PWM - Financial & Investment Advisors in New Jersey | Private Wealth Management - Registered Investment Advisor, RIA | NJ, NY, PA, FL http://www.pwm-nj.com Thu, 18 Sep 2014 14:38:58 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.2 Charity Fraud – Don’t Fall Victim http://www.pwm-nj.com/knowledge/investment/charity-fraud-dont-fall-victim?utm_source=rss&utm_medium=rss&utm_campaign=charity-fraud-dont-fall-victim http://www.pwm-nj.com/knowledge/investment/charity-fraud-dont-fall-victim#comments Wed, 17 Sep 2014 12:43:50 +0000 http://www.pwm-nj.com/?p=9901 more]]> image of aloe tree

| Featured Author: Elizabeth DeSandolo |

Know Where Your Money is Going

I recently received an email from the director of a child welfare organization soliciting donations to help fund their program. Their foundation initially appeared to be a charity that PWM would be interested in helping. The profile looked promising, their website was impressive and an internet search produced several positive articles. However, further vetting of this organization on CharityNavigator.org uncovered evidence of charity fraud.bio image

CharityNavigator.org can be a useful resource for those interested in giving back to their community. This organization evaluates a variety of charities and acts as an independent source of information regarding their practices. Charity Navigator does not accept contributions from the organizations it reviews and is therefore able to provide honest and objective feedback.

The foundation that we were considering to support was in fact fraudulent. Upon further investigation, we were able to uncover information about the director and his counterfeit charities.

At PWM, we participate in Impact Investing and donate a portion of our revenues to many worthy causes. We are conscious of our charitable objectives, but perhaps not always aware of the predators who try to take advantage of our philanthropy. We believe very strongly in putting our resources behind worthwhile charities and investments that respect social causes and support equality.

We will continue to give back whenever we can. For those of you that are charitably inclined, we encourage you to take from our experience. Always be mindful of fraudsters and take measures to ensure your money is getting to those who really need it.

 

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: PublicDomainImages

If You Liked This Article, SHARE IT!

Help Us Spread The Word. Share This Article With Your Friends & Peers

↓     ↓     ↓    

 

]]>
http://www.pwm-nj.com/knowledge/investment/charity-fraud-dont-fall-victim/feed 0
Dispel These 7 Popular Myths About Retirement http://www.pwm-nj.com/knowledge/investment/retirement-myths?utm_source=rss&utm_medium=rss&utm_campaign=retirement-myths http://www.pwm-nj.com/knowledge/investment/retirement-myths#comments Tue, 16 Sep 2014 13:00:08 +0000 http://www.pwm-nj.com/?p=9910 more]]> image of a man thinking

Make Sure You Don’t Fall Short of Your Goals

Retirement is changing. People are living longer, and many stay healthy and vital into their 80s and 90s. Working, at least part time, has become more commonplace. Yet with fewer and fewer corporate pensions to fall back on these days, the money to pay for a long life after work may not be there. And with change comes confusion and misperceptions about what really may happen during your retirement, however you define it. Consider these seven common ideas that may prove overly optimistic—and then tweak your plans to make sure you don’t fall short of your goals:

Myth #1: You’ll have saved enough for retirement when you get there. According to a 2014 survey by the Employee Benefits Research Institute (EBRI), an independent research firm, only 42% of current workers over age 55 say they’ve saved at least $100,000, while just 23% have set aside more than $250,000. The EBRI survey also indicated that just 18% of all workers were “very confident” they’ve saved enough for retirement. You easily could find yourself facing a shortfall.

Myth #2. You’ll spend a lot less than you do now. Some cash outlays, such as paying off the mortgage and sending the kids to college, no longer may apply. But what do you want your retirement to look like? If you’ve envisioned globe-trotting or indulging in expensive hobbies, you may find that will erode your nest egg more quickly than you expected. Unexpected expenses—high-priced dental work, say, or a down payment for a child’s home—also can siphon away funds.

Myth #3. You’ll save a lot of money when you downsize your home. Moving to a smaller place probably will reduce maintenance costs and property taxes. But that doesn’t mean you won’t still have all the usual expenses associated with home ownership—just on a smaller scale—plus other possible fees that may apply if you’ve moved into an over-55 community. And if you’ve relocated to a ritzy neighborhood in a city or resort area, your expenses could go up.

Myth #4. You’ll continue working past the normal retirement age. You may want to stay on the job or shift to something else, but such plans don’t always work out, and health problems also could pose obstacles. And if you’re counting on job income to shore up your finances through many years of “retirement,” not being able to do it—or deciding you’re just not up to it—could leave a big hole in your retirement income.

Myth #5. You easily can get a part-time job if you need one. When you retire from your full-time position, you might seek part-time employment, but those jobs may be harder to find, and to keep, than you imagine. You may be competing with youngsters who are more tech-savvy than you for jobs requiring computer skills. What’s more, if you’re living in an area with numerous other retirees, which is often the case, the competition can be fierce.

Myth #6. You can rely on Medicare for all your medical expenses. Retirees often expect Medicare to pick up the entire cost of physician visits, hearing or eye exams, or the like, but that’s simply not how the system works. In fact, Medicare covers only roughly half of such expenses, according to data recently provided by the Kaiser Family Foundation. And don’t overlook the exorbitant costs of staying in a long-term care facility or paying for in-home nursing care. If you don’t have a supplemental policy, Medicare might not provide enough coverage for you.

Myth #7. You can rely on Social Security for most of your income. Different people have different ideas about Social Security. Some almost disregard those payments from the government, thinking they’ll be too small to make any difference in funding retirement. Others, though, talk about Social Security like it’s the be-all, end-all. It’s neither. The fact is, Social Security can be genuinely helpful, often covering some of your essential expenses. But for most people it’s not nearly enough to live on. The Social Security Administration says the average monthly benefit in 2014 is $1,294, which works out to $15,528 a year. That’s why it’s vital to take steps to supplement Social Security with income from investments, employer retirement plans, IRAs, and other sources. There’s one more myth we would like to expose—that it’s too late to change your destiny. Reexamine your basic assumptions about your retirement and then make a reasonable retirement savings plan based on your needs and realistic objectives.

 

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: geralt

 

SHARE THE WEALTH!

Help Us Spread The Word. Share This Article With Your Friends & Peers!

↓ ↓ ↓ 

 

]]>
http://www.pwm-nj.com/knowledge/investment/retirement-myths/feed 0
The Rising Cost of Not Going to College http://www.pwm-nj.com/knowledge/investment/cost-of-not-going-to-college?utm_source=rss&utm_medium=rss&utm_campaign=cost-of-not-going-to-college http://www.pwm-nj.com/knowledge/investment/cost-of-not-going-to-college#comments Wed, 03 Sep 2014 13:00:35 +0000 http://www.pwm-nj.com/?p=9885 more]]>

image of campus

Why Education Matters Today

A recent study from the Pew Research Center found that on virtually every measure of economic well-being and career attainment, from personal earnings to job satisfaction, young college graduates are outperforming their peers with less education. Moreover, the findings show that when today’s young adults are compared with previous generations, the disparity in economic outcomes between college graduates and those with a high school diploma or less formal schooling has never been greater in the modern era.

Millennial college graduates aged between 25 and 32 who are working full time earn about $17,500 more annually than their peers who only hold a high-school diploma. This pay gap was significantly smaller in previous generations.

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: Picography

 

SHARE THE WEALTH!

Help Us Spread The Word. Share This Article With Your Friends & Peers!

↓ ↓ ↓ 

 

]]>
http://www.pwm-nj.com/knowledge/investment/cost-of-not-going-to-college/feed 0
Concerned About Longevity? Three Mistakes to Avoid http://www.pwm-nj.com/knowledge/investment/longevity?utm_source=rss&utm_medium=rss&utm_campaign=longevity http://www.pwm-nj.com/knowledge/investment/longevity#comments Tue, 02 Sep 2014 13:00:33 +0000 http://www.pwm-nj.com/?p=9895 more]]> image of a retired couple - PublicDomainPictures

Better to Be Safe Than Sorry

Longevity is often cheered as an achievement, but the downside of living well beyond one’s average life expectancy is that it can strain (or worse, completely deplete) an individual’s financial resources. The first step in addressing longevity risk is to evaluate just how great the odds are that either you or your spouse will have a much longer-than-average life span. Health considerations, family longevity history, employment choices, and income level may all be factors. If you’ve assessed these considerations and are concerned about longevity risk–or if you’ve determined that you’d simply rather be safe than sorry–here are three key mistakes to avoid.

Mistake 1: Holding a Too-Conservative Portfolio. When investors think about reducing risk in their portfolios, they often set their sights on curtailing short-term volatility—the risk that their portfolios will lose 10% or even 20% in a given year. But a too-conservative portfolio (one that emphasizes cash and bonds at the expense of stocks) can actually enhance shortfall risk while keeping a lid on short-term volatility. But, right now, interest rates have much more room to move up than they do down, which may reduce the opportunity for bond-price appreciation during the next decade. With such low returns, retirees with too-safe portfolios may not even outearn the inflation rate over time.

Mistake 2: Not Delaying Social Security Filing.* Because it provides an inflation-adjusted income stream for the rest of your life, Social Security is designed to provide you with at least some money coming in the door even if your investment portfolio runs low (or out) during your later years. If you file early (you’re eligible to do so as early as age 62), you permanently reduce your annual benefit from the program.

Delayed filing, on the other hand, has the opposite effect, amping up the value of your hedge. Not only will your benefits last as long as you do, but they’ll be higher, perhaps even substantially so, as well. Those who delay filing until age 70 may receive an annual benefit that’s more than 30% higher than what they would have received had they filed at full retirement age (currently 66) and more than 50% higher than their benefit had they filed at age 62.

Mistake 3: Not Adjusting Withdrawal-Rate Assumptions. Just as savings rates are the main determinant of success during the accumulation years (much more than investment selection, in fact), spending rate is one of the central determinants of retirement plans’ viability.

The 4% rule, which indicates that you can withdraw 4% of your total portfolio balance in year 1 of retirement, then annually inflation-adjust that dollar amount to determine each subsequent year’s portfolio payout, is a decent starting point in the sustainable withdrawal-rate discussion. But it’s important to tweak your withdrawal rate based on your own situation. If you have a sparkling health record and it looks likely that you’ll be retired longer than the 30-year withdrawal period that underpins the 4% rule, you may be better off starting a bit lower.

In a similar vein, it’s important to not set and forget your retirement-plan variables, such as your spending rate and your asset allocation, because retirement progresses and new information becomes available about your health and potential longevity, market valuations, and so forth.

This is for informational 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 specific to your individual circumstances. Asset allocation and diversification are methods used to help manage risk. They do not ensure a profit or protect against a loss. Returns and principal invested in securities are not guaranteed, and stocks have been more volatile than bonds.

*Source: Social Security Administration.

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

SHARE THE WEALTH!

Help Us Spread The Word. Share This Article With Your Friends & Peers!

↓ ↓ ↓ 

 

]]>
http://www.pwm-nj.com/knowledge/investment/longevity/feed 0
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: 

SHARE THE WEALTH!

Help Us Spread The Word. Share This Article With Your Friends & Peers!

↓ ↓ ↓ 

]]>
http://www.pwm-nj.com/knowledge/investment/digital-estate-planning/feed 0
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: 

SHARE THE WEALTH!

Help Us Spread The Word. Share This Article With Your Friends & Peers!

↓ ↓ ↓ 

]]>
http://www.pwm-nj.com/knowledge/investment/roth-iras/feed 0
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

SHARE THE WEALTH!

Help Us Spread The Word. Share This Article With Your Friends & Peers!

↓ ↓ ↓ 

 

 

]]>
http://www.pwm-nj.com/knowledge/investment/retirement-hurdles/feed 0
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

SHARE THE WEALTH!

Help Us Spread The Word. Share This Article With Your Friends & Peers!

↓ ↓ ↓ 

]]> 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

 

SHARE THE WEALTH!

Help Us Spread The Word. Share This Article With Your Friends & Peers!

↓ ↓ ↓ 

 

]]>
http://www.pwm-nj.com/knowledge/investment/retirement-money/feed 0
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

 

 

SHARE THE WEALTH!

Help Us Spread The Word. Share This Article With Your Friends & Peers!

↓ ↓ ↓ 

 

]]>
http://www.pwm-nj.com/knowledge/tax/daf/feed 0