Basic Facts of Life Insurance

Thinking of a future without ourselves in it, is not the most pleasant of thoughts. . .however, it is necessary to do so for the financial security of your family. Life insurance may provide you with the opportunity to bequeath money to your survivors, while at the same time, provide the necessary liquidity to help pay estate taxes. This, in turn, may allow your assets to pass undiminished to your heirs. As a general rule of thumb when purchasing life insurance, it is usually thought that you would need eight to ten times your salary in order to take care of your family’s needs. A more accurate formula may be as follows: Determine the amount needed to help meet specific needs such as providing funds for college, paying off your mortgage, or giving money to an heir. Label this figure as [A]. Determine the amount necessary for the support of …

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401k Loans: Pros and Cons

You might be considering taking out a loan from your 401k. But before you do, you should know the rules and weigh the risks against the benefits. Because not knowing the rules and understanding the risks might hurt you and your retirement in the long-term. Consider this for a Second Most of us simply do not have enough in our 401k where we can afford to borrow. According to Fidelity Investments, the average 401k balance was approximately $91,000. And while that is a lot of money, it won’t cover the average retiree’s health-care costs. Fidelity projects that a 65-year-old couple retiring in 2014 will incur an average of $220,000 in retirement healthcare costs alone. Before you take out that 401k loan, know this: According to the IRS: the maximum amount that the plan can permit as a loan is (1) the greater of $10,000 or 50% of your vested account …

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The Huge Decline in U.S. Publicly Traded Companies

The Huge Decline in U.S. Publicly Traded Companies: Why investors should be worried Financial advisors spend a lot of time reassuring clients. Yes, interest rates are rising, but they are still at historical lows – the markets will be fine long-term. Yes, the technology sector is on a tear, but there are significant differences from the technology bubble from the late 90s – the markets will be fine long-term. Yes, the U.S. dollar declined last year for the first time in 5 years – the markets will be fine long-term. But there is one 20-year trend that has financial advisors worried about the markets long-term: the sharp decline in the number of publicly traded companies here in the U.S. The Worry In 1996, the US stock markets boasted over 8,000 publicly traded companies. Today, that number has dropped to less than 3,500. Let’s go back further and add the US …

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Annual Rebalancing Steps

Annual Rebalancing Steps: Perspectives from a Seasoned Financial Advisor As you begin to receive your year-end statements, it will be tempting to focus on how well the markets performed – because it really was a year for the record books. The year 2017 saw the DJIA set 71 all-time highs, surpassing the previous record of 69 set in 1995. We saw NASDAQ up 28%, the DJIA up 25% and the S&P 500 up 19%. And at almost nine years old, this bull market is now the second-oldest and second-strongest in history. Given last year’s market performance, it would be a safe bet that many investors need to consider rebalancing, because they might now be overweight or underweight certain asset classes – and therefore positioned in a way that is inconsistent with their risk tolerance and goals. Now is the Time to Think About Rebalancing The reality is that the market …

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What Impact Will the New Tax Policy Have?

While Republicans are touting a victory in the passage and signing of the Tax Cuts and Jobs Act, it will take some time before most changes go into effect. And with all the sweeping changes in the law, tweaks and fixes are likely in the coming months, experts say. “It’s important to remember that it could be years before the IRS does its interpretation of the tax changes and even longer, if ever, before those interpretations are tested by courts,” says Steven Weil, Ph.D., president and tax manager of RMS Accounting, an accounting and bookkeeping firm. “There are sure to be errors, and corrections that Congress will have to make. How long these will take and how many there will be is anyone’s guess.” In the meantime you may see a few changes sooner, depending on some variables. It Depends on How You File One of the main changes is …

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