Category Archives: Financial Planning

No Leverage = Higher Costs

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We hear all the time that medical costs are too high in the U.S., and that Medicare is going to go bankrupt in the future.  The President-Elect recently told us in a press conference that drug companies are “getting away with murder.”  So how high are drug prices, and are those prices contributing at all to the high medical costs in the U.S.?

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Investments to Avoid

morningstar

Every year, the Morningstar mutual fund tracking organization releases a list of the worst new ETF investments—and generally, these tend to be trendy new offerings that are designed to catch the eye of investors who are responding to yesterday’s  headlines rather than their long-term economic future.

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Preliminary Tax Forecast

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Many of President-Elect Donald Trump’s policy proposals are too vague to analyze, but one area where he has been clear is on reforming our tax system.  Here’s a quick primer on the changes that you can expect to be introduced to Congress in the coming year.

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Roth Conversions and Mandatory Distributions

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You probably know that the IRS requires you to start taking mandatory distributions from your IRA when you turn 70 1/2, even if you don’t actually need the money.  But can you do a Roth conversion at that late date, and thereby defer distributions forever?

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Retirement Contribution Limits Unchanged

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In case you missed it, the contribution limits to your 401(k) plan, IRA and Roth IRA—set by the government each year based on the inflation rate—will not go up in 2017.  Just like this year, you will be able to defer up to $18,000 of your paycheck to your 401(k), and individuals over age 50 will still be able to make a “catch-up” contribution of an additional $6,000.  (The same limits apply to 403(b) plans and the federal government’s new Thrift Savings Plan.)  Your IRA and Roth IRA contributions will continue to max out at $5,500, plus a $1,000 “catch-up” contribution for persons 50 or older.

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The Election’s Impact on Your Portfolio

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By now, most voters have made up their mind about who they want to serve as their next President.  But what can they look forward to, from an investment and tax standpoint, if their candidate wins or loses?  How will the election affect their portfolio and future net worth?

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Costs of Living

cost of living

What is a dollar worth?

If you answered that it’s worth a dollar, you must be living in Illinois.  A research report by U.S. Bureau of Economic Analysis found that the prices for a particular basket of goods and services—food, transportation, housing and education—are higher in some states than others.  Illinois came in at almost exactly the average; a $100 bill will buy $100.70 worth of the items.  People living in the District of Columbia, the nation’s most expensive area, would have to pay, on average, $118.10 for the same basket of items.

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