Month: December 2022

When you marry or simply share a household with someone, your life changes—and your approach to managing your money may change as well. The good news is it’s usually not so difficult.

At some point, you will have to ask yourselves some money questions—questions that pertain not only to your shared finances but also to your individual finances. Waiting too long to ask (or answer) those questions might have some consequences.

First off, how do you propose setting priorities? One of your first priorities should be simply setting aside money that may help you build an emergency fund. But there are other questions to ask. Should you open joint accounts? How should you title assets that are owned by both of you?

How much will you spend & save? Budgeting can help you arrive at your answer. A simple budget, an elaborate budget, or any attempt at a budget can prove more informative than you realize. A thorough, line-item budget may seem a little over the top, but what you learn from it may be truly eye-opening.

How often will you check up on your financial progress? When finances affect two people rather than one, statements can become more important. Checking in on these details once a month (or at least once a quarter) may keep you both informed, so that neither one of you have misconceptions about household finances or assets. Arguments can be avoided when money misunderstandings are resolved through check ups.

What degree of independence do you want to maintain? Do you want to keep some money separate? Some spouses need individual financial “space” of their own. There is nothing wrong with this approach.

Can you be businesslike about your finances? Spouses who are inattentive or nonchalant about financial matters may encounter more financial trouble than they anticipate. So watch where your money goes, and think about ways to pay yourself first. Set shared short-term, medium-term, and long-term objectives.

Communication is key to all this. Watching your progress together may well have benefits beyond the financial, so a regular conversation should be a goal.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.

Anyone who has gone through the process of mapping out their retirement knows there can be a lot to keep in mind. Saving, investing, anticipating medical costs, and making sure you have enough tucked away for years to come is just the start. One question many people overlook is: “Should I pay off my mortgage before I retire?” The answer is more complicated than you may think.

Maintaining a Mortgage in Retirement

Opportunity Cost

Imagine you have $300,000 set aside to pay off your mortgage. But rather than using those funds to pay off your mortgage, you instead invest that money. Sure it’s tempting to stop making a monthly payment, but what if that $300,000 earned a hypothetical 6% for the next five years. You would have a little more than $400,000. Yes, your house may appreciate in value over the same period of time, but you should consider all your choices for that lump-sum of money.¹

Eradicate (Other) Debt

Before you pay down your mortgage, any extra cash might be better suited to paying off other kinds of debt that carry higher interest rates, especially non-deductible debt, such as credit card balances.²

Make Your Mortgage Work

Some homeowners benefit from a mortgage interest deduction on their taxes. Here’s how it works: the amount you pay in mortgage interest is deducted from your gross income, which reduces your federal income tax burden. But remember, the further along you are toward paying off your mortgage, the less interest you’re paying. If you’re unsure if you’ll be able to take advantage of this mortgage benefit, it’s best to consult your financial professional.^3,4

Retire Your Mortgage

Don’t Throw Your Money Away

Your monthly mortgage payment may be a large part of your available capital, especially in retirement. Eliminating unnecessary subsidies can significantly reduce the amount of cash you need to meet monthly expenses.

Uninteresting Interest

Depending on the length of your mortgage term and the size of your debt, you may be paying a substantial amount in interest.

Paying off your mortgage early can free up money for other uses.”

True, you may lose the mortgage interest tax deduction, but remember as you get closer to paying off your loan: more of each monthly payment goes to principal and less to interest. In other words, the amount you can deduct from taxes decreases.⁵

Home Is Where the Heart Is

There’s a value to your home beyond money. It’s where you raised your children, made fond memories, and you may want it to remain in the family. Paying off the mortgage may help make your home part of your legacy. After all, some things you just can’t put a price on.

1. This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments. Investments seeking to achieve a higher rate of return also involve higher risks. You should consider your risk tolerance before committing to any investment strategy.
2. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.
3. Investopedia.com, June 30, 2023. The mortgage interest deductibility is limited to mortgages up to $750,000 ($375,000 if married filing separately) in principal value. This article is for informational purposes only, and is not a replacement for real-life advice. Please consult a tax, legal and accounting professional before modifying your tax strategy.
4. IRS.gov, 2023
5. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.

Are you making charitable donations at year’s end? If so, you should know about some of the financial “fine print” involved, as the right moves could potentially bring more of a benefit to both you and your chosen charity.

Keep in mind, this article is for informational purposes only and is not a replacement for real-life advice. Make sure to consult your tax, legal, or accounting professionals before modifying your charitable gifting strategy.

Evaluate the Impact

How can you maximize the impact of your gifts? First, consider giving to a qualified charity with 501(c)(3) nonprofit status. Also, Charity Navigator, Charity Watch, and Give Well have websites that offer information to help you evaluate a charity and learn about how effectively it utilizes donations. If you are considering a large donation, it is often wise to ask the charity involved how it will use your gift.

If you’re still working, you may want to check with your employer. Some companies match charitable contributions made by their employees, an often-overlooked opportunity to give back.

Itemize to Optimize

To deduct charitable donations, you must itemize them on IRS Schedule A. So, you’ll need to log each donation you make. Ideally, the charity will provide you with a form to document proof of your contribution. If the charity does not have such a form handy (and some do not), a receipt, a credit or debit card statement, a bank statement, or a canceled check can work. The IRS may want to know three things: the name of the charity, the gifted amount, and the date of your gift.¹

Remember, itemized deductions may only have tax benefits when they exceed the standard income tax deduction, so be sure to check on the standard deduction amount for your tax filing year.

Show Your Appreciation

Many charities welcome non-cash donations. In fact, donating an appreciated asset can be a tax-savvy move. You may wish to explore a gift of highly appreciated securities. Selling securities can lead to a taxable event. As an alternative, you or a financial professional can write a letter of instruction to a bank or brokerage, which can facilitate authorizing a transfer of shares to a charity.

This transfer can accomplish three things:

• You can manage paying the tax you would normally pay upon selling the shares.
• You may be able to take a current-year tax deduction for the full fair market value of the shares.
• The charity gets the full value of the shares, not their after-tax net value. This can be a winning strategy all around.¹

A Policy of Giving Back

Do you have a life insurance policy? If you make an irrevocable gift of that policy to a qualified charity, you can get a current-year income tax deduction. If you keep paying the policy premiums, each payment may become a deductible charitable donation. (Deduction limits can apply.) If you pay premiums for at least three years after the gift, that could reduce the size of your taxable estate. The death benefit may be transferred out of your taxable estate, in any case.²

You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments. Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications.

Whatever your situation, getting advice from a tax or financial professional can help you give wisely as the year comes to a close. We’re here to help find a strategy that works for your situation.

1. IRS.gov, 2023
2. Investopedia.com, March 2, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.

If college were a party, then student loans are the hangover.

Unfortunately, the “hair of the dog” won’t cure this headache, but here are some ideas for managing your student loan debt.

The programs listed are not intended as tax or legal advice. They may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The programs are for informational purposes only, and should not be considered a substitute for a more comprehensive student loan evaluation.

Income-Driven Repayment Programs — There are four different types of income-driven repayment choices that may help to manage your monthly federal student loan payments:¹

• Revised Pay As You Earn Repayment Plan (REPAYE Plan)
• Pay As You Earn Repayment Plan (PAYE Plan)
• Income-Based Repayment Plan (IBR Plan)
• Income-Contingent Repayment Plan (ICR Plan)

You may be eligible for one or more of these payment choices depending on the types of student loans you have, your family size, your income, and certain other factors.

Under these income-driven repayment plans, any remaining loan balance may be forgiven at the end of the payment period. Payment periods vary depending on the payment option you enroll in, but typically range between 20-25 years.

A financial professional may help you to determine which of these income-driven repayment choices you might be eligible for.¹

Public Service Loan Forgiveness — Certain federal loans may be forgiven after 10 years of qualifying payments if you take a job with federal, state, or local government; a non-profit; or certain other public service organizations.¹

Volunteer — There are a number of programs, such as AmeriCorps, Peace Corps, and the military, in which service may accrue a benefit that reduces an outstanding loan balance in an amount that varies depending upon the program.²

Pre-Pay Principal — Pre-payment of principal may help lower the lifetime interest costs of a loan. To raise cash to fund pre-payments, one idea is to ask that birthday and holiday gifts be cash to put toward pre-payments. You could also direct any raises, bonuses or overtime pay to pre-payments. If you do pre-pay principal, be sure to target the loans with the highest rate of interest.

Loan Consolidation — You can consolidate your federal loans through the Direct Loan program, or through a private lender if you have private loans. However, this may only make sense if you can obtain an overall lower interest rate.¹

1. StudentAid.gov, 2023
2. Credible.com, June 5, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.

The Fair and Accurate Credit Transaction Act of 2003 provided individuals with valuable rights to the credit information companies keep on them, but did you know that the credit score provided to you may be different than the one provided to lenders?

The first thing you should know is that you have a right to see your credit report once annually without cost. You can find free credit reports online. The report will contain important information that may affect your credit score.

While your credit report can be obtained for free, your credit score will cost you money, except in the case where you have been denied a loan on the basis of your credit score, in which case you may obtain your credit score for free. However, many banks and lenders are now providing their customers with free monthly credit score updates.

Your credit score is a numerical representation of your creditworthiness, which takes into account past and current credit activities, including any late payments, judgments, liens, bankruptcies, and foreclosures.

When you see an offer for getting your free credit score, it may be a marketing-driven incentive to get you to sign up for a fee-based credit monitoring service. The score may be only available at no cost if you agree to sign up for a trial subscription and don’t cancel prior to the end of that trial period.

The Dirty Little Secret of Credit Scores

Before you purchase your credit score, understand that the methodology used to calculate the score you buy is different from that used to determine the credit score lenders receive.

While the correlation between the scores is high (90%), correlations vary among different consumer subsets. For instance, the correlation is strongest among consumers with scores below the median than for consumers with scores above the median. In fact, up to 27% of the scores received by individuals could be placed in a different credit score category from what the lender receives.¹

While knowing your credit score may be important, it may be more vital to review your credit report to correct any errors that may be hurting your score. After that, you can take any necessary steps to improve your credit profile.

1. Consumer Financial Protection Bureau, 2023. Based on a landmark study published in 2012. Most recent data available.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.

Believe it or not, the agency responsible for protecting U.S. currency is the United States Secret Service. The agency was founded on July 5, 1865, as part of the Department of the Treasury to combat the widespread counterfeiting of currency happening at the end of the Civil War.¹

Combating counterfeiting remains core to preserving the integrity of the nation’s money.

Money Matters

The advent of high-tech printers and inks continues to raise the bar on what the federal government needs to do to limit counterfeiting, leading to a range of new strategies.

To make U.S. paper currency more difficult to copy, there have been continual changes to the artwork, paper, and ink. Summarized below are some of these recent changes.²

Portrait – The portrait has become much more sophisticated by becoming closer to a lifelike picture than the screen-like background it was previously. On counterfeit bills, the portraits often appear to be unclear or unnaturally white.

Border – The border design is now composed of intricate, crisscrossing lines that are clear and unbroken, distinguishing them from the smudged or broken lines of counterfeit bills.

Paper – The paper is now embedded with tiny red and blue fibers. A polyester thread is also woven inside $10, $20, $50, and $100 bills with “USA TEN, USA TWENTY” printed on them to match the denomination. This makes it nearly impossible for photocopiers to reproduce.

Ink – The ink used is a special, “never-dry” ink that can be rubbed off. This is not foolproof, however, since ink on some counterfeit bills can be rubbed off as well.

Microprinting – Surrounding the portrait are the words “The United States of America” in miniature letters. It appears to be a black line to the naked eye, and is how a photocopier would reproduce it.

Keep in mind that you are not reimbursed for any counterfeit currency that may come into your possession. So you are advised to be careful about the large bills you accept for payment.

1. SecretService.gov, 2023
2. USCurrency.gov, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.

If you’re like 49% of Americans, you drink coffee every day. Few, if any, take a moment during their morning coffee ritual to contemplate or marvel at the complex journey that brought their coffee from farm to their kitchen table.¹

Coffee is one of the U.S.’s largest food imports. It wields an economic impact that starts with farmers from Brazil to Vietnam and ends with the barista at your local coffeehouse, involving hundreds of truckers, shippers, roasters, and retail workers in between.^²

Like many agricultural enterprises, coffee is grown on large plantations and small farms alike. Harvests are purchased by coffee mills located proximate to coffee growing regions, either directly from the plantation and farm cooperative or via a trader who buys from the farmer in the hopes of re-selling at a higher price.

The mills take these “cherries”—so-called because the beans are red—and bring them through a milling process that dries them and removes their husks to reveal the inner green bean.

The green beans are brought into the U.S. by importers and sold to roasters and major coffee brands whose roasting facilities are typically located in coastal cities with seaports that can receive the coffee shipments.

Once roasted, coffee will be ground (or left as whole beans), packaged, and shipped to distribution centers around the country for eventual delivery to retail outlets.

Coffee’s journey to your table may travel a different path, given the rise of specialty roasters and a growing connection between coffee retailers and farmers that removes many of these middlemen.

1. MedicalNewsToday.com, 2023
2. USDA.gov, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.

The famous saying from Poor Richard’s Almanack is frequently misquoted. It was published by founder Benjamin Franklin in 1737: “A penny saved is two pence clear.” Finding ways to manage expenses is one of the cornerstones of a sound financial strategy.

Here are some simple and inexpensive energy-saving tips that may help you save money.

Audit First..

To better understand where opportunities may exist for improving energy efficiency, consider an energy audit. Perform one yourself by purchasing a home energy monitor, which tracks your energy use, and a handheld air leak detector to identify windows, doors and other areas of the home that are drafty.

Also, your local power utility may offer in-home energy audits or related services that can help identify remediation opportunities.

..Then Act

Consider these do-it-yourself ideas that may offer immediate savings at very little cost.

• Install a programmable thermostat to automatically lower the heat or air conditioning because—let’s face it—you forget to do it.
• Devices that offer “instant on,” or continuous display (e.g., TV, cable box and recharger) use energy non-stop. Consider a power strip to reduce their electrical use by shutting off the power strip at bedtime.
• Plug up the air leaks through weather stripping or caulking; install door sweeps to block drafts. Close the fireplace damper when not in use.
• Be sure to have your heating system serviced to ensure maximum efficiency.
• Install a water heater blanket and turn it down to 120 degrees; not only is a higher temperature wasteful, but a lower temperature is a safety precaution for younger children. Lower it to a minimum temperature when you leave for vacation.

Honk If You Like to Save Money

For many, the cost of running their automobile(s) can be higher than their home. Here are ways to save:

• Tune up your car.
• Check your tires for proper inflation.
• Drive sensibly by eliminating excessive idling, aggressive driving, and observing the speed limit.
• Eliminate weight—empty that trunk!

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.

Mobile applications have become ubiquitous. While many of these apps are games and social media platforms, an increasing number have been developed to help individuals with their personal finances. Which leads to an interesting question: what should you look for in a personal finance app?

Category

One of the first things to consider is what type of financial apps may be most useful. Five basic categories of these apps exist:

Budget tracking apps allow users to record expenditures as they are made, in order to keep track of bank balances and budget categories. Some allow users to make a budget and then watch how closely expenditures are tracking to it.

Financial assistant apps collect, store, and report information from users’ various savings and investment accounts, providing a single place to keep track of asset performance.

Loan calculator apps estimate payments and current balances for loans. Some also track how long it will take to pay off one or more loans.

Spending and saving apps allow users to perform a wide range of activities, including “what-if” scenarios.

Banking apps offer FDIC-insured banking options, including (in some cases) faster direct deposits, bill paying, and other choices for your account.

Criteria

Once a user has decided on a category of app that may be useful, there are additional criteria to consider.

Credibility. As everyone knows, not everything written on the internet is true. For example, The Wall Street Journal and The New York Times are generally considered more credible than an anonymous blog. The same principle applies to apps: understand who’s providing the information.

Security. Before using any financial app, read the privacy or security statement. This can typically be found at the bottom of the company’s web page or in the “About” section of their website. If you don’t find one online, contact the company to request a copy.

Clarity. A personal finance app should provide information that is easy to understand. There are some apps that provide detailed charts of stock performance using a wide variety of financial analyses. However, if you don’t understand the underlying analysis, the app may be useless.

Relevance. Remember the old saying: “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.” The same applies to financial information. A mutual fund company may be a great source of information about investing concepts, but it may be less useful at providing information about tax management.

Using an app to help with your personal finances may be a great first step in becoming a better money manager, but asking yourself a few key questions before you download may help you select the app that best fits your personal finance needs.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite.