PWM - Financial & Investment Advisors in New Jersey | Private Wealth Management - Registered Investment Advisor, RIA | NJ, NY, PA, FL http://www.pwm-nj.com Wed, 20 Aug 2014 13:00:25 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.2 Digital Estate Planning http://www.pwm-nj.com/knowledge/investment/digital-estate-planning?utm_source=rss&utm_medium=rss&utm_campaign=digital-estate-planning http://www.pwm-nj.com/knowledge/investment/digital-estate-planning#comments Wed, 20 Aug 2014 13:00:25 +0000 http://www.pwm-nj.com/?p=9866 more]]> image of laptop

Do You Have a Plan for Your Digital ‘Estate’?

Even people who think they’ve ticked off all of the usual boxes on their estate-planning to-do lists may have overlooked an increasingly important component of the process: ensuring the proper management and orderly transfer of their digital assets. Just as traditional estate-planning relates to the management and transfer of financial accounts and hard assets, digital estate-planning encompasses digital possessions, including data stored on tangible digital devices (computers and smartphones), data stored in the cloud, and online user accounts.

Digital estate planning is, in many respects, more complicated than traditional estate planning. The field of digital estate planning is evolving rapidly, as are digital providers’ policies on what should happen to digital assets that are left behind. Digital assets are also governed by a complex web of rapidly evolving laws, both at the state and federal levels. Precisely because of all the potential complications, it’s important to take a few minutes and get a plan in order. Here are several key steps to take.

1) Conduct a Digital ‘Fire Drill.’ A good first step in the digital estate-planning process is to conduct a digital fire drill, which tends to jog your memory about what digital assets you deem important. Consider the following questions. What valuable items would you lose if your computer was lost or stolen today? If you were in an accident, would your loved ones be able to gain access to your valuable or significant digital information while you were incapacitated? If you were to die today, to what valuable or significant digital property would you like your loved ones to have access?

2) Take an Inventory of Your Assets. The next must-do is to create an inventory of the digital assets you named during the fire drill. Document the item/account name as well as user names and passwords associated with that item. Among the items to document in your digital inventory are: digital devices such as computers and smartphones, data-storage devices or media, electronically stored data, including online financial records, whether stored in the cloud or on your device, user accounts, domain names, and intellectual property in electronic format. This document would be chock-full of sensitive information, so keeping it safe is crucial. A printed document should be stored in a safe or safe deposit box, and an electronic document should, of course, be password protected.

3) Back It Up. We’ve all been schooled on the importance of regularly backing up digital assets, and estate-planning considerations make it doubly important to do so. Even if a specific device malfunctions, storing digital assets on another storage device or in the cloud helps ensure the longevity of those assets. Moreover, online account service providers may voluntarily disclose the contents of electronic communications, but they’re not compelled to do so. If you want to help ensure that your loved ones have access to the information in your online accounts, backing it up on your own device is a best practice.

4) Put Your Plan in Writing. Experts also recommend formalizing your digital estate plan. That means naming a digital executor—someone who can ensure that your digital assets are managed or disposed of in accordance with your wishes after you’re gone. If your primary executor is savvy with technology, there’s probably no need to name a separate digital executor. But if not, or if you have particularly valuable or special digital property, such as intellectual property, experts advise a separate fiduciary/executor for digital assets. Depending on the type of property, the fiduciary may also need special powers and authorizations to deal with specific assets.

This is for information purposes only and should not be construed as legal, tax, or financial planning advice. Please consult a legal, tax, and/or financial professional for advice regarding your personal estate planning situation.

This presentation was designed for educational purposes only and is not intended for specific legal, accounting, investment, income tax or other professional advice. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by PWM Advisory Group, LLC [“PWM”]), or any non-investment related content, made reference to directly or indirectly in the presented material(s) will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from PWM. PWM is neither a law firm nor a certified public accounting firm and no portion of the presented material(s) should be construed as legal, accounting or consulting advice. A copy of the PWM’s current written disclosure statement discussing our advisory services and fees is available for review upon request. ©2012 Morningstar, Inc. All Rights Reserved. The information contained herein (1) is intended solely for informational purposes; (2) is proprietary to Morningstar and/or the content providers; (3) is not warranted to be accurate, complete, or timely; and (4) does not constitute investment advice of any kind. Neither Morningstar nor the content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. “Morningstar” and the Morningstar logo are registered trademarks of Morningstar, Inc. Morningstar Market Commentary originally published by Robert Johnson, CFA, Director of Economic Analysis with Morningstar and has been modified for Morningstar Newsletter Builder. To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication (including attachments) is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. Photo Credit: 

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Why Roth IRAs Are Still Red-Hot http://www.pwm-nj.com/knowledge/investment/roth-iras?utm_source=rss&utm_medium=rss&utm_campaign=roth-iras http://www.pwm-nj.com/knowledge/investment/roth-iras#comments Mon, 18 Aug 2014 13:02:24 +0000 http://www.pwm-nj.com/?p=9876 more]]> image of sunset on beach

What’s The Next Big Thing in Financial Planning?

It’s actually something that has been around for years: the Roth IRA. This tax-advantaged account offers the promise of future benefits without some of the restrictions that hamper traditional IRAs.

What makes a Roth so special? With a Roth IRA that’s at least five years old, most distributions after you’ve reached age 59½ are completely tax-free, while earlier payouts may be wholly or partially tax-free under the tax law’s “ordering rules” that treat the first money out of the account as coming from your contributions, which aren’t taxable. Also, you never have to take the “required minimum distributions” (RMDs) that force you to deplete a traditional IRA. Those RMDs and other distributions are taxable at ordinary income rates (except for any portion representing nondeductible contributions) reaching up to 39.6%. RMDs for IRAs become mandatory after age 70 ½.

There are two main ways to establish a Roth and take advantage of its benefits: through annual contributions or with a conversion from a traditional IRA.

1. Annual contributions. You can set up a Roth IRA and make contributions each year of as much as $5,500 ($6,500 if you’re age 50 or over). But the ability to contribute to a Roth is phased at higher-income levels.

2. Roth conversion. Anyone can convert a traditional IRA to a Roth, or use a conversion to add to a Roth you’ve already established. In either case, you must pay tax at ordinary income tax rates on the taxable portion of the converted funds. Advance planning can help you minimize the tax damage.

One popular technique is to convert just enough to fill up extra “space” in the lower tax brackets while triggering as little tax as possible in the top tax brackets. This can be particularly powerful if you expect to be in a higher tax bracket in retirement than you are in now.

Suppose you’re married and file a joint tax return, you have $500,000 in a traditional IRA, and your adjusted gross income in 2014 is $130,000. Using current tax rates, you are in the 25% tax bracket, but you anticipate being in the 35% bracket during retirement. If you fill up the 25% tax bracket (which tops out at $148,850) by converting $18,850 in traditional IRA funds to a Roth, you’ll save 10% in tax (the difference in the current 25% rate and the future 35% rate). Assuming you repeat this strategy over several years, the savings could be as high as $50,000 (10% of $500,000).

This assumes you can pay the conversion tax with funds from outside the IRA, which might be a problem. Other factors also may come into play. So be sure that converting to a Roth IRA in this way makes sense for your situation before you take the plunge. Roth IRAs are hot, but you don’t want to get burned.

Please note that various factors such as changes in tax laws, inflation, and the uncertainty of social security can have a significant impact on the results of the study discussed in this section.This presentation was designed for educational purposes only and is not intended for specific legal, accounting, investment, income tax or other professional advice. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by PWM Advisory Group, LLC [“PWM”]), or any non-investment related content, made reference to directly or indirectly in the presented material(s) will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from PWM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. PWM is neither a law firm nor a certified public accounting firm and no portion of the presented material(s) should be construed as legal, accounting or consulting advice. A copy of the PWM’s current written disclosure statement discussing our advisory services and fees is available for review upon request. To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication (including attachments) is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. ©2012 Advisor Products Inc. All Rights Reserved. Photo Credit: 

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It’s a Marathon, Not a Sprint http://www.pwm-nj.com/knowledge/investment/retirement-hurdles?utm_source=rss&utm_medium=rss&utm_campaign=retirement-hurdles http://www.pwm-nj.com/knowledge/investment/retirement-hurdles#comments Wed, 23 Jul 2014 13:00:53 +0000 http://www.pwm-nj.com/?p=9813 more]]> image of tree - Liza Valero

7 Retirement Hurdles You May Be Forced To Overcome

It’s a marathon, not a sprint, to reach retirement, and you may find you still need to clear some formidable hurdles. Positioning yourself for the long haul could mean building flexibility into your retirement plan to accommodate emergency expenditures or adjustments in income or expenses. You’ll need to take into account likely fluctuations in housing costs, taxes, health-care outlays, investments, and other items in your budget. Consider these seven obstacles and figure out how to get past each of them:

1. Market uncertainty. Stock market volatility always will be a wild card, whether retirement is still far in the future or has become your everyday life. There are no guarantees for how well your investments will perform. Therefore you need a long-range plan that takes into account both your objectives and your ability to tolerate investment risks. It helps if you diversify your holdings among stocks, bonds, mutual funds, real estate, and other kinds of investments. And you’ll need to review your plan at least once a year to check your progress and see whether adjustments are necessary.

2. Eldercare for relatives. As your parents and in-laws age, they may need financial help from you. And this is an expense that can sneak up at a time when your children still may be at home or running up tuition bills. You may want, or need, to help out the older generation with costs for housing and nursing care. Having conversations with the entire family can make everyone aware of the situation and could help you find solutions you hadn’t considered.

3. Financial help for adult children. These days it can take a while for young people to find their way and establish themselves with their own careers and families. Some will move back into their old rooms after college while looking for a job; others may need a financial boost to help them buy a home, start a business, or handle money emergencies. You’ll need to balance your desire to help them with your own financial needs as you move toward retirement.

4. Long-term care. It’s not only parents, grandparents, and in-laws who age; you and your spouse, as you move into your 60s, 70s, and beyond, may have to confront your own need for care in a nursing home or another facility. That’s an expense that can bankrupt a family, and buying long-term care insurance while you are younger and premiums are lower could help you be prepared for whatever comes. But this insurance is complicated, with many options and riders, and your costs could vary widely. To make a good choice you’ll need to educate yourself about what’s out there and then shop around to find a policy that works for you.

5. Inheritances. Are you counting heavily on inheriting money from older family members as a way to bolster your retirement savings? That can be a risky proposition. You—or your parents or grandparents—may overestimate what may be left for you, especially considering today’s longer life spans, rising retirement costs and end-of-life costs. You won’t really know how much to expect until an estate has been valued, debts have been paid, and will provisions have been attended to. Though it may be impossible not to think about a possible inheritance, you’ll do much better if you don’t include its expected value in your retirement planning.

6. Outstanding debts. Paying off credit card balances or your mortgage during retirement will drain away money that you undoubtedly could put to better use. If possible, pay off your debts before you retire, and be careful about taking on additional loans. If it will take a while longer to pay what you owe, you could consider staying on the job an extra year or two to improve your household balance sheet.

7. Inflation. Living costs have risen slowly during the past several years, but that doesn’t mean inflation isn’t still one of the biggest threats to your retirement security. Even if it matches its long-term average—and doesn’t spike higher at just the wrong time for you—prices will double in about 20 years. Staying ahead of inflation is one reason why you may need to hold some stocks or other growth investments even after you retire.

These and other factors could stand in the way of your plans for retirement. We can help you assess where you are now and work with you on a strategy that will help you achieve your goals for life after work.

Please note that various factors such as changes in tax laws, inflation, and the uncertainty of social security can have a significant impact on the results of the study discussed in this section.This presentation was designed for educational purposes only and is not intended for specific legal, accounting, investment, income tax or other professional advice. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by PWM Advisory Group, LLC [“PWM”]), or any non-investment related content, made reference to directly or indirectly in the presented material(s) will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from PWM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. PWM is neither a law firm nor a certified public accounting firm and no portion of the presented material(s) should be construed as legal, accounting or consulting advice. A copy of the PWM’s current written disclosure statement discussing our advisory services and fees is available for review upon request. To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication (including attachments) is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. ©2012 Advisor Products Inc. All Rights Reserved. Photo Credit: Liza Valero

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5 Tips That Can Help Get Your Kids Into College http://www.pwm-nj.com/knowledge/investment/getting-into-college?utm_source=rss&utm_medium=rss&utm_campaign=getting-into-college http://www.pwm-nj.com/knowledge/investment/getting-into-college#comments Tue, 22 Jul 2014 13:00:42 +0000 http://www.pwm-nj.com/?p=9810 more]]> image of a light bulb

The Preliminary Steps 

Saving money for college is a daunting proposition. But there’s another big challenge—making sure your high school sophomore or junior is doing the right things to improve the odds of being admitted to college. Here are five tips for helping bolster your children’s academic standing:

1. Selecting the right classes. The courses your child chooses do make a difference, particularly if the goal is to get into a top-flight college or a particular field of study. For instance, if your child wants to enter one of the top U.S. engineering programs—at Georgia Tech, Purdue, MIT, or another leading school—he or she will need to have taken at least trigonometry and pre-calculus.

College admissions counselors base acceptance decisions on high school coursework completed through the junior year. They’ll also want to see a list of classes a student will be taking as a senior. You can help by finding out what courses are required, or preferred, by the colleges on your child’s wish list.

2. Test preparation. Whether your child is taking the SAT, the ACT, or both, doing well on these tests is likely to require considerable preparation.

Getting ready can take many forms, from buying a guide that walks kids though the exam and gives test-taking strategies, to completing online SAT practice tests from the College Board, to signing up for a formal SAT/ACT preparation course. At the very least, the published guides and online samples can be a good way for students to become familiar and comfortable with the test format.

If you think your child will need more intensive help to ace the test—many bright, talented students aren’t great test-takers—you may find that coursework, tutors, and anxiety-coping strategies can be effective.

3. Summer experience. For many high school students, the summer between their junior year and senior year is their last opportunity to gain real-life experience that is relevant to their career interests. It also can provide excellent material for college essays and personal statements that students may be asked to explain why they’re interested in a particular college or area of study.

Students might gain experience through a job, an internship (paid or unpaid), or they might interview people in fields that interest them.

4. Vacation with a purpose. A summertime family trip could be a great time to visit prospective colleges. While you’re there:

  • Pick up copies of the student newspaper to find out what’s going on at the school.
  • Ask questions of students and residents to learn what the climate will be like when it’s not summer.
  • Seek out the professors in your child’s areas of interest. Faculty schedules in the summer are often less frantic than during the academic year. his is also an ideal time to make a positive, lasting connection with an admissions counselor. The summer pace is slower for the admissions staff, too, and they have more time to spend with families.
  • While visits are important, it’s easy to fall in love with the campus of a college that may be out of reach for a particular student. On the other hand, there’s nothing wrong with aiming high, and working harder to get into a dream school could be a benefit no matter what.

5. Advance planning for the application process. The more students can find out about the colleges they want to attend, including application requirements, the better prepared they may be to throw themselves into a very selective application process. Two of the most intensive aspects of that process are essays and letters of recommendation.

There’s no “one-size-fits-all” essay. Many colleges now require essays of various lengths and topics in addition to the essay prompts on the Common Application. Here, too, preparation can be very helpful, with students thinking about what they want to write and taking the time to develop an effective essay.

As far as recommendations go, keep in mind that the best teachers are likely to be in great demand, and it’s important to get a request in early.

Of course, your part in this process, beyond helping your student prepare and not miss important deadlines, is to make sure you’re financially ready to foot part or all of the college tab. Good preparation isn’t just for the kids.

Please note that various factors such as changes in tax laws, inflation, and the uncertainty of social security can have a significant impact on the results of the study discussed in this section.This presentation was designed for educational purposes only and is not intended for specific legal, accounting, investment, income tax or other professional advice. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by PWM Advisory Group, LLC [“PWM”]), or any non-investment related content, made reference to directly or indirectly in the presented material(s) will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from PWM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. PWM is neither a law firm nor a certified public accounting firm and no portion of the presented material(s) should be construed as legal, accounting or consulting advice. A copy of the PWM’s current written disclosure statement discussing our advisory services and fees is available for review upon request. To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication (including attachments) is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. ©2012 Advisor Products Inc. All Rights Reserved. Photo Credit: Josch13

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]]> http://www.pwm-nj.com/knowledge/investment/getting-into-college/feed 0 Figuring Out How Much You Need In Retirement http://www.pwm-nj.com/knowledge/investment/retirement-money?utm_source=rss&utm_medium=rss&utm_campaign=retirement-money http://www.pwm-nj.com/knowledge/investment/retirement-money#comments Wed, 09 Jul 2014 12:58:23 +0000 http://www.pwm-nj.com/?p=9781 more]]> image of golf course

Do I Have Enough?

At some point, almost everyone asks this question: How much do I have to save for retirement? Of course, there’s no easy answer, but what may be even more disconcerting is the possibility that this may be the wrong question. It might be more beneficial to figure out how much income you will need annually in retirement than it is to pinpoint the amount you should try to set aside.

Start by Changing Your Mindset

You are who you are and that isn’t likely to shift 180 degrees in retirement. Sure, you’ll have more time to travel or pursue other activities, but you’ll still be the same person with the same basic values, interests, and inclinations. Armed with this knowledge, you may want to shift from the notion of accumulating a specific amount for your retirement to figuring out what your expenses will be on a year-to-year basis.

Once you understand your financial liabilities, you’ll be better prepared to devise a retirement saving strategy and at the same time eliminate fears that your money won’t last long enough. Targeting a “magic number” for the future can be stressful. According to a recent survey, 82% of the respondents who have dependents and are age 44 through 49 were more worried about outliving their money than they were about death. Concentrating more on your personal needs can help alleviate concerns.

Begin this process by calculating your true retirement liability. Rather than asking “How much money do I need to retire?” try to determine “How much money in future dollars will I need each year during retirement?”

Calculate Your Expected Expenses

Where and how will you spend most of your money during retirement? Everyone’s situation is different, but recent statistics from the Bureau of Labor Statistics indicate the typical results, some of which you may find surprising. Here are a few findings to ponder about retirees age 65 and over:

  • They spend 34.2% of their money on housing. If you’re already an empty nester, or expect to be one in the near future, you might look to downsize soon to take advantage of the equity built up in your home. In any event, consider working out a plan that lets you live more economically than you could when you were in the middle of a career and raising kids.
  • They spend 16% of their money on transportation. And it’s not paying for gasoline that hurts the wallet most; the bulk of these expenditures come from buying new cars. Instead of succumbing to the temptation to rush out and get a new vehicle every three years, consider keeping your existing car or buying a pre-owned model.
  • They spend only 0.5% of their money on education. Just because you’re retired doesn’t mean you should stop learning. Going back to school on a part-time basis—even if you do it online—could improve your lifestyle and open up new opportunities.

This is just the tip of the iceberg. Also consider health care—often a big expense—food, entertainment, and retirement travel. No one knows better than you do where your money will go.

4 Steps to Prepare

It can be challenging to change the way you think about retirement planning, but here are four steps that may help:

  1. Make retirement planning a top priority. It’s been said that any plan is better than no plan at all. You’re one step ahead of the game if you’ve already started to focus on the challenges ahead. Ignoring it could be the worst option.
  2. Seek the counsel of others. We would be glad to provide whatever assistance you need in meeting your goals. It is often helpful if an impartial voice can provide guidance on emotional topics such as selling the family home or bypassing luxuries.
  3. Create a range of estimates for what you will spend. Even if you knew with certainty how long you would live and how much you would spend, it still would be extremely difficult, if not impossible, to estimate their retirement liability exactly. Make reasonable estimates within a range and review the analysis annually.
  4. Start sooner rather than later. Regardless of your age, it’s not too early to begin planning. Your circumstances could change, so you’ll need to build some flexibility into the plan. That’s far easier at an early age than it is when retirement is knocking on the door.

 

Please note that various factors such as changes in tax laws, inflation, and the uncertainty of social security can have a significant impact on the results of the study discussed in this section.This presentation was designed for educational purposes only and is not intended for specific legal, accounting, investment, income tax or other professional advice. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by PWM Advisory Group, LLC [“PWM”]), or any non-investment related content, made reference to directly or indirectly in the presented material(s) will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from PWM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. PWM is neither a law firm nor a certified public accounting firm and no portion of the presented material(s) should be construed as legal, accounting or consulting advice. A copy of the PWM’s current written disclosure statement discussing our advisory services and fees is available for review upon request. To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication (including attachments) is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. ©2012 Advisor Products Inc. All Rights Reserved. Photo Credit:  tpsdave

 

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Sound Advice On Donor-Advised Funds http://www.pwm-nj.com/knowledge/tax/daf?utm_source=rss&utm_medium=rss&utm_campaign=daf http://www.pwm-nj.com/knowledge/tax/daf#comments Tue, 08 Jul 2014 13:09:37 +0000 http://www.pwm-nj.com/?p=9779 more]]> image of hands

Charitable giving in the United States has rebounded.

In 2013, such donations were up 4.9% from a year earlier. According to the “Charitable Giving Report” for 2014, large nonprofit organizations grew by 5.7%, medium-sized organizations by 3.8%, and small nonprofits by 3.6%. And 2013 marked the biggest year-over-year increase in charitable giving since the recession of 2008-09.

But some people these days want to do more than simply write checks to their favorite causes. One way to become more involved in the process is to set up a donor-advised fund.

These funds work pretty much as the name implies, giving donors more control than normal over contributions. Typically, you give money to a fund managed by a financial institution. A minimum gift of $5,000 or more may be required. Also, the fund may charge fees, based on a percentage of your assets in the fund (often charging from 0.5 to 1%), to cover administrative costs.

Then donors choose one or more charitable organizations to be potential recipients of their gifts. The fund reviews those selections to verify that the charity is eligible to receive tax-deductible contributions. Once the grant is approved by the fund, the money is sent to the appropriate charity, indicating that the contribution was made upon the donor-advised fund’s recommendation. Gifts also may be made anonymously.

What are the tax benefits? The basic rules for charitable donations still apply. You generally can deduct monetary contributions in full, although the amount is limited to 50% of your adjusted gross income (AGI). Any excess may be carried over for up to five years. You also can claim a deduction for the fair market value of donated property you’ve held for longer than one year, but deductions for those gifts are limited to 30% of AGI. In either case, though, you get the deduction in the year you make the contribution, even if the money doesn’t go from the donor-advised fund to the charity until a future tax year.

Keep in mind, however, that charitable deductions are among the items that now may be reduced under the “Pease rule.” The reduction is equal to 3% of the excess AGI over $250,000 for single filers and $300,000 for joint filers (but not more than 80% overall). You may want to calculate how these reductions would affect the tax-saving benefits of your generosity.

Finally, it’s important to remember you can’t benefit personally from your donations to a donor-advised fund. For instance, you can’t authorize the fund to pay for tickets to a fundraiser that you attend or use the assets to support a political candidate.

Please do not hesitate to contact us if you have any questions regarding Donor-Advised Funds or how we can help you build a charitable strategy.

 

 

Please note that various factors such as changes in tax laws, inflation, and the uncertainty of social security can have a significant impact on the results of the study discussed in this section.This presentation was designed for educational purposes only and is not intended for specific legal, accounting, investment, income tax or other professional advice. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by PWM Advisory Group, LLC [“PWM”]), or any non-investment related content, made reference to directly or indirectly in the presented material(s) will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from PWM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. PWM is neither a law firm nor a certified public accounting firm and no portion of the presented material(s) should be construed as legal, accounting or consulting advice. A copy of the PWM’s current written disclosure statement discussing our advisory services and fees is available for review upon request. To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication (including attachments) is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. ©2012 Advisor Products Inc. All Rights Reserved. Photo Credit:  AlexVan

 

 

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Talking and Acting Tough http://www.pwm-nj.com/knowledge/investment/samsung?utm_source=rss&utm_medium=rss&utm_campaign=samsung http://www.pwm-nj.com/knowledge/investment/samsung#comments Sat, 05 Jul 2014 20:16:16 +0000 http://www.pwm-nj.com/?p=9799 more]]> image of inside a computer

| Featured Author: Jim Ferrare |

Alleged Child Labor Issues

According to a Reuter’s news report, Samsung electronics has suspended its operations with a Chinese supplier because of suspected child labor law violations. Only a few days earlier US based China Labor Watch (CLW) released a report alleging it found “at least five child workers” without proper paperwork. In a recent statement Samsung responded: “If the investigations conclude that the supplier indeed hired children illegally, Samsung will permanently halt business with the supplier in accordance with its zero-tolerance policy on child labor”.

This is not the first time CLW has brought to the public’s attention alleged child labor issues related to Samsung factories in China. In press releases in December 2013 it again made claims of children labor violations involving Samsung factories located in China. It should be noted the claim of exploitative child labor in China is not rare and is something that has plagued Samsung competitor Apple as well.Jim Ferrare's pencil headshot

In June 2014 Samsung published a detailed 87 page sustainability report titled Global Harmony citing it inspected working conditions at 200 suppliers in the previous year and “no instances of child labor were found”. It is possible that both CLW and Samsung’s statements are truthful and it appears that this week Samsung is taking action following CLW’s most recent allegations.

Child labor is not a topic Samsung is shying away from. On its website Vice Chairman and CEO Oh-Hyun Kwon stated beginning “in 2012, in order to ensure the responsible management of our supply chain, Samsung Electronics intensified the systematic scrutiny of our suppliers in terms of labor conditions, human rights and health and safety”.
It should also be noted that Samsung has initiated many other steps and reporting measures that are aimed at improving the environment, creating a more transparent management and improving gender equality to name a few.

Apparently Samsung is not just talking anymore. If true, hopefully this will create pressure on other global titans to follow suit.

Important Disclosure: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by PWM Advisory Group. [“PWM”] ), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from PWM. Please remember to contact PWM in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. PWM is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the PWM current written disclosure statement discussing our advisory services and fees is available for review upon request. Photo Credit:  

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]]> http://www.pwm-nj.com/knowledge/investment/samsung/feed 0 The Next Generation of Values Based Investing http://www.pwm-nj.com/knowledge/investment/value-based-investing?utm_source=rss&utm_medium=rss&utm_campaign=value-based-investing http://www.pwm-nj.com/knowledge/investment/value-based-investing#comments Wed, 25 Jun 2014 12:55:59 +0000 http://www.pwm-nj.com/?p=9753 more]]> image of fingers touching

| Featured Author: Carmine D’Avino, CFP |

Sustainable Responsible Investing Version 2.0

We are witnessing the evolution of values based investing. For decades, the concept of investing with values was synonymous with Socially Responsible Investing, or SRI. This approach was primarily guided by exclusionary screens which focused on specific investments to avoid – such as tobacco or firearms companies. And although we haven’t seen concrete evidence to prove it, conventional wisdom has long held that SRI was an ideological, feel-good way to invest but not a great money making proposition.

While the acronym SRI is still used, the underlying focus has evolved. Today more than ever investors are interested in Sustainable Responsible Investing. The concept of values based investing has changed by placing greater emphasis on companies with sound Environmental, Social and Governance (ESG) policies. Simply put, it’s less about what types of companies to avoid and more about aligning ones investments with the most responsible corporate citizens.Carmine D'Avino's pencil headshot

Along with this evolution, perceptions surrounding the potential profitability of SRI are also changing. Doing good and doing well financially are no longer viewed as being mutually exclusive. Actually, we see growing numbers of individuals and institutions who want investments that produce a measurable, beneficial social and environmental impact along with a competitive financial return.

Our decision to place greater emphasis on ESG criteria is rooted in the belief that corporations that do good can also be profitable investments. High quality, industry leading companies are increasingly becoming forces for positive change – whether by offering employees free college tuition, updating their fleet of delivery vehicles to be more fuel efficient or by taking steps to ensure diversity on their boards.

It is possible to invest in the public markets thru quality companies with sustainable, long-term visions. The latest generation of SRI seeks to align responsible societal and environmental policies with positive investment results. After decades of companies focusing on short-term results, SRI Version 2.0 is an evolved approach whose time has come.

 

Important Disclosure: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by PWM Advisory Group. [“PWM”] ), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from PWM. Please remember to contact PWM in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. PWM is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the PWM current written disclosure statement discussing our advisory services and fees is available for review upon request. Photo Credit: 

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Investing With a Purpose http://www.pwm-nj.com/knowledge/investment/investing-with-a-purpose?utm_source=rss&utm_medium=rss&utm_campaign=investing-with-a-purpose http://www.pwm-nj.com/knowledge/investment/investing-with-a-purpose#comments Wed, 11 Jun 2014 12:44:57 +0000 http://www.pwm-nj.com/?p=9687 more]]> image of apple tree

| Featured Author | Jim Ferrare

A Call out to Corporate CEO’s and Board Members

The train is leaving the station, its eco friendly, full of diverse passengers, maintains a tolerance for whistle blowers, a strong desire to avoid negative surprises and a passion to get you to your destination in a timely and safe manner. If you are not on board you are headed in the wrong direction.

Hardly a day goes by where the media is not reporting on an environmental, social or governance concern in corporate America. In the past week the Wall Street Journal spotlighted the lack of diversity in Fortune 500 board rooms, the EPA announced proposals to cut carbon dioxide emissions from coal plants by 30%, the SEC called for higher scrutiny of high frequency traders, Citigroup’s Board enlisted an outside law firm to help it understand why it lost $400 million at the bank’s Mexico unit and finally we heard General Motor’s CEO, Mary Barra vowing to upend a corporate culture responsible for “a pattern of incompetence and neglect”. And these are just some of the highlights (perhaps highlights is not the best choice of words) for the past week.Jim Ferrare's pencil headshot

As stewards of our client’s money we are placing a growing emphasis on environmental, social and governance (ESG) criteria when choosing an investment. It is our strong belief, that companies which are simply not adding a women director to quiet their critics, but rather understand there can be long- term competitive advantages associated with respecting the environment, stakeholders and aligning their interests with shareholders will outshine the competition in all relevant phases including stock market appreciation.

We are not saying that our internal universe of investment choices will exclude (or include) a particular investment based solely on one factor or incident but rather we will evaluate that company using a composite of ESG factors in conjunction with traditional financial and valuation analysis. In particular, with respect ESG factors we will examine the trend of results as well as their current peer rank.

To us sustainable and responsible investing equates to profiting with a purpose. And we are all aboard.

Important Disclosure: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by PWM Advisory Group. [“PWM”] ), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from PWM. Please remember to contact PWM in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. PWM is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the PWM current written disclosure statement discussing our advisory services and fees is available for review upon request. Photo Credit:  

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Financial Aid for College: A Few Tips http://www.pwm-nj.com/knowledge/investment/financial-aid-for-college?utm_source=rss&utm_medium=rss&utm_campaign=financial-aid-for-college http://www.pwm-nj.com/knowledge/investment/financial-aid-for-college#comments Wed, 04 Jun 2014 13:01:27 +0000 http://www.pwm-nj.com/?p=9680 more]]> financial aid

Understanding Financial Aid

Key to understanding financial aid eligibility is learning how financial aid formulas work. They’re rather complex and vary from school to school, but they basically use answers to questions about family income, assets, and size to help arrive at a special number known as the expected family contribution, or EFC. The EFC represents the amount of tuition, fees, and other college costs the family is expected to cover based on its financial situation and other factors. Not all assets are counted when calculating the EFC (for example, assets held in retirement accounts don’t count).

However, income plays a far greater role than assets in determining EFC. As much as 47% of income may be used in calculating a family’s EFC, whereas parental assets are assessed at a maximum of 5.64%, and student-owned assets at a maximum of 20%. Financial-aid awards are based on the previous calendar year’s income, so some families use strategies to reduce income the year before applying. For example, if one parent is considering retiring or going back to school, doing so will likely reduce the family’s income, thus increasing aid eligibility. A parent also may ask that a work bonus be postponed to reduce income that counts against aid.

One common mistake families make is selling securities the year before the student enrolls as a way to cover college costs. But any capital gains from the sale count as income in the following year’s financial aid calculation, so it may be best to sell securities the year before the base year (in other words, two years before the student enrolls), when the proceeds won’t be counted as income.

This should not be considered tax or financial planning advice. Please consult a tax and/or financial professional for advice specific to your individual circumstances.

This presentation was designed for educational purposes only and is not intended for specific legal, accounting, investment, income tax or other professional advice. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by PWM Advisory Group, LLC [“PWM”]), or any non-investment related content, made reference to directly or indirectly in the presented material(s) will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from PWM. PWM is neither a law firm nor a certified public accounting firm and no portion of the presented material(s) should be construed as legal, accounting or consulting advice. A copy of the PWM’s current written disclosure statement discussing our advisory services and fees is available for review upon request. ©2012 Morningstar, Inc. All Rights Reserved. The information contained herein (1) is intended solely for informational purposes; (2) is proprietary to Morningstar and/or the content providers; (3) is not warranted to be accurate, complete, or timely; and (4) does not constitute investment advice of any kind. Neither Morningstar nor the content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. “Morningstar” and the Morningstar logo are registered trademarks of Morningstar, Inc. Morningstar Market Commentary originally published by Robert Johnson, CFA, Director of Economic Analysis with Morningstar and has been modified for Morningstar Newsletter Builder. To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication (including attachments) is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. Photo Credit: PublicDomainPictures

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