth #4: Medicare will pay for my long-term c are needs.

We have alluded to the answer to this question in several of our videos, but it is truly one of the most common misconceptions about Medicare. Medicare simply does not pay for long-term care. EVER. Medicare will, however, pay for skilled care on a short-term basis for rehabilitative needs not to exceed stays of 100 days. For more information on your options for paying for your long-term care needs, check out our three-part video series on long-term care on our media page at www.soundwealth.net/media .

Myth #5: Medicare and Medicaid are the sa me thing.

These two terms often g et used interchangeably because they sound similar and they are both government programs that help people to pay for health care. However, while the programs will occasionally work in tandem, that is where the similarities end.

Medicare is a federal program for people who are older or disabled. Medicaid is a program governed by the states for people with limited income and resources. The federal government sets the qualifying income and resource levels for Medicaid qualification, but it is up to each individual state to determine the calculation method for an individual. For this reason, Medicaid qualification will vary greatly from one state to the next.

Myth #6: I can enroll in Medicare wheneve r I want.

Th ere are very specific enrollment periods with rules that surround each of them. If you fail to adhere to them, you could, potentially, end up paying financial penalties.

Most people initially qualify for Medicare when they turn age 65, however, some also become eligible via qualified disabilities or medical conditions. For either of these circumstances, you will have a 7-month Initial Enrollment Period.

The only exception to this rule is for those who work past age 65 and are qualified to delay enrollment because they have creditable coverage from their employer. These individuals may enroll via a Special Enrollment Period immediately after losing their employer coverage.

Myth #7: Medicare will cover all my healthcare ex penses.

Generally speaking, “Original Medic are,” or parts A & B, cover only hospital stays, inpatient services, outpatient doctor visits and associated services. It is important to be aware, also, that there is some cost sharing required for the services that are covered under parts A & B. Medicare Parts A & B do not cover:

Prescription drugs
Dental, vision or hearing health care services
Fitness
Special benefits like coordinated care or transportation for doctor visits

This is where your Medicare Supplement Insurance or Medicare Advantage Plan and your Part D Prescription Drug Plan come into play. These additional policies will help to fill in the gaps, so to speak, for what “Original Medicare” does not provide coverage.

If you have additional questions about Medicare or planning to live your retirement with confidence, reach out to our advisory team at 941.932.4822 or schedule your no obligation consultation online at www.soundwealth.net where Sound Wealth Management is more than just our name!

Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.

Medicare Options During Retirement

Tue, 11 Oct 2022 12:55:55 GMT

A mericans 65 years of age and older face a number of choices when it comes to Medicare healthcare coverage. We look at the top considerations.

Medicare is available to virtually all U.S. citizens and legal residents 65 years of age and over who have previously worked and paid U.S. taxes or who are/were married to someone who did. And while this opens a host of healthcare coverage options, there are important considerations to help you make the best decision for your personal circumstances.

Medicare overview

As the largest health insurance program in the United States, Medicare is available when you turn 65 if you are eligible for Social Security or Railroad Retirement Board benefits, or if you’ve paid Medicare taxes while working in a government job. Medicare coverage is available in various parts:

Medicare Parts A and B are referred to as Ori ginal Medicare

Pa rt A pays for hospital stays and follow-up costs associated with those stays. It also covers various outpatient medical services, such as home healthcare and physical therapy.

Pa rt B pays for doctor visits and other medical care administered on an outpatient basis. It may also include the costs of medical equipment/devices and tests. You must sign up for Part B when you turn 65 or else face penalties if you sign up for it later.

If you elect Original Medicare (Parts A and B), you should still expect to pay out-of-pocket costs, including copayments and deductibles. Additionally, prescription drugs, vision care, dental care, and hearing services are not covered by Original Medicare.

To address out-of-pocket costs and those elements that are not covered by Original Medicare, you can purchase Medicare supplement insurance and a standalone Medicare Part D plan that helps pay for prescription drugs.

P art C (also called Medicare Advantage) is an option offered by private insurance companies. This generally provides all of the coverage in Original Medicare plus Part D prescription drug coverage and additional benefits (dental, vision, and hearing services). However, this type of plan may restrict your choice of medical providers and treatment options.

Pa rt D is standalone prescription drug insurance. Most Part D plans require that you pay a premium. You must sign up for this at age 65 or else be subject to penalties if you sign up for it later.

Premiums for Parts C and D depend on your income and benefits selected. Low end pricing starts at around $100 per month for each, and can go up to $600 per month for high-income individuals.

To cover out-of-pocket deductibles and copayments, you can also sign up for a private Medigap policy at a cost of $100 to $200 per month (approximate).

Non-Medicare cover age issues

If you remain in the workforce past age 65 and have employer-sponsored health insurance as well as Medicare coverage, you may be asked to sign up for Part A, using your employer coverage for Parts B and D. If you continue with your employer coverage past age 65 (or if you’re not in the workforce but are covered by your spouse’s employer-sponsored health plan), you will not incur a penalty if you later sign up for the optional Medicare parts when your employer coverage ends.

This material was prepared by LPL Financial, LLC.

Taking A Hike

Tue, 20 Sep 2022 12:38:16 GMT

Taking A Hike: Four ways interest Rate Hikes Can Affect Your Finances

Unless you live on an other planet, you are fully aware of this thing called inflation — whether you’re at the grocery store, a gas station, buying clothes online, hiring a contractor or doing almost any other thing that requires spending money for something. Earlier this year, the Federal Reserve started raising interest rates to rein in inflation, which reached another 40-year high in June. By raising rates, the Fed hopes to slow the economy and inflation. That’s because as borrowing becomes more expensive, consumers tend to reduce spending. The drop in demand for goods eventually leads to lower prices.

The Fed doesn’t set interest rates on credit cards, mortgages, auto loans, and savings accounts, but its actions influence those rates. Here are four ways interest-rate hikes can affect your finances and how to deal with the impact:

1. Cr edit Cards

Most cards charge a variable rate that’s tied to the bank’s prime rate — the rate banks charge their best customers (many consumers pay an additional rate on top of prime, based on their credit profile.) Banks typically raise their prime rate quickly after the Fed boosts its key rate. HIKING TIP: It may take a couple of statements before you notice the impact of a rate increase. Start paying down any balance before rates get much higher, focusing on the card with the highest rate first.

2. Mortgages

If you have a fixed-rate mortgage, your monthly payments will stay the same. If you refinanced over the last few years and locked in a rate in the 2% to 3% range, that was really good timing. However, if you have an adjustable-rate mortgage (ARM), you may be faced with having to make larger payments, depending on the terms of your loan. HIKING TIP: If you have an ARM, budget for higher payments. Or, if you anticipate buying a home within the next year or two, take steps to improve your credit score so you can secure a lower interest rate.

3. Home Equity Line of Credit

This allows you to borrow agai nst the equity in your home as needed, usually at a variable interest rate. Borrowers typically pay only interest on the amount borrowed for the first 10 years, and thereafter must repay interest and the principal over the next, say, 15 or 20 years. Your Home Equity Line of Credit (HELOC) rate can adjust monthly or quarterly. So, if you have an outstanding balance, your payments will likely go up when the Fed implements a rate hike. HIKING TIP: If you have a HELOC, budget for higher payments. You can also pay down your HELOC balance to reduce the interest you pay, or talk to your lender about options, such as refinancing.

4. Auto Loans

It’s already more expensive to buy a new or used car, as their prices have increased dramatically over the last two years. This is due to a number of reasons that have resulted in supply not keeping up with demand. Unfortunately, if you’re planning on financing the purchase of a vehicle in the near future, you’ll need to add in the higher cost of borrowing. HIKING TIP : Make a down payment of at least 20% of the purchase of a new car, and no less than 10% for a used car. A sizable down payment will lower your monthly payments and could help secure a lower interest rate.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

Global Grub

Fri, 02 Sep 2022 12:49:33 GMT

Looking to eat healthier? Look to these international influences for inspiration

We all look for healthier ways to eat from time to time, or just expand our food horizons. If you’re looking to shake things up a bit, consider incorporating some of these healthy eating habits from other cultures around the world.

GREECE. The health benefits of the Mediterranean diet are frequently documented in medical journals and the general media. Traditional Mediterranean cuisine includes lots of fruits, veggies, whole grains, and legumes, plus small amounts of meat, fish, dairy and olive oil.

MEXICO. Traditional Mexican culture includes almuerzo, a midday feast that’s the largest meal of the day. Recent research suggests that eating a big meal late in the evening could be a culprit behind gaining weight. Consider making breakfast or lunch your biggest meal of the day.

SWEDEN. Swedish cuisine tends to go lighter on the veggies, but it still has several healthy elements. Rye bread is a staple — and it’s loaded with fiber, which helps keep you fuller longer. Try making a sandwich on rye for a fiber-rich alternative to white or whole-wheat bread.

INDIA. Indian cuisine features tons of spices, which add great flavor, appealing color and several health benefits. Spices like turmeric, ginger and red pepper may help to lower cholesterol. Frequently used aromatics like onions and garlic can also lower your risk of heart disease.

ETHIOPIA. Injera, a traditional Ethiopian flatbread made of teff flour, is high in fiber, vitamin C and protein. Traditional Ethiopian cuisine emphasizes root vegetables, beans and lentils, and it’s light on dairy and animal products.

JAPAN. Japan’s Ministry of Health, Labor and Welfare and Ministry of Agriculture, Forestry and Fisheries recommend an inverted-pyramid style of food consumption, with whole grains on the top, and sugar and sweets on the bottom, supplemented by regular exercise and hydration. Japan is home to one of the densest populations of people aged 100 years or older in the world, the island of Okinawa. Residents here also have less cancer, heart disease and dementia than Americans. They rely on fresh food, mostly vegetables, to surpass the life span of most of the world.

ICELAND. People in Iceland consume an average of 250 grams of seafood per day, according to the United Nations, compared to 60 grams in the United States. As a result, Icelanders are getting much more heart-health-boosting omega-3 fatty acids. According to the American Heart Association, omega-3 fatty acids can reduce your risk of heart attack, stroke and death from coronary heart disease.

SOUTH KOREA. The bacteria in fermented plant products contribute to healthy gut bacteria and ease inflammatory responses in the body. In South Korea, kimchi, fermented cabbage and radish, are served at every meal.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

Kids and Money

Mon, 22 Aug 2022 12:21:57 GMT

T eaching kids about money isn’t always easy. Plus, it’s hard to know when to start, and to figure out what specific things kids should know about money and at what age. In this video, we’ll do a high-level introduction to some key topics, like what do kids need to know and how we might try to teach them.

Young people today often appear to have little understanding of where money comes from and that the supply of it isn’t unlimited. It seems at times that kids spend money like it grows freely on trees. How are parents supposed to change this attitude? How can they encourage a practical sense of how much money comes in to the family and good practices regarding the use of money and how to make it, grow it, and keep it safe?

One of the first considerations is the major sources of information that influence kids in terms of how they learn and think about money. A poll of young people conducted by themint.org, a financial education website, found that more than two-thirds of those who responded indicated that their parents were the biggest financial influence on them. Friends were reported to be the biggest influence by 16% of the respondents. Various media, such as television, magazines, books and radio were named as the most influential source of money information by 14%. Teachers were the major influence for only 1% of those who responded to the poll. The fact that parents were the most important influence, by far, about kids’ thoughts regarding money, should give us all incentive to take this teaching responsibility seriously.

Themint.org also polled young people about why they asked their parents for money. Almost half wanted money for tickets to a movie, concert, or sporting event. About one-quarter of those responding to the poll said they asked for money for food or drinks. Almost 20% asked for cash to buy a toy, game, or phone. Only 15% wanted money for a school or educational item. And only 1% asked for money to give to or participate in a charitable effort. These aren’t particularly surprising responses. But, what’s really interesting is the response of young people when asked how often their parents said “okay” when they asked for extra money beyond their allowance. Nearly two-thirds said “always.” A little over 25% said “sometimes.” Those responding “never” or “never asked” made up only 11% of the kids responding to the poll. Maybe parents also have a little work to do of their own when it comes to handling money for the kids!

So, what are some of the key things that young people need to know about money and how it can be used responsibly?

A good starting point is cash flow. Where does the money coming in actually come from, and what happens to it after it’s received. A very basic concept for even some of the youngest children is that you need money to buy things. Some things are free (like samples at Costco, or music on the radio), but most are not. But, how do you get money? For most people, you earn money by working. A paycheck allows you to buy things, pay bills, and save for the future. To support the concept that you earn money by working, a parent can describe his or her job to a child. When out in the neighborhood, point out people who are working, like the landscaper or the bus driver. Explain that some people start their own businesses, like restaurants or repair shops.

Which sets us up to talk about the next item: learning the difference between needs and wants. There’s often a big difference, which is usually easily understood by adults, but not necessarily by children. It’s important for children to understand the difference between needing something and wanting something. We need clothes and food, because they’re essential to our everyday life. But, we may want a new toy or book. Wanting and needing are different, and it’s very helpful to know the difference. There are times when you have to wait before you buy something you would like to have. Sometimes, bills have to be paid before you can buy that item. Or, there might be a big expense later this month that will require a large amount of money, so you may have to put off a purchase earlier in the month. Handling money is about making choices.

The importance of saving and the power of compounding are extremely important concepts for children to understand, since these concepts will stay with them throughout their lives. Talk about keeping money at the bank, and the effect of interest paid on your savings account. Open a savings account for your child, and explain the process. A good way to begin a lifelong saving habit is to encourage kids to save ten percent of every dollar they receive. That amount is fairly painless, and won’t be noticed once the child gets in the habit of putting that small amount aside. You might also want to consider a “match’: you could add 15 or 25 cents for every dollar that is saved by the child.

How to responsibly use credit cards is another concept that kids need to know about. When using a credit card, money isn’t obvious, but money will be needed when the bill arrives. Kids need to be aware that using a credit card is the same as taking out a loan. If you don’t pay the bill in full each month, interest will be charged and you will end up, over time, owing more than you originally spent. So that $8 download of the latest recording from their favorite group can cost more if the bill isn’t paid in full when the next bill comes. Discuss how a credit card can be helpful in making online purchases or as a convenience in other situations. Talk about the pitfalls of making just the minimum monthly payments and how that lengthens the repayment time and can result in owing more than you originally charged on the credit card. Establishing and maintaining a good credit history is another skill that will be important throughout children’s lives.

A final topic of importance for kids to learn about is the relationship between earnings from employment and income taxes. For the teenagers that have recently gotten their first job and will be getting paychecks, this is a good opportunity to discuss the difference between gross and net pay. Point out that there are required deductions from pay, such as for taxes and other governmental charges. So, if the wage paid for their job is $15 per hour, they need to know that they won’t be bringing home $15 for every hour they work. This could also provide an opportunity to take advantage of the convenience of direct deposit of pay into the child’s bank account. Start down the road of increasing the child’s knowledge of investing by looking at a Roth IRA’s advantages. Not only will this provide an opportunity to learn about a major retirement saving vehicle, but it will also serve as a good introduction to investing by looking at the investment menu available for an IRA.

But, many would say that the best way to teach is by example. Show kids that you make good money choices when you’re out shopping with them. Talk to them about your bank statement when it arrives, and the credit card bills. Demonstrate that you think about the use of your money before making decisions about purchases and saving. Discuss with the kids what you do well in terms of money, what you don’t do so well and the mistakes you have made, and how you’re going to improve on that in the future.

There definitely is something to be said for starting early. Kids need to learn that money doesn’t just magically pop out of the ATM, that using a credit card doesn’t mean that the item is free, and that Mom and Dad won’t always be there, or be willing, to bail them out when they get into money trouble.

And, remember…there are many tools and resources available online to help you along the way as you teach your children to become good stewards of money. And the advisory team at Sound Wealth Management is proud to be a resource for you and your family, as well. To schedule your family financial meeting, reach out to our advisory team at 941.932.4822 or schedule your no obligation consultation online at www.soundwealth.net , where Sound Wealth Management is more than just our name.

This material was prepared by LPL Financial.

This presentation was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational presentation.

Index funds are subject to market risk, which is the chance that stock prices overall will decline. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. Also, an index fund’s target index may track a subset of the U.S. stock market, which could cause the fund to perform differently from the overall stock market.

A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.

Eliminate the Guesswork

Mon, 08 Aug 2022 14:16:49 GMT

Creating an estate plan is a key component of achieving financial wellness

Most people don’t spend too much time thinking about end-of-life planning on a daily basis. But you may have loved ones who will soon face those issues. While it’s not pleasant to think about, you may be the one who ends up having to sort out their affairs. In addition, there will come a time when you need to think about yourself and your own family.

In a nutshell, estate planning is writing down what you want to happen after you die. This is commonly accomplished using wills, trusts, advance directives and beneficiary designations on accounts. If you don’t have an estate plan when you pass away, you force people to guess what you wanted. Guessing can place a lot of stress on your family. Creating an estate plan is actually one of the most generous things you can do for them. Here are four key reasons to create an estate plan.

Choose How To Distribute Your Assets

An estate plan allows you to allocate your assets according to your wishes. If you don’t have an estate plan, your money and property may not get to the correct person. In addition, some people who get an inheritance in one big sum may have the potential to spend it all pretty quickly. Creating an estate plan identifies specific inheritances for certain beneficiaries, especially those who might be young, immature or irresponsible.

In addition, if there is not a will when you die, it is called dying intestate. Each state has a succession formula for who receives money and property left behind. In most cases, if the state can’t find anyone, it goes to the state where you passed away.

Set Up Care for Dependent Children

Families with dependent children should make a plan for childcare if both parents pass away. Many young couples don’t think about it, but in the event of both of their untimely deaths, they need to appoint someone to be the guardian of their children. Make sure that if you have minor children, that you have named someone to be the proper caretaker. Although it can be uncomfortable having the conversation on who will be the caretaker (your parents or your spouse or partner’s parents, for example), setting up an estate plan can prevent arguing among family members.

Avoid Probate

If you die without a will, your estate will go through probate. The probate process in most states takes a minimum of seven months to allow creditors to put through claims. In addition, it’s a public hearing, which allows people to know your personal business. The probate process can also be expensive, and legal costs will reduce the amount your loved ones inherit. Essentially, the probate process gets in the way of a smooth transition of your assets to your loved ones.

Minimize Taxes

Some advance planning can save your heirs from getting a big tax bill. For example, depending on whether or not your heir is a spouse or nonspouse (and subject to certain rules), they may need to pay income tax on money they inherit and withdraw from a traditional IRA. However, if they inherit a Roth IRA that was funded for five years or more prior to your death, distributions can be taken tax-free. In addition, if you plan to leave behind an estate in excess of $12.06 million (based on 2022 Internal Revenue Service figures), you need to make a plan for estate taxes, or the so-called “death tax.” Some states also have an estate or inheritance tax with a different threshold. You can reduce these estate taxes with an estate plan.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

Know Your Worth

Fri, 29 Jul 2022 12:28:30 GMT

E very time the title changes hands, we are overwhelmed with news updates of who holds the title of the “richest person in America.” But have you ever wondered where exactly a person’s net worth comes from and how to calculate yours?

Your net worth statement is like a personal balance sheet. In the simplest of terms, a person’s net worth is their assets minus their liabilities. Sounds simple enough, right? On the surface, it is. It’s easy enough to add up the total balances of your bank accounts, your 401(k), your Roth IRA and any other accounts you may have and then subtract out your mortgage and your car loan and your credit cards. However, doing the math that simply could potentially leave a lot on the table.

What you may be forgetting is your tangible assets…the things you can touch and feel. Let’s start with your house. If you own a home…and let’s say you just purchased it on a conventional mortgage, you could be leaving out a 20% equity stake in the property that theoretically translates into real money if you were to sell the property. The same holds true for your car. While the margin of equity may be narrower, at some point in the life of your ownership of the vehicle, you will likely own more of the vehicle than you owe.

How about jewelry and collectibles? Maybe you own a run of Amazing Spider Man comics or a collection of baseball cards. These items play into your net worth, as well.

The true math formula for calculating your net worth is to add the positive values of everything you own – from your bank and investment accounts to cash value life insurance, to your home and your vehicle, to your jewelry and collectibles – and then subtract out all your debts – your mortgage, your auto loan, your credit cards, etc. This will give you your true net worth number. There are quite a few online resources available to help you with the math.

If you would like help calculating your net worth as part of your comprehensive financial plan, please feel welcome to reach out to the advisory team here at Sound Wealth Management or schedule your no obligation consultation online at www.soundwealth.net where Sound Wealth Management is more than just our name!

How Much Disability Insurance Do I Need?

Mon, 11 Jul 2022 12:46:41 GMT

W hat is your most valuable asset? Your first reaction may be to think or your home or possibly an investment account, so the answer may surprise you. According to The 100 Absolutely Unbreakable Laws of Business Success by Brian Tracy, your most valuable asset is your earning ability. The rationale here is that by having the ability to e arn an income, you can continuously yield a steady, predictable cash flow. When that ability is calculated out over your remaining years until retirement and considers your ability to save, you have now created a machine that can not only provide for yourself and family today but produce additional income for the future through compounding.

Now that we have established that, what have you done to protect this asset from loss?

As much as we all hate to admit it, we are not invincible. Just saying that kind of hurts a little, but it’s true. So, what would happen to your ability to earn an income if you were in a serious accident? You may still be able to work and earn some form of income…but would you be able to perform your same job function? For example, if you’re a chiropractor and you lose an arm in a car accident, would you still be able to perform your job? Maybe not. But you may still be able to teach chiropractic.

This brings us to an important point about disability policy design. There are 2 main types of disability policies “own occupation” and “any occupation.” In an “own occupation” policy, your policy will pay you if you are not able to perform your “own” occupation, or “chiropractor” in our previous example. In an “any occupation” policy, your policy will only pay you if you are no longer able to perform any occupation…meaning if you are no longer able to work at all. This is an important distinction because our chiropractor in the previous example would be able to collect disability payments while teaching under an “own occupation” policy but not under an “any occupation” policy. For this reason, the policy type – meaning “own occupation” or “any occupation” – can play a major role in determining the amount of coverage that you will need as it will determine whether your policy will need to replace your entire income or only provide a supplemental income.

Now, consider how much income you need to get by. Add up your monthly expenses, bearing in mind that some of your expenses may change if you are no longer working at all, such as the cost of commuting, professional wardrobe, or the need for childcare. Now, subtract out any income that you will be receiving from other sources such as a new job if you are still able to work in a different capacity – like our chiropractor in the previous example – a spousal income, or any income that you plan to draw from investments. This will be the amount that you will need to supplement through disability coverage without making any additional lifestyle changes.

As always, for a review of your unique scenario, feel welcome to reach out to the advisory team here at Sound Wealth Management at 941.932.4822 or schedule your no obligation consultation online at www.soundwealth.net where Sound Wealth Management is more than just our name!

How Much Do I Need to Save for Retirement?

Mon, 27 Jun 2022 12:17:41 GMT

O ne of the most asked questions in the financial industry is, “how much do I need to save for retirement?” While we would love to be able to throw out a blanket answer and say something like “a million bucks – you’ll be just fine,” the truth is that the answer is just not that simple because some people can retire comfortably on far less savings, while others will need a far more substantial amount. This is where having an individual financial plan – specific to your situation – can help you to not only plan for how much you will need to save for your personal retirement goals, but also manage your distribution needs once you reach retirement. However, there are a few “rules of thumb” to help guide you along the way. So, let’s look at a few of them.

Income and Lifestyle

Many financial experts suggest that your retirement income needs will typically be around 70-80% of your pre-retirement income. The rationale behind this is that you will no longer need to put money away to save for your retirement and you may have paid off some of your major debts such as mortgages and car loans. Bear in mind, however, that this number may need to be adjusted if you plan to celebrate your retirement in a big way with some “bucket list” items such as travel or major purchases. It’s also important to keep in mind potential healthcare costs – particularly if you have health risk factors – as these can play a major role in your retirement income needs.

The 4% Rule

Another “rule of thumb” that has been widely used in retirement planning is the “4% rule.” This rule suggests that retirees can safely withdraw the amount equal to 4 percent of their savings during the year that they retire and then adjust for inflation each subsequent year for 30 years. The advantage of the 4% rule is to provide a simple guideline for retirement spending. The downside, however, is that it may not be completely accurate based on your returns or the current rate of inflation during your retirement as it doesn’t adjust to meet current conditions. That’s not to say, however, that it can’t provide a benchmark to help estimate the math as you start making your early plans.

Retirement Savings Be nchmarks

Fidelity Investments suggests the following Retirement Savings Benchmarks by age to help ensure that you are on the right track:

Age 30: 1X annual salary
Age 40: 3X annual salary
Age 50: 6x annual salary
Age 60: 8x annual salary
Age 67: 10x annual salary

To meet these benchmarks, both Fidelity and T. Rowe Price suggest saving 15% of your annual salary beginning in your 20’s and continuing until your retirement.

And remember, for a personalized look at your unique financial situation and goals, feel welcome to reach out to the Sound Wealth Management team at 941.932.4822 or schedule your no obligation consultation online at www.soundwealth.net where Sound Wealth Management is more than just our name.

Caring for Aging Parents

Mon, 13 Jun 2022 12:28:32 GMT

There are important steps you can take to help your aging parents find living and health care assistance, as well as to secure financing for the cost of the care.

Many adults have aging parents who are in need of living and health care assistance. There are a number of resources today that can help them grow old gracefully, either in their existing home or in a facility, along with multiple options for financing the cost of the care.

Livin g options

Livin g alone

Depending on the independence of your parents, living alone in their existing house may be an option. However, you may need to make several modifications — some of them expensive — to make their home environmentally safe and suitable for an aging person. For instance, important safety features such as a first-floor bathroom, grab bars in hallways in bathrooms, and an emergency response system may be necessary.

If your parent requires assistance with meals or chores, there are several services which can provide support, such as Meals on Wheels, which are free for anyone over 60.

You can also consider an in-home aide if your parent needs additional personal assistance.

Living with Family

Some families choose to move an aging parent into their own home. If you can do this with minimal conflict, this can be beneficial as it avoids having to maintain a second home and of course can be less expensive. If your parent has dementia or other health issues, adult day care can be helpful, as it allows them to socialize with other adults.

Assis ted living

If your parents are independent and can care for themselves, they may be eligible to enter a continuing-care retirement community, where they can rent (or purchase) an apartment and be eligible for nursing care, if it becomes necessary. Consider purchasing long-term care insurance, which can help pay for nursing home costs or the cost of an in-home aide.

Nursing h ome

If your parents need more extensive care and require a nursing home, research the options extensively. You may need to reserve a space far in advance, as waiting lists are often long at popular facilities. The government provides limited financial assistance for families paying for nursing home care. Financing long-term care can be a tremendous challenge for many adults.

Financing lon g-term care

Medicare will only pay the full cost of professional help if a physician certifies that your parent requires nursing care and if the services are provided by a Medicare-certified home health care agency. However, Medicare will pay for nursing home care for the short-term only, with benefits restricted to low-income individuals with limited assets.

You can offset some of these costs, as you can claim a federal tax credit up to $3,000 off the cost of in-home care or day care.

You can use a flexible spending account, too, which h elps your pay for a certain amount of covered expenses with pretax dollars.

With the cost of elderly care continually on the rise, financial planning can be an important step in providing adequate support for your parents’ future well-being.

This material was prepared by LPL Financial, LLC

Wealth Building Strategies While Raising a Family

Tue, 31 May 2022 13:12:38 GMT

R aising a family is rewarding─and expensive. Consider taking these steps to support your family financially through a program of smart investing.

Building a ca reer and raising a family requires management skills. Juggling your time, priorities, and money now while planning for the future can be daunting. Saving now to send your kids to college, take care of your parents as they age, and pursuing a comfortable retirement can be challenging.

Savings alone may not be enough. Saving part of your monthly income is the first step toward building wealth, but with current interest and inflation rates, saving may not be able to do the job on its own. After putting aside enough cash for an emergency fund, you may want to consider investing in a diversified set of investments such as stocks, bonds, mutual funds, real estate, and more. I can show you how to match your investment portfolio to your tolerance for risk, your age, your goals, and your income to help you build your wealth.

Start with building your retirement nest egg. Most often, parents put their children’s future first by building a college fund. While this is certainly important, preparing for retirement should take precedence. Your children have options that you don’t. Your kids can use a combination of savings, loans, and scholarships to attend college. You must live on Social Security and the wealth you’ve accumulated. The last thing you want is to depend on your children’s financial support when they begin working and you stop.

Use the tax code to help build wealth. If you’re covered by a qualified employer retirement plan, not only should consider making the largest contributions you can afford, you should make sure the money is invested in assets with the potential to provide long-term growth. If you are self-employed or not covered at work, consider an Individual Retirement Account (IRA) and/or Self-Employed 401(k), preferably self-directed ones, to hold your investment portfolio. Not only are contributions tax-deductible each year (subject to income and contribution limits), but all your earnings are tax-deferred until you start making withdrawals. You can delay withdrawals until age 70½, giving you many years of tax-deferred growth potential.

Take advantage of other tax breaks. While contributions to a 529 education savings plan are not deductible from your taxes, growth is tax-deferred, and if used for qualified educational purposes, withdrawals are tax-free. Your employer may offer tax-advantaged benefits like cafeteria plans. As your wealth grows, consider if it’s appropriate to allocate money into investment vehicles like tax-free municipal bonds*, Treasury Inflation-Protected Securities, whole life insurance, Real Estate Investment Trusts (REITs), and qualified annuities, to name a few.

Be a good parent, and be good to yourself. How you invest your money is critical to the financial health of you and your family.

T his material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

Source/Disclaimer:

*Interest income may be subject to the alternative minimum tax. Municipal bonds are federally taxfree but other state and local taxes may apply.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a nondiversified portfolio. Diversification does not protect against market risks.

Qualified accounts such as 401(k)s and traditional IRAs are accounts funded with tax deductible contributions in which any earnings are tax deferred until withdrawn, usually after retirement age. Unless certain criteria are met, IRS penalties and income taxes may apply on any withdrawals taken prior to age 59½. RMDs (required minimum distributions) must generally be taken by the account holder within the year after turning 70½.

Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary.

This material was prepared for Sound Wealth Management and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

How To Reduce Your Credit Card Debt

Mon, 16 May 2022 13:36:54 GMT

Description: Credit card debt can be an all-consuming matter that should be addressed sooner, rather than later in life. This article outlines steps to get started.

As of 2020, the average credit card balance has reached over $6,200 . It is not uncommon to see credit cards with interest rates as high as 24%, and the higher the rate, the more you will pay over time if only paying the minimum amount per month. As those who follow this advice can share, the balance never seems to go down. In fact, it often climbs much higher because of the interest and even late fees. So what can you do to pay down a high balance?

Step 1: Con solidate Debt

There are several banks now offering 0% APR rates for consolidation. If you have good to excellent credit, see if you can qualify for one of these offers. Note that the 0% APR does not usually last forever. You may have roughly nine to 12 months to pay off the remaining balance before the bank begins to charge an interest rate again.

There are two main ways to consolidate your account. You can take out a 0% interest card and transfer the balance. Ensure the lender allows this before you open it. Secondly, some lenders provide personal loans that you can use to consolidate credit cards and other types of debts.

Step 2: Make a Budget

Get serious about paying off your debt as soon as possible. Take a look at your monthly budget. If you don’t yet have a budget, it’s time to make one. Many people are surprised to discover where their money goes when they start to track income and expenses.

If you have trouble doing this manually, try using an app such as NerdWallet. Automating the process as much as possible is always best. What can you trim from your expenses to put toward paying down debt faster?

Step 3: Pay as Much a s Possible

You can use simple methods to either save or earn enough extra money to pay another $50 to $200 per month toward debt. Use this money to start paying the highest-interest rate card first and keep going. Here are some options to consider:

• Ride your bike, walk, take the bus or ride the train a few days per week.

• Use pay increases, bonuses and tax refunds to pay down debt.

• Make your own lunch instead of eating out.

• Bring your own coffee to work.

• Start an easy side gig.

• Get a roommate.

Step 4: Dela y Investing

Some financial professionals advise investing first and then paying off debt. There are pros and cons to both tactics, but paying off debt sooner can save you a lot of money you would otherwise waste on interest. The best way to decide is to consider interest rate versus earning potential.

Step 5: Try To Ge t a Lower Rate

The good news is that you can ask the bank for a lower rate.

Getting a lower interest rate is easiest if you have good to excellent credit, have had your account for at least a year and it is still in good standing. Be prepared to negotiate with your lenders as not all of them will jump at the idea of charging you lower interest rates on what you owe.

Millions of Americans all across the country are buried in debt. Still, there are proven ways to dig yourself out if you have the patience and the willpower. Get more information from our financial professionals at Sound Wealth Management at 941.932.4822 .

1. https://www.usatoday.com/story/money/2020/02/12/credit-card-debt-average-balance-hits-6-200-and-limit-31-000/4722897002/

2. https://wallethub.com/edu/cc/average-credit-card-interest-rate/50841/

Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This material was prepared by LPL Financial, LLC

Financial Traps to Avoid

Mon, 02 May 2022 12:43:04 GMT

There’s a good reason so many athletes, entertainers and business people who made seven figures and higher suddenly find themselves filing for bankruptcy. Money mismanag ement can eat through even the biggest bankrolls. Here are some specific threats to financial stability that people can avoid to help effectively manage their wealth.

No Bu dget

In 2019, CNBC reported that even though 93% of Americans ¹ believe everyone should have a budget, only one in three actually does. Budgeting does not have to mean skipping coffee and driving a jalopy for the rest of your life. It does mean paying close attention to how much money comes in and where it all goes. Use your financial goals to guide you in steering your money in the right direction.

To o Much Debt

If you have a lot of debt to pay off, a budget is all the more important. It helps reduce the likelihood of relying on more credit to fill the gaps. A budget also helps you to collect all those extra dollars and cents that you could put toward paying more than the bare minimum on debt. When paying off debt, start with the higher-interest accounts first and work your way through to save money.

No Protection

Insurance can be expensive, but going without insurance can be even more so. Renters, homeowners, auto, health, disability and life insurance policies are the main ones you should consider. If you have a business — especially if it is your main or only source of income — getting business insurance can protect your livelihood in the event of a mishap with a client or customer.

No Retirem ent Planning

Forbes estimates that roughly 25% of Americans have nothing saved for retirement ² . This may be forcing some people to continue to hold stressful, low-paying jobs well into their retirement years. It is never too early to start planning for retirement, no matter how small your contributions are. Remember to take advantage of matched contributions from employers whenever possible.

To o Much Risk

There is no investment that is 100% without risk. If there were, the returns on that investment would be negligible. Even so, taking on too much risk at the wrong time can lead to big financial problems. Taking on high levels of risk is appropriate for young people who have more time to recover and is not advised for people nearing retirement.

Shady Inve stments

Even worse is when risky investments turn out to be fraudulent or shady. In fact, the more risk-free an investment sounds, the more you should do some digging. This holds true whether the business or individual you plan to invest in is a stranger or your brother. People who miscalculate or fail to do enough research can cause you just as much financial damage as fraudsters.

Poor Tax Manag ement

No matter how much or how little money you make, tax management is a great way to help keep money in your pockets. This is especially important after a large windfall, such as an inheritance. For instance, if you inherit an Individual Retirement Account (IRA) and choose to cash out, you may lose a portion of this in taxes. Divorce is another time of life when tax management is key.

Mismanage d Assets

Stocks are often traded frequently, making them active investments, but you still need to ensure your portfolio stays balanced. Similarly, if you have a home, keeping up with repairs and improvements maintains and grows its value. Unmanaged assets also pose a problem, such as when people allow large sums of money to sit in accounts with low to no interest rates and high fees.

For some people, money management is a talent and financial literacy is almost an inborn skill. Many other people, however, could use a little help making financial decisions. Contact [insert name here] to speak with professionals who can help to steer your finances in the right direction.

1. https://www1.cbn.com/cbnnews/finance/2019/may/1-out-of-3-americans-dont-use-a-budget-but-93-say-everyone-needs-a-budget

2. https://www.forbes.com/sites/niallmccarthy/2019/06/03/report-a-quarter-of-americans-have-no-retirement-savings-infographic/#30e15bb23ebf

This material was prepared by LPL Financial, LLC

Money Mantras

Tue, 19 Apr 2022 14:31:13 GMT

Market swings causing you some anxiety? These four money mantras can help you overcome it.

Whether it’s the continuing presence of the COVID-19 pandemic, a sudden boost in prices related to gas, food, housing and other essentials, supply chain hiccups, an uncertain labor market (or any number of other things), the stock market has certainly seen its share of ups and downs over the past six months. As always, it’s impossible to predict what the market will do on any given day. But at the start of a new year, it’s always a good idea to take some deep, measured breaths and focus on some basic money mantras. Doing so will help you push through any anxiety you may be feeling regarding your retirement account (no yoga pose required).

Mantra #1: I Am Investing for the Long Term

An old saying goes, “saving for retirement is a journey, not a sprint.” A volatile market can push the most experienced investors into making emotional decisions. However, it’s never a good idea to change your investments simply because of day-to-day volatility. Set a strategy that’s right for you and stick with it. Having a diversified portfolio can help you build confidence in your long-term plan — so don’t just throw it out the window during big market swings!

Historically, equity markets have trended upward over the long term. However, past performance is not a guarantee of future results. Investing involves risk, so you may want to consider working with a financial professional who can help you review your current tolerance for risk, keeping in mind your other financial goals.

Mantra #2: I Will Diversify My Portfolio

Putting your money into a number of investment options that include different types of asset classes can help reduce risk. Generally speaking, if your dollars are invested in materially different types of investments (stocks, bonds and cash), and market conditions cause one of your investments to decline, all of your money shouldn’t be affected.

A simpler way to understand diversification is to look at the food you put on your plate. The more food groups and colors on your plate, the more nutrients your body consumes and the healthier you are. If, however, you only ate pizza every day, your body would suffer from a lack of key nutrients. The same is true for an investment portfolio’s diversification. Investors who put their money in only one type of asset (such as stocks) are at an increased risk for loss of principal due to a lack of variety in their portfolio.

Mantra #3: I Will Rebalance My Portfolio on a Regular Basis

Over time, market changes can lead to shifts in your portfolio’s asset allocation. For example, you may have started with a 75/25 stock fund-to-bond fund split, but changes in the market caused stocks to now account for 85% of your portfolio’s value. That’s why it’s important to periodically check your asset allocation to see if it aligns with your current strategy and risk tolerance. Keep in mind, you may also want to rebalance to a more aggressive or conservative allocation should your tolerance for risk change due to where you are in life or how close you are to retirement.

Mantra #4: I Will Seek Professional Help If I Need It

Many people consult with an investment advisor for guidance regarding their retirement plan investments. An advisor can help you determine an appropriate investment strategy to achieve your financial goals that is based on your risk tolerance and time frame.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

©2021 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this newsletter are those of Kmotion. The articles and opinions are for general information only and are not intended to provide specific advice or recommendations for any individual. Nothing in this publication shall be construed as providing investment counseling or directing employees to participate in any investment program in any way. Please consult your financial advisor or other appropriate professional for further assistance with regard to your individual situation.The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

Techniques for Charitable Giving

Fri, 01 Apr 2022 19:16:32 GMT

We have found through the years that many of our clients have charitable intentions. While noble at heart, your charitable contributions can also provide some potentially significant financial rewards to you and/or your heirs as well as fulfilling your philanthropic goals.

While many people think of the immediate solution of real-time donations of cash and supplies to charities as their method of making contributions, this only illustrates one method to help to support your favorite causes. In this post, we’re going to highlight a few alternative methods of planned giving techniques encompassing the simple to the sophisticated.

Cash

When you have a desire to provide immediate support to your chosen charity, an outright gift of cash is often the first charitable gifting technique that springs to mind. You will receive an immediate charitable income tax deduction equal to the amount that you have chosen to gift, subject to the annual deduction limit. Estate tax law also allows for gifted amounts to be removed from your estate for estate tax purposes. Making a lifetime gift of cash and/or other assets allows you to witness your charitable gift being used for the purposes that you intend during your lifetime, as well as to potentially be recognized for your contributions by the charity that you have selected.

Securities

Gifting securities such as stocks, bonds and mutual funds is often an attractive alternative to cash for current donations, especially if you have highly appreciated positions as it can allow for some tax savings on top of your charitable tax deduction. For example, through your charitable gift of a highly appreciated security, you can avoid paying the capital gains tax that would be due if you had liquidated the position. Additionally, the charity does not incur taxes when it sells the position, as a tax-exempt organization. To achieve this tax-free transaction, it is important to remember that the position must be transferred directly to the charity rather than liquidated.

Life Insurance

Life insurance can provide a means to multiply your dollar in order to provide a larger gift to your favorite charity at the time of your passing than would be possible for you otherwise. To accomplish this, simply name your chosen charitable organization as the full or partial beneficiary of your life insurance proceeds. You may also note that policy proceeds that are received by the charity are not included in your estate for estate tax purposes. You can also transfer the ownership of the policy to the charity during your lifetime. The benefit here is that you will receive an income tax deduction for both the donation and for any premiums that you pay on the policy.

Real Estate

For many, real estate makes up a very large and important part of our wealth. For this reason, it is sometimes an attractive asset to accomplish your charitable giving. There are, however, some very important considerations to take into account when you are thinking of making a gift of real estate. As real estate brings with it some unique challenges, it is important to first consult with the charity regarding their capacity to accept your generous gift. Secondly, while the concept of gifting your home may appeal to you, you also may want to continue to live in it. No worries. You can still fulfill your gifting goals by entering into a life estate agreement with your chosen charitable organization. Such an agreement will allow you to continue to live in your home for as long as you choose while the remaining interest is transferred to the charity. You remain responsible for the upkeep, maintenance, and taxes, however. What’s more, you will be entitled to a charitable income tax deduction equal to the remainder interest that was transferred to the charity.

Retirement Assets

Making charitable gifts from retirement assets can provide several opportunities for significant tax savings. First, during your lifetime, withdrawals payable to yourself from most retirement accounts are taxed at ordinary income tax rates. Making taxable withdrawals from these accounts will not only incur income taxes but can potentially increase your income tax bracket. What’s more, retirees ages 72 and over are required to withdraw funds from their retirement accounts whether they need the money for income or not. By withdrawing funds from your retirement account payable directly to the charity of your choice, the funds never incur the income taxes that you would owe on them…therefore your taxable income does not increase nor does your bill to Uncle Sam.

After your passing, your heirs may find that they owe both estate taxes as well as income taxes. To avoid this burden to your heirs, you could consider making a charitable gift of your retirement assets. Amounts received by your charity of choice are not subjected to income tax, saving money for your estate, and providing a legacy for you by helping one of your favorite causes to work toward their mission.

Estate Plan

Another posthumous option for leaving a charitable legacy for yourself is to name a charity as a beneficiary in your will or trust. This can be accomplished by providing either a specific dollar amount, asset, or fractional share of remaining assets. However, bear in mind, that it is important to note how you would like your gift to be utilized such as to fund a specific program or in the event that the charity merges or dissolves.

Charitable Remainder Trust

A charitable remainder trust is a planned giving tool that allows you to make a substantial gift to your favorite charity while also drawing an income stream during your lifetime. Simplified, you establish an irrevocable trust from which you (or other designated beneficiary) receive annual payments during life or term of years. At the end of the designated term, the remaining trust assets will revert to the charity that you have specified. Using a charitable remainder trust entitles you to a charitable deduction equivalent to the value of the charity’s interest, based on current IRS tables. Charitable remainder trusts are excellent vehicles for transferring highly appreciated security positions as they are exempt from taxes. As the charity becomes the ultimate beneficiary of the account, capital gains will not be owed upon the sale of appreciated stock held by the trust.

Charitable Lead Trust

Accomplishing much the same thing as a charitable remainder trust, a charitable lead trust works in the reverse order. In this case, the charity will receive payments for a set number of years at the end of which a designated beneficiary or beneficiaries will receive the trust assets.

Donor Advised Fund.

Increasingly popular as a tool for charitable giving, is the donor advised fund. In a donor advised fund, an irrevocable gift is made to a fund or account at a sponsoring organization (such as a community foundation) in your name over which you or your family maintains advisory rights when it comes to investments and distributions. Your donation entitles you to an immediate tax benefit even though your funds may be held by the sponsoring organization for future use. You also avoid capital gains tax on any appreciated positions that are transferred into the fund. The downside is that you give up some control. While you can make recommendations as to the charities and grants supported, the sponsoring organization has the ultimate authority. However, they are also responsible for all administration and tax filings.

Private Foundation

While attractive, the most complicated of all charitable gifting strategies is the private foundation. According to IRS tax code, to qualify for non-profit status, a private foundation must be established for religious, charitable, scientific, literary, or educational purposes and have a primary activity of making grants to other non-profit organizations. Forming a private foundation provides you with an immediate tax deduction for donated funds, though grants will not be made until a future date. Private foundations are often created by families as a means of creating continued stewardship in future generations. Be aware, however, that there are many additional tax rules that apply when forming a private foundation, but they also provide you and your heirs the greatest control over your philanthropic legacy.

At Sound Wealth Management, we have experience in working with donors and non-profits, alike. We can help to provide guidance as to what giving scenario may be the right fit for your current financial needs. Likewise, we can help to ethically manage foundation dollars that are set aside for your charitable intentions.

For a review of your unique situation, please reach out to our advisory team at 941.932.4822 or schedule your no-obligation consultation online at www.soundwealth.net .

Sound Wealth Management and LPL Financial do not provide legal advice or services. Please consult your legal advisor regarding your specific situation.

Plan Sponsors Ask...Q1 2022

Mon, 07 Mar 2022 14:32:33 GMT

Plan Sponsors Ask...Q1 2022

Plan Sponsors Ask...

Q: We are considering adding a financial wellness program as part of our retirement plan benefit program. Unfortunately, there isn’t a lot in the budget to work with right now. Any ideas on how we might approach it?

A: As you probably know, workers are becoming increasingly interested in financial wellness education that can help reduce financial stress and prepare them for economic uncertainty. In fact, a recent survey by Brightplan revealed that when employees ranked employer-sponsored benefits, “financial wellness” was consistently ranked higher than workplace standards like healthcare and vacation time — and was only surpassed by “salary.”

Here are two activities to consider before launching a financial wellness education program in the workplace:

Conduct an employee survey. Employees should be formally surveyed to get a sense of what they need to feel supported as they continue to return to their prepandemic lives. Employees should be specifically asked in which areas of their personal finances they would most value employer support — such as building an emergency savings account or reducing debt.

Quantify your numbers to justify funding the program. Employers should consider quantifying how financial stress impacts their bottom line through factors such as lower productivity, absenteeism or medical costs. They may also want to consider identifying and targeting groups of employees who need the most help and focus initial financial wellness education efforts on them.

Q: Our plan committee is thinking about purchasing fiduciary liability insurance. Is a fidelity bond the same thing as fiduciary liability insurance?

A: The fidelity bond required under the Employee Retirement Income Security Act of 1974 (ERISA) specifically insures a plan against losses due to fraud or dishonesty (e.g., theft) by persons who handle plan funds or property. Fiduciary liability insurance, on the other hand, is insurance plan fiduciaries purchase to protect themselves in the event they breach their fiduciary responsibilities with respect to the plan. Please note that courts can hold plan fiduciaries personally liable for losses incurred by a plan as a result of their fiduciary failures. Fiduciary liability insurance — while not required — could be an important financial safety net for plan fiduciaries. Although obtaining ERISA fiduciary insurance is considered prudent, it does not satisfy the fidelity bonding required by ERISA.

Q: During our recent annual plan review, we were happy to see that the majority of our employees have continued to make contributions to their retirement accounts during COVID-19 (and very few took hardship withdrawals). Is this unique to us or was it more of a universal trend?

A: Americans continued to save for retirement through DC plans during the first half of this year despite ongoing economic stresses brought about by the COVID-19 pandemic, according to the Investment Company Institute’s “Defined Contribution Plan Participants’ Activities, First Half 2021.” The study tracks contributions, withdrawals and other activity in 401(k) and other DC retirement plans, based on DC plan recordkeeper data covering more than 30 million participant accounts in employer-based DC plans at the end of June 2021. The latest recordkeeper data indicate that plan participants remained committed to saving and investing: a preliminary estimate indicates that only 1.1% of DC plan participants stopped contributing to their plans in the first half of 2021. That compares with 2% in the first half of 2020, and 4.6% in the first half of 2009 (another time of financial stress).

In addition, during the first half of 2021, 2.8% of DC plan participants took withdrawals, the same percentage as in the first half of 2020. Levels of hardship withdrawal activity also were low, with only 1.1% of DC plan participants taking hardship withdrawals during the first half of 2021 — the same share of participants as in the first half of 2020.

For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

©2021 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.

Investment Implications of the Russian Invasion of Ukraine

Thu, 03 Mar 2022 17:32:24 GMT

My uncle updated his Facebook status yesterday with something that I think many people are feeling right now with yesterday’s Russian invasion of Ukraine on the tail end of an unprecedented global pandemic. It said, “I am tired of witnessing once-in-a-lifetime historical events.” When you think about it, we have, in our lifetimes, borne witness to some of the most unprecedented events in history…from the novel Coronavirus pandemic to the Russian invasion of Ukraine, from record stock market highs to unimaginable advancements in technology. Through it all, one thing remains constant…that we were here to witness it together.

As the Sound Wealth Management advisory team is always actively working to stay informed on all events that will impact our clients’ portfolios, I had the opportunity, yesterday afternoon, to be on an economic update call with JPMorgan Chief Global Strategist, Dr. David Kelly during which Dr. Kelly shared his insight on the global investment implications of the Russian invasion of Ukraine. I would like to share with you a few of the key takeaways from Dr. Kelly’s discussion. As your trusted advisors, our job is to try to make sense of these events in terms of how they impact investments.

Firstly, there are a couple of items to note on the substantial financial sanctions that are being imposed, particularly on the potential sanctions – specifically removing Russia from SWFT – that were purposely omitted leaving many people are wondering why. Removing Russia from SWFT, which, for those that don’t know, is a global system allowing for the exchange of money between countries for import/export will ultimately stop gas supply from most of Western Europe. This is important for Western Europe to keep as they do not have energy independence nor oil reserves.

As can be evidenced by the stabilization that we saw in the markets by the close of the US trading day yesterday, markets are sniffing out the most logical next step which will likely be some sort of negotiation. This being the case, global commodity prices are unlikely to continue to soar, and money won’t need to flood into the US if energy supply isn’t disrupted.

How does this situation affect fiscal/monetary policy? It could, potentially, be a hit to consumer confidence. Additionally, it could increase the possibility of additional fiscal stimulus, although most likely not in the form of corporate tax breaks. Further, we can expect to see 3 rate hikes of 25 bps each from Fed early in the year.

Moving along to the potential impact to the US economy. JPMorgan estimates that, for the first quarter of 2022, we will end with 1-2% GDP growth. Americans are known to spend money to soothe their nerves, so we don’t anticipate consumer spending to slow. However, employers may slow hiring, but expect that there will continue to be more jobs available than workers to fill them. For the second quarter, expect 5% GDP growth. The bottom line: we may still see some increased inflation, but the economy will gradually move past this.

To address the investment implications of this situation, we must first remember that there are always unpredictable shocks to the market, and the best defense to take to this is to be broadly diversified. We do, however, have a few short and long-term expectations for the market particularly as it relates to the consumption of energy. If this situation has taught us anything, it has proven the world-wide importance of energy independence, particularly in Western Europe. As this is a long-term issue to solve, for the short-term solution, we expect a greater investment in US oil. Long-term, expect great investments into alternative energy sources globally. Oil prices will include a “risk premium” in the near future, so expect them to stay on the high side near-term, however, the price of oil should not cause a recession in the US as, since 2020, we have been a net exporter of oil with gas making up less than 3% of consumer spending.

When it comes to hedging risk in your portfolio, one of the things that you need to take into consideration is what it is that you are trying to hedge against. In the current environment, there are several potential risks including inflation, market risk, more drastic actions by Russia and many more. Rather than hedging a specific risk, your best defensive action here is to diversify your portfolio broadly against a variety of risks. When doing this, however, you should be sure to take a careful look at market valuations versus actual economic values and beware of highly speculative assets.

For a more in-depth discussion as to how this specifically impacts your portfolio and investment needs, please feel welcome to contact our advisory team at 941.932.4822 or schedule your no obligation consultation online at www.soundwealth.net where Sound Wealth Management is more than just our name.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.

We Are Made By History: The History of Money in America

Mon, 21 Feb 2022 05:59:10 GMT

In the hit musical Cabaret, Liza Minnelli sang about how “Money Makes the World Go Around,” but how much do you really know about the currency we use every day? Our national currency has a long and very detailed history. While we often take our “tap to pay” lifestyle for granted, we sometimes forget about the history that got us to this point. If you think that the bags full of coins that we remember from the cartoons of our childhood is something that only existed in “Toon Town,” it’s time for your history lesson. So, if you have ever been curious about those “Greenbacks” burning a hole in your pocket, read on to learn a little more about the history of money in America.

Colonial period: This was a time of great inconsistency for currency as the nation began to take shape. During this time, a wide variety of coinage was found in circulation ranging from British pounds to German thalers to Spanish milled dollars and even some coins produced by the colonies, themselves. The most coveted became the Spanish milled dollar due to the silver content. Can you imagine that, when change was due for a purchase, the coins were often cut into halves, quarters, eighths and even as small as sixteenths?

1690: Colonial notes were the first recognized form of paper currency in the United States, and Massachusetts was the first colony to issue its own paper money to fund military expeditions with other colonies quickly following suit. This, however, created some tensions between the colonies and Great Britain which resulted in the Currency Acts of 1751 and 1764 designed to curtail those bills’ designation as legal tender.

1775: At the height of events leading up to the Revolutionary War, the Continental Congress issued the first overarching colonial currency, known as Continentals. While the bills differed greatly from the ones that we know today, they did carry with them a few familiar motifs that we still see on our notes today – including the unfinished pyramid. These bills were also designed to specifically address a very specific problem of the day – economic warfare in the form of counterfeiting by the British. To combat this issue, Benjamin Franklin’s printing firm added several unique designs such as nature prints to the notes that made them more difficult to duplicate

1776: On June 25, 1776, nine days prior to the signing of the Declaration of Independence, the Continental Congress authorized the issuance of a new $2 denomination referred to as “bills of credit” for the defense of America.

1785: Evolved from the Spanish-American figure for pesos, the “$” is adopted.
1787: Congress authorized the production of copper cents, also known as Fugio cents. These coins featured a sundial on one side and a chain of 13 links on the other. However, after the ratification of the Constitution the following year, a new government was established and a new debate over national coinage created.

• 1789: The U.S. Treasury was established on September 2, 1789.

• 1791: The Bank of the United States was established by Alexander Hamilton to create a system of credit for the government. This was the first of several U.S. banks to issue private currencies to facilitate the acts of borrowing and lending. As many Americans were uncomfortable with the idea of a large, powerful bank and, therefore, opposed the concept, when the bank’s 20-year charter expired in 1811, Congress failed to renew it by one vote.

1792: Due to runaway inflation and the collapse in value of the continental currency, the Coinage Act of 1792 was passed, and the first national mint was opened. As previously mentioned, the Spanish milled dollar was the preferred currency of the Colonial period, so this became the model for the new national currency. The design of the first coins released (pictured below) were wildly unpopular due to the “frightened” portrayal of Lady Liberty and the chain links which many associated with oppression. The design was quickly revised to a more pleasing image of Lady Liberty and the chain replaced with a wreath. While great in theory, the Mint struggled with supply and demand issues for many years until the production finally grew to mee the demands of the growing nation. Legislation temporarily allowed certain foreign coins to continue to circulate until the Mint was able to meet the country’s demands. This remained until the Coinage Act of 1857. The Act also disallowed states to issue paper currency, a role that was now replaced by private entities and banks issuing thousands of different notes of tender. This process lasted for nearly 70 years before the federal government, once again, began to issue its own paper currency. The Coinage Act of 1792 specified that all coins were to feature an “impression emblematic of liberty,” the inscription “LIBERTY” and the year of coinage. All gold and silver coins were required to feature an eagle and the inscription “UNITED STATES OF AMERICA.”

1816: History repeated itself. By 1816, there was a shift in the political climate that, once again, favored the idea of a central bank, albeit by a narrow margin, and Congress opened the Second Bank of the United States. This was quickly met by opposition from Andrew Jackson, a foe to the central banking system, who was elected President in 1828. He rallied support for his attack on banker-controlled power from Americans so when the Second Bank’s charter expired in 1836, it met the same fate as the first one.

1836-1865: This became a confusing time for monetary transactions as state-chartered banks and unchartered “free banks” began issuing their own notes which could be redeemed in gold. These banks also began to offer demand deposits to enhance their role in commerce. This led to a rise in volume for check transactions and the creation of the New York Clearinghouse Association in 1853, allowing the city’s banks to exchange checks and settle accounts.
1861: Needing to finance the Civil War, Congress authorized demand notes to be issued in denominations of $5, $10, and $20, so named because they were redeemable “on demand” in coin. Utilizing an innovative chemical ink which gave it a unique green color to guard against the new technology of photographic copying, the notes were nicknamed “Greenbacks.” Images on the Union notes included such portraits as Alexander Hamilton and Abraham Lincoln

1861: The Confederacy began issuing its own paper currency, nicknamed “greybacks,” also named for their ink color scheme. These notes featured such images as slaves working in fields (on the $100 note,) as well as portraits of figures such as Andrew Jackson, John C. Calhoun, Jefferson Davis, Lucy Holcombe Pickens and George Washington.

1862: The first $1 Legal Tender Note is issued featuring a portrait of Treasury Secretary Salmon P. Chase.

1863: A national banking system and uniform national currency were established under The National Banking Act of 1863. Under this Act, banks were required to purchase U.S. government securities as backing for their National Bank Notes – the most widely accepted currency circulating between the Civil War and World War I, being issued from 1863 through 1932. National Bank Notes were printed by private bank note companies as contractors to the Federal government from 1863 until 1877, at which time the Federal government took over the printing process.

1863: Gold certificates were first issued in the United States in 1863, however, were not put into general circulation until 1865, and remained in use until 1934 when all gold certificates were called in from the Federal Reserve Banks because of the Great Depression having resulted in runs on the banks and demands by the public for gold. From 1934 until 1974, it was illegal for U.S. Citizens to hold gold bullion or certificates. The look of the gold certificate changed many times over the course of its lifetime. Below are examples from 1863 and 1928.

1873: The United States began to mint trade dollars. As global trade began to increase, particularly between the US and China, the United States faced a new challenge. Their new trade partner favored payment in the Mexican peso over the US dollar due to the content of pure silver contained in the coinage. This caused US businesses to need to exchange their dollars for pesos to conduct trade, resulting in costly broker fees. The federal government answered back with the trade dollar. These trade dollars weighed in slightly heavier than the peso and contained 90% silver, easing the country’s trade issues. However, this created a new issue. With the need for trade dollars, western mines began producing such enormous amounts of silver that the price of silver plummeted, eventually resulting in a halt in production ordered by then Treasury Secretary John Sherman two years later. The Treasury continued to issue proof strikes through the1880s with 1884 and 1885 being the most rare.

1878: Congress directed the production of five different issues of silver certificates, including the first and only U.S. banknote to feature a woman on the front – Martha Washington. These bills were backed by actual silver and were first issued in exchange for silver dollars in 1878. These remained in circulation until the early 1960s when rising silver prices threatened to undermine this system of currency, at which time Congress eliminated the silver certificates as well as the use of silver in circulating coinage. Much like its predecessor, the gold certificate, the silver certificate also changed its look many times while in circulation. Below are examples of a $50 silver certificate from 1878, a $1 silver certificate from 1886 and a $1 silver certificate from 1957.

1893: Despite the National Banking Act of 1863 adding some measure of stability to the currency issues plaguing the young nation, it was becoming increasingly clear to the public that the nation’s financial system was in need of serious attention. Financial panic and bank runs became the norm of the day until 1893 when a banking panic triggered the worst depression the United States had seen to that point. It was only after the intervention of financial mogul J.P. Morgan that the economy stabilized.

1907: After Wall Street speculation results in failure leading to a particularly sever wave of banking panic, J.P. Morgan is once again called upon to avert monetary disaster. While opinions over the solution remained deeply divided, by this time, most Americans were demanding reform of the banking system.
1908: The Aldrich-Vreeland Act of 1908 is passed as an immediate governmental response to the banking crisis of 1907. The Act allowed for emergency issuance of currency during times of financial crises. The Act also created the national Monetary Commission to search for a long-term solution to the nation’s banking and financial system issues.
1912: Woodrow Wilson sought the advice of Virginia Representative Carter Glass and H. Parker Willis, a former professor of economics at Washington and Lee University, to formulate a solution to the U.S. financial issues. Carter Glass would soon become the chairman of the House Committee on Banking and Finance. By year end, Glass and Willis presented Wilson with a proposal that would eventually become, after some modifications, the Federal Reserve Act.

1913: After a year of contentious debate, on December 23, 1913, President Woodrow Wilson signed the Federal Reserve Act into law, creating a “decentralized central bank,” balancing the competing interests of private banks and popular sentiment. Additionally, the Federal Reserve Act created the surviving modern form of currency by giving the federal government the authority to issue Federal Reserve Notes (U.S. dollars) as legal tender. By this time, most of the design elements that we continue to see in circulation today were already determined by the dollar’s predecessors before the Federal Reserve Note was born. Many of these early notes featured presidents on the front, while the back pictured iconic Americana, such as the landing of the Pilgrims at Plymouth Rock.

1933: In the aftermath of the Great Depression, Congress passed the Banking Act of 1933, better known as the Glass-Steagall Act. This required the separation of commercial and investment banking, as well as the use of government securities as collateral for Federal Reserve notes. Among other things, the Act also created the Federal Deposit Insurance Corporation (FDIC) and outlined additional criteria for bank oversight by the Fed to help protect the end consumer. As part of the reforms, President Roosevelt also recalled all outstanding gold and silver certificates, effectively putting an end to the gold standard.
1934: While never circulated or issued for public use, in 1934, the Bureau of Engraving and Printing created the $100,000 gold certificate note for the purpose of conducting official transactions between Federal Reserve banks. A total of 42,000 of these bills were printed. While it is not legal for collectors to hold the $100,000 bill, some institutions such as the Museum of American Finance display them for educational purposes. The Smithsonian Museum and some branches of the Federal Reserve System maintain some of these rare bills in their possession, as well.

1935: The Federal Open Market Committee (FOMC) is created as a separate legal entity by the Banking Act of 1935. The Act also removed the Treasury Secretary and Comptroller of the Currency from the Fed’s governing board and set the member’s terms at 14 years.
1957: The $1 bill became the first U.S. currency to feature the motto “IN GOD WE TRUST.”

1963: The $1 bill began replacing the $1 Silver Certificate. The new bills featured a new border design on the front and the serial number and treasury seal printed in green ink.

1969: The $1 bill replaced the wording of the treasury seal with English as opposed to the original Latin.

1978: The Humphrey-Hawkins Act required the Fed chairman to report to Congress semi-annually on monetary policy goals and objectives.
1996: March 25, 1996 brought us the most significant design change to United States currency since 1929 in the form of the $100 bill with new anti-counterfeiting technology. The new enhanced security features included optically variable ink that changes from green to black when viewed from different angles, a watermark of Benjamin Franklin and the reverse image of Independence Hall. One of the most instantly recognizable changes on the 1996 series $100 bill is a significantly larger and higher-quality portrait of Benjamin Franklin.

1999: The Gramm-Leach-Bliley Act was passed, effectively, overturning some nuances of the Glass-Steagall Act of 1933 by allowing banks to offer a menu of financial services, including investment banking and insurance.
2003: Beginning with the $20 bill, more colors were added to the bills in addition to more advanced anti-counterfeiting technology.

2004: The next bill in line to see the enhanced security changes was the $50 note, issued under Series 2004, beginning September 28, 2004. The revisions to the $50 bill brought us the first use of multiple colors on U.S. Currency sine the Series 1905 $20 Gold Certificate. The vibrant design included the addition of a red and blue colored image of an American flag background.

2013: October 2013 was the first appearance of changes to the $100 bill that had been approved three years earlier in April of 2010. The revisions made to this series of the $100 bill included the addition of a brown quill to represent the one used to sign the Declaration of Independence and the image of an inkwell that appears when viewed from different angles. Additionally, the image of Benjamin Franklin was retooled and is no longer within the traditional border. A teal background was added to give the bill additional color as well as coordinate with a 3-D security ribbon that contains miniature images of the Liberty Bell that change to the numerals “100” as the bill is viewed at different angles.

Throughout our nation’s history, our currency has gone through nearly as many changes as our country itself. We can only expect that additional changes will continue to come as technology continues to advance and our history continues to progress. Reverend Doctor Martin Luther King, Jr. said, “We are not makers of history. We are made by history.” Every piece of history, no matter how seemingly insignificant has helped to shape the landscape of the country we call home and how we do business today.

If you need help turning your financial history into your financial future, contact our advisory team where Sound Wealth Management is more than just our name.

Everything’s Better With Bacon

Wed, 09 Feb 2022 01:54:02 GMT

Everything’s Better With Bacon

It even makes understanding inflation easier.

“Bacon’s the best. Even the frying of bacon sounds like applause. Bacon bits are like the fairy dust of the food community.”

– Jim Gaffigan

Let’s face it: talking about bacon is always fun. It can even help illustrate a topic that has been in the financial media a lot lately — inflation. In 1991, the price of a pound of bacon cost $2.22 (according to the Bureau of Labor Statistics). Thirty years later, in August of 2021, a pound cost $7.10. That’s inflation at work. Inflation is simply the rise in the cost of living, and it eats away at your money’s purchasing power and may not buy as much retirement in the future as it does today.

Over the past several months, inflation has crept back into the financial media limelight. Last year, price increases began to grow out of pandemic-related shutdowns and supply chain disruptions. As an example, the Consumer Price Index, a key measure of inflation, climbed 5.4% in September of 2021 compared with the prior year.

Keep Inflation in Mind in Your Retirement Planning

When you retire, one thing is a given: the cost of basic necessities as well as other things you enjoy will continue to rise. The following table provides some hypothetical examples to help increase your awareness of inflation.

2021 prices are based on Kmotion Research and general averages, including data from the U.S. Labor Department’s Bureau of Labor Statistics. Projections for 2051 prices assume a 3% annual inflation rate.

Get Real With Inflation

When managing inflation risk with your investments, it’s important to understand a couple of basic terms. Your nominal rate of return is the amount of money you make on an investment before expenses — this rate of return does not take inflation into account. Your real rate of return is the nominal return on your investment minus the inflation rate, and gives you a better sense of the purchasing power of the money you make from your investments. For example, if your investment portfolio earns an 8% rate of return in a particular year, and the inflation rate is currently 3%, your real rate of return is just 5%.

Conventional wisdom says you should consider keeping an appropriate amount of your assets allocated to stocks and stock mutual funds to help offset inflation risk. Although past performance is no guarantee of future results, historical average stock returns have stayed ahead of inflation over the long term.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

IRA 101: Know the Facts

Mon, 24 Jan 2022 15:24:23 GMT

If you own an IRA, then you should be as familiar as possible with the rules that govern your account.

Individual retirement accounts (IRAs) are one of the most common assets people rely on to save and invest for retirement. In fact, more than a third of households in America own an IRA. If you’re thinking of opening an IRA for the first time, it’s a good idea to review the rules. Even if you have had an IRA for years, note that laws change.

The Different Types

There are two main types of IRA accounts to choose from: traditional and Roth . The timing of the tax advantages is the main difference between the two. For a traditional IRA, contributions are tax deductible and tax is paid upon withdrawal. Roth IRA contributions are taxed in the year they are made, and qualified withdrawals are tax-free. Both types are almost equally popular:

36% of American households have Roth IRAs
35% of American households have traditional IRAs
26% of American households contribute to both

There are also employer-sponsored IRAs. These may fall into either of the two categories.

Contribution Limits

The IRS set a 2022 annual limit of $6,000 for people under 50 years old. People who are 50 years and older can make a total contribution of $7,000. What some breadwinners do to maximize contributions is to file joint tax returns and open a second account for their spouses. They then make additional contributions to this account. The IRS states that the combined contribution cannot exceed the lesser of the couple’s taxable income or the contributor’s individual limit times two.

Eligibility

The IRS considers net income from self-employment, gross wages and gross salaries as qualifying income. Too much income, however, and IRA contributions can get reduced or prohibited altogether:

Qualifying Widower or Married Filing Jointly: The regular contribution rules apply up to $196,000. From $196,000 to $206,000, the IRS reduces the contribution limit. No contributions are allowed after $206,000.
Single, Married Filing Separately (did not live together) or Head-of-household: Filers who earn less than $124,000 follow the usual contribution rules. More than this up to $139,000, the IRS reduces the contribution limit and after $139,000, contributing is not allowed.
Married Filing Separately (lived together): The IRS reduces the contribution amount for less than $10,000 and prohibits contributions for $10,000 in income or more.

Tax Deductions

How much income you make determines how much of your total contribution you can deduct from your taxable income and whether or not your contribute to an employer sponsored retirement plan:

Qualifying Widower or Married Filing Jointly: Filers who make $104,000 or less can take tax deductions up to the full contribution limit. More than this up to less than $124,000, people can get a partial deduction. Beyond this, there is no deduction.
Single or Head-of-household: For total incomes of $65,000 or less, the individual can take the full deduction. More than this up to less than $75,000, there is only a partial deduction. Beyond $75,000, there is no deduction.
Married Filing Separately: There is a partial deduction for income up to $10,000. After $10,000, there is no deduction.

Distributions

Like any retirement account, you do not need to wait until retirement to claim your distributions. Here’s what you need to know:

There is no penalty for traditional IRA withdrawals after reaching age 59 and a half.
Traditional IRA distributions get taxed at the rate that is current at the time of withdrawal.
Roth withdrawals are not taxed because taxes were already paid upfront.
Roth IRAs do not have mandatory withdrawal rules, but traditional IRAs require distributions by April 1st of the year you turn 72 or there are considerable tax penalties.

There is no one-size-fits-all solution when it comes to choosing and funding a specific type of IRA account. This is why speaking directly with a financial professional at LPL Financial is so important. Contact us today [insert name and contact information here].

Traditional IRAs are funded with tax-deductible contributions in which any earnings are tax deferred until withdrawn, usually after retirement age. Unless certain criteria are met, IRS penalties and income taxes may apply on any withdrawals taken from Traditional IRAs prior to age 59 ½. RMDs (required minimum distributions) must generally be taken by the account holder within the year after turning 72.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax-free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

This material was prepared by LPL Financial, LLC

Breaking Down the Real Costs of Purchasing a Home

Thu, 13 Jan 2022 01:21:49 GMT

You’re finally ready to move up from your rental unit to your own home. Before you start searching for a home, understand how much money you’ll really need. Be prepared for the myriad expenses that you must add to the purchase price to see the whole picture.

Home ownership has several advantages over renting, including lower monthly payments, deductible mortgage interest, and the accumulation of equity. But there is a definite price to pay for these benefits, including the expenses we detail here.

The biggest spend is your initial equity. There are two costs that constitute the beginning equity in your home. The first is earnest money, typically $500 to $2,0001 , that ensures your commitment to the deal. You can get a refund if the deal falls through due to no fault of your own. The other initial spend is your down payment, which typically ranges from 3.5 to 20%. You make the down payment at the closing. Your mortgage covers the difference between the purchase price and the initial equity.

Fees, fees, fees. It seems like every time you turn around, you’ll encounter another fee. Sellers typically pay the broker’s fee, but if you use a buying agent, expect to pay up to 3%2 of the purchase price. Frequently, mortgage lenders charge an origination fee up to about 1% for the privilege of lending you money. You’ll encounter various other fees, such as those for inspections and surveys. Often, you’ll be asked to pay points, which is prepaid interest on the mortgage loan3. Other fees may be charged by a homeowner’s association, a title company, the recorder of deeds, and others.

Don’t forget the insurance and taxes. You won’t be able to get a mortgage without first getting homeowner’s insurance, with an average annual premium of approximately $1,200. You may also need flood insurance, based upon your location. Many lenders require you buy private mortgage insurance at an annual cost of 0.5 to 1.0% if your down payment is below 20%. You may also want to buy title insurance to ensure you have clear title to the property. Many folks purchase title-lock insurance to cover losses from mortgage fraud due to identity theft.

Figure move-in costs and initial repairs. Unless you do it yourself, it may cost you several thousand dollars to engage a moving service – the cost depends on the distance to the new property and how much stuff is being moved. In addition, you may face immediate repair expenses for problems that the seller has not agreed to fix before closing. Expensive repairs can include a new roof, new HVAC, structural changes, expansions, landscaping, etc. You may also have to pay a fee for a building permit. The worst-case scenario involves necessary, unexpected repairs not identified in the engineer’s inspection report.

Buying your first home is an enormous step. That’s why it’s essential to have your finances in order first. A well-rounded financial plan will show you how much home you can afford without shortchanging your retirement and other life events. Contact me today to review your financial plan and ensure you are on solid ground bbbbefore making an expensive commitment. Together, we can find the financial comfort zone for your home purchase.

LPL Financial Professionals do not offer mortgage or lending services. We suggest that you contact a mortgage or lending professional regarding those services.

This material was prepared by LPL Financial, LLC.

Citations:

1 https://www.hud.gov/topics/common_questions

2 https://www.thebalance.com/how-do-buyer-s-agents-get-paid-1798872 [4/22/20]

3 https://www.policygenius.com/homeowners-insurance/how-much-does-homeownersinsurance-cost/ [6/2/20]

New Year, New Portfolio?

websitebuilder@thryv.com — Fri, 24 Dec 2021 07:04:24 GMT

With 2021 rapidly drawing to a close, top analysts from around the globe are making their stock predictions for 2022. At the same time, your advisory team here at Sound Wealth Management are taking note of the themes presented by these stock lists from a great variety of sources as they are published.

While not all investments or investment styles are appropriate for all investors, there are definitely some key themes that we have noted and can apply as we work with our clients moving into the new year.

Tech is far and beyond the most recommended sector for 2022, by a landslide. Chip technology may prove to be favorable over the next 2-3 years with many strong recommendations.
Honorable mention to Financial Services and Consumer Cyclicals.

We see a handful of Industrials, Energy and Basic Materials entering the equation.
We anticipate that these may be areas to consider adding weight to moving into the new year with the recent passing of the infrastructure bill.

There remain a few Healthcare companies, predominantly pharmaceuticals, recommended by a few analysts.
As we transition from “pandemic” to “endemic” stage, this may be an area to consider our recommendations very carefully as many positions may not provide as much opportunity for growth as they did during the mass production required to manage the pandemic.

Key Takeaways:
Thinking back to our recent economic summary, Egg Nog and Economics, you may recall a couple of key points:
Unemployment is at a 52-year low with 11 million open jobs in the US
The M2 money supply is at an all-time high with $2.2 Trillion in disposable income

The above points tell us a couple of things.
US citizens have money to burn and will be demanding goods and services.
This creates opportunity in the Consumer Cyclical space.

Consumers will be demanding these goods and services from fewer workers than are needed to produce the goods and services demanded.
We have an aging and retiring baby boomer population that is still utilizing goods and services with fewer workers coming into the workforce to take their place.
When we have demands for people but no people to fill the void, it will require innovation in the tech space to fill the gap.
This creates opportunities in the Tech space.

The increased M2 money supply creates an alternative opportunity for those that choose not to “spend” it to “save” it.
This creates an opportunity in Financial Services.

As a final point, we expect the Fed to begin tightening monetary policy in 2022 by small interest rate increases and a reduction in their bond purchase policy.
This will create an additional opportunity for investors in the Financial Services arena.

We hope that this information is helpful to you in giving thoughtful consideration to your portfolio positioning as we move into the new year. As always, should you wish to discuss how this information relates to your financial situation and tolerance for market risk, we invite you to reach out to our advisory team at 941.932.4822 or visit our online calendar at www.soundwealth.net .

We wish you all a safe, healthy, prosperous, and very happy new year!

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. This material is for general information only and is not intended to provide or be construed as providing specific investment advice or recommendations for any individual. No strategy assures success or protects against loss.

Egg Nog and Economics

websitebuilder@thryv.com — Fri, 17 Dec 2021 04:07:57 GMT

Amid the hustle and bustle of the holiday season, I’m sure the things at the top of everyone’s minds are economics and asset allocation, right? Well, here at Sound Wealth Management, that is exactly what is foremost in our thoughts as we think forward to 2022, because the most important thing we can do is to get our allocation correct for our clients. As we sit down with a glass of egg nog and immerse ourselves deep in the economic outlooks from many of the world’s largest banks and leading economists, the key factors that we are taking away as we move into the new year are the following:

Tailwinds 2022:
52-year low for US unemployment, at a rate of 4.2%, estimated to reach 3.6% by year-end.
From 2021, we went from 18 million people down to 3 million people on the unemployment lines.
There are currently have 11 million open jobs in the US.
The M2 money supply contains $2.2 Trillion in disposable income – households to spend, corporates to benefit.
Debt service payments of disposable income is in a 40-year low from average.
$1.2 Trillion infrastructure bill that will be stimulating the economy over the next 5 years.
Low interest rate environment that should stay steady in 2022 between 1.4% and 2.25%.
US GDP growth estimates between 4.2% and 4.5%.
S&P 500 earnings per share should hit at least $220.
Vaccination rates in the US are climbing. (Pandemic to Endemic)
Corporate profits are at an all-time high and predicted to go higher.
Savings rates are at an all-time high – 13.4% per household.
Innovation is driving growth and value creation.
Key megatrends: digital transformation, healthcare innovation and sustainability.
There is no bubble in the market, perhaps certain stocks – but not the market.

Headwinds 2022:
Inflation and monetary policy diverging
Another variant of COVID-19 with unknown implications at this time
Geopolitical events (Ukraine, Taiwan, Iran)
China’s economic policy
Foreign countries having “zero COVID” policies

So, what does all of this mean for you, the investor, looking to the future? The key takeaway here is that the advisory team at Sound Wealth Management is risk-aware, but ultimately, optimistic about the markets going into 2022.

As renowned physicist, Niels Bohr, said, “prediction is very difficult, especially if it’s about the future.” However, there are a few steps that you can take to make it much easier. This is where relevant information and guidance from a team of experienced professionals can make a profound difference in your pursuit of success as an investor. For a more in-depth look at how the US and global economy fits into your business or personal finances as you make your plans for 2022, please feel welcome to reach out to the advisory team at Sound Wealth Management at 941.932.4822 or visit our online calendar at www.soundwealth.net , where Sound Wealth Management is more than just our name!

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Holidays, Hot Cocoa, Family Gatherings and…Tax Harvesting?

websitebuilder@thryv.com — Wed, 01 Dec 2021 22:00:49 GMT

As we approach the end of the year, we start thinking about the holidays, hot cocoa, gathering with family, and, if you’re in our business, tax harvesting. As a quick refresher, tax harvesting involves selling securities at a loss to offset a capital gains tax liability—especially short-term capital gains, which are generally taxed at a higher federal income tax rate than long-term gains.

By taking some time at the end of the year to do tax harvesting, you may be able to save small—or even significant—amounts of money. To help you prepare for the season, here are a few tips to consider when performing tax harvesting.

1. Unlike the holidays, tax harvesting doesn’t have to be a season

While tax harvesting is often done near the end of the year, you can consider leveraging it throughout the year. According to an article by Frank Pape of Russell Investments on Bloomberg Tax, if you’re like many our industry, you may only be considering loss harvesting in November and December, which have traditionally been two of the best months for the stock market. In fact, looking at the S&P 500 over the past 70 years shows:

• November has been the single-best stock market month.

• December has been the third-best stock market month.

And if you’re attempting to harvest losses during a time where your clients might not be seeing many, you’re likely not getting as much benefit out of the activity as you could be. By actively managing for taxes throughout the year, instead of just at the end of it, you can potentially better capture losses and improve your after-tax returns.

In fact, whenever there is volatility in the marketplace, there might be a good opportunity for tax-loss harvesting. As you look at tax-loss harvesting this year, perhaps take a look your potential savings and consider if a different method and schedule for next year might be more beneficial.

2. Remember the wash-sale rule

As you’re doing tax harvesting, it’s always important to be mindful of the wash-sale rule that requires you to wait 30 days to purchase a similar security when selling at a loss. Your options are to wait until the 30-day period is complete and buy back the original position, or immediately purchase a highly correlated position, as long as it’s not the exact holding.

3. Consider pushing out the loss

When you’re examining your portfolio and options for tax harvesting, you could consider waiting to harvest losses. You could sell positions at a loss, build the losses over time, and carry them into forthcoming years in anticipation of future capital gains. If you have a tax accountant, you may want to work with them to discuss what options may be best for you.

4. Be familiar with the rules of your trading platform for tax harvesting

Many advisory platforms provide tax harvesting options, but each one is slightly different depending upon the rules of the platform itself as well as the rules of any third-party asset manager if one is used. Be sure to check out what your tax-savings options are based on the trading platform that you’re using.

Happy harvesting

With the end of the year around the corner, you may be thinking about how you can save dollars, and tax harvesting is just one way you can increase after-tax returns in your portfolio. And while tax harvesting can be done any time of the year, now is a good time to think about your tax strategy in preparation for next year. Of course, it’s also important to keep in mind that the tax landscape is always changing, and it’s helpful to reach out to a tax accountant to be sure that you are up to date on any recent changes.

And, as always, feel welcome to contact my team at 941.932.4822 here at Sound Wealth Management for your investment planning or tax strategy needs or schedule your no-obligation consultation on our website at www.soundwealth.net.

This material is for general information only and is not intended to provide or be construed as providing specific investment advice or recommendations for any individual. The tax-loss harvesting, and other tax strategies discussed should not be interpreted as tax advice and there is no representation that such strategies will result in any particular tax consequence. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor

No strategy assures success or protects against loss.

Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.

GO TO THE HEAD OF THE CLASS

Tue, 16 Nov 2021 22:22:43 GMT

Master these Social Security lessons to get a more realistic view of your retirement.

According to Nationwide’s 8th Annual Social Security Consumer Survey , more than half of Americans express confidence that they know exactly how to optimize their Social Security benefits. However, only 6% actually understand all the factors that determine the maximum benefit someone can receive. In addition, the report highlighted additional knowledge gaps:

A full 39% don’t know at what age they are eligible to receive their full benefits.
Just over half (51%) do not have a clear understanding of how much they will receive in future income.
Over a third (37%) incorrectly assume that Social Security benefits are not protected against inflation.
Nearly half (45%) mistakenly believe if they claim their benefits early, their benefits will go up automatically when they reach full retirement age.

By mastering these lessons, you’ll immediately go to the head of the class for retirement planning—and avoid being an unfortunate statistic in some company’s future survey!

Lesson #1: Your “full retirement age” for Social Security benefits is the age at which you may first become entitled to full or unreduced retirement benefits.

Match your birth year to the full retirement ages shown below. Now, kindly memorize it!

Lesson #2: Social Security will only replace a portion of your preretirement income.

The rule of thumb is that you’ll need to replace about 75%–80% of your preretirement income. Social Security will help fund part of your income needs, generally somewhere between 25%–40% (depending on your earnings history). Your personal savings and retirement account will have to make up the difference.

Lesson #3: The longer you wait until you start taking your Social Security benefits, the more money you’ll receive.

Age 62 is the minimum age at which you can choose to begin receiving Social Security benefits. However, the math is pretty black and white: claiming earlier gives you a reduced benefit and claiming later gives you an increased benefit. For each year you postpone taking your benefit (until age 70), your monthly check will be larger. Check out the Social Security Benefits Planner ( www.ssa.gov/planners ) for more comprehensive information, including calculators and other resources.

Lesson #4: Social Security benefits are somewhat protected against inflation.

For 2021, the Social Security Administration is paying out a cost-of-living adjustment of 1.3%. In planning
for your retirement income, it’s important to note that any cost-of-living adjustment from the Social Security Administration can vary each year and is not guaranteed. Cost-of-living adjustments are typically announced in October of each year.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

THE BASICS OF FINANCIAL FITNESS

Tue, 02 Nov 2021 00:25:56 GMT

Becoming financially fit requires maintaining foundational elements, including a budget, emergency fund, strong credit score, and retirement savings.

There’s a subjective uncertainty associated with financial wellness. Are you financially fit? And if so, how fit are you?

While there is no clearly defined threshold for answering affirmatively, much less grading your level of fitness, there are baseline elements associated with financial fitness. To make sure that you’re on the right track, develop a financial plan that lays out clear goals and timelines. Below are steps to consider to get you started:

Budget Crunch

As a first step, make a reasonable and practical budget, assessing your income and expenses (by month, if possible), to understand your cash flow, identifying areas where you can trim costs. Revisit and revise your budget regularly to make sure it aligns with your personal circumstances.

Save for Unexpected Expenses

Expect unexpected expenses, such as a medical emergency, major car repair, and an appliance replacement, establishing an emergency fund that can pay for these costs. (Ideally, you want to keep three to six months’ worth of living expenses in the fund.) Without such a backup source of payment, you may have to incur credit card debit, which can be unwise.

Stay Credit-Worthy

Check your credit report periodically, making sure that there are no errors, while using it as a tool to make sure that you’re paying your bills on time and staying within your established credit limits. Such actions will help increase your credit score. NOTE: You are entitled to a free copy of your credit report annually from the three major credit reporting companies, Experian, Equifax, and TransUnion.

Establish Long-Term Financial Goals

Saving for your retirement is a personal decision that will help shape your lifestyle during your Golden Years. It’s never too early (or late) to work with a financial professional to strengthen your retirement plan.

Review Your Plan

Establishing a financial plan is not a one-and-done proposition. Review your plan at least annually, revising it as necessary to align with your financial goals.

Increase Investments Potential Faster With Early Contributions

Investing early and often, such as a small recurring investment over a long period of time, has the potential to produce greater returns than investing a larger amount over a shorter period of time.

For instance, If you invest $75 a month beginning at age 25 and continue until you are 65, your earnings will be greater than the 35-year-old who invested $100 a month until reaching 65 (assuming an equal rate of interest for each).

(This is a hypothetical example and is not representative of any specific investment. Your results may vary.)

This material was prepared by LPL Financial, LLC.

A DATE WITH DESTINY

Tue, 19 Oct 2021 02:30:44 GMT

Seven age milestones that will impact your retirement planning

As you travel the savings road toward retirement and beyond, certain key dates will pop up. Some of these dates are critically important to your retirement planning efforts. Taking the right retirement planning steps as you reach each of the following age milestones could help you maximize your income, minimize your taxes and avoid penalties.

AGE 50: Time to fly

If you’ve not been able to save as much as you wanted due to other financial priorities, this is a great opportunity to catch up on your retirement saving. At age 50, you’re eligible to make “catch-up” contributions to 401(k)s and other employer-sponsored retirement plans. The Internal Revenue Service (IRS) “catch-up” contribution limits are adjusted annually. For 2021, the IRS allows you to contribute an additional $6,500 to your workplace retirement plan over the annual contribution limit of $19,500.

AGE 59½: Out of the penalty box

Once you reach age 59½, withdrawals from employer-sponsored retirement plans are no longer subject to the additional 10% federal penalty tax on early withdrawals — though you still may owe regular income tax on the distributions. But it’s generally better to leave your tax-advantaged retirement savings alone until you plan to begin taking distributions during retirement.

AGE 62: Stake your claim?

Age 62 is the minimum age at which you can choose to begin receiving Social Security benefits. Many people choose to take benefits early, for a variety of reasons. However, the math is pretty clear: claiming earlier gives you a reduced benefit and claiming later gives you an increased benefit. For each year you postpone taking this benefit (until age 70), your monthly check will be larger. Check out the Social Security Benefits Planner ( www.ssa.gov/planners ) for more comprehensive information, including calculators and other resources.

AGE 65: Say hello to Medicare

If you’re already receiving Social Security, you’re automatically enrolled in both Parts A and B of Medicare. But if you aren’t yet receiving Social Security, you will need to apply for Medicare during one of the designated annual enrollment periods. Keep in mind that you may be eligible for Medicare coverage at 65, but your full retirement age for Social Security may be later. Your initial Medicare enrollment period lasts for seven months, beginning three months before the month in which you turn 65. Missing your enrollment date may mean penalties or even higher premiums for the rest of your life.

RP-689-1220

Tracking #1-05081349 (Exp. 12/21)

1Q 2021 Plan Participant Newsletter

Check out medicare.gov for comprehensive information (you can also sign up to get regular email alerts and updates).

AGE 67: Paid in full

Your “full retirement age” for Social Security benefits is the age at which you may first become entitled to full or unreduced retirement benefits. If you were born between 1943 and 1954, age 66 is your full retirement age. For those born after 1954, the full retirement age will increase by two months a year until the current maximum of age 67 for those born in 1960 and later.

AGE 70: Max out on social security

If you’ve waited until your 70th birthday to begin taking Social Security, you’ll now get the biggest possible monthly benefit, which may be significantly larger than if you had started receiving payments at age 62. Any further delay in claiming won’t increase the size of your check.

AGE 72: Show me the money

Even if you don’t feel ready to start withdrawing funds from your workplace retirement plan and other Individual Retirement Accounts, the government requires you to do so once you reach age 72. The amounts of these required minimum distributions will vary from year to year, depending on the value of your retirement accounts and your age. Failing to take a required minimum distribution, or taking an insufficient amount, can result in costly penalties. Choosing an appropriate distribution strategy can help you avoid issues and make the most of your retirement assets. Be sure to consult with a tax or retirement plan professional.

In certain instances RMDs can be delayed for retirement plans sponsored by the employer for whom you currently are working. For past employer plans and IRAs RMDs must be satisfied.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

DETERMINING IF IT MAKES SENSE TO MOVE OR REMODEL

Thu, 07 Oct 2021 01:20:47 GMT

The housing market is surprisingly strong right now. If your family needs more space, your options include remodeling your current home, building a new one, or buying one already on the market. Each alternative has its pros and cons.

If you already own your home or have significantly paid down your mortgage, your first instinct might be to make it larger or more efficient. But you must weigh the time, expense, and inconvenience of remodeling against the pricier options of buying and building. Whichever choice you make, ensure you understand the available financing options.

Get ready for sticker shock. Housing prices rose over 10% in 2020 thanks to sharply lower inventory. ¹ Accordingly, the average number of days on market for home sales fell significantly. Demand has been strong in all 50 of the largest U.S. metro markets, but your local real estate professionals can discuss housing prices for the neighborhoods that interest you. Mortgage interest rates are low, making it easier to finance homes despite inflated prices.

Remodeling lets you stay put. Some considerations that favor remodeling are proximity to schools, work, friends, and family. The cost will depend on the scope of the work and whether you’ll be contributing sweat equity. For 2020, whole-house renovations averaged between $15 and $60 per square foot, depending on home size, appliances, quality of materials, etc. ² If you just want to remodel a bathroom or kitchen, expect to pay $100 to $250 per square foot. Remodeling builds equity, but don’t underestimate the hassle and inconvenience of living on a job site.

Homebuilding puts you in control. When you have strong ideas about the shape, size, layout, and location of your home, building it from scratch can make a lot of sense. The average cost to construct a new home in 2020 was $248,000, with cost per square foot ranging from $100 to $155. ³ You can simplify the process by buying a plan from a local homebuilder. Furthermore, manufactured and modular homes can go up quite quickly and are usually built to high standards. Don’t forget to factor in the cost of land, which can add considerably to the overall expense.

Homes in all price points are selling at inflated prices. In 2020, the median home price rose to more than $300,000, and was $307,000 in midyear. ⁴ As inventory narrows, you can expect prices to continue to rise. Budget constraints may have you looking at older homes, which means you will probably be inheriting some problems left over by the seller. Always use an independent home inspector before making a final bid, and budget for any immediate repairs.

Your home is your costliest investment. Financing a home purchase, construction, or renovation is an important factor in getting what you want at a price you can afford. Many people are eligible for FHA loans, but there are many other options. If you’ve got the housing bug, contact me to discuss how it fits into your overall financial plan. Together, we can figure out which alternative makes the most sense while observing your financial constraints.

This material was prepared by LPL Financial, LLC.

Citations:

Begin Investing While Young

Tue, 28 Sep 2021 02:10:31 GMT

There’s a simple word that has profound implications for savings and investing: compounding. Like a snowball that grows as it rolls down a hill, compounding provides the potential for your money to grow, reinvesting your investment earnings.

It is a basic model for growth potential, and the more you invest, the greater the opportunities to create long-term value. Let’s take a hypothetical examples1 to illustrate:

If you invest $1,000 at age 20 and do not add anything to the principal, relying instead on 7.2% annual earning growth, you would end up with $32,000 at age 70.

If you wait until you’re 30, though, investing that same $1,000 that earns 7.2% annually, you would end up with $16,000 at age 70 — a decrease of 50%.

Finally, if you invest the $1,000 at age 20, earning 7.2% annually while contributing $83 a month until retirement, you would have $465,000. (This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing.)

Calculating the Impact of Compounding

To estimate how long it will take for compounding to double an investment, use the rule of 72:

Divide 72 by the annual rate of return. The answer is the approximate number of years it would take to double your investment’s value, assuming a fixed rate of return.

As an example: If you earn 9% annually, it will take 72/9 = 8 years to double the value of your investment. Please note: the rule of 72 is a mathematical concept and does not guarantee investment results nor functions as a predictor of how an investment will perform. It is an approximation for the impact of a targeted rate of return. Investments are subject to fluctuating returns and there is no assurance that any investment will double in value.

The Long-Term Effect

Adopt a strategy to maintain your portfolio for the long-term, it can help you emotionally ride out the short-term effects of sharp market swings.

Past performance is no guarantee of future results.

This material was prepared by LPL Financial, LLC.

From https://www.hermoney.com/invest/retirement/these-two-examples-illustrate-the-magic-of-compound-interest/

CATCHING A PHISH

Tue, 21 Sep 2021 08:25:17 GMT

Tips to help you identify common phishing scams and take steps to avoid trouble

If you spend any time online, you’ve probably been the target of a phishing attack. This is when a scammer pretends to be from a reputable company to get you to reveal personal information they can use for their own gain. They do this through a number of communication mediums, including emails, website pop-ups, text messages and even mobile apps. Here are some tips to help you spot the most common phishing scams and take the necessary steps to avoid trouble.

Common Email Phishing Scams

Email phishing scams take on the appearance of a legitimate email. They may even appear to be from a company you’re familiar with (such as Amazon, Costco or Netflix), to take advantage of your trust and gain personal or financial information. Here are some common email scams:

Foreign lottery . Congratulations! You just won a big prize! Unfortunately, it’s often in a foreign country, and you must pay a small amount upfront to receive the larger reward.

Survey says . You get a request to take a survey for a social issue you may care about. When you click the link, you get infected with malware.

Bank on it . You receive an email saying there is something wrong with your bank, Netflix or PayPal account “that needs your attention.” You’re then directed to a fake site where you are instructed to login so they can steal your user name and password for the actual site.

Common Phone Scams

Phone scams come in many forms. Some seem friendly, while others try and use intimidation. Either way, the goal is to get your personal information and money. Here are some common phone scams:

Fix your credit . Give them some money and they promise to “fix” or “remove” your debt.

Please give now . You need to give money today to help these people in need.

Extended car warranties . Almost everyone with a cell phone has had one of these robocalls. The scammers access public purchase records to try and sell you overpriced or worthless car warranties.

You’ve Been Scammed. Now What?

If you think you’ve received a suspicious communication, here are some questions to ask yourself and defeat the scam before it even gets started:

Does it pass the eye test? Phishing emails often contain a number of spelling, punctuation and grammar errors. In addition, the email may contain an embedded logo of a well-known company (to try to make it look “official”) that looks a bit fuzzy or blurry. If you read through it and spot any of these things, it’s a pretty good bet that it’s a scam email.

Is this asking for too much information? Be on the alert if anyone seems to be asking for sensitive information, like your Social Security or bank account number, even if you are talking to a company or bank you do business with.

Do I know you? Ask this simple question before responding to a message. First check to see if you recognize the sender’s name and email address. If you don’t do business or haven’t requested information from a particular company, don’t click on any links or take any surveys.

Do you know me? Avoid communications that lack personalization. “Dear valued customer” is your clue to ignore it.

Is this a legitimate link? Before clicking on a link, hover over it with your mouse to see if the URL address looks legitimate.

Am I on the web page I think I’m on? Before logging into an online account, make sure the web address is correct. Phishers often counterfeit legitimate websites, hoping to trick you into entering your login details.

Is it too good to be true? Avoid “free” offers or deals that sound too good to be true.

Is my security software active? Always use comprehensive security software to protect your devices and information from malware and other threats that might result from a phishing scam.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

Life Insurance Strategies For Business Owners

websitebuilder@thryv.com — Wed, 25 Aug 2021 13:46:18 GMT

Life Insurance Strategies For Business Owners

Life insurance is an essential asset for many of us; if you happen to be a business owner, life insurance is even more critical to consider when building your dream. You as a business owner are not only interested in your family's financial health and well-being, but you have the needs of your business, your employees, and partners when considering the future.

Planning ahead

As you consider possible scenarios in your absence, a solid life insurance policy will relieve pressure on business partners, employees, and your family as they make decisions that will impact many. You don't want your death to be the end of the company you've worked so hard to create; finding ways to make this transition manageable and financially sound may protect what you've worked so very hard to achieve and that you are able to take care of those that you care about.

How can life insurance impact my business and family?

There are many ways that life insurance policies may be used to reduce financial stress and strain on your business and loved ones. Your family, employees, and business partners may not need to undergo a difficult transition with a bit of pre-planning; consider these options for savvy business estate planning:

1. Life insurance as an employee benefit --Life insurance companies generally assume lower risk when offering group plans to employees that come from varying demographic backgrounds (age, health conditions, gender, etc.), so they are able to offer lower rates to your employees. Your business can offer to pay a portion or all of an employee's life insurance premium as an added measure of protection against unexpected events and financial losses.

2. Personal life insurance for you, the business owner --Your life insurance policy will cover designated beneficiaries upon your death and protect your assets from seizure or foreclosure. Quite often, small business owners have to take out personal lines of credit and put up their possessions as collateral for funds. In the event of your death, an individual life insurance plan will allow family members income for expenses as well as revenue to pay down debts that may still be outstanding, allowing them to keep your business intact. A personal life insurance plan will also allow for the payment of estate taxes and death taxes that may otherwise threaten to cause the loss of your business.

3. Life insurance as funding for a buy-sell agreement --A buy-sell agreement is a contract between co-owners or owners and employees of a business. The agreement defines the conditions under which a business can continue to operate or be sold, establishes requirements for potential purchasers, and determines how an existing partner's interest is calculated. When set up correctly, a buy-sell agreement may protect all parties and clearly establishes expectations for the future of a company and all affected parties, giving thought to employees, partners, and your family members. Death may not be the only triggering event for a buy-sell agreement to be implemented; other issues affecting this agreement may be illness, disability, or even retirement.

4. Life insurance for key people --Key-person life insurance provides coverage for someone considered essential to the functioning of your business. A key-person policy is issued in the name of the business itself, and the company is responsible for paying premiums. If the key person dies, insurance payouts go directly to support the business in their absence. In the event that this policy is not enough to help a business stay afloat without key players, it offers enough of a cushion to provide assistance to family members and employees as business operations wind down.

An essential piece of your ongoing success

Life insurance policies are a vital part of future financial security--for you, your family, and your business. Finding the right coverage will be an important part of setting yourself in a stable and sustainable way. If you have concerns about finding the correct type of life insurance for you and your business, we may be able to help. Sound Wealth Management is financial planning for all aspects of your life; our qualified financial professionals are here to assist you through any stage of the planning process. Let us help you find solutions that work for you, your family, and your valued employees. Contact us today for a financial needs assessment; visit https://www.soundwealth.net/ for more information.

Ways To Potentially Maximize Your 401K Benefits

Mon, 12 Jul 2021 06:42:03 GMT

Saving for retirement is an essential step in establishing financial security for you and your loved ones. If you have the option of taking advantage of a 401K through your employer, with the added benefit of employer-matched funds that can grow tax-deferred until retirement, this may be beneficial for you. While most people choose to contribute conservatively when starting a 401K, it may be to your advantage to consider some tips for maximizing its growth over time. Setting up your financial future so that you and your loved ones can be comfortable is simple if you know how to best use your contributions. Here are some simple steps you can take that may help with the consistent growth of your 401K plan:

Put in enough money to make your employer match. Many companies and employers offer a dollar-to-dollar match of contributed funds; if you choose not to contribute the full amount needed to procure this match, you’re giving up free money. Follow your company’s compensation plan and figure out what you’ll need to put in monthly in order to maximize your profits.
Take full advantage of any catch-up contributions. Both IRAs and 401K plans have options to place catch-up contributions in your accounts; for adults aged 50 and younger, the annual cap on contributions is $19,500, while those over 50 can contribute an additional $6,500 per calendar year for a total of $26,000. All of this additional funding adds up over time and can significantly impact your retirement portfolio.
Avoid fees that can sap your investment returns. The money that you contribute to your 401K should not just sit in cash; consider choosing consistent investments with relatively lower fees. Knowing that you will not have access to these funds until you are near retirement, it is helpful to know that what you do contribute will have the potential to grow over time.
Save in a Roth account. More 401K plans are offering a Roth savings option. Although you don’t get tax savings that you would with a 401K, you do get to enjoy withdrawal with a tax-free advantage. Set aside a small portion of your contributions for the Roth savings option, and enjoy more as you withdraw.
Avoid early withdrawal. With a traditional 401K plan, there are penalties incurred for early withdrawal. Withdrawal rules are abundant and complicated, but there are a few situations where penalties can be avoided. Have another option for emergency cash to avoid taking a hit on your growing account.
Avoid 401K loans. While 401K loans offer no credit checks and relatively low interest rates, there are serious consequences for taking out money. If you were to leave an employer or lose your job and are unable to pay back the loan, penalties and higher interest rates will apply over time, costing you more money on your already diminished account.

Talk with a Sound Wealth Management financial professional today

Sound Wealth Management professionals have the tools, strategies, and advice that can help you plan for a financially sound retirement. Whether you are starting to contemplate retirement planning or you are nearing the end of your career, we will assist with all aspects of financial preparation. Contact us today to see how we can help you improve your portfolio; visit www.soundwealth.net today.

This material was created for educational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such services must be obtained on your own separate from this educational material.

All About Disability Insurance

Mon, 21 Jun 2021 06:55:54 GMT

Even if you are in the prime of life, it’s always a good idea to plan for adversity. Many people are so caught up in the day-to-day tasks of life that little thought is given to planning for emergencies. As we age, it becomes more essential to prepare when we do not have the physical capabilities needed to perform work, obligations, and self-care.

What would you do if a crippling accident or illness prevented you from working and taking care of personal responsibilities? Procuring a disability insurance policy is one way to ensure more financial stability in uncertain times.

What is disability insurance?

Disability insurance is a form of coverage that provides you and your family financial support in case of illness, accident, or injury. This regularly scheduled payment pays out a portion of your monthly income so you can provide for yourself during this time.

While disability insurance for singles is not necessarily required, it’s a great idea to supplement your coverage if you have family or significant others that rely on you for support. If you happen to be young and in reasonably good health, disability insurance may seem like a frivolous expense. As you age and begin to acquire more medical care, the possibility of developing an illness or sustaining an injury grows, and supplemental insurance might be needed. With nearly 25 percent of today’s 20-year-olds becoming disabled by age 67, the option to procure disability insurance is a wise decision.

Peace of mind with disability insurance

Disability insurance gives you peace of mind that basic living expenses will be covered while you get on with the business of healing. Recover without the added pressure of having to make ends meet and give your loved ones the peace and security that comes with knowing that life can have a sense of normalcy about it.

Types of disability insurance

Two main types of disability insurance most commonly used by workers are short-term disability and long-term disability. When considering factors such as housing, income, health, and family situation, each has its own advantages and disadvantages, and taking a look at what each package can offer will give you a more informed viewpoint with which to make your choice.

Short term disability

Short-term disability policies pay out larger amounts of financial support over a shorter period of time. This type of coverage is beneficial for those situations where you are fairly certain long-term care will not be needed, such as:

Musculoskeletal injuries
Pregnancy and issues associated with pregnancy
Short term mental health concerns
Digestive issues
Fractures, pulled muscles, and sprains

Long term disability

Long-term disability insurance is associated with those conditions where you cannot recover from illness or injury for longer periods. The type of insurance is determined by the care you need and the length of time you will be unable to work. In general, long-term disability will replace 40 to 60 percent of your base salary until such time that you are able to retire, or you are able to return to work. Some companies will put a cap on the number of years that you are eligible for long-term disability benefits. Some illnesses/injuries associated with the need for long term care include:

Severe or debilitating musculoskeletal disorders such as arthritis or fibromyalgia
Pregnancy
Cancer
Serious physical injury
Ongoing mental health concerns/issues

With both types of disability coverage, there is a period required where you must demonstrate the need for financial assistance; even then, you might be waiting as much as six months for benefits to appear in your account. Having an additional savings account tucked away would be a good idea to get you through the initial waiting period and to provide extra peace of mind for your loved ones.

Factors to consider

When applying for disability coverage, several factors are taken into consideration so you can receive the best possible coverage.

Age-- The cost of disability coverage rises as you age, as you are more likely to suffer illness or injury.
Occupation-- If you work at a job that is considered high risk, you’ll likely end up paying a higher rate for coverage than someone who has a desk job. Highly specialized professionals should note that their expertise may be hard to replace; in these cases, you should plan to pay higher rates for coverage.
Health-- An underwriter will take factors like chronic conditions, past health problems, family history, and any recreational drug use into consideration when determining your policy value. Monitoring your health for any changes will be an integral part of you receiving the best care possible.
Annual salary-- Disability coverage is typically measured as a percentage of your salary; this means that higher premiums will be necessary to obtain coverage.

How to obtain disability coverage

There are several options for getting disability coverage. Employer-sponsored insurance is offered through most employers, and it’s more convenient because premiums are lower across the group. Ask your employer if they offer disability coverage and take advantage of any programs offered that may allow for tax benefits as well.

Professional group disability insurance is offered by labor unions, trade organizations, and professional associations. These large-group insurance plans are easier for members to enroll in, and they have lower premiums when compared to some individual plans.

Individual disability insurance policies will give you more options than a group plan, but you lose some of the benefits of large group subscriptions. Shop around to find the plan and the deal that work best for you and ask questions as you navigate the process of obtaining additional coverage for your family.

Need advice? We’re here to help!

Sound Wealth Management is a financial planning company of professionals who are passionate about portfolio growth and individual security. We know how important financial planning is to the success and confidence experienced by you and your families; we can help you pursue any financial goals that you have for your future. If financial changes like disability insurance are on the horizon, don’t hesitate. Contact us now to see how we can get you on the path to making your financial dreams a reality; visit www.soundwealth.net to see what we can do for you!

Tax Diversification And Investing

Mon, 21 Jun 2021 06:50:20 GMT

Whether you’ve been in the business of investing for some time or you’re relatively new to the game, it’s essential to know that diversification across several different types of stocks and bonds is important to reduce risk. A good financial planner will inform you that there are types of diversification you can do to reduce your tax liabilities as well, leaving you with more money to call your own.

What is tax diversification?

Tax diversification refers to the planned allocation of your assets across multiple accounts with varying taxation. Diversification is similar to asset location, meaning you as an investor can choose where to place your investment dollars across accounts such as traditional IRAs, Roth IRAs, and brokerage accounts.

Investing your hard-earned money in anticipation of retirement is serious business. We as investors would prefer not to pay a portion of our investment gains in taxes, so knowing how to shelter our contributions will be an important factor in working to maximize your growth. Strategic use of fully taxable, tax-advantaged, and tax-free accounts can save you money as you plan for your golden years.

Tax-advantaged accounts

If you are enrolled in a 401K, a 403B, or a traditional IRA, you have tax-advantaged retirement accounts. Also known as tax-deferred accounts, they give you some advantages for future financial planning, such as:

Being able to contribute with pre-tax or tax-deductible dollars
Being able to defer tax withdrawals until you collect on your accounts
Being able to make contributions on your investments at age 72
Being taxed at regular rates on withdrawals

Check with your employer to see if an employee match option exists and take advantage of this benefit if possible. If you contribute $500 per month toward your accounts, your employer may match a portion of your contribution or even your entire amount, depending on your income. While these types of accounts may save you money on taxes right now, they have the potential to move you to a higher tax bracket in retirement.

Fully taxable investment accounts

A traditional brokerage account is fully taxable, and it involves making contributions to various stocks and bonds. These types of accounts do not necessarily afford you immediate tax benefits, but they do offer additional withdrawal and mobility benefits, giving you more control about where you place your money and how you choose to use it. Fully taxable investment accounts:

Are funded with after-tax dollars
Are not subject to RMDs
Are subject to taxation on all earnings, dividends, and sales during a calendar year
Are taxed according to your income tax bracket
Allow for tax deductions on losses

Tax-free investment accounts

Tax-free investment accounts include Roth IRAs, Roth 401k plans, 529 plans, and any Health Savings Accounts that you procure. These accounts are intended for long-term use and growth, so you could incur penalties if you choose to withdraw early for any reason. Other attributes of tax-free investment accounts include:

Tax-free withdrawals from 529 and HSA plans if you use the funds for educational or qualified health expenses
Tax-free distributions on Roth accounts if you are age 59 ½ or older.
Significant savings on income tax in retirement
Tax-deferred earnings on income
Tax-deductible contributions

Knowledge is power

As tax laws are constantly evolving, it is difficult to predict how your money will perform long term. Your best course of action is acquiring knowledge on retirement options and to get advice from a financial expert on how to procure consistent growth. The financial professionals at Sound Wealth Management Group can offer solid advice, proper planning strategies, and proper planning to ensure that all of your retirement plans can become reality. Contact us today to see how we can help you work to achieve more efficient growth as you plan for the future. Visit https://www.soundwealth.net/ for more information.

The information provided here is for general information only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

Past performance is no guarantee of future results.

There can be no guarantee that strategies promoted will be successful and no guarantee of positive results.

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Strategies To Potentially Maximize Your Social Security

Tue, 18 May 2021 07:04:22 GMT

Social security benefits are an excellent addition to traditional retirement plans. Coming out of a standard paycheck, it is an additional layer of financial security that you are able to take advantage of as you near retirement.

Seeing that social security withholding on your paycheck may bring several questions to the forefront of your mind as you contemplate your financial future. You may be asking:

What are social security benefits?
How are they calculated?
When am I able to take advantage of these benefits?
Are they taxable?
How can I potentially maximize my benefits to ensure a quality retirement?

These questions will be addressed as we give you an overview of this government benefit and its significance for you and your loved ones.

What are social security benefits?

Signed initially into practice by President Franklin D. Roosevelt, what we know as social security benefits were originally referred to as “old age, survivors, and disability insurance.” It is a large pool of money funded by payroll taxes taken out by employers, and it is intended to function as an insurance pool funded by government dollars. As workers near retirement, it is designed to serve as an additional retirement account to ensure that common wage workers are provided a median standard of living. They are also intended to be supplemental; this should not be considered a sole source of income that you’ll draw on after retirement. Suppose you have the opportunity to set up additional retirement accounts through your employer. In that case, it is advised that you do so to take advantage of pre-tax programs your employer may offer.

How are social security benefits calculated?

Social security benefits are calculated on your lifetime wages. They are adjusted or “indexed” to account for changes in wages over time and are held in reserve for you until the time that you elect to receive them. The more you are able to make while working, the more benefits you stand to gain from this type of insurance; delaying withdrawal can also potentially maximize your benefits when you truly need them.

When can I elect to draw on social security?

The earliest you may elect to take social security benefits without proof of a medical condition is 62. Prior to that, if you have a medical condition that qualifies as a disability, you may take social security benefits, but only if you’ve worked for a specific period of time. The social security system is based on credits; you receive a certain number of credits for years worked. If you have questions about whether it would be wise to draw on your benefits, speak to a financial service professional to determine if this is the right step for you.

Are social security benefits taxable?

Depending on your annual income and any non-taxable interest that you yield from investments and other retirement accounts, your social security benefits will be taxable from 50-85 percent. If you fall below base income guidelines as determined by the IRS, your social security benefits will not be taxed. Social security calculators and tax professionals will be able to give you an accurate estimate of what percentage you will need to pay.

How can I maximize my social security benefits as I look toward retirement?

There are some simple steps that you can take to maximize your social security benefits. They are:

Work at least 35 years. SSA totals your income from 35 years of your highest wages and calculates a median income based on that total.
Max out your earnings till age 60. Extra income in your 60th year and beyond does not count toward your social security index, so it would not be shown on your SSI score.
Hold off on collecting if you can. Most people know that the expected age to collect is 66, but if you can hold off until age 70, you stand to gain an extra 8 percent each year.
Claim spousal benefits and delay yours. If you and your spouse are both approaching retirement, one of you can hold off till age 70 and collect a higher benefit just a short time later.
Avoid social security tax. Those who wish to keep working after official retirement could see significant tax liabilities if they earn traditional wages. Talk to a financial services professional to see how you can minimize tax debt while continuing to make money off investments and other sources of income.

Need some advice? We’re here to help.

Sound Wealth Management’s committed, caring professionals provide sound financial advice at all stages of your professional career. If you have questions on how to potentially maximize your dollar--no matter what season of life you are in--we have you covered. Contact us now for more information; visit https://www.soundwealth.net/ today.

Stressless Planning For Long Term Care

Fri, 23 Apr 2021 07:12:45 GMT

Planning for retirement and beyond is not something that many of us look forward to, but it is a necessary part of creating a quality life for you and your loved ones. At some point, you'll find yourself needing long-term care. Long-term care can be a senior living community, assisted living, or a nursing home facility. The cost for such care requires a bit of forethought and planning to ensure that you and your family aren’t faced with financial pressures to ensure safety and security.

Recent statistics show that a large majority of seniors will need long-term care at some point in their lives. Many of us are resistant to discussing a plan for care until faced with an emergency; don’t wait till it’s too late and put additional stress on you and your family members. Begin now to ask those difficult questions, make decisions about your care or that of your loved ones, and look forward to a higher quality of life after retirement. Here are some options for funding long term care, regardless of the form that it takes:

Option #1--Pay out of pocket. Paying for long-term care yourself may be the easiest way to secure services, but it is not necessarily the smartest thing to do. Constantly changing insurance benefit laws and rising health care costs will make it difficult to anticipate how much to tuck into savings. If you do plan to start a savings account to cover your expenses, consider the following list of things you may need:

Home health aide--$25/hour
Nursing home care--$97,000 per year
Assisted living facilities--$4000 per month
Dementia care and end of life services--$350,000

If this is one of your care choices, talk to a financial planner about how to make the most of your savings so that you avoid running out of funds while still requiring medical care.

Option #2--Use long-term care insurance. Long-term care insurance is designed to cover home health, nursing home care, adult daycare, hospice, modifications and home construction, and more. Your premium will depend on the coverage that you choose, how long you anticipate your needs will last, and when you will take advantage of your benefits. Purchasing long-term care is relatively inexpensive when you are young and healthy, with premiums gradually increasing as you get older. One drawback to long-term care insurance is the possibility that you may pay premiums for years without the need to cash in on benefits. As the insurance industry continues to evolve, new options are becoming available; ask your financial planner or insurance agent questions to ensure that you understand policy regulations and benefits.

Option #3--Use life insurance. A life insurance policy is a very valuable asset that may be able to fund extended-term care in many ways. Monitor your policy to see if it contains features such as:

An accelerated death benefit--The ADB allows you to get a tax-free advantage on death benefits for the purpose of paying for long-term care. You might qualify if you are terminally ill, if you have received a life-threatening diagnosis, or cannot perform basic personal care measures.
A life settlement--If you are over 70 years of age, you might be able to sell your policy for its current policy to cover care. Proceeds will be taxed, and you may have very little death benefit left for heirs when you pass away.
A viatical settlement--This type of addendum is only available to terminally ill policyholders. The holder will sell the policy to a third party for a percentage of the death benefit. They will then have tax-free funds to pay for care while they are still alive.

Option #4--Use a hybrid policy that combines life insurance with long-term care. A hybrid policy covers coverage for care when Medicare and your regular health insurance plan cannot cover expenses. Part of your premium will go into a pool of money intended for long-term care expenses. If you need this money sooner, you’ll be able to draw a tax-free monthly stipend to pay for care. Any death benefit you would stand to receive would be reduced by any amount used to pay for your long-term care.

Option #5--Use a health savings account. Most employers offer traditional health insurance in combination with a health savings account. An HSA is most often funded with pre-tax dollars, and they are not subject to taxation when used for qualified health care expenses. Maximum contribution limits for 2020 are $3550 for individuals and $7100 for those with family insurance plans.

Not sure what to choose? Ask us!

Sound Wealth Management is a team of committed professionals who want the best financial outcome for you and your family. We provide quality service, professional financial advice, and we give viable solutions for navigating your wealth management from your first job to retirement and beyond. For more information about financial planning after retirement, visit https://www.soundwealth.net/ . We look forward to serving you!

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