Going through a divorce during COVID was not easy. There was a lot to disentangle, especially finances, after being married so many years. Like many people, my number one concern was having a positive cash flow, not only after the divorce but 5, 10 or 20 years in the future. Would I have enough to live on? Do I want the house and, if not, where will I live and what will it cost? Can I maintain my lifestyle? So many questions and at first – so few answers.
We continue our Financial Planning 101 series with the balance sheet, by addressing what to do with any excess cash.
For many folks, the recent turmoil in the regional banking sector has added a fresh new layer of anxiety about their finances. The media has not helped matters either, calling it the 'greatest banking crisis since the financial crisis of 2008.' To be fair, it is the only banking crisis since the financial crisis. Nevertheless, at West Financial, we have heard from clients who question whether their investments are safe, or if they should be concerned.
The start of spring is one of my favorite times of the year. It's not just the warmer weather itself, but also the excitement about anticipated trips to the beach and other vacation spots in the coming months. Wherever your favorite vacation spots are located, we've all been in get-a-way traffic, desperately searching Waze for the less traveled roads. It's a dilemma, as sometimes that back road doesn't save much time, versus the more crowded route, and one never really knows which would have been the better choice to take until you arrive.
In this series of articles, we will be introducing financial planning concepts for participants to consider, related both to personal finances and participation in a retirement plan. This first discussion is about account consolidation, a basic recommendation in many of our plans.
Pre-tax retirement accounts are great while you are contributing, but the tax bite can be quite a shock when it’s time to take distributions in retirement. There is one way, however, to avoid paying tax on certain pre-tax IRA distributions. The secret is to make qualifying IRA distributions directly to charity!
The increase of required minimum distribution (RMD) age from 72 to 73 this year, and to 75 in ten years, has the potential of creating some pretty impressive tax implications for those with larger retirement plan balances. While it is all well and good to put off taking distributions until you absolutely have to, you should be aware of how that decision impacts not only your own tax situation, but also the tax situation of your beneficiaries.
At the beginning of 2023, I decided to really look at how I spent my money in 2022, according to my primary credit card. It was an eye opener, especially since I didn’t see myself as someone who eats out much, but dining out was one of my top spending categories. I guess all of those impromptu trips to get a latte and pastry really add up! That got me thinking about the days when paying more than $10 for a fancy coffee and croissant was simply not an option.
During the depths of the pandemic, work from home businesses were, undoubtedly, huge beneficiaries of consumer demand for their services and products. First-order thinking was rewarded during this period, as investments into these stocks appreciated handsomely. While we experienced some uprooting of our lives and the impact of rapid change, West Financial was also brainstorming ways to intelligently invest in long-term COVID-winners. Exercise equipment manufacturer and subscription service, Peloton Interactive Inc.
This has been a difficult year for stock and bond investors. After several years of above average performance, the broad based market index returns have been negative this year, reducing portfolio values relative to where they started the year. For example, through 10/31/2022, the S&P 500 index is down -17.72% since the start of the year and the ICE Bank of America 1-5yr US Corporate Bond Index is experiencing a -8.22% decline over the same time period.
When you hear the word, “millennial,” what first comes to mind for many is a generation of entitled, social media addicted, avocado toast lovers who worship at the shrine of Starbucks. But, in truth like prior generations, millennials have a great capacity to learn from others and put structure to their wants and needs. And while purchases such as avocados and fancy coffee drinks can quickly become expensive, millennials can have their avocado toast and eat it too.
As summer winds down and back to school ads ramp up, things are a little different at our house. Our daughter is off to college. Once she made her school choice official, her gleeful plans for dorm décor and collegiate life began, while I agonized over other matters. Was there enough in the 529 plan? How do we go from contribution to distribution mode? Was she disciplined enough to avoid the high cost of daily stops at the campus’s Starbucks and Chick-fil-A? To avoid obsessing over nightmarish scenarios, I went into my typical list making, planning, and basic preparations mode.