A 2015 survey by the American Psychological Association found money was the top source of stress for American adults. (1) Whether it is worrying about debt, paying bills or planning for retirement, financial concerns are at the forefront of our psyche. Read more
First, let’s understand what sequence of returns risk is. In the example below, we invest $100,000 each in two portfolios. In both portfolios, we withdraw $5,000 per year inflated at 3%. Both portfolios earn an average arithmetic return of 6.5% over the next 20 years. In Portfolio A, we see four years of initial negative returns, and in Portfolio B, we see four years of initial positive returns. By year 20, Portfolio A has run out of money, while Portfolio B still has a balance of $87,054.
With that in mind, let’s explore some of the types of risk that can affect your investments.
Many companies offer employees benefits packages that include savings plans, pensions and stock options, but employees are often left to their own devices when implementing decisions on their financial future. Read more
Nothing is certain except death and taxes, Benjamin Franklin once wrote. However, life insurance policies can afford us a brighter outlook by providing strategies to reduce taxes. Making the choice to purchase life insurance is a decision to protect your loved ones and help them maintain their quality of life. When establishing this legacy for a partner or child, it is important to consider the tax minimizing incentives of different policies.
Let’s shed light on some exciting possibilities:
– Elimination of the ACA Surtax: as you know there is currently a 3.8% tax on income above $200,000 ($250,000 filed jointly) for the Affordable Care Act. Read more