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A Quick and Dirty Guide to Credit

August 2019

About 43% of small employers (with fewer than 500 employees) applied for credit in 2018, up from 40% in 2017. Fortunately, nearly half of applicants received the full amount requested — 47% in 2018, slightly higher than the previous year.1 Even though the credit market has become friendlier overall, smaller companies often find it more… Read more

Qualified Longevity Annuity Contracts (QLACs)

August 2019

Most people can only guess how long their retirement savings might need to last. Those who withdraw too much or live longer than expected could eventually run out of money; others may withdraw too little and live more frugally than might be necessary. A qualified longevity annuity contract (QLAC) is a special type of longevity… Read more

Life Insurance with Long-Term Care Benefits

August 2019

If you are concerned about the high costs of long-term care but don’t want to purchase traditional long-term care (LTC) insurance, you might consider two strategies that combine permanent life insurance coverage with long-term care benefits. Keep in mind that any payouts for covered LTC expenses reduce (and are usually limited to) the life insurance… Read more

Consider REITs for Income and Diversification

August 2019

Real estate investment trusts (REITs) can offer a consistent income stream and help provide portfolio diversification. Considering these potential benefits, it may not be surprising that an estimated 80 million Americans own REITs in their retirement accounts and other investment funds.1 Of course, like all investments, REITs also have risks and downsides. Pooled Property Investments… Read more

Caught in the Middle: The Sandwich Generation

August 2019

There is an old saying about being caught between a rock and a hard place. Many people might feel that way about providing financial support to children and aging parents while also trying to save for retirement and meet daily financial needs. Dubbed the “sandwich generation,” this group may be growing as people live longer… Read more

HOT TOPIC: How Geopolitical Tensions May Affect Oil Prices and the Economy

August 2019

Conflict in the Persian Gulf has spurred modest oil price volatility in recent weeks, but prices didn’t spike to high levels seen during some past conflicts. That’s partly because rising U.S. oil production has shaken up the global oil market since 2010. Crude oil prices still react to geopolitical events and other unplanned supply disruptions…. Read more

Calculating Key Financial Ratios

July 2019

Used to measure a business’s condition and performance, financial ratios can help you quantify your organization’s financial health and level of success. They are also used by those evaluating your business for potential investment or lending opportunities. Your balance sheet and income statement will help you calculate the following widely used ratios. Liquidity Current ratio…. Read more

New Study Finds Widespread Job Loss After 50

July 2019

Research conducted by the Urban Institute suggests that many people with apparently stable positions face a job loss after age 50 with serious financial consequences.1 Analyzing data from the University of Michigan Health and Retirement Survey — a long-term survey of Americans ages 51 and older — researchers found that about two-thirds of people in… Read more

Indexed Annuities: Growth Potential with Downside Protection

July 2019

Indexed annuities (IAs) set a new annual sales record in 2018, due in part to higher interest rates that allowed insurance companies to offer more appealing income withdrawal rates.1 Of course, the fact that a product is popular doesn’t mean it’s right for you. Indexed annuities are complex, so it’s important to understand how they… Read more

Seeking Balance in a Mutual Fund

July 2019

Maintaining an appropriate balance of stocks and bonds is one of the most fundamental concepts in constructing an investment portfolio. Stocks provide greater growth potential with higher risk and relatively low income; bonds tend to be more stable, with modest potential for growth and income. Together, they may result in a less volatile portfolio that… Read more

What’s the Real Return on Your Investments?

July 2019

Changing tax rates, steady inflation, and higher interest rates — put them together, and this might be a good time to consider the real return on your investments. As an investor, you probably pay attention to nominal return, which is the percentage increase or decrease in the value of an investment over a given period… Read more

HOT TOPIC: All Eyes on the U.S. Economy as It Caps Off Decade of Growth

July 2019

The current economic expansion passed the 10-year mark in June 2019, becoming the longest growth streak in U.S. history. Despite its record-breaking durability, U.S. gross domestic product (GDP) growth was slower than expected over the past decade, averaging just 2.3% annually since the expansion began in June 2009. By comparison, GDP grew at a vigorous… Read more

Steps to Executing an Exit Strategy

June 2019

Some business owners don’t think about succession possibilities or when they might retire, because they love running their companies and don’t want to stop any time soon. But unfortunately, about half of retirees must stop working earlier than expected, often due to health problems or to care for an ailing spouse.1 Succession plans are designed… Read more

Interest Rates and the Economy

June 2019

The yield curve is a graph with the rates of U.S. Treasury bonds plotted by maturity. The slope of the curve is the difference between short-dated bonds and long-dated bonds. Normally, it curves upward as investors demand higher yields to compensate for the risk of lending money over a longer period. The curve flattens, however,… Read more

Avoiding Probate with a Transfer-on-Death Deed

June 2019

If you want to leave your home to your children or other heirs and keep the property out of the costly and time-consuming probate process, you could place your home in a living trust. Trusts offer numerous advantages, but they incur up-front costs, often have ongoing administrative fees, and involve a complex web of tax… Read more

College Savings: Roth or 529 Plan?

June 2019

Roth IRAs were primarily intended as a tax-advantaged way to save for retirement, but for some parents (and students with earned income), a Roth IRA can double as a college savings tool. On the other hand, state-based 529 savings plans were designed specifically to help families set aside money for future education costs. Roth IRAs… Read more

A Steady Strategy in Turbulent Times

June 2019

After an unusually calm year in 2017, the stock market turned unusually volatile in 2018. How volatile was it? Consider this: In 2017, the S&P 500 had only eight days when the index closed with a rise or fall of 1% or more from the previous day’s closing price. In 2018, there were 64 such… Read more

HOT TOPIC: U.S.-China Trade War: Who Pays the Price?

June 2019

On May 13, 2019, escalating trade tensions between the United States and China sparked a worldwide stock sell-off that wiped out more than $1 trillion in global equity values.1 The markets recovered over the next three days, but tensions between the economic giants continued to drive volatility with no resolution in sight.2 Investors sometimes overreact… Read more

Watch Out for Scams That Target Businesses

May 2019

According to a 2018 report by the Better Business Bureau, an estimated 6% of small businesses are scammed each year, suffering an average loss of $4,373. Unfortunately, scam activity directed at businesses seems to be growing and tends to involve greater losses than scams directed at consumers.1 Tactics used by scammers to trick owners and… Read more

Retirement Planning: How Secure Is Social Security?

May 2019

You may have heard that a looming Social Security shortfall is threatening to affect future benefits. If you’re retired or close to retiring, then you probably have nothing to worry about — your Social Security benefits will likely be paid to you in the amount you’ve planned on. But what if your retirement is still… Read more

Be Aware of Observation Care

May 2019

No one wants to be admitted to a hospital, but for Medicare beneficiaries the distinction between inpatient and outpatient treatment can be confusing and potentially expensive. The key issue is observation care (also called observation status), during which a patient spends time being evaluated in a hospital — and may be in a hospital room… Read more

SRI Investing: Not Just for Stocks

May 2019

Sustainable, responsible, and impact (SRI) investing — also called socially responsible investing — has been around for a long time, but growing interest has moved it into the mainstream. U.S. SRI assets reached $12 trillion in 2018, 38% more than in 2016. SRI investments now account for about one-fourth of all professionally managed U.S. assets.1… Read more

Bonds Can Offer Stability Even with Rising Rates

May 2019

Bonds can be a tricky investment when interest rates are rising, as they have been for the last few years. The value of bonds sold on the secondary market typically falls as rates rise, because investors can buy new bonds with higher yields. (The reverse is true when rates are falling.) Even so, bonds can… Read more

HOT TOPIC: 1040 Postmortem: Making Sense of Your Taxes and Withholding

May 2019

The Tax Cuts and Jobs Act (TCJA), which passed in December 2017, made fundamental changes to the U.S. tax code, and 2018 returns were the first time most taxpayers could see the practical impact of these changes. In an April 2019 Gallup poll, 43% of Americans said they were unsure how the new tax law… Read more

Clarifying Tax Deductions for Meals and Entertainment

April 2019

Despite some initial confusion and dismay when the 2017 tax law was first passed, the IRS has confirmed that businesses can continue to write off 50% of the cost of food and beverages provided to current or potential clients, customers, consultants, or similar business contacts. However, the deduction for entertainment expenses — such as golf… Read more

Considering Preferreds? Proceed with Caution

April 2019

Preferred stocks may appeal to investors looking for a robust income stream, but they come with heightened risks during a period of rising interest rates. If you’re considering or already own preferred shares, here are some points to keep in mind. Stocks That Act Like Bonds Preferred stocks act more like bonds than common stock…. Read more

Trusts Offer More Than Estate Tax Protection

April 2019

The 2017 tax reform law effectively doubled the federal estate tax exclusion amount to $11.18 million for individuals who died in 2018 ($11.4 million in 2019). With the portability provision that allows the unused exclusion amount to pass to a surviving spouse, a married couple could shelter up to $22.8 million in 2019. Trusts have… Read more

Why Americans Are Eating Out Less Than Ever

April 2019

Sharing meals in your home or out on the town isn’t just about eating; it’s also an opportunity to spend quality time with friends and family. But whether you are a frugal home cook or a foodie who frequents the trendiest eateries, your dining habits can impact your finances. U.S. consumers spend about 13% of… Read more

Do You Need a Power of Attorney?

April 2019

A power of attorney (POA) is a legal document that gives another person the authority to act on your behalf. Unless you have authorized someone to carry out your medical or financial affairs in the event you are unable to do so, a relative or friend will have to ask the court to appoint a… Read more

HOT TOPIC: The Fed Hits the Brakes: No Rate Hikes Projected in 2019

April 2019

At its meeting on March 20, 2019, the Federal Open Market Committee (FOMC) maintained the benchmark federal funds rate at the target range of 2.25% to 2.50% that was set in December 2018. This in itself was not surprising. But other communications signaled a definite hiatus in the Fed’s policy of raising interest rates and… Read more

Succession Plans Often Hinge on Reliable Valuation

March 2019

The “fair market value” of a business is a price that is acceptable to a willing buyer and seller, neither of whom is under any compulsion to complete the transaction, and with both parties having reasonable knowledge of the relevant facts. Still, lenders generally require a professional valuation (or appraisal) before extending credit to business… Read more

Estate Taxes: Should a Trust Own Your Life Insurance?

March 2019

Federal estate taxes became less of a concern for many families when the 2017 Tax Cuts and Jobs Act doubled the estate tax exemption. In 2019, a 40% tax rate applies only to taxable estate assets exceeding the $11.4 million exemption amount, with a “portability” provision allowing a surviving spouse to shelter up to $22.8… Read more

Bridging the Gap Between Retirement and Medicare Eligibility

March 2019

Almost seven out of 10 retirees left the workforce before reaching the Medicare eligibility age of 65. Most current workers expect to retire at 65 or later, but retirees’ experiences suggest this may not be realistic.1 If you (and your spouse) retire early, bridging the health insurance coverage gap between retirement and Medicare eligibility could… Read more

IPOs: Consider the Risks Behind the Hype

March 2019

An initial public offering (IPO) is the first public sale of stock by a private company. Companies tend to schedule IPOs when investors are feeling good about their financial prospects and are more inclined to take on the risk associated with a new venture. The U.S. IPO market was strong in 2018, reflecting the surging… Read more

Taking a Team Approach to Retirement Savings

March 2019

Now that it’s common for families to have two wage earners, many married couples accumulate assets in separate accounts. They might each have savings in an employer-sponsored plan and perhaps one or more IRAs as well. Even when most of a couple’s retirement assets reside in different accounts, it’s still possible to craft a unified… Read more

HOT TOPIC: Keeping an Eye on Corporate Debt

March 2019

The opportunity to borrow at low interest rates has enticed corporations to issue more than $1.0 trillion in bonds every year since 2010. By the end of 2018, corporate balance sheets were carrying $9.1 trillion in debt, up from $5.5 trillion in 2008.1 As a result, corporate leverage amounts to about 46% of U.S. gross… Read more

A Business Plan Can Be Your Guide to Growth

February 2019

Whether you’re a current business owner or a budding entrepreneur burning with the next great idea, one of the most important steps you can take on your journey to success is creating a business plan. A well-written business plan captures your vision, illustrates it for others (including potential lenders and investors), and ultimately becomes a… Read more

Seeking Synergy: Why Mergers and Acquisitions Matter to Investors

February 2019

Merger and acquisition (M&A) activity in U.S.-targeted transactions surged to the highest level on record in the first half of 2018. There were 4,425 deals worth $1.06 trillion — a 74% increase in deal volume over the same period of 2017. There has also been a notable rise in mega deals exceeding $10 billion.1 Collectively,… Read more

Getting Real About Retirement

February 2019

Preparing for retirement can be daunting, but like any challenge it helps to take a hard look at some real data. Yet only 29% of workers or their spouses have tried to estimate their retirement expenses, and only 33% have estimated the monthly retirement income they would need.1 For younger people, this may be understandable…. Read more

Looking Back, Looking Ahead

February 2019

January is named after the Roman god Janus, who was portrayed as having two faces: one looking backward, the other looking forward. In a similar manner, economists like to look in both directions to better understand economic trends. But instead of two faces, they use economic measures called “indicators.” Some economists consider unusual trends. For… Read more

Need to Tap Your 401(k)? Proceed with Care

February 2019

Everyone faces challenges, and some challenges require more cash than you have readily available. If you find yourself in that position, you might eye your 401(k) balance and consider using those funds to meet your present needs. That’s a natural response, but it’s usually not a good idea. Taxes and Lost Growth If you are… Read more

HOT TOPIC: What Are the Costs of the Government Shutdown?

February 2019

The longest government shutdown in U.S. history ended after 35 days on January 25, 2019. A temporary appropriations bill extended funding for all shuttered federal agencies to February 15, 2019, while a bipartisan committee negotiates a new spending bill for the Department of Homeland Security.1 The full impact of the shutdown will not be known… Read more

Some Small Companies Facing Tariff Troubles

January 2019

The Trump administration has been using tariffs — or the threat of tariffs — in its efforts to reduce the trade deficit, address unfair trade practices, and push multinational businesses to move production back to the United States. In response, major trading partners including China, India, the European Union, Mexico, and Canada have retaliated with… Read more

Technology Trend: How Blockchain Could Impact the Future

January 2019

Blockchain is a data structure used to create a digital ledger shared among a distributed network of computers. It was initially designed for the peer-to-peer exchange of the virtual currency bitcoin. However, businesses and governments worldwide are now exploring blockchain technologies as they seek to improve transparency, increase productivity, and reduce costs. Investment in blockchain… Read more

Are Your Designated Heirs Up-to-Date?

January 2019

The end of the year is a time when families often gather together. Although these gatherings may keep you busy, this could be a good time to think about the future and make sure that you have correctly designated family members and any others you wish as beneficiaries in your will, insurance policies, and financial… Read more

Consider a Customized Disability Policy

January 2019

If you are in good health, disability insurance may not be high on your list of financial priorities. But the statistics might surprise you. A 50-year-old has a 36% chance of experiencing at least one disability lasting 90 days or more before reaching age 65.1 Less surprising, perhaps, is that older people often take longer… Read more

ABLE Accounts for Disability Expenses

January 2019

Achieving a Better Life Experience (ABLE) accounts allow eligible individuals to save and invest money in tax-advantaged plans to pay qualified disability expenses. Expenses that may qualify include housing, education, transportation, health, prevention and wellness, employment training and support, assistive technology, personal support services, and other disability-related expenses. Along with tax advantages, ABLE accounts offer… Read more

HOT TOPIC: After Rocky Year-End, Risks Follow Investors into 2019

January 2019

In the final quarter of 2018, interest rate and growth fears, along with geopolitical events, sparked volatility in the financial markets and reversed many of the outsize stock gains notched earlier in the year. The S&P 500 posted a loss of about 6.2% for 2018. After falling into bear market territory, defined as a drop… Read more

Weighing a Wider Range of Health Plan Options

December 2018

The Affordable Care Act (ACA) does not require small businesses with fewer than 50 full-time employees to offer health insurance. Still, many would like to do so, in part to stay competitive in a tightening job market. It is often difficult for small businesses to find affordable health coverage. For companies with 3 to 199… Read more

Insurance Strategies: Giving Old Life Insurance a New Purpose

December 2018

Later in life — when your children are on their own, you’ve retired, or you’ve paid off your mortgage — you may think you no longer need to keep your life insurance coverage, or that the benefit isn’t worth the cost. If you own permanent life insurance, the policy may have a cash surrender value… Read more

Know Your Mutual Funds

December 2018

An estimated 100 million Americans — representing almost 45% of U.S. households — owned mutual funds in 2017. These individual retail investors held about 90% of the $18.7 trillion in assets invested in U.S. mutual fund companies.1 Mutual funds offer a convenient way to participate in a variety of market activity that would be difficult… Read more

Low-Volatility Strategies for a Less Stressful Ride

December 2018

After an unusually steady 2017, the U.S. stock market took a more volatile turn in the first half of 2018.1 A number of factors contributed to this year’s volatility, but trade tensions between the United States and its largest trading partners were a frequent trigger. A series of announced tariffs raised the possibility of a broader… Read more

Competing Goals: Pay Off Student Loans or Save for Retirement?

December 2018

Many college graduates face a tough decision early in their working lives: pay off student loans or save for retirement. It’s a financial tug of war between digging out from debt today and saving for tomorrow, both of which are very important goals. Recent graduates might enter the workforce with little more than their diplomas… Read more

HOT TOPIC: Consumer Nation: Can Confidence Drive the Economy?

December 2018

In October 2018, The Conference Board Consumer Confidence Index® reached its highest level since September 2000, despite a steep stock market slide and potential headwinds from inflation and rising interest rates.1 Another measure, the University of Michigan Index of Consumer Sentiment, has also remained higher in 2018 than in any year since 2000.2 Confidence dropped… Read more

Reviewing Business Structure in Light of Tax Changes

November 2018

The difference between personal and business tax rates is a factor that often influences a business owner’s choice of organizational structure. Thus, recent tax changes make it a good time to recalculate and evaluate your options. C corporations are taxed at the corporate tax rate, which was permanently cut from a top rate of 35%… Read more

Health Savings Account: Funding an HSA Could Help You Prepare for Retirement

November 2018

By one estimate, the average 65-year-old couple retiring in 2017 could spend more than $404,000 on health-care expenses in retirement. This figure includes lifetime premiums for Medicare, supplemental insurance, dental coverage, deductibles, coinsurance, and other out-of-pocket costs.1 The primary purpose of a health savings account (HSA) is for workers to set aside pre-tax income to… Read more

Help with College: A Gift for Your Grandkids

November 2018

College graduates generally earn more, have lower rates of unemployment, lead healthier lifestyles, and are more active citizens than those without a degree.1 One estimate places the lifetime value of a bachelor’s degree at $2.8 million.2 That kind of opportunity requires a substantial investment that can be overwhelming even for families who are on solid… Read more

Community Property Laws: Yours, Mine, and Ours

November 2018

The question of asset ownership can be contentious in the event of a divorce, but even in the happiest marriage it may be helpful to understand the laws regarding ownership of property obtained before and during the marriage. Currently, nine states have community property laws: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and… Read more

Is a Roth 401(k) Right for You?

November 2018

First available in 2006, the Roth 401(k) is a relative newcomer to the retirement savings world, and employers were slow to adopt it. That has changed in recent years. A 2017 survey found that seven out of 10 large and mid-size employers with defined contribution plans offer Roth accounts, and another 15% were planning to… Read more

HOT TOPIC: Monetary Policy: Should Investors Fear the Fed?

November 2018

In October 2018, U.S. investors experienced a broad sell-off and an anxiety-fueled increase in market volatility. The recent stir in the financial markets has been blamed on a combination of factors: a worsening trade dispute with China, slowing global growth, a surge in Treasury yields, and possibly even an offhand comment by Federal Reserve Chairman… Read more

Dealing with Divorce

October 2018

While we all hope our marriages will last forever, about 50% of first marriages in the United States end in divorce.1 And unfortunately, a couple who decide to divorce must typically negotiate a property settlement agreement (or seek the assistance of the courts). Retirement assets can be divided at the time of a divorce, just… Read more

Key Tax Breaks for Business Owners

October 2018

The Tax Cuts and Jobs Act has made the tax code more favorable for small businesses. Still, owners will want to take full advantage of every legal tax break they can find. The following deductible business costs could help reduce your 2018 tax bill. Be sure to consult with your tax professional before you take… Read more

Choosing and Using a College Checking Account

October 2018

Attending college requires learning about many aspects of life outside the classroom, and one of those is managing a checking account. Even if your student had an account in high school, college will require handling more money, more often, without your direct supervision. Whether your student is opening a new account or using an old… Read more

Social Security 101

October 2018

Social Security is complex, and the details are often misunderstood even by those who are already receiving benefits. If you’re looking forward to Social Security, whether in one year or 30 years, it’s important to understand some of the basic rules and options and how they might affect your financial future. Full retirement age (FRA)…. Read more

Seven Classic Investing Quotes

October 2018

Investing can be daunting, whether you are experienced or a beginner. Even if you feel confident about your investing strategy, it can be easy to lose focus or make decisions based on emotion. Here are seven quotes from successful investors, economists, and other insightful thinkers that may help provide perspective and focus for your own… Read more

HOT TOPIC: Bear in the Woods: Emerging Markets Credit Crisis

October 2018

On September 6, 2018, the MSCI Emerging Markets (EM) Index — which tracks stocks in 24 of the world’s largest developing economies — dropped 20% below its January high, a level of decline that is commonly considered a bear market.1 Hong Kong’s Hang Seng Index reached the same negative milestone a few days later. China’s… Read more

Family Limited Partnerships for Estate Planning Purposes

September 2018

One challenge faced by family-run businesses involves transitioning both the ownership and operations from one generation to the next. A family limited partnership (FLP) is a legal agreement that enables business owners and their heirs to address tax issues, business succession, and estate planning needs all at once. Specifically, business owners who want family members… Read more

Inflation Protection for Investment Dollars

September 2018

For the 12-month period ending in March 2018, the Consumer Price Index for All Urban Consumers (CPI-U), the standard measure of “headline inflation,” increased 2.4% — the fastest pace since March 2017 and significantly higher than the 1.6% average over the past 10 years.1 Looking at the bigger picture, the 50-year U.S. inflation average is… Read more

A Map to Guide Your Family

September 2018

If you have a legal will, you’ve taken an important step to help your family know your wishes and make appropriate decisions. But a will does not address all the complicated matters of your financial life. You may have multiple bank, retirement, and investment accounts; insurance policies; a safe-deposit box; and more. You have bills… Read more

Insurance with Potential Cash Value

September 2018

The simplest and most cost-effective type of life insurance is generally term insurance, which provides coverage for a specified number of years, as long as you pay the premiums, and pays a death benefit if you die within that term. A term policy has no other value and is separate from your savings and investments…. Read more

Risk Tolerance Is About You, Not the Market

September 2018

Surveys show that tolerance for investment risk rises and falls with the stock market. In mid-2008, 36% of mutual fund investors said they were willing to accept substantial or above-average risk for the potential of substantial or above-average gain. The percentage plunged to 30% the following year, when the market hit its recession-era low, and… Read more

HOT TOPIC: Blockchain Buzz: Emerging Tech Offers Potential, Not Promises

September 2018

Blockchain is a data structure used to create a digital ledger shared among a distributed network of computers. It was initially designed for the peer-to-peer exchange of the virtual currency bitcoin. However, businesses are now developing and testing some potentially game-changing blockchain applications. According to a recent survey of executives across a variety of industries,… Read more

Equity REITs and Rising Rates

August 2018

A real estate investment trust (REIT) is a company that uses the combined capital of a large number of investors to buy and manage residential, commercial, and industrial income properties. Like other equities, publicly traded REIT shares can generally be bought or sold in a moment on an exchange, making them more liquid than physical… Read more

Reward Workers and Fund Retirement with a Cash Balance Plan

August 2018

Cash balance plans are technically defined benefit plans that share some key characteristics with defined contribution plans. IRS regulations finalized in 2010 and 2014 clarified some legal issues and made these plans more flexible and appealing to employers. As a result, there was a 152% increase in new cash balance plans between 2010 and 2015.1… Read more

Oil Prices and the Economy

August 2018

Crude oil plays an important role in the manufacturing and worldwide distribution of numerous products ranging from food to electronics. When rising fuel costs are passed on to consumers, it can drive up inflation and reduce the purchasing power of wages. Gasoline and heating oil (which are derived from crude) are essential expenses for many… Read more

An Affordable Insurance Solution

August 2018

Many people allow their term life insurance policies to expire once their children are grown. This may not be a good idea, especially if you have other bills and your spouse would need continued financial support. But a new term policy can be quite expensive when you are older. Survivorship life insurance may be a… Read more

ETFs on the Rise

August 2018

Mutual funds are still king of the investment world, but investor interest in exchange-traded funds (ETFs) has grown quickly over the last decade. At the end of 2017, more than $3.4 trillion in assets were invested among over 1,800 ETFs. This is equivalent to about 18% of the assets invested in mutual funds. In 2007,… Read more

HOT TOPIC — U.S. Fiscal Issues: Larger Deficits Are Driving Up Debt

August 2018

According to the most recent Congressional Budget Office (CBO) projection, the federal budget deficit for fiscal year 2018 (which ends on September 30) will reach $793 billion, or 3.9% of gross domestic product (GDP). This figure is $230 billion larger than the CBO previously estimated in June 2017, largely because legislation enacted since then reduced… Read more

Two Technology Trends to Help Power Growth

July 2018

Not long ago, a small business may have found it difficult to compete with its larger competitors, especially those with the financial resources to develop or purchase advanced technology. In recent years, however, innovative and relatively inexpensive apps for laptops and mobile devices have leveled the playing field by helping small companies increase productivity with… Read more

Making Sense of Bond Behavior

July 2018

Federal Reserve monetary policies can affect the financial markets, and the prospect of higher inflation and interest rates has become a major concern for bond investors. Even so, many investors rely on bonds to temper the effects of stock market volatility on their portfolios or to generate income in retirement. Here are some strategies that… Read more

Good News, Bad News for Boomer Retirement

July 2018

The baby boom generation was the largest and longest birth bonanza in U.S. history, extending 18 years from 1946 to 1964.1 With that wide spread, it’s natural that older baby boomers might have different feelings and experiences regarding retirement than younger boomers. A recent survey highlights this disparity and raises important questions for those who… Read more

New Tax Law Expands 529 Savings Plans

July 2018

The Tax Cuts and Jobs Act, signed into law at the end of 2017, expanded the use of Section 529 savings plans to be used for K–12 public, private, and religious school tuition. This could be a boon for some families. But regardless of where your children go to elementary or secondary school, 529 plans… Read more

Indexed Annuities: Potential Gain with Some Downside Protection

July 2018

Like all annuities, an indexed annuity is a contract with an insurance company that provides an income stream — either immediately or at some point in the future — in exchange for premium payments. However, indexed annuities also offer potential for gain when the market is riding high, while helping to protect principal during a… Read more

HOT TOPIC — Pain at the Pump: Why Does It Cost More to Fill Your Tank?

July 2018

The Memorial Day weekend is the beginning of the summer driving season, and — not coincidentally — often a high point in the annual ups and downs of gas prices. This year, almost 37 million drivers hit the road and faced the highest fuel costs since 2014. The national average price for a gallon of… Read more

New Tax Breaks for Pass-Through Entities

June 2018

The 2017 tax bill permanently cut corporate income taxes from a top rate of 35% to a flat 21%. However, about 95% of U.S. businesses are pass-through companies that do not pay taxes at corporate rates. Profits flow to the owners, who report the net income on their individual tax returns and pay tax at… Read more

Beyond Medicare: What Are Your Options?

June 2018

Medicare is a valuable benefit, with average spending per beneficiary projected at $13,490 in 2018.1 Even so, Medicare covers only a little more than 60% of total health-care costs for Americans age 65 and older.2 Deductibles, copays, coinsurance, and payments for services not covered by Medicare can all add up to substantial out-of-pocket expenses. And… Read more

Chained CPI and Your Taxes

June 2018

Tax legislation signed at the end of 2017 made dramatic changes to the U.S. tax code for corporations and individuals. One of the most fundamental changes — a new way of measuring inflation — received relatively little attention but could have a significant effect on your taxes over the long term. A number of key… Read more

Rules of the Rollover

June 2018

When you leave a job, you may have up to four options for any funds in your former employer’s retirement plan: (1) leave the funds in the employer’s plan, (2) roll them to a new employer’s plan, (3) roll the assets to an IRA, or (4) take a taxable distribution. Although there may be good… Read more

Is Smart Beta for You?

June 2018

Traditional investment indexes such as the S&P 500 are weighted based on market capitalization, the value of a company’s total outstanding stock. This means the largest companies in the index may have much greater influence than smaller companies on index performance — and on funds that track the index. For example, the 10 largest companies… Read more

HOT TOPIC — Wage Growth: Watching for a Tipping Point

June 2018

In April 2018, average hourly earnings for private-sector U.S. workers grew at a 2.6% annual rate, and “real” wage growth (adjusted for inflation) increased just 0.2% year over year. The unemployment rate fell to 3.9% in the same month, a 17-year low that leaves many people wondering why workers are not seeing corresponding wage increases.1… Read more

A New Look at Old Retirement Savings Guidelines

May 2018

Saving for retirement is complicated, so it’s not surprising that a few fundamental guidelines have become popular over the years to help simplify complex ideas. Here are four that you might have come across in reading, researching, or just talking with friends. Like most guidelines, they offer helpful starting points but need to be examined… Read more

Time to Hire? Consider the Pros and Costs

May 2018

It’s exciting to discover an opportunity to expand the size or scope of your business, and sometimes more workers are needed to make that happen. In the fourth quarter of 2017, 32% of small-business owners said they intend to increase the number of jobs in their companies over the next 12 months.1 How do you… Read more

The Cost of Caregiving

May 2018

About 40 million family caregivers in the United States provide unpaid care to another adult.1 Caregiving for a loved one is a noble endeavor, and considering the high cost of professional long-term care, it may be the only alternative for some families. But “free” caregiving often comes with financial, physical, and emotional costs. If you… Read more

A Steady Strategy

May 2018

One of the most fundamental truths of investing is that you can’t time the market. Even so, it’s natural to wince a little when you buy an investment only to see the price drop, or sell only to see the price rise. One approach that might help alleviate some of your concerns is dollar-cost averaging…. Read more

Where There’s a Will…

May 2018

A 2017 survey found that only 42% of U.S. adults — and only 36% of those with children under age 18 — had a will or a living trust.1 (A living trust can serve some but not all functions of a will; you should have a will even if you have a trust.) The most… Read more

HOT TOPIC — Changing Market: Municipal Bonds After Tax Reform

May 2018

January is typically a strong month for the municipal bond market, but 2018 began with the worst January performance since 1981, driven by rising interest rates and uncertainty over changes in the Tax Cuts and Jobs Act (TCJA).1 The muni market stabilized through late April 2018, but uncertainty remains.2 The tax law changed the playing… Read more

Guard Against Growing Cybersecurity Threats

April 2018

Hackers are continuing to target small businesses at an alarming rate. In one 2017 survey, 53% of executives said their businesses had experienced a cyber attack in the previous year.1 When a data breach occurs, outsiders gain access to the personally identifiable information of customers or other individuals, opening the door for identity theft and… Read more

Income for the Long Run

April 2018

In a recent survey of 3,000 Americans ranging in age from 20 to 70, almost two-thirds of the respondents said they feared running out of money in retirement more than they feared death.1 Fear may not be a helpful response, but this concern is not surprising considering changes in the American retirement landscape. People are… Read more

Monetary Policy Update

April 2018

The Federal Reserve System is the central bank of the United States. It includes a network of 12 Federal Reserve Banks and 24 branches around the nation. The Federal Open Market Committee (FOMC) is responsible for setting monetary policies in accordance with the Fed’s dual mandate to foster maximum employment and price stability. Seven members… Read more

Pick Your Plastic: Debit or Credit?

April 2018

According to a Federal Reserve study, Americans use debit cards more often than credit cards, but the total value and the average value of credit card transactions are higher than those of debit card transactions (see chart). This reflects fundamental differences. A debit card acts like a plastic check and draws directly from your checking… Read more

Dividend Investing: Small Payments Can Boost Returns

April 2018

Owning shares of stock or stock funds might increase the value of your portfolio in one of two fundamental ways: capital appreciation (i.e., price increases) and dividend payments. Of the two, capital appreciation carries the greatest potential for return, but it also carries the greatest potential for loss. And any gains or losses are only… Read more

HOT TOPIC: Trade Tactics: New Metal Tariffs Reflect Policy Shift

April 2018

On March 8, 2018, President Trump imposed a global tariff of 25% on steel imports and 10% on aluminum imports.1 A tariff is a tax on a particular class of imported goods or services that is designed to help protect domestic industries from foreign competition. The metals tariffs have not been well received by U.S…. Read more

Preparing to Withstand the Loss of Key Players

March 2018

For the most part, the odds of dying young are fairly remote. The probability that people between the ages of 30 and 60 will live to age 65 ranges from about 85% to 95%, depending on gender and age.1 But have you considered that the odds of one out of any two people dying before… Read more

Going Public

March 2018

An initial public offering (IPO) is the first public sale of stock by a private company. Companies tend to schedule IPOs when investors are feeling good about their financial prospects and are more inclined to take on the risk associated with a new venture. Thus, IPOs tend to reflect broader economic and market trends. And… Read more

Do You Need an Umbrella?

March 2018

Getting caught in the rain without an umbrella can be an unpleasant experience. Getting caught without appropriate insurance coverage can be more than unpleasant — it could damage your hard-earned financial stability. Having an umbrella policy might make the difference between getting a little “wet” financially and facing a financial downpour. Another Layer of Protection… Read more

Four Financial Numbers You Should Know

March 2018

Daily life is full of numbers, and some matter more than others. Here are four that could help you understand and potentially improve your financial situation. Retirement Plan Contribution Rate What percentage of your salary are you contributing to a retirement plan? Making automatic contributions through an employer-sponsored plan is a convenient way to save… Read more

Phasing Out…or Practice Makes Perfect

March 2018

In late 2014, the federal government launched a formal phased retirement program that allows eligible employees to work part-time in their positions while collecting half of their salary and half of their pension. Typically, at least 20% of their remaining work hours must be spent mentoring younger workers. And their pensions continue to grow based… Read more

HOT TOPIC: Correction Time: The Market Takes a Hit

March 2018

After reaching all-time highs on January 26, 2018, the Dow Jones Industrial Average and the S&P 500 went into a two-week slide that saw both stock indexes drop by more than 10%, a decline that is typically considered a market correction.1 Analysts have been saying for several years that the long, booming bull market was… Read more

Settling an Estate

February 2018

Being named as the executor of a family member’s estate is generally an honor. It means that person has been chosen to handle the financial affairs of the deceased individual and is trusted to help carry out his or her wishes. Settling an estate, however, can be a difficult and time-consuming job that could take… Read more

Disaster Insurance Can Help Your Company Stay Afloat

February 2018

Hurricane Harvey deluged southeast Texas and Louisiana with 27 trillion gallons of water in August 2017. By one estimate, economic losses could total $81 billion to $108 billion, a range that would surpass Hurricane Katrina (2005) and make Harvey the second most expensive storm since 1980.1 Small businesses tend to operate on tight margins, so… Read more

Why Hold Money Market Mutual Funds?

February 2018

After six years of near-zero returns, the yield on money market mutual funds began to edge upward in 2016, with 30-day taxable funds returning 0.13% for the year. This may not sound like much, but it’s a big jump from the 0.01% to 0.03% yield during the 2010 to 2015 period. The uptick continued in… Read more

How Long Should You Keep Financial Records?

February 2018

The beginning of the year is also the start of tax filing season, so it’s a great time to organize your records. As you do so, you may want to discard old records to make room for new ones. (Use a shredder to discard records containing confidential information such as Social Security and financial account… Read more

Options for Inherited IRAs

February 2018

IRS rules for inheriting retirement accounts are complex, and an uninformed decision could result in unexpected taxes and penalties. Your options depend on your relationship to the original owner and the owner’s age at the time of death. Beneficiaries of both traditional and Roth IRAs must take required minimum distributions (RMDs), with one exception for… Read more

HOT TOPIC: Business Tax Breaks: Impact on Earnings and the Economy

February 2018

The Tax Cuts and Jobs Act, a $1.5 trillion tax cut package, was signed into law on December 22, 2017. The following changes are intended to put the tax treatment of U.S. businesses on more equal footing with their global competitors and to spur business investment in the United States that could drive up economic… Read more

No Shortage of Liability Risks

January 2018

Accidents and mistakes happen no matter how well a business is run, and the expenses involved in defending a lawsuit could be devastating, whether the owner is found to be at fault or not. Fortunately, liability insurance can help offset unforeseen legal costs (up to the policy limits) that could consume your business’s profits or… Read more

Illinois Highlights Credit Risk

January 2018

State and local governments sell bonds to help fund ongoing expenses and finance public projects such as roads, sewers, schools, and stadiums. Because government entities have the power to raise taxes and fees as needed to pay the interest, municipal bonds are generally considered to be less risky than corporate bonds, so they typically offer… Read more

Keeping Savings on Track with a Spousal IRA

January 2018

Being a stay-at-home mom or dad, or working part-time to help take care of the children, can make a big contribution to the balance and well-being of a family. Unfortunately, time out of the workforce could put the caregiving spouse at a disadvantage when it comes to retirement savings. A spousal IRA — funded for… Read more

An Introduction to Trusts

January 2018

You may think trusts are only for wealthy people, but that’s not necessarily the case. A properly constructed trust can serve many purposes for families of more modest means. A trust might help avoid the time-consuming and costly probate process, maintain control of a legacy for your heirs, provide for a dependent with special needs,… Read more

International Investing: Opportunities Overseas?

January 2018

In late June 2017, a time when U.S. market indexes were at near-record highs, 65% of investment managers thought the U.S. stock market was overvalued. By contrast, 86% thought European stocks were undervalued, and 88% thought stocks in emerging markets were undervalued.1 At the same time, a majority of investment managers felt that U.S. corporate… Read more

HOT TOPIC: Tax Reform: How Will You Be Affected?

January 2018

On December 22, 2017, President Trump signed a sweeping $1.5 trillion tax-cut package that fundamentally changes the individual and business tax landscape. The centerpiece of the legislation is a permanent reduction of the corporate income tax rate from 35% to 21%. Among other business provisions are a shift to a territorial tax system (in which… Read more

Two Tax-Friendly Retirement Plans for the Self-Employed

December 2017

Like most business owners, you may devote most of your time, energy, and profits to running and growing your company. But keep in mind that you are likely on your own when it comes to saving money for retirement. This is not the only reason it may be worth the effort to divert a sizable… Read more

Better Late Than Never

December 2017

Federal estate and gift taxes affect only relatively large estates. That’s because individuals can exclude a very high amount of assets from federal estate and gift tax liability. The lifetime exclusion amount for individuals is $5.49 million in 2017 and indexed annually for inflation. Assets left to a surviving spouse, which aren’t subject to federal… Read more

How a Pension Could Affect Social Security Benefits

December 2017

If you earned a pension while working in private industry, you probably also paid Social Security taxes on your earnings. If that’s the case, the two retirement income streams are independent of each other, and you can enjoy the full benefits of both. However, if you earned a pension while NOT paying into Social Security… Read more

Market Measures: Beyond the Dow

December 2017

When you hear that the market is up or down — on the car radio or around the water cooler — what does that really mean? More often than not, it reflects movement in the two most well-known stock market indexes, the Dow Jones Industrial Average and the Standard & Poor’s 500, which tend to… Read more

Consider a Roth for Tax-Free Retirement Income

December 2017

Contributing to a traditional IRA or an employer-sponsored retirement plan may offer a current-year tax benefit by reducing taxable income. However, distributions — including any earnings — are taxed as ordinary income. By contrast, contributions to a Roth IRA or a designated Roth account in an employer retirement plan do not reduce current income, but… Read more

HOT TOPIC: Junk Jitters: What’s Behind the Exodus from High-Yield Bonds?

December 2017

For the one-week period ending on November 15, 2017, investors withdrew a net $4.43 billion from U.S. funds holding high-yield bonds (often called junk bonds) — the third largest exodus from such funds on record.1 The high-yield market stabilized over the next two days, but the mass sell-off rang alarm bells for some market analysts…. Read more

Required Minimum Distribution Rules

November 2017

Many people wait as long as possible to withdraw funds from tax-deferred retirement plans such as IRAs and 401(k)s in order to give their investments more time to grow. But the IRS won’t let you postpone the income taxes indefinitely. Once you reach age 70½, you generally must begin taking required minimum distributions (RMDs) from… Read more

Stacking Up Tax Breaks for Business Investments

November 2017

There are times in the lifecycle of a small business when spending money now could really pay off later. New equipment or technology might help streamline operations or improve employee productivity. Maybe a larger facility is needed or there’s an attractive opportunity to expand into a new market. The U.S. tax code generally encourages investments… Read more

FAFSA in the Fall for Lower Stress

November 2017

Filling out the Free Application for Federal Student Aid (FAFSA) used to be a family “stressfest” right after the winter holidays. Parents and students scrambled to estimate their prior-year tax information after the FAFSA became available on January 1, and then had to update the information when they finalized their returns. The situation improved in… Read more

Medicare Open Enrollment

November 2017

Each year between October 15 and December 7, Medicare offers an open enrollment period during which beneficiaries can make changes among several coverage options: Part A hospital insurance and Part B medical insurance, referred to as Original Medicare Part C or Medicare Advantage, which replaces Original Medicare and often includes prescription drug coverage and other… Read more

PPO or HDHP? Making Health Insurance Choices

November 2017

More than half of large U.S. companies offer employees a high-deductible health plan (HDHP).1 When an HDHP is offered, employees often have a choice between the HDHP and a traditional preferred provider organization (PPO) plan. People who buy coverage outside the workplace may face a similar choice. Premiums are generally lower for an HDHP than… Read more

HOT TOPIC: Spanish Showdown, Slow Brexit

November 2017

With separatists in Catalonia pushing for independence, Spain’s democratic government is facing a constitutional crisis. Meanwhile, little progress has been made in negotiations on the terms of the United Kingdom’s pending exit from the European Union. Geopolitical tensions can affect economies and move financial markets. Here’s a closer look at these two political standoffs taking… Read more

Insuring a Home-Based Business

October 2017

Slightly more than half of U.S. businesses are home based, and people who run businesses from their own homes often assume that their homeowners insurance provides sufficient coverage.1 This misconception may expose them to a considerable amount of risk. With standard homeowners insurance, the coverage for business equipment such as computers is often limited to… Read more

Bracing for Higher Rates

October 2017

With inflation ticking higher and the employment situation improving, the Federal Reserve anticipates gradually lifting the benchmark federal funds rate in 2017 and 2018.1  Officials are also discussing plans to shrink the Fed’s huge bond portfolio ($4.5 trillion). Phasing out the bond-buying program could reduce overall demand for government bonds and cause some financial market… Read more

The State of State Pensions

October 2017

It’s no secret that state pension funds face fiscal challenges. A 2017 Pew Research study found that the median funded ratio — the proportion of assets to liabilities — dropped from 75% in fiscal year 2014 to 72% in fiscal year 2015, with a total shortfall of almost $1.1 trillion. The shortfall was expected to… Read more

New Life for Your Old Insurance Policy

October 2017

Life insurance can serve many valuable purposes. However, later in life — when your children have grown, you’ve retired, or you’ve paid off your mortgage — you may no longer think you need to keep your coverage, or perhaps your coverage has become too expensive. You might be tempted to abandon the policy or surrender… Read more

Birthday Opportunities

October 2017

The most common month to be born in the United States is September. September 9 is the most common day, and December 25 is the least common day.1 Of course, every birthday is special, no matter when it falls on the calendar. And some birthdays bring new benefits or responsibilities. See whether you can match… Read more

HOT TOPIC: After the Storms: The Economic Impact of Harvey and Irma

October 2017

As Texas and Florida recover from the devastation of Hurricanes Harvey and Irma, economists and industry experts have begun to assess the economic impact of the storms on a local and national level. It may take years for the effects to become clear, and the loss of life and human suffering are beyond calculation. But… Read more

Keeping Up with Quarterly Taxes

September 2017

As of 2015, there were roughly 15 million self-employed people in the United States. About 9.5 million had not incorporated their businesses, while the remaining 5.5 million had incorporated.1 Either way, most of these entrepreneurs and freelancers don’t have an employer that withholds taxes for them. Sole proprietors, S corporation shareholders, and other self-employed individuals… Read more

Estate Planning: Life Insurance Options for Leaving a Legacy

September 2017

By definition, term life insurance policies come to an end. But permanent policies such as whole life insurance typically provide a lifetime death benefit, regardless of your health, as long as you pay the premiums to keep the policy in force. Thus, a whole life or survivorship life policy could play an important role in… Read more

New Math for Social Security

September 2017

In 2017, Americans born in 1955 become eligible to claim Social Security benefits at age 62. Claiming benefits before reaching full retirement age results in a permanently reduced benefit, so it requires careful consideration. But for those born in 1955 or later, the math for claiming at any age is different than it was for… Read more

Insuring Your College Student

September 2017

Almost 18 million undergraduates are expected to enroll in U.S. colleges and universities in the fall of 2017.1 Sending a student off to college can be hectic — and insurance might not be at the top of the to-do list. But every college student has insurance needs that should be addressed. Health Insurance Health policies… Read more

Buying and Selling: Trading Basics

September 2017

The New York Stock Exchange Group averaged more than 7.4 million trades per day in 2016, with an average of almost 1.8 billion shares changing hands.1 Many of these trades are more complex than most investors need to consider, but it may be helpful to understand some basic terms and types of trades. Bid and… Read more

HOT TOPIC: Brick-and-Mortar: The Precarious Fate of Traditional Retail

September 2017

The rise of e-commerce has been a disruptive force in the retail sector. In fact, 5,300 store closings were announced in the first half of 2017 — about three times as many as during the same period in 2016. At this pace, the 2017 total should easily exceed the 6,163 store closings in 2008, the… Read more

Social Media Marketing Strategies

August 2017

According to a 2016 survey, about three-fourths of small businesses have used social media for marketing purposes or were planning to start doing so in the coming year.1 Established networks such as Facebook, Twitter, Instagram, LinkedIn, YouTube, Pinterest, and Yelp are already well known, although Facebook is the most widely used. However, newer platforms (such… Read more

Demographic Dilemma

August 2017

It’s no secret that the demographic profile of the United States is growing older at a rapid pace. While the U.S. population is projected to grow just 8% between 2015 and 2025, the number of older Americans ages 70 to 84 will skyrocket 50%.1 With roughly 75 million members, baby boomers (born between 1946 and… Read more

ETFs or Mutual Funds: What’s the Difference?

August 2017

Mutual funds are still king of the investment world, but exchange-traded funds (ETFs) have become increasingly popular over the last few years. At the end of 2016, more than $2.5 trillion in assets were invested among over 1,700 ETFs. This is equivalent to about 15% of the assets invested in mutual funds. In 2006, ETF… Read more

Deficit Trading: The Import/Export Imbalance

August 2017

The U.S. trade deficit is a consistent and often controversial topic in Washington and the business community. As the new administration presents policies that might affect trade relationships, this may be a good time to consider some of the facts regarding U.S. imports and exports. Goods and Services Total international trade in goods and services… Read more

Do You Have Enough Life Insurance?

August 2017

A 2016 survey found that two out of five U.S. households have no life insurance protection. And many households who do have insurance think they need a higher level of coverage.1 The most common reason survey respondents gave for not purchasing life insurance was that it was too expensive, yet consumers tend to overestimate the… Read more

HOT TOPIC: Low Volatility: Calm Before the Storm?

August 2017

The U.S. stock market has been unusually calm in 2017, while gradually trending upward. Through July 28, 2017, the S&P 500 gained or lost 1% or more on just four trading days. By contrast, over the same period in 2016, there were 39 such days, with gains or losses of 2% or more on seven… Read more

Offering Life Insurance as an Employee Benefit

July 2017

Employee turnover has become a problem for many small businesses, primarily because it is often difficult and expensive to replace experienced workers who decide to leave. In fact, 57% of companies report that employee retention is now a top concern.1 Making life insurance part of your employee benefit program could be a cost-effective way to… Read more

Anticipating Inflation?

July 2017

For the 12 months ending in December 2016, inflation (measured by the Consumer Price Index, or CPI) increased 2.1%, the fastest pace since June 2014. Inflation stalled in 2015, rising just 0.7%. Headline CPI is a broad and closely watched measure of price changes across the U.S. economy.1 The inflation rate is still well below… Read more

Interested in Interest Rates?

July 2017

After falling to historic lows during the recession, interest rates have been rising. Try this short quiz to test your interest rate knowledge. 1. Which of the following interest rates is directly controlled by the Federal Reserve’s Federal Open Market Committee? A) Prime rate B) Federal funds rate C) Mortgage rates D) All of the… Read more

Surprise! It’s Retirement Time

July 2017

“The best-laid plans of mice and men often go awry.” This famous saying, adapted from 18th-century Scottish poet Robert Burns, could apply to many aspects of life, including retirement.1 In 2016, 46% of retirees said they retired earlier than they had planned. This percentage has consistently been high over the past 25 years, ranging from… Read more

When a Saver Marries a Spender, Every Penny Counts

July 2017

If you’re a penny pincher but your spouse is loose with the family purse strings, money arguments may frequently erupt. Thinking of yourselves as two sides of the same coin might help you appreciate your financial differences. Heads or Tails, Saver or Spender If you’re a saver, you like having money in the bank, investing… Read more

HOT TOPIC: Volatility Puts Tech Sector in the Spotlight

July 2017

Technology stocks experienced a sharp burst of volatility in June 2017. Stocks in the S&P 500 Information Technology sector fell 3.7% during the week ending June 16, even though the performance of the broader S&P 500 index was relatively flat.1 On June 19, S&P tech stocks rebounded 1.7% in a single trading session.2 What caused… Read more

The Pros and Cons of Financing Options

June 2017

A 2015 survey found that nearly half of small employers (with fewer than 500 employees) applied for credit in the previous 12 months. Even though the credit market has become friendlier overall, small companies still have a more difficult time getting approved for bank loans than larger businesses.1 Here are some common types of financing… Read more

Indexed Annuities

June 2017

Like all annuities, an indexed annuity is a contract with an insurance company that provides an income stream — either immediately or at some point in the future — in exchange for premium payments. However, indexed annuities are unique in offering a minimum rate of return (typically 1% to 3%) that helps to preserve principal,… Read more

Student Loans Meet Retirement

June 2017

The burden of student loans is typically associated with recent college graduates or young professionals, but the number of consumers age 60 and older with student loan debt quadrupled from 2005 to 2015 (see chart). During this period, the average amount owed by those 60 and older rose from $12,100 to $23,500.1 Repaying college debt… Read more

Do You Need Disability Insurance

June 2017

More than seven out of 10 working Americans believe that most people need disability insurance, yet only one out of three actually has disability insurance protection.1 This disconnect suggests the importance of assessing your own situation and determining whether you have appropriate financial backup in the event that you cannot work due to a disability… Read more

Investing in Your Values

June 2017

Two recent surveys found that a large majority of young, high-net-worth investors want to make a positive social impact with their investments.1 This may bode well for the future of social impact investing, which has already become a large part of the investment world — and you don’t have to be wealthy to align your… Read more

HOT TOPIC: Full Employment: What Happens Now?

June 2017

In April 2017, the nation’s unemployment rate dropped to 4.4%, matching a 10-year low last seen in May 2007. To put this in perspective, the last time the unemployment rate fell below 4.4% was in May 2001, the end of the dot-com boom, when the U.S. economy grew by more than 4% annually for four… Read more

Consider Taxation When Setting Compensation

May 2017

According to an annual survey, only about half of small-business owners paid themselves a salary in 2016. Of those who did, the average reported salary was about $76,000.1 Of course, the size of a business owner’s paycheck largely depends on the type of business and how well it’s doing. If the company is new or… Read more

Advance Medical and Legal Directives

May 2017

It’s not pleasant to think about the possibility of being unable to make your own medical or financial decisions. But taking the time to express your wishes in advance could help ensure that your health-care and financial affairs are handled as you wish and that your loved ones feel more confident about any decisions made… Read more

Use Sense with Student Loans

May 2017

According to a recent survey, 57% of millennials regret how much they borrowed for college.1 This doesn’t mean they regretted going to college or borrowing at all, but rather that it may be wise to carefully consider the amount of any loans a student might need for higher education. The numbers can be daunting. In… Read more

The State of Social Security

May 2017

Sixty-two percent of retirees report that Social Security is a major source of retirement income. By contrast, only 35% of workers expect the program to be a major source of income for them in retirement.1 Social Security was never intended to be a retiree’s sole source of retirement income, so lower expectations are realistic and… Read more

Mutual Benefits: Funds to Pursue Your Goals

May 2017

About 94 million Americans — 43.6% of U.S. households — owned mutual funds in 2016.1 What’s the appeal? It may be that mutual funds offer a convenient way to participate in a wide range of market activity that would be difficult for most investors to achieve by purchasing individual securities. With more than 8,000 funds… Read more

HOT TOPIC: Robos Have Arrived, But Life Often Calls for a Human Touch

May 2017

Numerous robo advisors have entered the world of investment management, but many investors may not fully understand exactly what robos do, or how they do it. A robo advisor is a digital platform that uses advanced algorithms (based on various financial models and assumptions) to select and manage investments. To keep costs relatively low, portfolios… Read more

Cash Balance Plans Can Help Supercharge Retirement Savings

April 2017

Cash balance plans are technically defined benefit plans that share some characteristics with defined contribution plans. IRS regulations finalized in 2010 and 2014 clarified some legal issues and made these hybrid plans more flexible and appealing to employers. Nationwide, there was a 189% increase in new cash balance plans between 2008 and 2014.1 Cash balance… Read more

Real Estate Markets on the Mend

April 2017

With a stable housing market, low interest rates, and a more positive employment picture, more Americans may be in a position to buy or sell properties in 2017. Moreover, the U.S. tax code favors real estate ownership, allowing for tax savings that might help families enhance their everyday lives and build wealth over the long… Read more

Factor-Based Investing

April 2017

Traditional indexes such as the S&P 500 are weighted based on market capitalization, the value of a company’s total outstanding stock. This means the largest companies in the index may have a much greater influence on index performance than smaller companies. For example, the 10 largest companies in the S&P 500 account for more than… Read more

Is It Wise to Trade Your Pension for a Lump Sum?

April 2017

Most employers have already replaced traditional pensions, which promise lifetime income payments in retirement, with defined contribution plans such as 401(k)s. Even so, 35% of workers say they (and/or their spouse) have pension benefits with a current or former employer. Pension payments are a major or minor source of steady income for about 47% of… Read more

Are UITs for You?

April 2017

When you invest in mutual funds, you are actually buying shares in an investment company. A unit investment trust (UIT) is also an investment company, but it is structured differently than a mutual fund company and offers unique features that may appeal to some investors. A Fixed, Time-Limited Portfolio A UIT purchases a portfolio of… Read more

HOT TOPIC: Debt Ceiling: A Stop Sign for Federal Borrowing

April 2017

The Bipartisan Budget Act of 2015 suspended the federal government’s statutory debt limit — commonly called the debt ceiling — through March 15, 2017. That deadline came and went with little fanfare as Congress focused on other matters, but the debt ceiling cannot be ignored for long, and it’s likely to become a focal point… Read more

LLCs: Hybrid Structure May Offer Best of Both Worlds

March 2017

A limited liability company (LLC) provides many of the legal advantages of a corporation but can choose to be taxed as a partnership or a sole proprietorship. An LLC establishes a separate entity to help shield the business owners’ personal assets from lawsuits brought against the firm by its customers or employees. In theory, the… Read more

Tax Tips on Capital Gains

March 2017

Tax season can be stressful, but it also offers an opportunity to look at the tax implications of your investment strategies and plan for the year ahead. You may want to take time to consider the tax treatment of capital gains. When you sell a capital asset such as an investment or property, the capital… Read more

Chasing Performance vs. Diversification

March 2017

In 2013, the S&P 500 index, generally considered representative of the U.S. stock market as a whole, produced total returns of 32.39% — the highest return for the index since 1997. But the S&P 600, which represents the stocks of smaller companies, returned 41.31%.1–2 Consider a hypothetical investor named Jim, who looked at those returns… Read more

What Is the Roth IRA Five-Year Rule?

March 2017

Information on Roth IRAs often refers to the “five-year rule,” but in fact there are two separate five-year holding requirements that may affect the tax treatment of Roth distributions. The first determines whether a withdrawal of earnings will be tax-free, and the second determines whether a withdrawal of converted principal will be penalty-free. Withdrawal of… Read more

Tax Breaks for College Costs

March 2017

College is expensive, and the costs continue to rise. For the 2016–17 academic year, the average cost of in-state tuition, fees, and room and board at a public university is $20,090. At a private school, the average cost is more than double at $45,370.1 Fortunately, the federal government offers tax benefits that can help ease… Read more

HOT TOPIC: Automating the American Workforce

March 2017

A widely cited University of Oxford study concluded that 47% of U.S. jobs could be automated (i.e., performed by machines) within a decade or two. It may seem unthinkable that about 80 million jobs could be at risk, but this startling prediction isn’t just science fiction.1 As artificial intelligence is combined with robots, sensors, and… Read more

Six Steps to Launching a New Venture

February 2017

According to an annual report that tracks startup activity and trends over time, about 550,000 Americans launched new businesses each month in 2016.1 Better yet, today’s entrepreneurs are more likely to start a business because they spot an opportunity rather than do so out of necessity. Do you have an idea that you would like… Read more

Taxing Social Security Benefits

February 2017

A recent study by the Social Security Administration projected that an average of 56% of households receiving Social Security benefits will owe federal income tax on some or all of their benefits during the period from 2015 to 2050.1 This typically applies to taxpayers who have other substantial income, such as from a pension, investments,… Read more

A Roadmap for Your Family

February 2017

If you are among the 44% of Americans who have a legal will, you’ve taken an important step to help your family know your wishes and make appropriate decisions.1 But there’s another step you might take as well, and it’s easier than drafting a will. A letter of instruction has no formal legal status, and… Read more

Managing Risk with a Strong Foundation

February 2017

Asset allocation and diversification are so fundamental that you might consider them the foundation for constructing your portfolio. And just as the foundation of a building may seem to disappear under the finished building, it’s easy to lose sight of portfolio structure as you track the performance of specific securities or the dollar value of… Read more

How Much Should You Save for Retirement?

February 2017

Saving for retirement can be daunting, but as with any long-term project, it may help to have a plan. Yet less than half of current workers have tried to estimate how much savings they will need to live comfortably in retirement. Those who do try to estimate their needs tend to set higher savings goals… Read more

HOT TOPIC: Digital Deception: Current Trends in Cybercrime

February 2017

In December 2016, Yahoo announced that data associated with more than 1 billion user accounts had been stolen in 2013. The company believes this was a separate incident from a previously announced theft of data from 500,000 user accounts in 2014.1 Although the sheer number of compromised accounts is staggering, the Yahoo breaches are just… Read more

Making Sense of Beneficiary Designations

January 2017

A will is a good starting point to help ensure that your assets are passed on to your heirs according to your wishes. However, it’s important to specify beneficiaries for financial accounts and insurance policies on the appropriate forms, because they typically supersede instructions in a will. In any document distributing assets to your heirs,… Read more

Improving Market Allows More Owners to Cash Out

January 2017

The small-business market has gained momentum over the last couple of years. In fact, the number of small businesses that changed hands during the first half of 2016 surpassed the same period in 2015 and the previous record set in the first half of 2014.1 This is good news for business owners who need a… Read more

Following the Federal Reserve

January 2017

The Federal Reserve and the Federal Open Market Committee (FOMC) operate under a dual mandate to conduct monetary policies that foster maximum employment and price stability. Adjusting the federal funds rate is one of the tools used by the central bank to influence short-term interest rates, economic growth, and inflation. Theoretically, lowering interest rates fuels… Read more

In or Out of the Nest? Helping Adult Children

January 2017

Almost a third of young adults ages 18 to 34 were living with their parents in 2014, up from one out of five in 1960. And for the first time on record, dating back to 1880, the percentage living with a parent was higher than the percentage living with a romantic partner. This may have… Read more

The Cost of Caregiving for a Loved One

January 2017

A 2015 study found that almost 40 million Americans — about one out of six adults — had provided unpaid care to another adult during the previous 12 months. About 60% of caregivers were women, and the average age was 49. It’s probably not surprising that many caregivers were older, but one out of four… Read more

HOT TOPIC: Rising Rates: The Fed Takes Next Step Toward Normal

January 2017

On December 14, the Federal Open Market Committee (FOMC) voted unanimously to raise the federal funds rate by 0.25% — to a range of 0.50% to 0.75%. This was the second increase since December 2008, when the benchmark rate was lowered to a near-zero level (0% to 0.25%) during the Great Recession.1 The rate hike… Read more

New Overtime Rules Could Be Costly for Small Businesses

December 2016

When the U.S. Department of Labor (DOL) finalized its changes to the Fair Labor Standards Act (FLSA) overtime rules in May 2016, the minimum salary for exempt workers more than doubled — from $23,660 to $47,476. It’s estimated that 4.2 million more U.S. workers could become eligible for overtime pay when the rules take effect… Read more

Could the AMT Boost Your Taxes?

December 2016

After years of Congress enacting temporary “patches,” the American Taxpayer Relief Act of 2012 permanently indexed the exemption level of the alternative minimum tax (AMT) to inflation. Although this change limited future expansion of the tax, the AMT is still expected to affect about 4.3 million taxpayers in 2016 (see chart). The AMT is a… Read more

Why You Need a Will…Even If You’re Not a Prince

December 2016

The unexpected death of famed musician Prince in April 2016 put the importance of a will in the national spotlight. Prince, who apparently died intestate — without a legal will — left an estate worth an estimated $150 million to $300 million. The disposition of those assets will now be up to the state of… Read more

Finding Lost Money

December 2016

The idea of finding buried treasure or receiving an inheritance from a long-lost relative is a staple of fantasies and adventure stories. Though finding treasure is unlikely, discovering “lost” money or other assets from a relative, a business, or a government agency may not be a fantasy after all. The Unclaimed Property Professionals Organization estimates… Read more

Consider Munis for Tax-Free Income

December 2016

The city of Detroit’s 2013 bankruptcy and the continuing debt crisis in Puerto Rico have cast municipal bonds in a negative light for some investors. In general, however, “munis” are considered to be a relatively safe investment and more stable than corporate bonds. A 2015 study found that only 0.14% of municipal bonds default within… Read more

HOT TOPIC: Three Financial Issues to Watch Under the New Administration

December 2016

On January 20, 2017, Donald J. Trump will be sworn in as the 45th president of the United States. Between now and then, attention should largely focus on efforts to facilitate an orderly transfer of power, but there will be no shortage of conjecture over what may happen after the inauguration. While changes are likely,… Read more

Bracing for Potential Cybersecurity Threats

November 2016

A recent report suggests that hackers are targeting small businesses at an alarming rate. In fact, cyber attacks on businesses with fewer than 250 employees accounted for 43% of all reported attacks in 2015, up from 34% in 2014.1 By one estimate, cybercrime costs the global economy as much as $575 billion each year.2 Given… Read more

Medicare Means Testing

November 2016

As more baby boomers turn 65, Medicare enrollment is projected to swell from 57 million in 2016 to around 64 million in 2020 and 81 million by 2030.1 In 2015, legislation known as the “Doc Fix” changed the formula used to reimburse physicians for Medicare services, offering a long-term solution for one of Medicare’s most… Read more

Step Up to Help Reduce Taxes on Inherited Assets

November 2016

If you have assets that have appreciated in value, such as stocks or real property, you could be subject to substantial capital gains taxes when you sell the assets (see chart below). However, if you leave these assets to your heirs, any gain accrued before your death would not be taxed because of the step-up… Read more

Balancing Medicare and Work-Based Insurance

November 2016

Almost 20% of Americans 65 and older are still working — the highest level since before Medicare was established in 1965. This amounts to almost 9 million workers who are eligible for Medicare, and the number is expected to grow as about 8,000 baby boomers turn 65 every day until 2030.1–2 Some employers may require… Read more

Feeling Confident: Steps to Saving More

November 2016

In 2016, 21% of U.S. workers said they were very confident they would have enough money for a comfortable retirement. This was about the same percentage as in 2015, but both years showed a big increase in confidence from the 13% level in 2013, when many Americans were still struggling to recover from the Great… Read more

HOT TOPIC: Are Soaring Health-Care Costs Hurting the U.S. Economy?

November 2016

About 8% of U.S. household spending went toward health care in 2015, up from 5.8% in 2007. Even though the growth of nationwide health-care spending has slowed, the cost burden is falling more heavily on consumers.1 More than 118 million people qualify for coverage through government programs such as Medicare, which serves individuals age 65… Read more

Comparing Your Retirement Plan Options

October 2016

Retirement plan contributions made for yourself and your workers are generally tax deductible as a business expense. Offering one of these retirement plans could help you shelter more of your income from taxes and build wealth outside of your business. It might also be an effective way to reward and help retain valuable employees. 401(k)… Read more

Looking for Income? Consider Closed-End Funds

October 2016

Most mutual funds are open ended, which means the investment company can issue and redeem fund shares to meet investor demand. By contrast, closed-end funds issue a fixed number of shares in an initial public offering (IPO), and investors who want to purchase shares after the IPO must do so on a secondary market, such… Read more

Know Your Credit Score

October 2016

Credit scores were a well-kept secret for many years. That has changed as a result of recent initiatives by the Consumer Financial Protection Bureau and Fair Isaac Corporation (FICO), which provides the most commonly used credit scores based on its proprietary software. By April 2016, more than 150 million consumer credit-card and loan accounts included… Read more

Universal Life for Flexibility

October 2016

Universal life insurance accounted for 38% of all new life insurance premiums in 2015.1 What’s the appeal of this type of coverage? In a word: flexibility. If you have a need for life insurance, you might consider the choices offered by universal life (UL) and the related product, variable universal life (VUL). Protection and Savings… Read more

Changing Jobs? Careful with Your 401(k)

October 2016

U.S. workers change jobs every 5½ years, on average.1 These changes often include a very important decision regarding the assets in their former employer’s 401(k) or other defined-contribution plan. Unfortunately, about 45% of people cash out their balances in workplace plans when changing jobs, and the percentage rises to 55% for those with balances of… Read more

HOT TOPIC: Election 2016: The Candidates’ Tax Proposals

October 2016

It’s no surprise that the major candidates have strong disagreements on the overall direction of tax policy; it may be more surprising that they agree on a number of specific concerns. In general, the Clinton campaign characterizes its tax plans as an effort to require high-income taxpayers and large corporations to contribute a greater share… Read more

Enticing the Crowd: New Rules for Raising Capital Online

September 2016

Equity crowdfunding platforms raised approximately $1.2 billion for U.S. start-ups in 2015, mainly from accredited investors — generally wealthy and sophisticated investors who meet certain criteria established by the Securities and Exchange Commission (SEC). That figure is expected to grow by 75% to 100% in 2016, with new SEC rules known as Regulation Crowdfunding that… Read more

Reclassifying Real Estate

September 2016

S&P Dow Jones Indices and MSCI are moving publicly traded real estate investment trusts (REITs) and other listed real estate companies from the Financials sector to a distinct Real Estate sector. In September 2016, there will be 11 headline sectors instead of 10; this is the first time a new sector has been added to… Read more

Focused on College Funding

September 2016

In 2015, nearly 75% of college freshmen said cost was an important factor in selecting a school, while more than 20% said they turned down their first choice because they could not afford to attend. 1 If one of your financial priorities is helping your family cover escalating college costs, you may want to take… Read more

New Law Requires Notification of Medicare Observation Status

September 2016

A new law effective August 6, 2016, requires hospitals to notify Medicare patients who are treated for more than 24 hours under observation status, which is considered outpatient care even if it includes one or more overnight stays in a hospital room. The distinction between outpatient and inpatient status can make a big difference in… Read more

How Much Cash Should You Keep?

September 2016

Keeping cash under a mattress may be an outdated idea, but it’s important to include cash or cash alternatives in your financial strategy. The amount of cash you need — and where to keep it — depends on your situation. To some extent, it’s a balancing act between short-term needs and long-term goals. Interest rates… Read more

HOT TOPIC: Social Security and Medicare Update: The 2016 Trustees Reports

September 2016

The fiscal challenges facing Social Security and Medicare have been well publicized, but many Americans may not be aware of the facts behind the headlines. Each year, the Trustees of the Social Security and Medicare trust funds release detailed reports to Congress on the current financial condition and projected financial outlook of these programs. Here… Read more

Who Needs a Succession Plan? Maybe You

August 2016

It’s estimated that about 10 million baby boomers plan to sell or close their businesses during the next decade.1 And even though 78% of small-business owners are counting on the proceeds of a sale to meet 60% to 100% of their retirement needs, only 30% of owners have a formal succession plan.2 That’s a pretty… Read more

As Manufacturing Stumbles…

August 2016

In February 2016, the Institute for Supply Management (ISM) manufacturing index improved to 49.5, a 1.3 percentage point increase from the 48.2 reading in January. Even so, a reading below 50 generally means that manufacturing activity is contracting, and February marked the fifth straight month in contraction territory — a trend that hasn’t been seen… Read more

Have You Used Mobile Payments?

August 2016

In 2015, 52% of U.S. consumers said they were “extremely aware” of the option to use mobile payments, an increase of 9% over 2014.1 Yet only 13% of adults with smartphones had a digital wallet on their phones, and most of them had seldom or never used it.2 Not surprisingly, mobile-payment technology is being adopted… Read more

Preparing to Retire in a Down Market

August 2016

In an ideal world, your retirement would be timed perfectly. You would be ready to leave the workforce, your debt would be paid off, and your nest egg would be large enough to provide a comfortable retirement — with some left over to leave a legacy for your heirs. Unfortunately, this is not a perfect… Read more

Stock Diversification: Large, Mid, and Small

August 2016

The S&P 500 index returned more than 32% in 2013, a great year for the stock market. That was impressive, but the S&P 600 index — which includes much smaller companies than those in the S&P 500 — performed even better, returning more than 41%. In 2015, as the market struggled, small-company stocks lost almost… Read more

HOT TOPIC: Equity Crowdfunding: Why Investors Should Tread Carefully

August 2016

Equity crowdfunding is a nontraditional way to raise the money needed to launch or expand a small business. Instead of seeking a large cash infusion from an “angel investor” or venture capital firm, shares are offered online to a larger group of people, each of whom takes a smaller stake in the company. Before May… Read more

Putting Your Kids on the Payroll

July 2016

If you could use a little help for your business this summer, there are some good reasons to recruit your own offspring. First and foremost, it’s a good opportunity for teens and college students to earn money for their own expenses while gaining valuable work experience for the future. Involving children in the operation of… Read more

The Second Time Around

July 2016

Roughly four in 10 new marriages in 2013 included at least one partner who had been married before, and altogether about 42 million Americans have been married more than once.1 A second marriage can create numerous estate planning challenges, especially when you wish to provide for both your current spouse and your children from a… Read more

Home-Sweet-Home Equity

July 2016

Buying a home is a long-term commitment, so it’s not surprising that older Americans are much more likely than younger Americans to own their homes “free and clear.” On average, only about 36% of owner-occupied housing units in the United States do not have a mortgage. For units occupied by homeowners who are 65 and… Read more

Teaching Children About Finance

July 2016

More than nine out of ten parents believe it is important for students to learn about personal finance in school, and three out of four think there should be a finance requirement to graduate from high school. Even so, 72% express at least some reluctance when it comes to talking about finances at home.1 Certainly,… Read more

Market Slices: Investing in Sector Funds

July 2016

The U.S. economy is complex, and business performance can vary widely among different industries. Some industries tend to lead when the economy is growing rapidly, others shine during periods of slower growth, and still others outperform during periods of recession or recovery. Regardless of broader cycles, industries may respond differently to certain trends or specific… Read more

HOT TOPIC: The British Are Leaving! Why the Brexit Matters to Investors

July 2016

On June 23, citizens of the United Kingdom (England, Scotland, Wales, and Northern Ireland) voted to leave the European Union by a margin of 52% to 48%.1 Though pre-election polls suggested that public opinion was evenly divided, when the election results became clear, financial markets around the world reacted swiftly to concerns about potential economic… Read more

Men, Women, and Investment Partnership

June 2016

Many studies have shown that men and women tend to have different approaches to investing. In general, men are more aggressive in their investment strategies, whereas women tend to be more conservative.1 The difference is probably not surprising, but the practical results of these different approaches may not be what you expect. Research dating back… Read more

Life Policies Plus Long-Term-Care Benefits

June 2016

It may be hard to fathom, but the median annual cost of a private room in a nursing home has surpassed $90,000, and the median cost of a home health aide is already more than $45,000 a year.1 If you expect to pay for long-term care out of pocket, it might be wise to consider… Read more

Using Data to Drive Critical Decisions

June 2016

Many large corporations use high-cost computer power and technological expertise to capture and analyze data as they look for ways to improve business efficiency and customer interaction. Recently, a new crop of user-friendly technology tools has made it possible for small businesses with limited budgets to do the same. Owners may appreciate applications that take… Read more

Investors Are Human, Too

June 2016

In 1981, the Nobel Prize–winning economist Robert Shiller published a groundbreaking study that contradicted a prevailing theory that markets are always efficient. If they were, stock prices would generally mirror the growth in earnings and dividends. Shiller’s research showed that stock prices fluctuate more often than changes in companies’ intrinsic valuations (such as dividend yield)… Read more

Working for Yourself — and Your Future

June 2016

Self-employment can be rewarding personally and financially, but it comes with some tough challenges: long hours, an uncertain income, and a lack of structured benefits such as health insurance and retirement plans. In a recent survey, 61% of self-employed individuals said they were anxious about saving enough for retirement, 59% were not making regular contributions… Read more

Is 70 the New 65? Why Americans Are Working Longer

June 2016

Age 65 has long been considered the traditional retirement age, and not coincidentally is also the age of Medicare eligibility. According to recent statistics, the percentage of Americans 65 and older who are still in the labor force has risen to nearly 20%, the highest level since before Medicare was established in 1965.1 More than… Read more

Don’t Miss These Key Tax Deductions

May 2016

One in three small businesses devote more than 80 hours each year — two full work weeks — to handling federal taxes.1 Because of the complexity of the tax code, it typically benefits small-business owners to take full advantage of every legal tax break they can find. The following deductible business costs could help reduce… Read more

Evaluating a Pension Plan Offer

May 2016

A popular corporate strategy known as “de-risking” involves buying out employee pensions. By shrinking the size of a pension plan, the company can reduce the associated risks and costs and limit the impact of future retirement obligations on current financial performance. About half of workers with pensions can now choose to take their money in… Read more

TIPS for Inflation Protection

May 2016

Inflation was very low in 2014 and 2015, with annual rates of just 0.8% and 0.2%, respectively, as measured by changes in the consumer price index (CPI).1 The Federal Reserve’s decision to begin raising interest rates reflects a belief that inflation will return to its more normal “run rate” of about 2% annually.2 That rate… Read more

Expressing Your Wishes in Advance

May 2016

It’s not pleasant to think about the possibility of being unable to make your own medical or financial decisions. That may explain why many people don’t take the time to draw up appropriate documents expressing their wishes. Regardless of your age or health, it’s better to prepare now — and hope you never need advance… Read more

Managing Your 401(k)

May 2016

More than 73 million Americans actively participate in employer-sponsored defined-contribution plans such as 401(k), 403(b), and 457 plans.1 If you are among this group, you’ve taken a big step on the road to retirement, but as with all investing, it’s important to understand your plan and what it can do for you. Here are a… Read more

HOT TOPIC: The World Experiments with Negative Interest Rates

May 2016

As of late April 2016, six central banks in Europe and Asia have adopted negative interest rates in an effort to stimulate their national economies. The experiment began in Denmark in 2012, but the big step came in June 2014 when the European Central Bank (ECB) dropped its benchmark rate below zero. Sweden and Switzerland… Read more

Don’t Let the Weather Put Your Company Underwater

April 2016

Many climatologists expected an unusual warming of the Pacific Ocean (known as an El Niño) to have a dramatic effect on weather patterns in early 2016.1 These warnings may have prompted residents of southwestern states to prepare for a wetter winter. But history reminds us that most communities are vulnerable to some kind of large-scale… Read more

Rates on the Rise

April 2016

A long period of low yields has been challenging for many fixed-income investors, but owning bond investments in a rising interest-rate environment could become even trickier. When interest rates go up, the prices of existing bonds typically fall. Consequently, the Federal Reserve’s rate-setting decisions could affect the entire fixed-income market, from U.S. Treasuries (guaranteed by… Read more

Community Property Laws: Yours, Mine, and Ours

April 2016

The question of asset ownership can be contentious in the event of a divorce, but even in the happiest marriage it may be helpful to understand the laws regarding ownership of property obtained before and during the marriage. Currently, nine states have community property laws: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and… Read more

Protecting Your Assets Under an Umbrella

April 2016

Getting caught in the rain without an umbrella can be an unpleasant experience. Getting caught without appropriate insurance coverage can be more than unpleasant — it could damage your hard-earned financial stability. Having an umbrella policy might make the difference between getting a little “wet” financially and facing a financial downpour. Another Layer of Protection… Read more

Does Your Risk Tolerance Follow the Market?

April 2016

According to an investment industry survey, in mid-2008 — when the financial crisis was still developing — 23% of U.S. households were willing to accept substantial or above-average investment risk in order to achieve substantial or above-average returns. The following year, after the stock market hit bottom, the percentage of risk-taking households fell to 19%… Read more

HOT TOPIC: Full Employment: Are We There Yet?

April 2016

In the fall of 2015, as the unemployment rate neared 5%, economists began to ask whether the U.S. economy was approaching “full employment,” a possibility that was hard to imagine when unemployment peaked at 10% in October 2009.1 In January and February 2016, the rate dropped to 4.9%, crossing a symbolic threshold and reaching the… Read more

The Tax Treatment of Travel Expenses

March 2016

If you schedule a business trip to a beautiful location that has some fun things to do and see, it often makes sense to pencil in some vacation days. For business owners and self-employed individuals, transportation costs to and from a domestic destination are 100% deductible, but only if the primary purpose of the trip… Read more

The Rise of Socially Conscious Investing Strategies

March 2016

The acronym SRI has come to represent various investment strategies that favor companies with business practices generally viewed as socially responsible, ethical, and/or sustainable. These buzzwords are often interchangeable, but investor interest in SRIs overall is gaining momentum. In fact, U.S. assets invested according to SRI principles grew to $6.57 trillion at the beginning of… Read more

The Spousal IRA Opportunity

March 2016

Tax-friendly IRAs were devised as an incentive for workers to set aside money for retirement, so the maximum an individual can contribute annually is limited to the amount of his or her earned income. This limitation once left stay-at-home parents and other nonworking spouses without a way to keep their own retirement savings on track…. Read more

A Gift That Gives Back

March 2016

If you are interested in donating assets to a favorite charity or other nonprofit organization but would like to receive income from the assets during your retirement years, you might consider funding a gift annuity. This charitable vehicle is popular for giving to colleges and universities, and is also offered by other organizations. A gift… Read more

Predicting Economic Performance

March 2016

Now that 2016 is well under way, you have probably come across a number of economic predictions for the year. Economists use a wide variety of data to make these predictions, which often vary widely depending on how a particular economist views the available data. Serious economic forecasting is best left to the experts, but… Read more

HOT TOPIC: Is Cheap Oil Causing Trouble for the U.S. Economy?

March 2016

Oil prices began a downward slide in June 2014. Brent crude, the benchmark for global oil prices, plunged roughly 70% — from highs above $100 per barrel to less than $33 in mid-February 2016.1 Crude oil plays a part in the manufacturing and worldwide distribution of everything from food to electronics. The earnings of oil… Read more

The Status of Women-Owned Businesses

February 2016

According to the U.S. Census Bureau’s Survey of Business Owners, the total number of U.S. businesses grew just 2% between 2007 and 2012, while the number of women-owned businesses grew about 27% to 9.9 million. At last count, women-owned businesses employed almost 9 million people and added more than $1.6 trillion annually to the U.S…. Read more

Assessing Portfolio Performance

February 2016

You can’t help but hear about the frequent ups and downs of the Dow Jones Industrial Average or the S&P 500 index. The performance of both major indexes is widely reported and analyzed in detail by financial news outlets around the nation. Like the Dow, the S&P 500 tracks the stocks of large domestic companies…. Read more

Writing a Letter of Instruction

February 2016

A will is an essential legal document that describes how your estate should be distributed upon your death. It is the basis for the probate process and can serve as a guide for your heirs. A letter of instruction has no formal legal status, but it could be just as important to help your loved… Read more

A Guide on the Road to Retirement

February 2016

The title of the Beatles’ song “The Long and Winding Road” could apply to the journey toward a comfortable retirement. For those who have the foresight to start preparing in their 20s, the journey could take 40 years or more. Even those who procrastinate might have 20 or 30 years to prepare. No matter how… Read more

The Appeal of ETFs

February 2016

Exchange-traded funds (ETFs) represented 28% of the total trading value on world stock exchanges at the end of June 2015, a 35% increase over the previous year.1 In the United States, 1,502 ETFs held more than $2 trillion in assets at mid-year, up more than 10% and 13%, respectively, over the same period in 2014.2… Read more

HOT TOPIC: PATH Act Makes Many Tax Breaks Permanent

February 2016

In a welcome end-of-year surprise, the Protecting Americans from Tax Hikes (PATH) Act, signed into law on December 18, 2015, made many popular tax breaks permanent and retroactively extended others. Most of these provisions had expired at the end of 2014, and — as has become typical of tax extensions — congressional action came too… Read more

Student Debt? These Programs Could Spell Relief

January 2016

More student loan borrowers are expected to gain access to new federal programs designed to reduce monthly payments and lessen the wider economic toll of student debt. The Revised Pay as You Earn (REPAYE) program will expand an existing income-based repayment program. It may be available to as many as 5 million Direct Loan borrowers… Read more

Family Limited Partnerships for the Next Generation

January 2016

About 75% of family businesses in the United States have been family-run for two or more generations.1 One challenge faced by family-run businesses involves business continuation. When business owners fail to consider that federal and state estate taxes could be due upon their passing, the money needed to cover the bill may not be available,… Read more

Donor-Advised Funds

January 2016

The holiday season is full of emotional appeals for charitable donations. Thus, some people may find themselves rushing to write checks by the end of the year, just in time to qualify for a tax deduction. But there may be a more effective way to give throughout the year. A donor-advised fund (DAF) is a… Read more

Stability and Liquidity: Money Market Mutual Funds

January 2016

During the late 1990s, money market mutual funds offered an annual return of around 5% (see graph). This made them attractive to investors, including retirees and pre-retirees who wanted to preserve principal while earning a modest return. After an uptick just before the recession, yields on these funds have been near zero. Even so, at… Read more

Mistakes People Make at Different Ages

January 2016

Financial challenges are not limited to a specific age, but people tend to face certain challenges during particular stages of their lives. Regardless of your age, you might recognize some of these financial issues. In Your 20s Living beyond your means. When you have your first good job, it’s tempting to spend money on the… Read more

HOT TOPIC: Fed Delivers Vote of Confidence in the U.S. Economy

January 2016

On December 16, the Federal Open Market Committee (FOMC) raised the benchmark federal funds rate to a range of 0.25% to 0.50%, the first increase from the near-zero range (0% to 0.25%) where it had lingered since December 2008.1 In response to the widely expected decision, the stock market rallied, reflecting a collective sigh of… Read more

How the Cloud Can Help Meet Technology Needs

December 2015

“The cloud” is a popular catch phrase that refers to on-demand computing resources delivered over the Internet. An estimated 37% of small businesses are already operating in the cloud, and nearly 80% could be doing the same by 2020.1 In fact, small-business owners spend an average of four hours a day online running their companies.2… Read more

The Unpaid Army: Family Caregivers Face Challenges

December 2015

Roughly one in four U.S. workers age 25 and older provide unpaid care for a loved one who has health problems or is disabled. In 2014, there were about 40 million family caregivers in the United States, 60% of whom had full- or part-time jobs. Family caregivers spend an average of 18 hours per week… Read more

The Talk You Need to Have

December 2015

Many people have a difficult time talking about personal finances, even with family members. It’s natural to feel uncomfortable revealing information you consider private, and it’s wise to be concerned about the security of financial accounts. However, it can be important to discuss your finances with your adult children. You might be surprised to discover… Read more

Feeling Powerful? Take It to the Bank

December 2015

Do you have a hard time saving as much as you should for retirement or other long-term goals? If so, you’re not alone. On average, Americans save less of their incomes than people in many other developed countries (see chart). Research in the field of behavioral finance has suggested a number of factors that might… Read more

Tracking the Market with Index Funds

December 2015

Index funds have become a popular way to invest because of their simplicity, lower fees, and tax efficiency. At the end of 2014, they accounted for 35% of all assets invested in stock mutual funds and exchange-traded funds (ETFs), up from 25% in 2010.1 Group Performance A market index measures the performance of a specific… Read more

HOT TOPIC: Bipartisan Budget Act Impacts Medicare and Social Security

December 2015

The Bipartisan Budget Act of 2015, signed into law on November 2, 2015, ensures federal government funding through fiscal year 2017, primarily by suspending forced across-the-board spending cuts called “sequesters,” which were triggered when lawmakers failed to reach a budget agreement in 2011. Among a variety of other provisions, the law limits Medicare premium increases… Read more

Using Life Insurance to Retain MVPs

November 2015

Employee turnover is increasing as the economy and job market continue to improve. As a result, 63% of companies now say that employee retention is a top concern, and about half of all employers report a lack of skilled applicants for their open positions.1 Thus, it may be difficult and expensive for businesses to replace… Read more

Going Solo

November 2015

It’s estimated that more than 53 million Americans are now part of the nation’s growing freelance workforce; this figure includes small-business owners, contract workers, consultants, and others who work on a project basis.1 Self-employed workers may enjoy the flexibility and control, but without help from an employer they often must take extra steps to strengthen… Read more

Controlling Health Insurance Costs

November 2015

If your employer offers health insurance benefits, one of your options may be a high-deductible health plan (HDHP) with eligibility to participate in a health savings account (HSA). These plans offer potential savings by giving you more responsibility over your medical spending. If you do not have employer-sponsored health coverage, you can choose from a… Read more

Understanding RMDs

November 2015

Tax-deferred plans can be a great way to save money for retirement, but you can’t defer your tax liability forever. Once you reach age 70½, you must begin taking required minimum distributions (RMDs) from these plans each year or face a 50% penalty on the amount that should have been withdrawn. If you are still… Read more

Dividends as a Growth Strategy

November 2015

Dividends can be a source of current income for retirees and others who want an income stream without selling their underlying investments. For long-term investors, reinvested dividends can be a powerful growth engine. A 2013 study by Standard & Poor’s found that dividend income represented 34% of the monthly total return of the S&P 500… Read more

HOT TOPIC: Trans-Pacific Partnership

November 2015

After five years and 19 formal rounds of negotiations, the Trans-Pacific Partnership (TPP) was finalized in October 2015 by representatives of the United States and 11 other nations. The comprehensive, 30-chapter document aims to lower trade barriers and create a rules-based trading system for TPP nations, which represent about 40% of the world’s total gross… Read more

The ABCs of Incorporation

October 2015

One question that a business should revisit from time to time is whether its current organizational structure is meeting its needs. Sole proprietorships, partnerships, and limited liability companies (LLCs) are fairly basic forms of ownership, whereas corporations are significantly more complex. A corporation is a separate legal entity from its owners, which means shareholders generally… Read more

Executors Inherit Important Title

October 2015

Being named as the executor of a family member’s estate is generally an honor. It means that person has been chosen to handle the financial affairs of the deceased individual and is trusted to help carry out his or her wishes. Settling an estate, however, can be a difficult and time-consuming job that could take… Read more

Correlation and Portfolio Performance

October 2015

Different types of investments are subject to different types of risk. On days when you notice that stock prices have fallen, for example, it would not be unusual to see a rally in the bond market. Asset allocation refers to how an investor’s portfolio is divided among asset classes, which tend to perform differently under… Read more

Time to Make Medicare Changes

October 2015

When Medicare was first signed into law in 1965, it consisted of Part A hospital insurance and Part B medical insurance, now referred to as Original Medicare. These programs are administered directly by the federal government and have standardized services, premiums, and deductibles. Two other types of coverage have since been added — both offered… Read more

Coverage You Can Keep

October 2015

In a 2015 study, 43% of Americans said they would feel a financial impact within six months if the primary wage earner died. Perhaps reflecting this concern, three out of 10 acknowledged that they needed more life insurance coverage.1 Four out of five consumers overestimate the cost of life insurance, which may explain why many… Read more

HOT TOPIC: Wild Ride: Understanding Market Volatility

October 2015

On Monday, August 24, 2015, the Dow Jones Industrial Average plunged 1,089 points in the first 10 minutes of trading, the largest intraday point drop in the history of America’s oldest stock index. The benchmark rallied, regaining almost 1,000 points, only to slip again and close down 588 points — the most volatile day in… Read more

Women May Need More Life Insurance

September 2015

Did you know that 100 years ago, women were not even able to buy life insurance? Now women make up more than half (57%) of the U.S. labor force. Yet in spite of their important contributions to the nation and their families’ financial well-being, about 43% of women still don’t have life insurance. In fact,… Read more

Do You Need Disability Insurance?

September 2015

It might surprise you to know that the odds of long-term disability actually decline with age. For example, a 40-year-old has a 43% chance of experiencing at least one disability lasting 90 days or more before reaching age 65. For a 50-year-old, the odds drop to 36% — still a higher risk than most people… Read more

Financing Options for Small Businesses

September 2015

While bank lending to large businesses (loans over $1 million) rose to record levels in 2014 — loans outstanding were more than 24% higher than before the recession — small-business loans (under $1 million) in 2014 were still 17% below pre-recession highs.1 Even though the credit market is becoming friendlier, small firms are still having… Read more

Investing in Your Values

September 2015

It’s probably safe to say that people choose an investment with the assumption that it will add financial value to a portfolio. However, more investors are considering other values when making investment decisions — the way a company does business, the way it treats employees, and the social and environmental impact of its products and… Read more

Inheriting an IRA

September 2015

Although IRAs are primarily intended to help fund retirement, some people don’t withdraw all IRA assets during their lifetimes. Any remaining assets go to the account owner’s designated beneficiaries and could provide a generous legacy. If you’ve inherited an IRA or might inherit one in the future, it’s important to understand your options. IRS rules… Read more

HOT TOPIC: Puerto Rico’s Debt Crisis

September 2015

On August 3, Puerto Rico missed a payment to bondholders for the first time. The default was not a big surprise, given the island’s weak economy and heavy $72 billion debt load.1   A painful recession has persisted for nearly a decade, while Puerto Rico’s debt-to-GDP ratio spiked to more than three times that of… Read more

Funding a Succession Plan with Insurance

August 2015

Death, disability, divorce, and bankruptcy are just a few of the events that can threaten the future of a once-thriving business. What would become of your life’s work if you decided to retire or had to leave suddenly for another reason? In the midst of an emotional transition, it may be difficult or even impossible… Read more

Cyclical vs. Defensive Stocks

August 2015

It’s no secret that consumers are the driving force behind the U.S. economy; consumer spending is responsible for more than two-thirds of U.S. gross domestic product (GDP).1 Even though real GDP increased at an unimpressive rate of 2.4% for all of 2014, consumer spending in the fourth quarter grew at the fastest pace in more… Read more

Should I Stay or Should I Go? Easing into Retirement

August 2015

Unforeseen events can sometimes force a person to retire, but for many people the decision to retire is a personal choice. And like any big decision, it can be fraught with uncertainty. If you’re considering retirement in the not-too-distant future but not sure whether you’re prepared — financially, emotionally, or both — here are two… Read more

Protecting Your Most Precious Asset

August 2015

Americans tend to drag their feet when it comes to estate planning. Only 36% of adults have a will, and the numbers are even lower for young adults. For example, among adults aged 35 to 44 — an age when many people have accumulated substantial assets — only 20% have a will to help ensure… Read more

Gen X Turns 50: Time to Rescue Retirement?

August 2015

The oldest members of Generation X are turning 50 in 2015, and a recent study suggests that this generation is well behind in saving for retirement. Although Gen Xers expect to need at least $1 million for a comfortable retirement — and many think they’ll need even more — the median savings in their retirement… Read more

HOT TOPIC: Chinese Market Turmoil

August 2015

It’s been a stressful summer for millions of Chinese stock market investors. The Shanghai Composite Index dropped 32% and lost more than $3 trillion in value in less than four weeks. After hitting bottom on July 9, the market rebounded 15% by July 21 before plunging 8.5% on July 27.1–3 Foreign investors’ access to mainland… Read more

Factors That Influence Hiring Decisions

July 2015

In early 2015, an index that measures the hiring intentions of small businesses rose to its highest level in seven years.1 About 90% of the U.S. workforce is employed at businesses with 20 or fewer employees, so rising employer optimism is good news for the U.S. job market and the broader economy.2 Fortunately, successful small… Read more

Understanding the Gift Tax

July 2015

You may have wondered whether the gift tax applies to any gifts you have made or plan to make. The good news is that the American Taxpayer Relief Act of 2012 set a permanent exemption for gift and estate taxes at a high-enough level ($5 million, indexed annually for inflation) that relatively few gifts should… Read more

Indexed Annuities: Potential Upside, Protecting the Downside

July 2015

Indexed annuities have become more popular in recent years. This appeal may be due to features that can help protect the principal while also participating in market gains. That’s an attractive combination, but indexed annuities are complex products and not appropriate for every investor. It’s important to understand how they work and the options you… Read more

Tax Tips for Tying the Knot

July 2015

Summer is a popular time for weddings. But no matter when you say “I do,” marriage typically leads to many changes — not only on a personal level but also in your finances. Here are some tax issues and other financial considerations to keep in mind if you or someone you know is making the… Read more

New Flexibility for College Savings

July 2015

The steady rise in the cost of a college education has slowed somewhat during the past two years. At public four-year schools, the average inflation-adjusted cost of tuition, fees, room, and board increased just 1.2% in the 2013–14 academic year and 1.0% in 2014–15. At private schools, the increases were 1.8% and 1.6%, respectively.1 That’s… Read more

HOT TOPIC: What’s Behind the M&A Surge?

July 2015

U.S. companies announced more than $1.5 trillion worth of mergers and acquisitions in 2014, a 55% increase over 2013 and the highest total since 2007. Altogether, 10,615 deals were forged. The pace continued in the first quarter of 2015, with 2,507 deals worth close to $406 billion.1 Why the sudden burst of M&A activity? And… Read more

Solving the Salary Puzzle

June 2015

To keep more money in the business, some small-business owners avoid paying themselves. According to one study, only a little more than half of small-business owners pay themselves a regular salary.1 Of course, the size of the owner’s paycheck largely depends on the type of business and how well it’s doing.  If the company is… Read more

Clue for Homeowners: Filing a Claim Could Cost You

June 2015

According to a recent report, homeowners who filed just one insurance claim saw their premiums increase by an average of 9% — and a second claim caused premiums to climb as much as 20%. Interestingly, the size of the claim didn’t matter much. Filing a small claim for a stolen bicycle could affect your rates… Read more

Coming to Terms with Long-Term-Care Needs

June 2015

It’s estimated that 70% of people aged 65 and older will need long-term-care services at some point, either in a facility or at home.1 Alzheimer’s disease, dementia, strokes, and advanced osteoporosis are just a few of the age-related health problems that can require a lengthy stay in a high-cost facility. The costs for long-term care… Read more

Financial Strategies for Changing Families

June 2015

It should come as no surprise that American family life has changed over the past four decades, but U.S. census data reveals just how widespread this change has been. In 1970, about 40% of households were married couples with children under 18 living at home. By 2012, only 20% of households fit this structure (see… Read more

Aiming at Target-Date Funds

June 2015

Target-date funds are increasingly popular in workplace retirement plans, where they are often the default option for new employees. A 2014 study found that 15% of all 401(k) assets — including 32% of assets for recently hired plan participants — were invested in target-date funds.1 These funds are not limited to new hires. Overall, more… Read more

HOT TOPIC: Fixing Social Security

June 2015

In May 2015, researchers from Harvard and Dartmouth published a report suggesting that actuaries for the Social Security Administration have been underestimating the demographic challenges facing the program since 2000.1 The fact that Social Security is in trouble was not a surprise, but the possibility that the day of reckoning might come sooner than previously… Read more

Liability Protection for Business Owners

May 2015

There’s a certain amount of risk that comes with owning a business. But accidents can happen no matter how well a company is run, and the expenses involved in defending a lawsuit could prove to be devastating — whether or not the owner is found to be at fault. Legal fees add up fast, especially… Read more

Homeownership Can Pay Off at Tax Time

May 2015

Young professionals might want to invest in a first home, growing families may need more living space, and empty nesters could be ready to downsize. Whatever the motivation, spring is often the time when households start preparing for such a move. Although home prices nationwide are still recovering from the housing crisis, the number of… Read more

Mutual Funds and ETFs

May 2015

Exchange-traded funds (ETFs) combine the diversification of mutual funds with the liquidity of individual investments, which is one reason they have attracted investors in recent years. ETF assets have more than tripled since 2007, reaching $1.8 trillion by mid-2014. Still, that figure falls far behind the $13.1 trillion of assets invested in mutual funds.1 Both… Read more

Special Bequests for Special People

May 2015

Having a Last Will and Testament can help ensure that your estate is distributed according to your wishes. Yet almost two out of three Americans have not taken this important step.1 If you don’t have a will, it would be wise to create one. If you already have a will, you may want to review… Read more

Interested in Interest Rates

May 2015

After dropping to historic lows during the recession, interest rates are expected to rise in 2015. Try this short quiz to test your interest-rate knowledge. 1.    Which of the following interest rates is directly controlled by the Federal Reserve Open Market Committee. A) Prime rate B) Federal funds rate C) Mortgage rates D) All of… Read more

HOT TOPIC: New Consumer Credit Protections

May 2015

Until recently, you typically had to pay to see your credit score. That’s changed as a result of an initiative by the Consumer Financial Protection Bureau (CFPB). In February, the CFPB announced that more than 50 million Americans now have free access to their credit scores through their credit-card companies, and tens of millions more… Read more

Cyber Crime on the Rise

May 2015

When hackers gain access to consumers’ personal information, it opens the door for identity theft and other financial crimes. Data breaches resulting from attacks on large retailers have dominated the news, but sophisticated cyber crimes also threaten small businesses, many of which don’t have the funds needed for cutting-edge security strategies. Ransomware, for example, is… Read more

The Roundabout Way to a Roth IRA

May 2015

A 2014 IRS ruling makes it easier for taxpayers to move after-tax 401(k) contributions directly to a Roth IRA. Prior to the notice, it was possible to achieve a tax-free Roth conversion of after-tax dollars in an employer plan, but it was a complicated process using 60-day (indirect) rollovers rather than trustee-to-trustee transfers. Not only… Read more

Studying the Earnings Test

May 2015

More than 2.7 million jobs were created in 2014, providing new opportunities for people of all ages.1 This is good news, but what happens if you find a good job after you’ve already filed for Social Security? You may have heard that the retirement earnings test (RET) could reduce your benefits. This shouldn’t stop you… Read more

Highly Appreciated Giving

May 2015

The stock market has been strong over the last few years, with the S&P 500 gaining about 200% from its bottom in March 2009 through the end of 2014.1 The housing market has also turned upward, and national home prices have bounced back to 2005 levels.2 In this improving economic environment, many people may have… Read more

Are You an Investor or a Speculator?

May 2015

Legendary investor and teacher Benjamin Graham — considered the “father of value investing” — once said, “The individual investor should act consistently as an investor and not as a speculator.”1 This simple quote captures a fundamental concept that could help you establish and maintain a sound financial strategy. Big Risks A dictionary of investment terms… Read more

HOT TOPIC: Blame It on the Weather

May 2015

Many parts of the United States experienced a particularly harsh winter. The Midwest and Northeast suffered the toughest blows from a stream of heavy storms. Boston’s record seasonal snowfall topped 110 inches.1 As winter was settling in, U.S. economic growth fell to a seasonally adjusted 2.2% annual rate in the fourth quarter of 2014.2 Disappointing… Read more

Time to Cash Out?

March 2015

After a long period of malaise, the small-business market heated up over the last couple of years. In fact, during the second quarter of 2014, the number of closed sales returned to pre-recession levels.1 This is good news for business owners who have been waiting and hoping for a healthier market to sell their businesses,… Read more

Is College Around the Corner?

March 2015

The average costs paid by families with students who attended private four-year colleges during the 2013–2014 academic year actually fell by 11.6% — from $39,434 to $34,855. This trend suggests that more families are making cost-conscious college decisions and taking advantage of scholarships offered to attract top students.1 The amount of need- and merit-based financial… Read more

New Opportunity for Generating Lifetime Income

March 2015

A survey of people aged 44 to 75 found that 61% fear running out of money in retirement.1 There may be various personal reasons behind this concern, but the decline of traditional pensions, combined with longer life spans and rising medical expenses, has created an uncertain future for many Americans, including those who have put… Read more

Know Your Rights, But File with Care

March 2015

In June 2014, as part of its ongoing effort to improve communication and service, the Internal Revenue Service issued a formal Taxpayer Bill of Rights. These rights are not new, but they were scattered throughout the tax code, and surveys have found that most taxpayers did not even know they had rights when dealing with… Read more

Growth, Value, or Both?

March 2015

When examining a list of mutual funds, you might find the word “growth” or “value” in some of the titles. Have you wondered what these labels mean? Shouldn’t all funds pursue these objectives? The terms growth and value reflect different investing styles. Generally, when a mutual fund has one of these words in the fund’s… Read more

HOT TOPIC: Key Indicators Signal Progress for U.S. Economy

March 2015

Data from government and private-sector reports can generate tantalizing headlines for the business media. And lately, nearly six years after the official end of the Great Recession, the good news is that Americans finally have reasons to feel upbeat about their financial prospects. Economic indicators typically fall into one of three categories. Leading indicators are… Read more

Can Small Companies Benefit from Big Data?

February 2015

Many large corporations use high-cost computer power and technological expertise to capture and mine data as they look for ways to improve business efficiency and customer interaction. Recently, a new crop of user-friendly technology products has made it possible for small businesses with limited budgets to do the same. Business Intelligence Here are some of… Read more

The Problem with Projections

February 2015

Last June, the Federal Reserve lowered its 2014 forecast for economic growth from 3% to between 2.1% and 2.3%, after data indicated that a particularly harsh winter caused U.S. gross domestic product to fall unexpectedly in the first quarter.1 The Fed’s quarterly economic forecasts, which influence interest-rate decisions, have been released to the public since… Read more

Fixed-Income Investments and Rising Interest Rates

February 2015

The Federal Reserve has indicated that it might begin raising its target interest rate sometime in 2015.1 Considering that bond prices typically fall when interest rates rise, this may be a good time to examine your fixed-income investments, including individual bonds and bond funds. Here are some factors to consider when reviewing your portfolio. Maturity… Read more

“I’ll Do It Later” — Why People Procrastinate

February 2015

One in five adults admits to being a chronic procrastinator. Among college students, the number may be as high as seven in 10, which might explain those all-nighters.1 In the “real world,” you can’t always cram for finals. Procrastination can have far-reaching effects on important activities and decisions, such as completing tasks at work, obtaining… Read more

Bridging the Gap with a Spousal IRA

February 2015

An IRA study found that women lag behind men when it comes to accumulating money for retirement (see chart). Though there may be multiple reasons for this disparity, the most fundamental is the continuing wage gap between men and women.1 This gap tends to widen around the age when many women have children, which suggests… Read more

HOT TOPIC: Is a Strong Dollar Good for the U.S. Economy?

February 2015

On January 16, 2015, the U.S. dollar reached an 11-year high in its value against the euro — part of a trend that has seen the value of the dollar rise steadily against the currencies of major U.S. trading partners since mid-summer 2014.1–2 Not coincidentally, the price of oil has dropped sharply during the same… Read more

When Weather Becomes Your Worst Enemy

January 2015

The winter of 2013–2014 was one of the costliest for U.S. businesses in decades. Insured losses from severe winter events in 2013 totaled about $1.9 billion. And in January 2014, the infamous “polar vortex” caused another $1.5 billion in losses over just a few bitterly cold days.1 Small businesses often operate on tight margins, so… Read more

SEC Decides to Break the Buck

January 2015

In July 2014, the U.S. Securities and Exchange Commission (SEC) adopted new regulations designed to help prevent “runs” on money market mutual funds.1 Vulnerabilities in the money fund market were exposed during the 2008 financial crisis. Money market funds are often considered cash alternatives because there is typically little fluctuation in their value and they… Read more

Are Your Beneficiaries Up-to-Date?

January 2015

The end of the year is a time when families often gather together. It might also be a good time to make sure you have accurately designated family members as beneficiaries in your will, insurance policies, and retirement accounts. This is especially important if there have been changes in your life, such as the birth… Read more

File and Suspend: A Flexible Social Security Strategy

January 2015

The Social Security system may seem complex, but understanding your claiming options could help increase your benefits. One strategy to consider is “file and suspend” (sometimes referred to as “voluntary suspension”). The basic concept is to file for benefits at full retirement age (66 to 67, depending on year of birth) and immediately suspend benefits… Read more

Expenses in Waiting: Managing Costs on Your Property and Casualty Insurance

January 2015

You may not think of the deductibles and liability limits on your insurance policies as part of your financial strategy, but they could make a difference in your overall financial picture. Consider them “expenses in waiting” — potential costs that you should be prepared to face. Deductibles and Premiums A deductible is the amount a… Read more

HOT TOPIC: Last-Minute Legislation: 2014 Tax Extenders

January 2015

After contentious congressional negotiations and the threat of a presidential veto, the Tax Increase Prevention Act of 2014 — extending 55 tax provisions through the end of 2014 — finally became law in December with less than two weeks left in the tax year. Unfortunately, the fate of these provisions for 2015 and beyond remains… Read more

Health-Care Update

December 2014

Starting in 2015, large companies with 100 or more full-time employees must provide affordable health coverage that meets minimum standards, or pay a fine. This requirement will expand to include midsize firms with 50 to 99 full-time workers in 2016. Small businesses (with fewer than 50 employees) may be relieved that the employer mandate does… Read more

Watching for Inflation

December 2014

Fed officials eventually need to decide when to tighten monetary policy and raise the benchmark interest rate, which has been near zero since 2008. Most Fed officials believe the first rate increase will occur in 2015, but the exact timing hinges on how quickly inflation rises and when the employment situation improves.1 As a result,… Read more

Guarding Against Fraud

December 2014

In a survey of American adults aged 40 and older, 84% revealed that they had been solicited to participate in a potentially fraudulent offer, and 11% had lost money after engaging in such an offer.1 The root of this problem — besides the endless efforts of criminals — seems to be naiveté and unwarranted trust… Read more

Who Controls the Cash?

December 2014

Once upon a time in American marriages, the husband “brought home the bacon” and made all the big financial decisions, and the wife received a “household allowance” to buy groceries and other everyday necessities. Today you might need to watch a 1950s sitcom to find that dynamic. Not only have women entered the workforce in… Read more

Adding Real Estate to Your Portfolio

December 2014

Have you ever considered investing in an income-producing real estate property such as a rental house or apartment building? It might seem like a good idea, but this type of investment typically requires substantial capital. Even if you have the necessary cash or credit, you may not want the responsibility that comes with being a… Read more

HOT TOPIC: Shoppers Still Waiting for Security Fix

December 2014

In September 2014, Home Depot disclosed a data breach involving up to 56 million payment cards. It’s believed that the attack on Home Depot was larger and lasted longer than the December 2013 hacking of Target’s payment system in which 40 million accounts were compromised.1 Roughly one in three people who received data-breach notification letters… Read more

Saving for Life After Work

November 2014

Setting up a retirement plan for your business provides a way to shelter more of your income from taxes and save money for the future. It could also help your employees do the same. In fact, surveys show that retirement benefits are the third most important consideration fostering employee loyalty, after salary and health coverage.1… Read more

If Inflation Is Low, Why Are Prices High?

November 2014

“Headline inflation,” as measured by changes in the Consumer Price Index (CPI), was a low 1.5% in 2013 and running at an annual rate of just 2.1% through June 2014.1 Yet when you go to the grocery store or fill up your car at the gas pump, you might wonder what the talk of low… Read more

Health Savings Accounts and Your Retirement

November 2014

Health savings accounts (HSAs) come with three powerful tax benefits: (1) the dollars you contribute are deducted from your income, (2) investment earnings compound tax-free inside the HSA, and (3) withdrawals are also untaxed if the money is spent on qualified health-care expenses. (Depending on the state, HSA contributions and earnings may or may not… Read more

A Brave New World

October 2014

Foreign nations may provide potentially lucrative markets for the product offerings of small U.S. companies, but only 5% of U.S. small businesses are currently exporting goods and services.1 Some owners are reluctant to enter foreign markets due to language barriers, paperwork demands, customs requirements, and expensive tariffs, among other worries. About two-thirds of small businesses… Read more

IRS Flips on Rollover Rules

October 2014

A 2014 U.S. tax court ruling related to IRA rollovers caught IRA owners and experts by surprise. In the case of Bobrow v. Commissioner, the court’s new interpretation of a key rule contradicts the position that the IRS has taken for the last 20 years and that was clearly stated in IRS Publication 590.1 There… Read more

Turbulent Times in Emerging Markets

October 2014

The term “emerging markets” refers to developing nations that show signs of progress, such as significant growth in gross domestic product (GDP) and infrastructure. Altogether, developing nations account for about 40% of global GDP, compared with about 18% two decades ago.1 Morningstar data suggests that emerging market stocks are about 50% riskier than U.S. stocks,… Read more

Options for Retirement Living

October 2014

At one time, retirement often meant moving to Florida or Arizona. Many retirees still move to warmer climates, but retirement could open the door to a wide range of options. Here are some ideas to help you consider the possibilities. Staying Put In a survey on post-retirement living, 53% of retired individuals indicated they were… Read more

When You Can’t Speak for Yourself

October 2014

It’s not pleasant to think about the possibility of having a serious condition that prevents you from making medical and financial decisions for yourself. But it’s better to be prepared and hope it never happens than to put your loved ones in the position of making decisions without knowing your wishes. Here are three legal… Read more

Tax Season Never Ends for the Self-Employed

September 2014

April 15 is the income tax filing deadline for U.S. taxpayers, but it’s not the only date that matters to business owners. Estimated tax payments for a given tax year are typically due in four equal installments: April 15, June 15, and September 15 of the current year, and January 15 of the following year…. Read more

Too Good to Be True?

September 2014

Bernie Madoff became infamous for perpetrating what may be the biggest Ponzi scheme in history — costing unsuspecting investors more than $17.5 billion in principal and $47 billion in phony profits.1 In a classic Ponzi scheme, the person committing the fraud usually pays investors their returns with their own money or with money from other… Read more

Timing Social Security and IRA Distributions

September 2014

Retirees often claim Social Security before reaching full retirement age and leave tax-deferred IRAs untouched until age 70½ , when they must start taking required minimum distributions (RMDs). In fact, about 75% of current Social Security recipients claimed early benefits before age 66.1 Some retired couples might be better off with the opposite approach: taking… Read more

Do You Still Need Life Insurance?

September 2014

Older people generally have a better understanding of life insurance than younger people.1 But even if you fully understand the costs and potential benefits of life insurance, you may wonder whether you still need it as you age and your children become self-supporting. Here are some ideas to consider. Protection for Your Spouse Even though… Read more

You Need a Will. What About a Trust?

September 2014

Having a legal will is an essential step to help ensure that your assets are distributed according to your wishes. However, in some cases you may also want to make provisions through a trust. Unlike a will, certain trusts might accomplish goals during your lifetime, provide greater control of your assets after your death, offer… Read more

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