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
The positive news is that many of the key rates have not changed. We have prepared a useful and convenient chart here which enables you to quickly review them all in one place.
As we had anticipated, 2016 has been an interesting year for the markets. Volatility returned in January as the major indexes declined over 10%. Staying invested in a diversified portfolio paid off as the major indexes regained nearly all of those losses over the last month.
Although we have recently seen a reduction in market volatility, there are still some looming uncertainties which we feel warrant maintaining a conservative outlook for the remainder of 2016. These include; oil price instability, negative foreign interest rates, mixed corporate earnings, and the presidential election in November.
Do you know if it will affect you?
As you are probably already well aware, figuring out when to start your social security benefits is no easy decision. Unfortunately, it has recently become a little more complicated. In October of 2015, congress passed the Bipartisan Budget Act of 2015. There was an addition to the Act that will affect Social Security Benefits, and could mean changes to your plans for claiming benefits.
As of the writing of this letter, the market as a whole has continued its decline to around a drop of 10% year to date and close to 15% from the 2015 highs. Oil continues to dominate the headlines as it has fallen through $30 per barrel of West Texas Intermediate, nearing $25 per barrel and is anyone’s guess as to where it will end up. The good news is that we have taken steps to limit our portfolio exposure to energy and the high yield credit sector which are closely tied to the price of oil. Although we don’t think the current market trend is indicative of how the year will finish, the storm has yet to pass.
Just as we were about to enter the fall, as the kids start back to school, a shock has occurred in the markets. China, which has been the global leader in growth for the last decade has been experiencing a stock market crash. This has spilled over into the U.S. stock market which, at the time of this writing, has seen the DJIA drop 7 consecutive days for ~8.57% and is now off ~14.6% from the year’s highs. Fresh in everyone’s mind is the crash of 2008 and for those approaching retirement, market volatility such as this can create uneasiness to say the least. Unlike the last several years where we have seen headlines cause selloffs like the Euro crisis or the taper tantrum; this is not a headline with an inevitable end point. Because of this, we are likely to continue to see volatility rear its ugly head for the coming months as both markets and expectations realign.