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  • The end of a marriage does not have to mean the end of financial stability: in fact, for some women it is just the opposite. Some women find that having no choice but to take control of their own financial planning gives them a confidence they may have not had before. Kiplinger.com published “Financial Confidence [] ©Bring Clarity to Your Finances™. Study Finds Divorced Women Gain Financial Confidence with Time is a post from Bring Clarity to Your Finances™
  • With stocks hovering around an all-time record high, a growing likelihood of a Federal income tax rate hike by 2021, and the deadline for end-of-year tax tactics closing in fast, this is a timely reminder to run a reality check on your retirement income plan. An unusual confluence of tax, financial-market and political factors make this a particularly good time for high-income and high net worth individuals to check their retirement income plan. Let’s get specific about current conditions: In 2019, the federal government is spending a trillion dollars more than it collected in revenue, and at the end of 2018, the national debt totaled $22 trillion Meanwhile, changing political winds could sweep in higher federal tax rates. Managing your tax bracket now — in case of a hike in federal income tax brackets — could lower your tax bill, not just for 2019 but in the year or two ahead, as well. Proactive tax planning before the end of 2019 may be especially timely for business owners with an interest in a pass-through entity, like an LLC, S corp, or sole proprietorship.
  • Navigating the transition into retirement can be difficult because so many things change! From where you live to how you spend your time to planning for your future, your life is seen from a new vantage point. A topic I see many retirees struggle with is incorporating their charitable efforts into their estate plans. Your charitable ambitions have helped guide your life from the organizations you support to all of the wonderful relationships you have sustained along the way and your passion for giving can also shine through as you plan for your legacy. Let’s explore a few simple action items that you can do to help make your legacy a charitable-focused one. 1. Understand your charitable goalsYour goals are the bedrock for your financial strategy—they inspire your decisions and motivate you to give your life a purpose. So many people find fulfillment and greater meaning in life through the charitable efforts they support through both using their time and financial resources. For you, this effort could be focused on your church community, one where you nurture the financial as well as relational components, a place where you develop a community. Since your community has been so instrumental throughout your life, it only makes sense that you wish to build-in that continued support into your legacy. The first step is understanding what your charitable goals are. Let’s start with a simple question: What does a charitable legacy look like to you? This is a question that only you can answer and it will look different for everyone. For you, it may be that you want to donate a percentage of your estate to your church or charity or perhaps you want to set up a scholarship fund for kids in your community with similar charitable drives as you, or you might even want to set up your own charity or foundation. No matter your goal, start by defining it and working through what your ideal situation would be. With prudent planning and adequate savings, you will be able to incorporate the things that matter most to you in your legacy. Because, after all, your legacy is yours. It should be specific to you and your goals and dreams for the future. If you are struggling to think through how this could take shape, take a step back and evaluate your current charitable efforts. What are you doing now? Is there a way that you can use your current work and build it into part of your legacy? Who can help you attain that? It will be more helpful for you to create a plan when you have a clear understanding of your goals. 2. Amend your estate planYour estate plan comprises of so many documents that outline the plan for your assets. When you are looking to include charitable efforts into your legacy, it is important to focus on the documents that can help you achieve that goal. Once you understand your goals, you will be able to work through the best strategy to implement those goals. That will also help determine the type of assets that will best serve your goals whether that be cash, assets, real estate, or other possessions such as fine art or antiques. You can make this happen by stipulating these wishes in your will. Keep in mind though that your will most likely will need to go through probate, a legal process of authenticating a will and ensuring all assets are distributed properly, which can trigger additional taxes and expenses. There are other vehicles for supporting charitable efforts in your estate plan including a charitable gift annuity, donor-advised fund , family foundation, and appreciated assets. Not every option will be the right fit for you, but with the help of your financial and legal team, you will be able to create an estate plan that is as generous as you. Estate plans aren’t set in stone. You can alter them as you go along and make edits if a significant change occurs in your life. Estate planning is a process and one that is custom to your goals, values, and priorities . 3. Include your loved onesYour loved ones are an important piece of your legacy. How will they impact your legacy? Will you also be leaving assets for your loved ones? Figuring out how you want to include your loved ones in your estate plan can be tricky but be sure you are encouraging an honest dialogue with them. When you are mapping out your plan for your charitable efforts, invite them to join you in these conversations. Spending this time together will allow you to openly express your wishes and get their input on the plan. Open, honest communication is especially important with tough subjects such as these. Legacy planning is a complex process. Take some time to evaluate your value set and uncover how your charitable efforts fit into that. You can incorporate charitable efforts into your legacy in many ways, it is just about finding the way that stays true to you and the people you love most. We are so passionate about extending our hands to help people hone in their charitable efforts. If you would like to discuss your ideas for including charitable giving into your legacy, give us a call . We can’t wait to hear from you!
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  • As people prepare for the Thanksgiving holiday, some are looking forward to it and waxing poetic about family togetherness while others are just going to try to grin and bear it. Here is another approach: think about the Thanksgiving holiday as a time to help younger relatives prepare for a better financial future. It can be [] ©Bring Clarity to Your Finances™. Teachable Moments at Thanksgiving is a post from Bring Clarity to Your Finances™
  • Major economic trends are always unfolding but are hidden in plain sight. Along these, only if you know what to look for would you see the spectacular After the Commerce Department released the latest monthly retail sales figures on Friday morning, the financial press and financial cable TV reported that October’s three-tenths of 1% uptick allayed fears of a recession but was nothing spectacular. The press totally missed the hidden trend in the economic picture by not adjusting retail sales for inflation. Inflation is at a long-term low and is not showing any sign of returning anytime soon to its performance in the 1970s, 80s and 90s. A low inflation rate masks strong real growth in consumer spending, but spotting it in the current investment picture requires a trained eye. Viewed from a prudent professional perspective, the newly released retail sales data helps explain why stock prices have been breaking records. Answers to life’s questions are often right in front of us, but we don’t see them. Please contact us with any questions fulbrightteam@moneyful.com or to set up a meeting at 919-544-0398, and don't hesitate to share this video with people who might benefit from our work.
  • When stocks repeatedly break new all-time highs, as they have done in recent weeks, you have to start wonder if investors are growing irrational, overly exuberant. Here are the facts. These four charts show the latest reading of key fundamental economic factors driving record financial market prices. Let’s start with the latest figures on the nation’s gross domestic product. Third quarter growth tallied by the federal government’s Bureau of Economic Analysis came in at 1.93%. The net of three of the four factors in economic growth — business investment, net exports, and state and local government spending — did not contribute to growth but consumer strength offset them and was the source of the 1.93% quarterly growth rate for the U.S.
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  • Have you ever worried that your low credit score will cause you to suffer the humiliation of being declined for credit cards, car loans, a mortgage, or even that rental apartment you fell in love with? What about getting turned down for your dream job? Having a better credit or credit score can improve: 1. Lower your interest rate on Loans and Credit Cards 2. Easier Approval for Credit 3. Higher Credit Limits that can increase your credit score 4. Easier to Get Approved as a Tenant 5. Easier Approval for Mortgage 6. Lower auto insurance 7. Easier Approval for Cell Phone contract 8. Save on Security Deposits for Utility Bills 9. Increase your odds of landing a job
  • “They are so lucky!”  How often have I heard this exclaimed?  If you are like me, you’ve probably heard something like this a whole bunch of times.   In varying ways I say it to myself as well while not considering in the moment how they created the luck. Sometimes I will say to myself,… [Continue] (Feed generated with FetchRSS )
  • Generally, side hustles are freelance or piecework in nature. Depending on how much time and energy you put into a side hustle, you could earn a significant supplemental income.
  • People go back and forth debating whether or not to save for retirement or pay down debt. Both are financial priorities and while it is possible to put some money towards both, some people want to know whether or not to concentrate on one or the other. In “Here’s why you should make paying off [] ©Bring Clarity to Your Finances™. Which Comes First: Student Loans or Retirement? is a post from Bring Clarity to Your Finances™
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  • The words Millennial and Baby Boomers are seldom used in the same sentence. Even more rare, as a way to connect the two generations in a show of solidarity. Today we will discuss these two distinct generations to illustrate how they can learn valuable lessons from each other simply by listening more closely and sharing more freely. Baby Boomers are people born between 1946 to 1964 and Millennials between 1981 to 1996. No artificial barriers should divide the two generations. If we are to understand each other more fully, we should try to embody mutual values and best practices in how to create an ideal quality of life, how to face the future for mutual enrichment, and how to give back to each other and to society at large.
  • This quarter is dedicated to exploring the topic of charity and the many ways we express it in our lives. But charitable actions are not something reserved for a certain time of year, rather the spirit of giving needs to transcend this quarter into finding a place in our hearts and minds each day. I’ve been thinking a lot about what charity means in my own life which lead me to explore the origins of the word “charity” and discover how it had been interpreted in the past. The Latin translation struck a particular chord with me. Caritatum is the Latin word for charity and in the Vulgate (the Latin Bible) it is used as a translation of the most powerful type of love in Ancient Greece, agape. Agape is love in its highest manifestation because it centers on respect and care for others, seeking the best for them unconditionally. This is a powerful view of charity because it stretches beyond our typical worldview of charitable efforts. While monetary support is an excellent and important component of charitable giving, it is not the only one. The giving of ourselves for the greater good, that is what charity is all about. Today, I’d like to explore a few ways that you can adopt a new dimension into your charitable efforts: your time. Beyond the financesGiving money in support of your church or local charity is an important part of your financial life. It helps the organization run and strengthens its own outreach efforts, allowing them to continue the good work they do. But there is more to giving than finances, the non-tangible side. As we learned from above, giving isn’t about money it is about people. We give in order to offer support to the people around us and that can be done in so many ways that aren’t financial. You can give your time, talents, and attention to a cause that is most important to you. Now, many people think of donating their time and energy during the holidays, whether it be serving food on Thanksgiving or spending part of Christmas day at the soup kitchen. And while these efforts are incredible, it is important to find ways to extend your giving beyond the holidays and one way to do that is using your gifts and talents to help others. You have a unique set of skills that can be beneficial to the community at large. Perhaps you have a strong financial background, you might consider joining the financial board of your church. Or maybe you are a gifted musician. You can use this gift in weekly services or in volunteer programs that bring music to nursing homes or other care facilities. Be proactive in finding where the need is and then use your skills to help fill that need. You can also be vigilant about saying yes to upcoming opportunities. You might find out that your church or community are all volunteering for a building project. Take the opportunity to help others through volunteer work and fellowship with your community at large. Charitable giving is about making connections with the people in your life. Drawing closer to your community is a wonderful way to collectively be apart of something bigger than yourselves. Impact-focused lifeWhat is the driving force of your life? Woah, you probably weren’t expecting such a deep question reading this financial blog, but the answers that come from exploring this question set the tone for the way you want to live your life and how your finances can support that vision. Increasing your charitable efforts is a great way to live a more impact-focused life. You may not always be in a position to offer financial support the way you want to, but that doesn’t mean your efforts need to stop. Use your passions to help those around you and that dedication will make a positive impact on your life and the community at large. Being charitable really means giving of our time and talents freely, without reservation, expectation, or desire for reciprocation. That is what it really means to honor and love ourselves and the community. Here at Step by Step, we are dedicated to working with people who want to make a positive impact in their home and their community. We would love to talk with you about incorporating charitable giving into your financial plan.
  • As your income increases your tax rate increases. In addition to increases in your tax rate, retirees incur three additional taxes/expenses when they reach certain income thresholds. These include taxation on a larger portion of your Social Security benefit, the 3.8 percent Medicare surtax on net investment income and an increase in Medicare premiums.
  • Kiplinger.com offered advice for married women who may need to do some retirement planning, mentioning this “sobering reality” “Most widows feel unprepared to make key financial decisions in their live-alone years.” While it isn’t pleasant to think about death, married people do have to consider they may need to continue without a spouse: not [] ©Bring Clarity to Your Finances™. Married? Get into Retirement Planning Before Losing a Spouse is a post from Bring Clarity to Your Finances™
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  • Credit cards can be a very handy tool to have in your toolbox, but when misused, can inflict significant damage. Depending on your spending habits and intended use for the card, one card may be more beneficial to own than another.
  • The nation is in a trade war with China, the manufacturing sector has fallen into a recession, and an impeachment of the President fraught with political uncertainty is under way. With so many frights haunting investors this Halloween, it’s important to note that the worst stock market scares of the past year all followed actions by the Federal Reserve Board, and the Fed has been able to avert Wall Street’s worst fears. An economic growth rate of about 1.8% annually is sustainable as long as the Fed does not make a policy mistake, which is always possible. Fed mistakes have caused every recession in modern history. But a subtle trend shown here is that the nation’s central bank has been able to lengthen the business cycle in recent decades. Fed Chairman Powell has said the Fed may be able to extend the current cycle of growth in gross domestic product well beyond the 123 months already achieved. Central banks have learned how to better manage national economies, a sign of progress in the modern era that has unfolded slowly in the post-War period. Since Alexander Hamilton revolutionized central banking in 1790, the United States has learned from its mistakes. The Fed used new modern tactics to stop the world financial system from collapsing in 2008 and its three-stage quantitative easing program — a central bank tactic never before attempted in a major economy — helped refinance this long expansion. The Fed is more nimble and quick to change monetary policy before economic growth is choked by high lending-rates, and the speed of information has accelerated the time it takes to promulgate monetary policy shifts. As Halloween sweeps by and the stock market hovers near a record high and seems vulnerable to frightening risks, watch the actions of the Fed in extending the expansion. Please contact us at 919-354-0368 or fulbrightteam@moneyful.com with any questions or to set up a meeting, and don't hesitate to share this video with people who might benefit from our work.
  • By any measure, we spend about half of our time thinking about something other than what we’re supposed to be doing. At work, this can be especially lethal to our projects and, along with them, our job satisfaction and success. Yet few people understand the degree to which routine diversions impact our performance. In fact, how many of us consider interruptions and distractions as just part of the job? But they aren’t, nor should they be, particularly when our precious projects are on the line. To start, let’s differentiate between interruptions, or externally driven diversions, and distractions, or internally driven diversions. Of the two, interruptions tend to be harder to deal with because they usually involve other living beings — say, a meddling micromanager, a chatty coworker, or even a playful pup. But distractions, particularly in the digital age, can be just as difficult. Who among us hasn’t allowed a ‘quick’ Facebook or email check devolve into 45 minutes we’ll never get back? Though minimizing distractions and interruptions may require different solutions, the solutions themselves share a common thread: They require recognizing the ‘entry point’ and then uncovering how to counter it. By focusing on entry points, we can actually prevent distractions and interruptions rather than just react to them. After all, once we’re diverted, we lose valuable momentum and oftentimes the will to recover it. So, whether interruptions or diversions, here are nine ways to deal with project diversions — and do your best work.
  • When I tell people I am a financial advisor, they sometimes ask the inevitable question: “Do you have any hot stock tips?” The GI doctor about to do my screening colonoscopy asked me this while I was lying in the fetal position. Awkward! No, I do not have any stock tips – hot or cold. []
  • The market once again has hit an all time high. That’s good, right? But, oddly enough, I sense some skepticism in the air. Can the market sustain these values? Will the impeachment proceedings harm our economy? From other angles I hear the economy is strong and has room to move ahead. It just depends who you listen to. The political landscape is Continue reading
  • Healthy people are generally happier and take a more active role in their finances. Individuals who strive to maintain their health have similar traits to those who work to improve their finances.
  • Most wealthy people were not born rich. In fact, 80% of wealthy people are first generation millionaires. In other words, never assume you are born into a standard of living that you can’t move out of. Your circumstances may not be ideal, or you may have been dealt a poor hand. However, even if your circumstances are not your fault, it remains your responsibility to manage your financial future. Don’t expect to be bailed out by family, the lottery, or the government. My goal is to empower you to take small steps towards wealth, even when you can’t see the immediate results.
  • One plot point in The Goldfinch (the movie version of this novel was released this year) involves a young boy whose mother has died and left him some money. In the movie, Theodore’s father coerces Theodore into calling his mother’s lawyer to ask that the lawyer to transfer a large sum of money to him. [] ©Bring Clarity to Your Finances™. Estate Planning is a Plot Point in The Goldfinch is a post from Bring Clarity to Your Finances™
  • Thanks to the #MeToo movement, companies are widely acknowledging the reality of sexual harassment and taking steps to protect employees. Driven by celebrity activists, the Time’s Up campaign is aiming to close the wage gap and shatter that glass ceiling. Yet, in workplaces across America, discrimination against women persists. Too often, bright, proficient, and extremely dedicated women are overlooked by their superiors, overshadowed by their male peers, and seethe in silence or worse, blame themselves. More influence on the job almost always means more money. After all, with more influence you can get that promotion, make more sales, get more people to like you. Joining us for our discussion Building Your Authority is Ron Price who is calling in from his Boise Idaho office. Ron Price is an internationally recognized business advisor, executive coach, speaker, and author who has worked in 15 countries and served in nearly every level of executive management over the past 40 years. The former president of a mult-million dollar international company, in 2004 he started Price Associates, a global leadership advisory firm. His latest co-authored book is Growing Influence Welcome to Mastering Your Money, is Ron Price .
  • When you hear the word money, what comes to mind? It might be a paycheck, a bill, a chore, a necessity for living your life. This is the side of money that we are most familiar with. The side that we spend, save, and curate to make our day-to-day lives run as normal. But there is another side to money that isn’t talked about nearly enough. The side that causes tears, stress, joy, fear, and love. The one that we spend days, nights, and weekends consumed by—the emotional side. Emotions are what make money so powerful—the way they impact our thoughts, feelings, and relationships with ourselves and those around us. Money can influence our emotions and the more we understand and embrace the emotional force of money, the better we will be at harnessing them and using them to help rather than hinder us and others. In order to do that, the first place to start is ourselves. Understand your relationship to financesYour relationship with your finances is a harbinger for understanding your financial inclinations. Let’s start by walking through a few questions: How do you feel about your finances? Are those feelings more positive or negative? Where do your feelings about money come from and what internal and external factors inform them? Have you always had this view about money and your personal finances? Quite often our first encounter with money happens at home. Your parents' or guardian’s relationship with their finances could have colored your view of finances as you grew up. Do you remember being taught about money, or was money and all of its concepts something you learned along the way? Analyzing your past relationship with finances can help you figure out how you see money today. The most important aspect here is understanding your why. The reason behind your relationship with money is the key to altering it and shifting it for the better. Your ‘why’ can help you think about your relationship in a deeper, provocative way. It can also point out areas where you can improve. Money will always be emotional, but if you have a healthy relationship with your finances you will be better able to handle financial stress and make a plan to get out of it. Alter negative emotional weightSometimes money can be stressful, from debt to market downturns to large purchases to being ready for retirement. There are so many moments throughout your financial journey that won’t always be easy, but it is important to maintain a healthy relationship with money throughout the tough times. When you were answering the questions above, did you uncover any negative thoughts or emotions toward your finances? If so, be honest about that bad feeling and dig into it to find the root of the problem. Why is this area of your financial life causing so much negativity? How can you change your strategy to find a better path forward? When you approach your finances in a calm, earnest way you will be able to better devise a plan that works for you. Don’t feel like you have to hide or conceal your emotions about your finances. If you are feeling upset about something, use that feeling to channel a positive response and work to change it. When you push something under the rug, you aren’t dealing with the emotion and trying to bury it will only lead to more problems for you and your loved ones later on. When you approach your finances with openness and honesty, you are promoting healthy conversations about your finances with your loved ones as well. Perhaps your spouse has the same concern you do, but if neither of you says it, no one will be aware. Take, for instance, your retirement savings. You might feel uneasy about your financial readiness for retirement and if you do nothing about it, that negative feeling can manifest into fear, anxiety, and stress until it snowballs out of control. Or you can acknowledge the feeling and work to find practical solutions. Maybe it is talking with your spouse to set up a meeting with your financial advisor to check in on your strategy, or altering your risk tolerance, or contributing more to your retirement accounts. All of these concrete avenues can help you turn that negative emotion into a practical plan forward for both you and your loved ones. Channel your emotion toward the greater goodMoney, like emotions, never stands still. It is constantly moving, changing, and evolving with time. Once you understand your relationship with your finances, you can use those emotions for the greater good not only for yourself but also for others. When you have a healthy understanding of your financial life, you will be better able to spend and save your money according to your goals and values. Let’s return to the retirement saving example from above. Say you decide to follow through and make an appointment with your financial advisor only to find that you are well on track to meet your retirement goals. This news could help free up your apprehension about not having enough and inspire you to give more to your church or other charities. Having transparency in your financial life when it comes to your emotions can help you better plan and execute a financial strategy that is centered around your values and priorities. Money will never stop being emotional and it is important to embrace those emotions, understand where they are coming from, and use them to make an impact on your life and the lives of those around you. We are passionate about helping you align your financial life with the people, places, and things that mean the most to you and would love to speak to you about how to optimize your financial strategy to reflect that.
  • More than 1 in 4 of those who are currently 20 years old can expect to be out of work for a least a year due to a disabling condition before they reach retirement.
  • Halloween is a good time to think about what really scares you and the ways you mask or hide behind old habits to avoid facing your financial fears. Maybe you just ignore bills as they arrive. Perhaps you avoid checking your bank balance, credit score, or investment portfolio because you aren’t sure you can handle [] ©Bring Clarity to Your Finances™. Financial Planning is Savvy, Not Scary is a post from Bring Clarity to Your Finances™
  • Can The U.S. Survive With Just 5% Of GDP From Manufacturing? Since September 2018, manufacturing activity plunged from record levels, and officially went into recession territory in August. Manufacturing now accounts for just 11% of total US economic activity and its continued plunge is the source of fears about the future of the American economy. Can the U.S. economy survive if the manufacturing sectors continues to shrink? Here are the facts. In 1950, manufacturing jobs were 37% of total private sector jobs. Today that figure is 10%. Some manufacturing jobs have been replaced by jobs in leisure and hospitality, sectors with lower-paying jobs; but most of the lost manufacturing jobs have been replaced by better-paying jobs in the health care sector, education or professional and business services. These are the latest projections from the Bureau of Labor Services of the sectors of the economy that will experience the fastest job creation rates over the next decade. Health care is projected to grow the fastest by far! Some 34 million new jobs are expected to be created in the health care sector! And professional and business services are expected to add 17 million new jobs to the economy through 2028, and it’s another high paying sector. Growth of jobs in the service sectors of the economy are largely a function of population growth, which means that the more people we add to population, the more jobs will be created in these sectors. Since population growth increases demand for jobs in these services, the U.S. is not only able to survive, but because manufacturing jobs are being replaced by better paying service sector jobs, the American economy can thrive even as manufacturing shrinks. Please contact us with any questions fulbrightteam@moneyful.com or to set up a meeting , and don't hesitate to share this video with people who might benefit from my work.
  • Family businesses are fraught with conflict, tension and a distinct lack of sophistication. Still some of the most successful companies in the world are family-owned and have succeeded through multiple generations. Now current sociopolitical and economic forces are threatening the very survival of family businesses. It has been cited by numerous credible sources that only 40% of family owned businesses are now surviving to the second generation, 12% to the third, and 3% to the fourth and these statistics are rapidly diminishing. But there are several things that have kept family businesses as one of the strongest sectors of the economy. It is their fortitude, resilience and indomitable will. The secret to saving the fate of family businesses lies in the behavior of the family business leaders. The overriding tenant of this book is that, “behavior precede performance.” If we can positively influence the behavior of family members they will perform at a higher level. They will win more cooperation from others, achieve higher goals and produce more fruitful outcomes. This book examines how impacting behavior dramatically improves performance and can sustain the entire enterprise for generations.
  • Avoid Rollover Mishaps – Money moved from an employer’s retirement plan should be transferred directly from the 401k plan to the custodian of your IRA. The check should be made payable to the custodian of your IRA account, not to you.
  • Forbes.com discussed the surprising results of research from The Center for Retirement Research as reported by Prudential Financial: Women in their 50s who are at the most financial risk in retirement are those who are married and in two-income households. The research still found risk for women who were married in households with one income [] ©Bring Clarity to Your Finances™. Which Women Face the Greatest Financial Risk in Retirement? is a post from Bring Clarity to Your Finances™
  • A year ago, I wrote about my lifelong passion (some would say obsession) for spare change. This dates back to counting the spare change and “egg money” in my grandmother’s chipped gravy boat in the 70’s and continues on today. But here in the 21st century we don’t have a lot of cash transactions, and []
  • “It’s not how much we give, but how much love we put into giving.” Mother Teresa As we move into the last quarter of the year, it is important to refocus our energy into the things that mean the most to us and how we can use our gifts and talents to help others. Charitable giving is an integral piece of life—something that we all should strive for 365 days a year. One thing that can help promote that spirit of giving is creating a plan for your charitable contributions throughout the year, and while there are many ways to do that, one that is becoming increasingly popular is the use of a donor-advised fund. What is a donor-advised fund and how can it maximize your giving strategy? Let’s dive in and find out. What is a donor-advised fund?A donor-advised fund (DAF) is a vehicle that is used for charitable giving. These funds have been growing in popularity and continue to be one of the most accessible accounts for charitable efforts. In fact, according to the National Philanthropic Trust’s 2018 survey , there are over 450,000 donor-advised funds contributing nearly 30 billion dollars to charities in the last year. DAF’s allow for donations regardless of tax-bracket or income level. In many ways, DAFs can be thought of as a charitable savings account. Once you set up the DAF, you are able to donate assets such as cash, stocks, real estate, and other investments into the fund to be used for your giving strategy. The DAF is then controlled by a third party to manage the investments for you as you decide when and where to donate the funds. It is important to note that once you contribute money to the DAF, you will be unable to get that money back for personal use—it remains in the fund until you designate where you would like the money to go. One great benefit of a DAF is that the money inside the account grows tax-free and can be used whenever you as the account owner requests. This level of flexibility can help you donate to the fund throughout the year, knowing that all contributions will be going to a charity of your choice. DAFs are an excellent giving tool for public charities as well as your local church donations for tithing. Are there tax benefits to consider?With the Tax Cuts and Jobs Act, many families had to alter their approach to charitable giving. The standard deduction doubled to $24,000 (tax year 2018) for married couples, making it difficult for people to itemize their deductions. This has changed how people give to charity in a tax-efficient way. Using a DAF can offer many tax benefits. Let’s take a look at some below. Since the money in your DAF doesn’t disappear, you are able to give to charities whenever you choose. For families who want to take advantage of itemizing their deductions, they decide to give in bulk every other year. For example, as opposed to donating $15,000 each year, in year one a family could donate $30,000 and in year two not make a donation while they replenish their fund. This is a great way to take advantage of the tax benefits while still giving the same amount of money you normally would. DAFs are a great way to include tax-efficiency into your charitable giving strategy. One of the most impactful tax benefits is that the gains from your donations grow tax-free. If you donate stock, for example, that is initially worth $10,000 but it doubles to $20,000, you won’t be responsible for paying tax on that gain. In using this strategy you save yourself money on taxes and increase the gift you are able to give. By donating through a DAF you are also reducing your tax burden as soon as you donate. Whenever you donate an asset, you are subject to an immediate tax break. This can be extremely beneficial when looking at your overall taxable income for the year while also making your dollars stretch further. Investors are often cognizant of the capital gains tax they will need to pay on their investments and donating stocks or other illiquid assets is one of the most popular ways to contribute to a DAF. This is tax-efficient because when you contribute an asset held for at least a year, you can donate them at their fair market value and not pay capital gains tax. Conversely, if the investor sold their asset they would have to pay capital gains tax which reduces the amount that they are able to donate. You are also able to use the gains from your existing non-qualified accounts and donate those gains to the donor-advised fund, using the proceeds from that to give to your church or community. How can it impact your approach to giving in retirement?Charitable giving is an important part of your life and one that drives how you approach the world around you. Using a donor-advised fund can help you hone your approach and strengthen your conviction for consistent giving to your church or other organization. DAFs can be an excellent tool to fuel your giving in retirement. I know that many of you are charitably-inclined and want to give in retirement, but may not know where to start. By contributing to a DAF, you can budget better for your giving and make it apart of your consistent monthly spending. This can make you more conscious of your giving and dedicated to seeing it through. The more money you are able to put aside now, the better able you are to say “yes” at the moment. Whether it be for a capital campaign, weekly tithe, or other need, you will have the confidence to know you can help as you have been setting money aside each month for this purpose. This helps integrate charitable giving into your every-day lives and can help you gain a clearer strategy for your giving. You can give to charities in many ways, using your time, energy, talents, and also through financial compensation. Using your financial resources wisely can not only help you be more tax-efficient but most importantly, can maximize the impact of your gift, giving more to the organizations that mean the most to you. Wondering how a donor-advised fund could be an asset to your giving strategy? Schedule a time to talk with us . We can’t wait to meet you and help you make your charitable ambitions come true.
  • If you do not leave a specific, legally executed estate plan with the appropriate documents, then you are leaving it up to your state to decide how your resources are distributed. This could make things quite difficult for your heirs (at least for the people whom the law determines are your heirs if you didn’t [] ©Bring Clarity to Your Finances™. Estate Planning for Blended Families is a post from Bring Clarity to Your Finances™
  • Budgeting Journey From time to time I have had clients that I believed need to do some work on budgeting. In, both, my professional and personal life I like to walk my talk or said another way practice what I preach. So, it was time for me start or rather restart my budgeting journey. I… [Continue] (Feed generated with FetchRSS )
  • Washington Post finance columnist Michelle Singletary took on the “counterintuitive” advice a reader wrote in about: The reader, who was trying to refinance a mortgage, was told to leave a small balance on her credit card (rather than paying the card off). That didn’t seem quite right and the reader wanted another opinion. While there [] ©Bring Clarity to Your Finances™. Should You Leave a Balance on a Credit Card? is a post from Bring Clarity to Your Finances™
  • Rather than improving your decision-making process, too much information makes it harder to make logical and rational investment decisions.
  • Since charitable donations are only deductible for taxpayers who itemize, many taxpayers were unable to deduct the charitable donations they had made.
  • Simply put, a beneficiary designation tells a financial institution (such as a bank, brokerage firm, or insurance company) what to do with your financial assets if you pass away. (Feed generated with FetchRSS )
  • Families are changing the way they donate money to charity. With the standard deduction rising to $24,000 (tax year 2018) for married filers under the Tax Cuts and Jobs Act, many married couples can’t take advantage of itemizing deductions on their taxes. This change means that dedicated donors need to alter their giving strategy in order to receive tax benefits for their gifts. Retirees have an interesting opportunity that other people do not—donating money from their required minimum distributions (RMDs) to a qualified charity. RMDs are mandated by the IRS and stipulate that once the account owner turns 70 ½, they need to withdraw a certain amount from the necessary accounts before December 31 each year. Designating some or all of your RMDs for charitable purposes can be done through a process called Qualified Charitable Distributions (QCDs). What are QCDs and how can they help retirees maintain their charitable efforts? I am excited to explore the answers and more with you today. RMDs + QCDsA Qualified Charitable Distribution is a direct payment from an IRA custodian to a qualified public charity. This strategy allows retirees to donate money directly from their IRA to the charity of their choice, allowing them to be both tax-efficient and charitably-inclined. There is a $100,000 limit on QCDs from a single account. This means that technically, a married couple could donate $200,000 through a QCD per year if they each made the $100,000 transaction from their own, separate accounts. Retirees who donate their RMDs to charity through this process will see numerous tax benefits, particularly in their tax bracket. RMDs are mandatory on all tax-deferred accounts such as a 401(k) or traditional IRA. Since you didn’t pay taxes on the money you contributed, the distributions will be taxed at your ordinary-income rate. By donating the money to charity, through a QCD, you will not need to pay income tax on the money, reducing your overall taxable income and increasing the amount of your gift. It is important to note that you don’t have to donate your entire RMD to charity. Most retirees need their RMD to supplement living expenses in retirement and only donate a portion of it. Say, for example, your RMD is $6,000. You may need to keep $4,000 for your expenses and donate the remaining $2,000 through a QCD. Remember, you will need to pay income tax on the $4,000 you keep for your own use. If you are using a QCD in place of your annual RMD, it is important to know that should you take more money out of your account than you are required to, those funds can’t be rolled over to the next year. Each year has a separate RMD. QCD requirementsA Qualified Charitable Distribution can only be made from a Traditional IRA. While in certain circumstances a Roth IRA can be used, be sure to focus on the Traditional IRA for charitable gifts. In order for a QCD to work and to gain the tax benefits from it, the transaction has to occur directly from the IRA custodian to the charity of choice. Should you withdraw the money yourself and donate it after the fact, you will need to pay income tax on the money and shift your gift accordingly. Most IRA custodians will make the transfer directly, but some may send you a check. If this happens, don’t worry, you will simply give the check to the charity yourself. It is also important to know that not all charities qualify for a QCD. In order for the transaction to work the charity has to be a 501(c)(3) organization eligible to receive tax-deductible contributions. There are three types of charitable giving that don’t qualify: Donor-advised funds Private foundations Supporting organizations Take some time to check on the status of the charity of your choice before you start the process. Why QCDs are tax-efficientUsing QCDs is a great way to be tax-efficient in retirement, particularly because you aren’t required to itemize the contributions. This allows you to retain tax benefits even with the new tax law. You will need to make sure your IRA custodian sends you 1099 that clearly states a QCD transaction occurred for your tax-planning purposes. Along this same line, since you receive a tax break from the QCD transaction, you can’t also itemize the QCD as a charitable deduction on your taxes. Be sure to check with your financial advisor and tax professional to make sure everything is in order. QCDs can help you reduce your taxable income for the year which can be especially important for retirees. Giving strategy in retirementMany retirees want to maintain their charitable efforts, but don’t know where to start. QCDs are an excellent tool because they allow you to create a planned giving strategy in retirement. You are able to build-in a giving plan into your retirement budget which will help you be more consistent in your charitable efforts. QCDs are a great resource because they allow retirees to give and not have it just be from their estate plan. While it is wonderful to include charitable efforts into your estate plan, your giving doesn’t have to take a break while you are in retirement. This strategy also allows retirees to give from investments as opposed to cash. A cash reserve is important to retirees and when that cash number dips too low, it can cause a lot of stress and anxiety. With a QCD, retirees don’t have to dip into their cash fund to donate. They can do it through their investment instead which offers a stronger sense of stability since they aren’t digging into their cash reserves. Charitable giving is a wonderful part of your life, so why should it stop in retirement? There are so many avenues for retirees to continue their generosity into their golden years and here at Step by Step, we want to do what we can to make it happen. Give us a call because we would love to talk to you about the best way for you to give to charity in retirement.
  • While you perhaps breathed a sigh of relief that it was over, experts began tax planning for 2020 right after the 2019 tax season ended (if they hadn’t started before). It’s okay if you didn’t start thinking about next year’s taxes that early, however, there are still things you can do during the last quarter [] ©Bring Clarity to Your Finances™. Get Set Up for Less Stress at Tax Time Next Year is a post from Bring Clarity to Your Finances™
  • The way we see things, the work doesn’t stop just because we’ve helped our clients tackle the problems that brought them to our door. We’re always looking for ways to add value to our clients’ lives. And sometimes, the best thing we can do is be there during those important life events when they need us the most. Here are 7 examples of those significant life events that we help our clients with. (Feed generated with FetchRSS )
  • If you have the opportunity to contribute to both a 401(k) and a health savings account (HSA), you may wonder how best to take advantage of them.
  • Studies have found that the average inheritance is spent within five years and one third of those receiving an inheritance have negative savings within two years.
  • Most people might believe that taxes should be left to the accountants. At Lawrence Financial Planning, we believe that most tax returns should be prepared by a tax professional. But we also believe there are many tax-related things a financial advisor can (and should) do for their clients. That’s why we help our clients each year with tax planning. (Feed generated with FetchRSS )
  • From the Wall Street Journal August 30th, 2019: Gas prices this past Labor Day were the lowest on the holiday in 3 years averaging $2.55/gallon nationally. According to AAA gas prices have remained steady. As of September 16th, 2019 the National average price is $2.56. State by state prices vary depending on taxes. Mississippi has []