We continue our Financial Planning 101 series with the balance sheet, by addressing what to do with any excess cash. If you don't have excess cash, then we will go over the importance of building up an emergency fund.
For many folks, the recent turmoil in the regional banking sector has added a fresh new layer of anxiety about their finances. The media has not helped matters either, calling it the 'greatest banking crisis since the financial crisis of 2008.' To be fair, it is the only banking crisis since the financial crisis. Nevertheless, at West Financial, we have heard from clients who question whether their investments are safe, or if they should be concerned. Based on this apprehension, we thought it a good idea to write a refresher on what risks clients assume when utilizing different savings instruments.
The start of spring is one of my favorite times of the year. It's not just the warmer weather itself, but also the excitement about anticipated trips to the beach and other vacation spots in the coming months. Wherever your favorite vacation spots are located, we've all been in get-a-way traffic, desperately searching Waze for the less traveled roads.
In this series of articles, we will be introducing financial planning concepts for participants to consider, related both to personal finances and participation in a retirement plan. This first discussion is about account consolidation, a basic recommendation in many of our plans.
Pre-tax retirement accounts are great while you are contributing, but the tax bite can be quite a shock when it’s time to take distributions in retirement. There is one way, however, to avoid paying tax on certain pre-tax IRA distributions. The secret is to make qualifying IRA distributions directly to charity!
The increase of required minimum distribution (RMD) age from 72 to 73 this year, and to 75 in ten years, has the potential of creating some pretty impressive tax implications for those with larger retirement plan balances. While it is all well and good to put off taking distributions until you absolutely have to, you should be aware of how that decision impacts not only your own tax situation, but also the tax situation of your beneficiaries.
At the beginning of 2023, I decided to really look at how I spent my money in 2022, according to my primary credit card. It was an eye opener, especially since I didn’t see myself as someone who eats out much, but dining out was one of my top spending categories. I guess all of those impromptu trips to get a latte and pastry really add up! That got me thinking about the days when paying more than $10 for a fancy coffee and croissant was simply not an option.
During the depths of the pandemic, work from home businesses were, undoubtedly, huge beneficiaries of consumer demand for their services and products. First-order thinking was rewarded during this period, as investments into these stocks appreciated handsomely. While we experienced some uprooting of our lives and the impact of rapid change, West Financial was also brainstorming ways to intelligently invest in long-term COVID-winners.
This has been a difficult year for stock and bond investors. After several years of above average performance, the broad based market index returns have been negative this year, reducing portfolio values relative to where they started the year.
In our first article (see Understanding Your Credit Score - Part I), we discussed credit reporting and what activities impact your credit score. We pick up from there with more information on how to potentially improve your credit score, the importance of reviewing your credit report, and how (and why) to freeze your credit.
