Category Archives: Investing

Pieces To The Retirement Puzzle

Pieces To The Retirement Puzzle

Individuals may have singular needs, but past history and a few surveys show many retirees have a few common ones, too. Here’s a look at two of them.


Challenge: Most estimates put the cost of healthcare in retirement in the six-figure range. This isn’t as surprising as you might first think, considering soaring healthcare costs — even with insurance — and the likelihood of illness and injury as we age.

Solution: Prepare for this expense by having the right insurance, including Medicare Parts A, B and D once you reach age 65, unless you are covered by an employer-sponsored health plan. Part A covers hospital insurance, Part B covers outpatient health expenses and Part D is prescription drug coverage. You can combine all of these through Medicare Advantage plans or buy supplemental Medicare from an insurer to cover deductibles and other potential expenses.


Challenge: Taxes can deplete your disposable income unless you know what to expect.

Solution: There are varied ways to limit the impact of taxes. Consider tax-free withdrawals from a Roth IRA. Invest to keep up with inflation and changes in your tax picture. Also make sure you don’t run afoul of minimum distribution rules, which apply to most retirement vehicles but not to the Roth. Move or downsize if property taxes are too high.

Original article appears here

money growth

Tax Harvesting

No one likes to lose money, but the good news is that certain investment losses may be tax-deductible, so this is a good time of year to get an idea about how your investments are performing.


Not all investment losses qualify for a federal tax deduction. First, you realize a capital gain or loss only by selling the investment. A paper loss on an investment that you continue to hold is not considered a loss for tax purposes, just as a paper gain isn’t a taxable event until you realize gains by selling the investment.

When you realize investment losses, offset them with investment gains. For example, let’s say you sell some investment losers for a $5,000 loss in 2018. You know this by subtracting what you sold the investment for from what you paid for it, called the basis. Then you sell a few winning investments that give you $4,000 in taxable gains. Subtract your loss from your gain, and you get a total loss, in this case, of $1,000.


Not all capital gains and losses are treated the same. Long-term capital gains are on investments you hold for at least a year, while short-term investment results are realized when you sell an investment you owned for a shorter time period.

You also need to be aware of the annual $3,000 capital loss deduction limit. Losses over this amount may be carried forward to the next year’s tax return.


Work with your accounting professional to make sure you can take advantage of tax-loss harvesting, as well as any other tax break the IRS offers. Also, some investments that are temporary losers may become long-term winners, so keep your long-term investing goals in mind before deciding whether to sell any investment.

originally printed in Client Line Newsletter

financial planning during a divorce

Divorce and Finances – Why It’s Important to have Financial Planning During a Divorce

During a divorce, it’s easy to get caught up in what is happening in the moment and not plan adequately for the future.   A Certified Divorce Financial Planner (CDFA™ ) is uniquely qualified to incorporate financial planning directly into the process as opposed to after the divorce process.  More importantly, settlements that are achieved when using a CDFA™ are much less prone to problems in the future.  A CDFA™ understands the emotional turmoil a divorce can cause, but doesn’t get caught up in it.  Having an objective third party involved in the process in the present, can avoid conflict in the future.

In most divorce cases, the following financial information must be made available (this is not an exhaustive list):


  • Couple’s income, collectively and individually, including W2’s and 1099
  • Income tax returns for the last 3 years
  • Statements of any financial accounts, including checking, savings, CD’s, mutual funds, money market accounts.
  • Real estate records, including the marital home and unimproved land.
  • Personal property, including vehicles, furnishings, collections, etc.
  • Medical savings accounts
  • Whole life insurance policies
  • Trusts
  • Stocks, bonds, retirement plans


  • Mortgage and home equity loans
  • College loans
  • Credit Card records
  • Promissory notes
  • Other loans

A CDFA™ will look at the couples martial assets and liabilities and help come up with a plan to protect your future, as well as the future of your children.  This is a critical step in the divorce process.

With a Certified Divorce Financial Planner at your side, you will be able to:

  • Take control of the divorce process
  • Gain a clear understanding of your current financial status
  • Gain a clear understanding of your future financial status
  • Be more focused on reaching a fair settlement
  • Negotiate more effectively
  • Ensure a faster resolution of all financial matters
  • Minimize both parties taxes
  • Maximize the marital assets

After the divorce process a CDFA™ can oversee asset transfers, set up budget and planning systems, manage investments, monitor results and update plans accordingly.

Divorce is neither pleasant or easy.  Having a by incorporating Financial Planning During a Divorce an having a CDFA™ on your team helps to maintain your well being by ensuring your financial plan is the right one for your future.

Women Lack Life Insurance

Women comprise almost half the U.S. labor force, and their contributions to family finances are more important than ever.(1) A record 40% of households with children under age 18 include mothers who are either the sole or primary breadwinner. In 1960, only about 11% of women carried this level of financial responsibility. (2)

About 37% of “breadwinner moms” are married women who earn a higher income than their husbands. The other 63% are single mothers. (3) Of course, many working women might not earn more than their spouses but still make a contribution to the family’s finances.

Stay-at-home moms also contribute to family stability, even if they don’t bring home a paycheck. Based on wages that would be paid for common household tasks, the annual “value of mom” in 2013 was $59,862. (4)

Coverage Gap
Despite the growing importance of their financial contributions, women are less likely than men to have life insurance (see chart). And those who do have insurance often have lower coverage amounts — an average of $169,000 for married mothers versus $215,000 for married dads. (5) Considering that life insurance should replace a worker’s lost income for as many years as necessary for the family, these averages may be below what many men and women with children could require.

The most cost-efficient way to obtain coverage is typically term life insurance, which may be less expensive than you think. One study found that consumers tend to overestimate the cost of life insurance by almost three times the actual cost. (6)

As the name suggests, term life insurance pays a death benefit if the insured dies within the covered time period, which could range from one to 30 years. Premiums may adjust each year or remain fixed for the full term, depending on the policy. Unlike work-based coverage, which could be lost if you change employers, an individual policy will stay in force throughout the specified term as long as the premiums are paid.

In addition to premiums, there are other expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving
life insurance, it would be prudent to make sure that you are insurable.

A century ago, women were not even able to buy life insurance. (7) Fortunately, times have changed. Whether you’re the breadwinner, a co-provider, or a stay-at-home parent, be sure that you have enough coverage to protect your family in the event you are no longer there to provide for them.

1) U.S. Bureau of Labor Statistics, 2013
2–3) Pew Research Center, 2013
4) Journal of Financial Planning, June 2013
5), January 9, 2013
6) LIFE Foundation, 2012
7) Insurance Information Institute, 2013

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2014 Emerald Connect, LLC.

A 401(k) Checkup



This is a great time of year to review your retirement account. For one thing, it’s tax season. So you’re already thinking about money. Plus, life is generally less hectic in winter. Before the pace picks up, spend some quality time with your 401(k).

Grab your latest statement and check your balance. Are you saving enough? You can do a quick check by estimating how much income you think you’ll need for a year of retirement. Then, subtract amounts you anticipate receiving from other sources (Social Security, payments from a pension plan, etc.). That will give you a rough estimate of the savings you’ll need to cover one year of retirement. To project the total savings you’ll need, you’ll have to consider the number of years you expect retirement to last, inflation, and other factors.

If it looks like you should be saving more, increase the amount you’re contributing to the plan. For 2014, the tax law limit on contributions is $17,500. If you’re age 50 or older and the plan allows, you can make additional “catch-up” contributions of up to $5,500.

If there’s been a major life change (birth, death, marriage, divorce, etc.) since your last checkup, you may need to change your asset allocation — the percentages of your portfolio that are invested in the different asset types. Your asset allocation should always fit your risk tolerance and investing time frame.

Even if your targeted asset allocation is the same, investment performance can change your portfolio’s actual allocation over time. When that happens, you may be exposed to more or less risk than you intended. If the percentages in your account have drifted, it might be time to rebalance.

If you have more than one retirement account — a 401(k) from a past employer or one or more individual retirement accounts (IRAs) — think about consolidating. Managing your retirement assets will be simpler if they’re all in one account.

Social Security in 2014

After announcing that benefits will increase 1.5% for 2014, the Social Security Administration provided some other information that may be of interest.

Benefits. The average benefit payable to retired workers is an estimated $1,294 a month (as of January 2014). Retired couples who both receive benefits get $2,111 on average. The maximum benefit for a worker retiring at full retirement age (FRA) is $2,642 a month.

Taxes. The 6.2% Social Security payroll tax applies to the first $117,000 of 2014 earnings. Self-employed individuals pay 12.4% on the first $117,000 of earnings.

Retirement earnings. Social Security recipients who haven’t reached FRA generally can earn as much as $15,480 this year before their benefits will be reduced ($41,400 if reaching FRA in 2014).

Original content provided by: Client Line Newsletter

Mutual Fund Facts

What’s the difference between open-end mutual funds and exchange-traded funds (ETFs)? Here’s a side-by-side look at the two types of funds:

Mutual funds vs. exchange-traded funds

When investors sell mutual fund shares, the fund usually sells underlying assets to satisfy the redemptions. If the assets have appreciated, taxable capital gains are generated and then are later distributed to investors. So regardless of whether they sold shares or not, the fund’s investors may incur some capital gains liability.

With ETFs, shares are purchased directly from other shareholders, rather than the fund itself, so the ETF is not generating a capital gain that will need to be later distributed. Investors do owe tax with respect to ETFs — and mutual funds — holding stocks that pay dividends or bonds that pay taxable interest. Also, ETF investors will owe capital gains tax on any gains they realize from selling their own ETF shares.

Original content provided by: Client Line Newsletter