Category Archives: Financial Planning

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

roth

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

retirement

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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Regs to the Rescue?

rescue

The world of money market funds changed forever back in 2008, when an investment vehicle called the Reserve Primary Fund loaded up on loan obligations backed by Lehman Brothers.  Lehman famously went under, and the fund “broke the buck,” meaning that when Lehman was unable to pay back its loans, the value of a share of the Reserve Primary Fund dipped under $1.

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Stocks To The Rescue?

SS shortfall

No doubt you know the statistics: the Social Security program’s reserves are due to run out in 2034.  At that point, the only money available to be paid out will be money collected that month from those current workers who are paying into the system.  Current estimates say that this will amount to about 75% of scheduled benefits.

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