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October 2021

Medicare Open Enrollment Is Here. 5 Steps to Prepare Now.

October marks the start of Medicare’s annual open enrollment period, where more than 63 million Americans who receive benefits through the federal health insurance program can make changes to their coverage.1 Any changes made during open enrollment are effective January 1, 2022. In addition, eligible new enrollees, who missed their 2021 enrollment period and didn’t qualify for a Special Enrollment Period, can enroll between October 7 and December 15.

Whether you or a loved one are enrolling for the first time or making changes to next year’s coverage, navigating the Medicare maze can be complicated. Before making important decisions that could impact your health and your wallet for years to come, Medicare encourages new and existing members to take the following steps to learn what’s new and where to get help if you need it.

  1. Watch for important notices. If you’re currently enrolled in a Medicare plan, you should have already received an Annual Notice of Changes (ANOC) in the mail. The ANOC includes any changes in coverage and costs, effective in January 2022.
  2. Review the Medicare & You 2022” handbook, which contains information about plans and coverage options in your area. Carefully review your current Medicare coverage, and note any upcoming changes to your costs or benefits, including coverage for COVID-19 vaccines, treatments, testing, and more. Medicare also offers plan information in multiple languages.
  3. Consider your 2022 coverage needs. Decide if your current coverage will meet your needs for the year ahead. If you like your current coverage, and it’s still available for 2022, you don’t need to take any action to keep it.
  4. Preview and compare plans. Medicare provides an online tool, making it easy to compare coverage options and shop for health and prescription drug plans. Log in or create an account at Medicare.gov to access a list of your prescription medications and compare plans and prices.
  5. Get personalized help. Visit Medicare.gov to access general information about Medicare plans, costs, eligibility, and more. You can also contact your State Health Insurance Assistance Program (SHIP) to get help from health insurance counselors in your area by phone.

Importantly, the budget reconciliation bill being debated in Congress includes a proposed expansion of Medicare benefits to include dental, vision and hearing services, which are not currently covered under Medicare, as well as changes impacting prescription drug plans and pricing. If you’re currently enrolled in Medicare or will be eligible to enroll in 2022, you will want to watch for any developments in the weeks and months ahead.

If you have questions about planning for your healthcare costs in retirement, contact the office to schedule time to talk.


1 https://www.cms.gov/research-statistics-data-systems/cms-fast-facts/cms-fast-facts-mobile-site

2 https://www.medicare.gov/sign-up-change-plans/joining-a-health-or-drug-plan

5 Rules of Thumb to Help Protect Yourself and Loved Ones From Medicare Scams

It’s no coincidence that Medicare-related scams increase as the annual fall open enrollment period begins each October. Current Medicare beneficiaries, as well as those who will be eligible in the following calendar year, are inundated with information and advertisements from television commercials to social media ads, and information arriving through the mail. That can make it hard to determine what’s legitimate and what’s not. For example, did you know that unsolicited phone calls from Medicare providers are prohibited?

Insurance companies that are approved to offer Medicare health and prescription drug plans, such as Medicare Advantage or “Medi-gap” plan providers, may send brochures or other marketing materials to you through the mail. However, they are not allowed to call you or come to your home without an invitation from you. If you receive unsolicited calls from parties identifying themselves as Medicare providers, assume it’s a scam and hang up.

One of the fastest growing scams in 2021 involves a robocall from “Becky, a Medicare advocate,” offering “precautionary genetic cancer screening.”1 The caller states that if you don’t act soon, Medicare may label you as ineligible for coverage. It’s important to know that Medicare will never call you to sell or promote any type of services or coverage.

Another popular scam involves fake invoices sent through the mail from an unknown hospital, doctor, or medical provider. The scammers bank on people paying these bills without checking into them first. To avoid this scam, save all medical receipts and statements and keep track of your quarterly Medicare Summary Notices. These notices list any services you received during the previous three months. When in doubt, contact the healthcare provider’s billing department to make sure the charges are valid. If you suspect fraud, call 1-800-MEDICARE.

Below are five rules of thumb to help protect yourself and loved ones from these and other Medicare-related scams. 

  1. Medicare will never contact you for your Medicare identification number or other personal information unless you’ve given them permission in advance.
  2. Medicare will never call you to sell you anything.
  3. You may get calls from people promising you things if you give them a Medicare number. Don’t do it. 
  4. Medicare will never visit you at your home.
  5. Medicare can’t enroll you over the phone unless you called first.

To learn more about avoiding Medicare scams and steps you can take to protect yourself or report suspected fraud, visit CMS.gov.

 

1 https://www.aarp.org/money/scams-fraud/info-2021/new-medicare-robocall.html

This information was written by KRW Creative Concepts, a non-affiliate of the broker-dealer.

Asset allocation is an investment strategy that will not guarantee a profit or protect you from loss. 

These examples are hypothetical only, and do not represent the actual performance of any particular investments. Investments in securities do not offer a fixed rate of return. Principal, yield and/or share price will fluctuate with changes in market conditions and when sold or redeemed, you may receive more or less than originally invested.

Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state's 529 Plan.

September 2021

How Technology Is Making It Easier and More Cost Effective for Retirees to Age in Place

According to a recent national survey, 90% of adults, age 50 or older, say they want to remain in their current homes as they age. The survey also notes that the pandemic has led many to give some serious thought to the resources they may need to age in place safely, from assistance with daily living activities to how they will access medical care.

Aging in place can be a cost-effective housing solution—if you plan ahead. However, due largely to a shortage of paid caregivers that began well before the pandemic, the average annual cost of homemaker services ($53,768) and home health aides ($54,912) has risen to a level on par with assisted living facilities ($51,600) in recent years. However, skilled nursing home care still far outpaced all other options at an average annual cost of $93,075 for a semi-private room and $105,850 for a private room in 2020.2

So what can you or someone you care about do to remain at home longer? Consider how technology is helping more retirees age in place safely. For example, wearable emergency alert systems can detect falls and summon help, while certain smart watches, fitness bands, mobile apps and devices can monitor heart rate or detect blood glucose levels. Telehealth services, which are now covered by most insurers, including Medicare, enable virtual visits with healthcare providers. Other smart technology is designed to help safeguard your home and its occupants, such as:

  • Cell phones with emergency response buttons
  • Smart thermostats, as well as smoke and carbon monoxide detectors
  • Voice-controlled devices that work with smart speakers to remind you when to take your medication or head out to a medical appointment
  • Cameras, microphones and motion sensors can monitor regular activity or signal a lack of it to your caregiver
  • Home security systems that allow you to lock or unlock doors from a smart phone or speaker

Ecommerce is also helping more retirees to age in place, especially those who may no longer drive or have access to public transportation. In fact, people age 65-plus are the fastest-growing group among online shoppers and increasingly rely on the convenience of home delivery for everything from groceries and clothing to prescription medications, personal care items, pet supplies, and more.These and other technological advances continue to make life safer, easier and more convenient for those who prefer to remain in their homes in retirement.

If you have questions about planning for your lifestyle needs and preferences in retirement, contact the office to schedule time to talk.

1 https://www.capitalcaring.org/nearly-90-of-americans-age-50-and-older-want-to-age-in-place/
2 https://www.genworth.com/aging-and-you/finances/cost-of-care.html
3 https://clarkstonconsulting.com/insights/ecommerce-adoption-by-seniors/

4 Tax-Smart Ways to Help Pay for a Grandchild’s Education

One of the best ways that grandparents can provide a lasting legacy is by helping to fund a grandchild’s education expenses. Below are four ways to help accomplish this goal during your lifetime, or afterward. 

  1. 529 education savings plans: When used to pay for qualified education expenses, 529 account earnings and withdrawals are free from federal and, in many cases, state taxes. They are one of the only assets that account owners can remove from their taxable estates while still maintaining control over the assets. Contributions can be made by anyone, for any beneficiary. Plan assets can be used to pay for most education expenses at colleges, technical, vocational, and graduate schools, or for qualifying adult continuing education programs. Assets can also be used to pay for up to $10,000 per year in K-12 tuition for primary or secondary public, private, and religious schools.1
  2. Annual gifts: In 2021, the annual gift tax exemption amount is $15,000 per recipient. That means that individual taxpayers, regardless of filing status, can give $15,000 to as many different people as they wish. If you’re married, you can combine your gifts and give $30,000 to as many different people as you wish. There is no limit on the number of gifts you can make in a given year or to whom those gifts are directed. For 2021, the lifetime exemption amount is $11.7 million for individuals and $23.4 million for married couples (minus, of course, any prior taxable gifts).2
     
  3. Direct payments to educational institutions: Payments made directly to an educational institution are not considered gifts under the gift tax rules, so they won’t count toward your $15,000 annual exclusion. It’s important to note that if you write the check to a grandchild, even if they endorse it over to the school, you will have made a gift to the grandchild that is subject to gift tax rules.
  4. Trust: A trust can help reduce estate and inheritance taxes as well as avoid probate, the court process for distributing assets upon the death of the owner. Trusts are one of the most flexible tools for carrying out your wishes during your lifetime and afterward, since they provide nearly unlimited freedom in designating how assets may be used. For example, a trust established to pay for a grandchild’s college costs may stipulate that the assets can only be used to pay for tuition, housing, and fees, or it could cover any number of related expenses. It’s entirely up to you. When you set up a trust, you will need to designate a trustee to pay out the funds as directed by the trust and to file annual tax returns on behalf of the trust, following the owner’s death. Meet with your legal professional to discuss the type of trust that meets your needs. 

If you have questions about planning your legacy, contact the office to discuss your specific situation and schedule time to talk. 

1 https://www.finra.org/investors/learn-to-invest/types-investments/saving-for-education/529-savings-plans
2 https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax

This information was written by KRW Creative Concepts, a non-affiliate of the broker-dealer.

Asset allocation is an investment strategy that will not guarantee a profit or protect you from loss. 

These examples are hypothetical only, and do not represent the actual performance of any particular investments. Investments in securities do not offer a fixed rate of return. Principal, yield and/or share price will fluctuate with changes in market conditions and when sold or redeemed, you may receive more or less than originally invested.

Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state's 529 Plan

August 2021

4 Things You Can Do About Rising Inflation

In June, the Consumer Price Index, which measures the change in the prices of a broad range of goods and services over time, rose 5.4% from a year earlier, marking the sharpest increase in inflation since 2008.Whether prices are rising at the gas pump or grocery store, inflation decreases your purchasing power, meaning you pay more money for the same things. While experts debate whether recent increases are a signal that we’re entering a period of sustained higher prices—or if inflation will be temporary—there are ways to help manage the impact on your purchasing power.

Why it’s different this time

It’s important to note that the price hikes we’re seeing now are different from those seen at the beginning of the pandemic, which were largely due to shortages and panic buying. In fact, a rise in inflation was expected this year as the economy picked up steam, business restrictions eased, and consumer demand surged. While ongoing supply chain disruptions and pent-up consumer demand may continue to drive prices upward in the coming months, the Federal Reserve (the Fed), which sets U.S. monetary policy, expects steep rises to be transitory and inflation to remain within its 2% target over the long term, into 2022 and 2023.2 However, there is no guarantee that the Fed will be successful in keeping inflation in check. Conditions could change based on direction of the COVID-19 pandemic, as well as other market, economic, and geopolitical factors. So what can you do to help protect your income from the eroding effects of inflation? Consider the following steps:

  1. Review your budget and spending habits. Cutting back on certain discretionary expenses can free up more money to help pay for essential expenses where prices may be rising for food, healthcare, clothing, or transportation.
  2. Follow a plan. The financial planning process takes inflation and other market and economic factors into account when modeling different strategies and scenarios. Planning can help ensure you have a flexible strategy in place that’s aligned with your income and spending goals that can be adjusted as market and economic conditions change over time.
  3. Put excess cash to work. If you have cash on the sidelines that you don’t need for current expenses or to shore up emergency savings, consider investing it, so it can work harder for you.
  4. Check your portfolio asset allocation. A portfolio allocation that’s too conservative may not generate the income you need. For example, if your portfolio earned 4% over the course of a year when inflation was at 5.4% for the same period, you could no longer afford the same basket of goods. Consider if it makes sense to allocate a larger percentage of portfolio assets to growth-oriented investments, which can provide a hedge against inflation over the long term.

To learn more, call the office to schedule time to talk about ways to help protect your income in retirement.

1 https://www.bls.gov/news.release/cpi.nr0.htm
2 https://www.federalreserve.gov/monetarypolicy/files/20210709_mprfullreport.pdf

*for a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks, LLC nor any of its representatives may give legal or tax advice.

 

 

Women Continue to Face Unique Challenges in Retirement

National Women’s Equality Day is celebrated on August 26 to commemorate the certification of the 19th Amendment in 1920, which guarantees women the right to vote. While women’s voices and votes continue to influence social, economic and public policy, as a group, women still face challenges when it comes to financial equality—especially where retirement is concerned.

According to the U.S. Bureau of Labor Statistics, women only earned 82.3% of what men earned in 2020.1 Lower earnings can have long-term consequences as women prepare for and enter retirement. In fact, the combination of lower lifetime earnings and longer average lifespans is a leading reason why women experience higher rates of poverty in retirement than men.2 Not only do many women start out with less—it also has to last longer. Yet, lower wages alone don’t tell the whole story. On average, women leave the workforce to care for children or relatives at a higher rate than men. That can reduce their Social Security benefits in retirement, which are based on earnings during their working years.3

In addition, the pandemic exacerbated many of these challenges. According to the National Women’s Law Center, more than 2.3 million women have left the workforce since February 2020, bringing their labor force participation rate down to levels not seen in more than three decades.

If you, or the women who are important to you, are concerned about having the income needed to meet important lifestyle goals in retirement, consider the following steps. 

For those saving for retirement:  

  • Contribute the maximum amount to any qualified retirement plans you are eligible to participate in, such as a 401(k), 403(b) or individual retirement account (IRA).
  • Take advantage of catch-up contributions if you’re age 50+ (limits vary by plan type)
  • Talk to a financial professional about how to optimize your Social Security benefits 

If you are in or nearing retirement:

  • Put a comprehensive plan in place for how you will draw income in retirement in a tax-efficient manner
  • Adhere to a budget to help manage spending in retirement
  • Meet with a financial professional at least annually to review your plan and make any necessary adjustments 

If you have questions about your income in retirement, contact the office to schedule time to talk. 

1 https://blog.dol.gov/2021/03/19/5-facts-about-the-state-of-the-gender-pay-gap
2 https://www.americanprogress.org/issues/women/reports/2020/08/03/488536/basic-facts-women-poverty/
3 https://www.ssa.gov/pubs/EN-05-10127.pdf

This information was written by KRW Creative Concepts, a non-affiliate of the broker-dealer.

Asset allocation is an investment strategy that will not guarantee a profit or protect you from loss. 

These examples are hypothetical only, and do not represent the actual performance of any particular investments. Investments in securities do not offer a fixed rate of return. Principal, yield and/or share price will fluctuate with changes in market conditions and when sold or redeemed, you may receive more or less than originally invested.

July 2021

Is It Time For a Mid-Year Financial Review?

This summer looks remarkably different than last year. As pandemic-related restrictions are lifted, retail, sports, travel, dining and entertainment venues are welcoming consumers back in droves. It’s likely that you’ve experienced changes in your life and your finances in recent months, as well. These may be subtle changes in your savings and spending habits as you resume travel or social activities, or more pronounced shifts that impact your goals and priorities. When faced with change, ensuring you remain on track toward your goals is critical. That’s where a mid-year financial review can help.

Why Now?

By mid-summer, you’re far enough into the year to gauge progress toward your goals, but still have time to make important adjustments to savings and spending, as well as your tax and investment strategies. A financial checkup can help you optimize your planning by:

  • Reassessing your spending needs
  • Reevaluating your financial priorities and goals
  • Confirming alignment between your investment strategy, time frame and risk tolerance
  • Identifying new opportunities

Consider the following tips to ensure you get the most out of your mid-year financial review:

  1. Gather and review all relevant paperwork and account statements prior to your scheduled review. This may include a list of action steps from your last meeting or review. 

  2. Write down any questions you may have about specific accounts, strategies, or fees.   

  3. Document any changes that have taken place in your life since your last checkup. Have certain goals or priorities changed? What about family dynamics, such as marital status, welcoming a new grandchild, or becoming an empty nester? Did you recently change jobs or receive a promotion? If you’re retired, did you sell a home, experience a change in health status, or make changes to your estate plan? 

  4. Consider your future plans. Maybe you’re thinking about changing careers, retiring earlier than planned, purchasing a vacation home, or moving closer to family members. Be prepared to share any new goals or changes in your priorities. This will provide an opportunity to discuss how your current plan may support these goals, or if adjustments are needed.

The past 18 months have been marked by rapid change, which can take a toll on your physical, emotional and financial health. Taking time now for a mid-year review can provide the confidence that you’re still on track toward the goals you have established for yourself and your family.

To learn more about the benefits of regular account reviews, call the office today to schedule time to meet.

Are You Ready to Fully Retire?

The United States experienced a flood of baby boomer retirements in 2020. According to the Pew Research Center, 1.2 million more Americans born between 1946 and 1964 retired last year than the historical annual average. Rising home prices, a surging stock market, and robust savings account balances have all played a significant role in the uptick in retirements. In addition, a growing number of workers, tiring of web conferencing and remote work, are also reluctant to return to grueling commutes, cramped office spaces, or rigorous business travel schedules.1 If you’re nearing retirement and thinking about joining them, take some time to determine if you’re ready to fully retire—or just need a break.

What’s Your Plan?

Transitioning to life after work is not without challenges. It’s important to understand how you will spend your time and who you will spend it with. Will you become bored or lonely if your spouse, other family members, or friends are still working? Do you plan to pursue a hobby or sport, join a club, or spend time volunteering for an organization? Having a plan for how you will spend your days is important for remaining mentally and physically engaged, which contributes to a sense of overall wellbeing. If you’re not sure if you’re emotionally prepared to retire, consider a trial period, such as a sabbatical or extended vacation. Other opportunities to test the waters may include part-time work or consulting in your field of expertise.

Before pulling the plug on work, you also need to understand how you will replace your paycheck and how long your savings may last, especially if you retire earlier than originally planned. That can be a hard question to answer without a comprehensive plan in place for how you will receive tax-efficient income in retirement.

The planning process provides an opportunity to model various scenarios to determine the probability of meeting different goals and helps to identify any adjustments or tradeoffs that may be required to accomplish your objectives. It can also help provide answers to important questions, such as:

  • How will you cover your healthcare expenses if you are under age 65 and not yet eligible for Medicare?
  • When is the optimal time for you to begin receiving Social Security benefits?
  • What if you have outstanding credit card debt or a mortgage?
  • Can your current strategy withstand one or more financial market or economic downturns, especially if one occurs during the early years of your retirement?

If you have questions about whether now is the right time for you to retire, contact the office to schedule time to talk.

1https://www.bloomberg.com/news/articles/2021-04-30/more-americans-are-considering-retirement-because-of-covid

This information was written by KRW Creative Concepts, a non-affiliate of the broker-dealer.

June 2021

4 Reasons to Consider Selling Your Business in 2021

Like many business owners, you may have spent more time over the last year focused on keeping your businesses afloat and navigating rapidly changing public health orders, rather than planning your exit strategy. However, a rebounding economy, the prospect for tax hikes, and buyers flush with cash have many business owners thinking about selling. Below are four reasons why you may want to join them and cash in now.

  1. Buyers are prepared to spend. A growing number of buyers with cash on the sidelines has created significant opportunities for business owners seeking to sell. According to a recent report, the median revenue and cash flow of businesses sold in the first quarter of this year were both up 15% and 7%, respectively. As a result, buyers have been paying premium prices for these businesses, with the median selling price up 30% year-over-year.
  2. Competition is expected to grow. While demand among buyers continued to grow throughout the pandemic, supply remained relatively low. This was due, in part, to businesses that were adversely impacted and owners who were waiting to recover before selling. As more businesses reopen and benefit from pent-up consumer demand, more owners are expected to regain business value and enter the market. This is especially true for baby boomers who make up a large majority of business owners preparing to retire and exit their businesses in the years ahead.2
  3. Capital investments are costly. While the United States has made considerable progress in tamping down the spread of COVID-19, the pandemic will continue to influence how business is conducted in the months and years ahead. Many business owners are taking the opportunity now to make substantial capital investments for ventilation and HVAC system upgrades, expanded office and indoor dining space, and other measures to help head off future business disruptions. However, if you’re thinking about selling now, you may not want to expend that capital. 
  4. Tax hikes may be on the horizon. President Biden ran on a platform that included raising levies on capital gains and ordinary income for taxpayers earning more than $400,000, as well as the federal statutory tax rate for corporations, to help pay for a large infrastructure bill and related proposals in the coming years. Keep in mind, these are only proposals until Congress enacts legislation, which could take months or years, or not happen at all. However, many business owners are considering the potential impact that higher taxes could have on business income or the future sale of a business.

If you would like to learn more about the importance of having an exit strategy in place that considers these and other factors impacting business owners, or want to discuss your unique business situation, call the office to schedule time to talk.

1 https://www.bizbuysell.com/insight-report/?utm_source=inc&utm_medium=referral&utm_campaign=inc04282
2 https://www.inc.com/bob-house/should-you-sell-your-business-in-2021.html


5 Ways Telehealth Will Continue to Benefit Retirees

Medicare and most private insurers expanded coverage for a broad range of telehealth services early in the COVID-19 pandemic to include virtual access to care via phone or web conferencing for office visits, consultations, and more.1 While Americans across all age groups quickly adapted to this new way of accessing healthcare services, it was widely embraced by seniors, many of whom were concerned about contact with people outside of their own households during the pandemic.

According to the CDC, telehealth visits during the last week of March 2020 increased by 154% over the same period in 2019.2 Additional government data shows that in just one week in April, nearly 1.7 million Medicare beneficiaries received telehealth services, compared with 13,000 in a typical week before the pandemic. In addition, more than 9 million Medicare enrollees received telehealth services during the four-month lockdown, which started in mid-March 2020.3

Below are five ways seniors are benefitting from virtual appointments and why telehealth is likely here to stay:

  1. Greater access to care: Often, people can “see” a doctor or physician’s assistant in a more timely manner than waiting for an office appointment. This can also help determine if it’s necessary to follow-up with an in-person appointment with their current provider or a specialist.
  2. Convenience: Telehealth allows people to access care in the comfort and privacy of their own home. Research also indicates that people who take advantage of telehealth services spend less time waiting in doctor’s offices and hospitals and commuting to doctors’ visits.
    1. Less stress: Many seniors and their caregivers report less stress with virtual visits, especially those with physical mobility issues or transportation challenges.2
    2. Reduced spread of infection: Less time spent in crowded waiting rooms at medical offices, hospitals, and clinics reduces the risk of exposure to others who may be sick.
    3. Lower costs: Cost savings from telehealth are largely realized when patients are able to avoid more costly care settings. Research shows that using telehealth to divert patients with non-life-threatening conditions from emergency departments can save more than $1,500 per visit.4

    While virtual visits are not expected to fully replace in-person care, in many cases, telehealth can provide greater convenience and confidence along the path to maintaining health and wellness.

    1 https://www.medicare.gov/coverage/telehealth
    2  https://www.cdc.gov/mmwr/volumes/69/wr/mm6943a3.htm
    3 https://www.aarp.org/health/conditions-treatments/info-2020/telehealth-goes-mainstream.html
    4 https://www.ortholive.com/blog/new-study-shows-telehealth-saves-1500-per-visit/

    This information was written by KRW Creative Concepts, a non-affiliate of the broker-dealer.

    May 2021

    4 Ways 529 Plans Can Benefit Estate Planning

    You may be familiar with the role 529 plans play in helping families set aside funds for future education expenses. Established in 1996 under Section 529 of the Internal Revenue Code, these plans are versatile savings accounts that offer tax incentives while minimizing the impact on financial aid. In addition to being one of the most popular education savings programs, 529 plans also offer important estate planning benefits, including:

    1. Significant tax advantages: When used to pay for qualified education expenses, 529 account earnings and withdrawals are free from federal and, in many cases, state taxes. They are also one of the only assets that account owners can remove from their taxable estates while still maintaining control over the assets. That makes 529 accounts a tax-smart option for grandparents seeking to fulfill certain legacy planning goals.  

    2. Maximum flexibility: Offered by most states, 529 plans are typically open to all savers, not just their own state residents. Contributions can also be made by anyone, including a trust and other entities, for any beneficiary. Plan assets can be used to pay for most education expenses, including tuition, room and board, books, computers, and supplies at most colleges, technical, vocational, and graduate schools, or for qualifying adult continuing education programs. Assets can also be used to pay for up to $10,000 per year in K-12 tuition for primary or secondary public, private, and religious schools.1

    3. Low minimum investments: Most states offer very flexible minimum contribution limits, making it easy and affordable to fund accounts for multiple beneficiaries. Many plans require a $250 initial contribution with subsequent contributions of as little as $50.1

    4. High maximum contribution amounts: Since contributions are considered gifts for tax purposes, they qualify under the annual gift tax exclusion, which is $15,000 for individuals ($30,000 for a married couple filing jointly) in 2021.2 Even better—an exception enables 529 account owners to accelerate their gifting schedule by front-loading the plan. That means you can contribute up to five years of gift-tax-exempt funds into the 529 account in a single tax year. For example, the five-year election would allow contributions up to $75,000 per parent or grandparent, or $150,000 for a married couple filing jointly. For each of the five years, you must report the five-year election on IRS Form 709.

    To learn more about tax-smart ways to help you pursue your legacy goals, call the office to schedule time to talk.

    1https://www.finra.org/investors/learn-to-invest/types-investments/saving-for-education/529-savings-plans

    2https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes

    Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This information is found in the issuer’s official statement and should be read carefully before investing.

    Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state's 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investing in any state's 529 Plan.

    This information is not intended as specific legal or tax advice.

    Thinking About Selling Your Home? Why 2021 May Be the Right Time

    Roughly one year ago, the COVID-19 lockdown put the housing market on hold. A few months later, it not only bounced back, but has been booming ever since, thanks to the combination of low interest rates, high demand, and low inventory. In recent months, these conditions have triggered bidding wars in many parts of the country, further driving up home prices.1 In fact, the median selling price for existing homes jumped 17.2%, year-over-year, to $329,100 in March.2 While this may be great news for sellers seeking top dollar, it’s important to weigh the pros and cons of selling now. After all, you will still need someplace to live, which may be harder and more expensive to find in the current market. Below are several considerations if you’re thinking about selling in the months ahead.

    Interest rates are expected to remain low: While mortgage rates have recorded modest increases in recent months, they are expected to remain low compared to historical averages. While that’s good if you anticipate buying a new home after selling yours, keep in mind that rising home prices can erode some of the benefits of low mortgage rates. This is especially true in tight markets where buyers may find themselves bidding well above a property’s asking price to secure the home of their choice.

    You recently refinanced: When you refinance, you generally want to remain in your home until you recover the closing costs on your new loan, known as your break-even point. However, in certain cases, selling now could lead to greater savings over the long term if the value of your current home has increased substantially and/or you are able to purchase a new home at a significantly lower interest rate. Just keep in mind that closing costs will also apply to your new purchase, so it’s important to run all the numbers to ensure a move makes good financial sense.

    You’re concerned about paying too much for your next home: While cashing in on today’s booming market may be tempting, if you’re on the fence, or you and your spouse disagree on when, where or if you should move, it may make sense to wait. A move is a big decision and one you don’t want to regret later. On the other hand, if you’re committed to moving but are concerned about paying too much for your next property, you may want to consider selling now and renting until the current seller’s market cools down.

    Don’t forget about taxes: If you've owned your home for at least two years and meet the primary residence rules, you may still owe tax on the profit if it exceeds IRS thresholds. Individuals can exclude up to $250,000 of the gain and married couples filing jointly can exclude up to $500,000.3

    For help in determining if this is the right time for you to sell, or to learn about strategies to help offset capital gains, call the office to schedule time to talk.

    1https://www.bloomberg.com/news/articles/2021-04-26/hot-u-s-housing-market-to-get-supply-boost-with-new-listings

    2 https://www.nar.realtor/newsroom/housing-market-reaches-record-high-home-price-and-gains-in-march

    3 https://www.irs.gov/taxtopics/tc701

    This information was written by KRW Creative Concepts, a non-affiliate of the broker-dealer.

    April 2021

    4 Estate Planning Documents You Can't Live (Your Best Life) Without

    Often, people view estate planning through a narrow lens, thinking it’s only about what happens to their property and assets after they’re gone. While the tax-efficient transfer of your assets to the people and organizations you designate is an important component, estate planning encompasses so much more. First and foremost, it’s about protecting your lifestyle and the people you care about during your lifetime. It answers critical questions, including: Who will have the legal authority to act on your behalf if you’re unable to do so, due to an accident or illness? Who will manage your assets and make important healthcare and end-of-life decisions on your behalf? And how will your legacy be carried out now and after you’re gone?

    Ask yourself: If a crisis occurred today, would your loved ones have the knowledge and legal authority to follow through and act on your behalf? Without the right legal documents in place, it can be hard—if not impossible—for those you appoint to carry out their obligations and responsibilities. To protect yourself and loved ones, plan to meet with an estate planning attorney who can help you draw up important legal documents, including:

    1. Will: A will instructs how your property will be distributed after your death. It allows you to name a personal representative (“executor”) charged with overseeing the distribution of your property and shepherding it through probate (the court process required to validate your will and transfer your assets). Keep in mind, certain assets sit outside of your will, such as life insurance policies or qualified retirement accounts (401(k), IRA, etc.). These transfer directly to the named beneficiaries on your accounts and are not subject to probate. That’s why it’s so important to review all your beneficiary designations on a regular basis.

    2. Durable power of attorney (POA): A durable POA empowers your “agent” to carry out any legal and/or financial decisions that have to be made on your behalf during your lifetime if you are unable to do so. Unlike POAs that extend specific or limited powers, a durable POA doesn’t end if you become incapacitated. However, all POAs end upon your death.

    3. Living will: Also called a healthcare proxy, this document enables you to 1) specify the kind of medical care you do or do not wish to receive in the event of temporary or long-term incapacity and 2) name who will make important healthcare and end-of-life decisions on your behalf.

    4. Trust: While not everyone needs a trust, it can provide the confidence that you have a plan in place to help provide for the tax-efficient management of family assets and to direct their use and distribution in accordance with your wishes, among many other objectives.

    To learn more about how estate planning can help you live your best life, while protecting the people and things you care about most, call the office to schedule time to talk.

    This communication is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.


    How to Master Financial Literacy at Any Age

    While understanding basic financial concepts, such as saving, investing and budgeting, is important at any age, it’s critical for those nearing or living in retirement. That’s because retirement marks a major shift from a lifetime of accumulating assets during your working years, to how you will use those assets to create a tax-efficient income stream to support your lifestyle for the next 20 or 30+ years.

    That requires a comprehensive approach to protecting and growing your assets to support your desired lifestyle. Mastering financial basics, including how to budget, avoid scams, and manage income and debt can also help you accomplish other important retirement goals, such as remaining independent longer.

    Whether you’re looking to brush up on a single topic or enroll in a course on financial management, consider the following resources, available at no cost to you.

    • Videos: Khan Academy offers engaging and easy-to-follow video presentations on dozens of financial topics from budgeting to investing, taxes and safeguarding your assets.

    • Podcasts: As part of its Money Smart program for adults, the Federal Deposit Insurance Corporation (FDIC) offers a series of podcasts designed to demystify personal finances, explain consumer protection measures, teach about savings, credit, loans and more.

    • Webinars: The Consumer Financial Protection Bureau (CFPB) offers monthly webinars on different financial education topics. If you missed one, past webinars are added to the archive for easy access to pre-recorded events on your schedule.

    • Articles: Founded in 1950, the National Council on Aging (NCO) is the nation’s longest-serving national organization focused on aging. NCO offers a wide variety of articles, programs and resources for older adults and caregivers, including an online tool for accessing financial assistance programs in all 50 states.

    • News and information: As longtime advocates for programs, policies and legislation affecting seniors at the state and national levels, the American Association of Retired Persons (AARP) is a good source for the latest news and information on issues impacting your taxes, savings, Social Security, Medicare and more.

    • College classes and workshops: Looking to go a little deeper? Many colleges and universities offer online courses and workshops on economics, personal finance and investing to seniors at no cost or for a reduced fee, including a full roster of free online classes at MIT Sloan School of Management. Be sure to check your local community college and state colleges and universities, as well. Many offer special programs and in-state discounts for seniors.

    If you have questions about managing your finances, we’re happy to help. Call the office to schedule time to talk.

    March 2021

    3 Ways to Boost Cash Reserves in Retirement

    How would you pay for an unanticipated home or car repair, medical emergency, or other expense? A recent study indicates that fewer than 4 in 10 Americans have enough savings to pay for an unexpected $1,000 expense in cash. The rest would have to borrow, use a credit card or take out a personal loan.1 The ability to pay for unexpected expenses without incurring debt is among many reasons why retirees need adequate cash reserves. Cash reserves or emergency savings play a significant role in helping to protect your income and your assets in retirement, by helping you:

    • Avoid cementing losses that can occur when you draw down on your investment portfolio during a stock market downturn or periods of extreme volatility, to meet your income needs.

    • Supplement income from sources that may not be performing as well under certain market or economic conditions, such as low-yielding fixed-income investments.

    • Increase confidence in your ability to meet unexpected expenses without derailing your long-term investment strategy.

    • Minimize the amount of new debt you take on in retirement, especially high-interest credit card debt, which can erode your income over time.

    What If You Haven’t Saved Enough?

    The general rule of thumb for cash reserves is to set aside three to six months’ worth of living expenses. How much you will need may differ based on your personal circumstances and lifestyle goals. Whether you need to boost or replenish cash reserves in retirement, there are several ways to do so.

    1. Put a budget in place: Unchecked spending, especially in the early years of retirement, can result in less money later. Following a budget can help to manage spending and reveal opportunities to save more at all stages of retirement.

    2. Save a fixed percentage: If you spend less money each month than you receive from income sources, such as Social Security and a pension, consider setting aside a percentage of what’s typically left over each month and direct that to your emergency fund.

    3. Take advantage of unplanned savings: Redirect any unexpected budget savings into your emergency fund. This may include savings resulting from tax refunds, steep discounts or rebates on items you purchase, a lower-than-expected utility bill, or even savings on groceries or prescriptions. These small amounts can add up over time.

    If you have questions about maintaining optimal cash reserves in retirement, call the office to schedule time to talk.

    1 https://www.cnbc.com/2021/01/11/just-39percent-of-americans-could-pay-for-a-1000-emergency-expense.html

    4 Tips for Managing Your Time in Retirement

    After years of juggling competing responsibilities and obligations during your working years, retirement should be a breeze, right? You’ll finally have the time to do all of the things you put on the backburner during your working years, or while raising a family. So, why do so many people find themselves busier than ever and just as stressed as they were in their working years? According to time management experts, managing an abundance of time can be as challenging as managing a scarcity of time because it requires you to prioritize what really matters to you.1 

    If you’re looking for ways to create a more intentional life in retirement, consider the following tips:

    1. Create a schedule: Like many people, you may have fantasized about the day you would finally ditch your Day-Timer or delete your electronic calendar. However, even in retirement, you need to establish some sort of framework for how you will spend your days or your week, Otherwise, it’s all too easy for time to pass without even noticing it. To ensure you’re spending your time on the things you want to accomplish, consider making a simple list to remind you of the things you’d like to do each day or week.

    2. Be flexible: Managing your time in retirement doesn’t mean blocking out every minute of the day. In fact, that can have the opposite effect, creating a sense of drudgery, which can increase stress. For example, you might not need to schedule everyday chores, such as grocery shopping, gardening or house cleaning. When it comes to routine tasks, give yourself the flexibility to move a task to another day if you don’t feel like tackling it today, knowing that eventually it will get done.

    3. Set boundaries: While allowing some flexibility in your schedule is important, setting boundaries is also critical. That means recognizing when you’re feeling overcommitted and saying “no” to those who may not be respectful of your time—even if they happen to be close friends or family members. Remember, this is your time to focus on what brings the most meaning and joy to your life.

    4. Pace yourself: In today’s fast-paced environment, there’s a tendency to equate productivity with activity. As a result, giving yourself permission to slow down can be difficult, especially if you were accustomed to a relatively high-pressure lifestyle before you retired. Keep in mind, while busywork may keep you occupied in the moment, it won’t necessarily provide a sense of fulfilment. Once you accept that you don't have to be busy every minute of the day, you can focus on accomplishing the things that are most important to you, at your own pace. That includes spending time doing absolutely nothing—guilt free.

    1 https://www.kiplinger.com/retirement/601545/9-tips-for-better-time-management-in-retirement

    February 2021

    RMDs Are Back. What's Your Strategy?


    Shortly after the pandemic hit, the CARES Act was passed in March 2020, allowing those age 72 or over to waive their required minimum distributions, or RMDs. While that resulted in a significant reduction in taxable income for many retirees in 2020, RMDs are back this year, along with the potential tax burden and steep penalties (50% of the required distribution amount) for those who fail to take them by year end. In addition, many retirees, especially those who did not take RMDs last year, may be subject to higher distribution amounts this year, due to higher account balances. That makes it even more important to have a strategy in place for managing RMDs.

    RMDs are commonly used to supplement income received in retirement from guaranteed income sources, such as Social Security or a pension. You can choose to take RMDs on a regular schedule throughout the year, such as monthly, quarterly or semiannually, or once a year as a lump sum. However, it’s important to remember that distributions from qualified retirement accounts are taxable, so if you choose not to have taxes automatically withheld, you’ll need to set money aside to pay any taxes owed on your distributions.

    Should You Take Regular Distributions or a Lump Sum?

    Many people find it easier to manage their income and expenses in retirement by taking distributions throughout the year. In addition to providing regular cash flow, regular installments can help ensure that you receive a range of prices for the assets you sell, which may provide some stability during periods of increased market volatility. Regularly scheduled distributions can also help retain the benefits of tax-deferred compounding in your retirement account(s) throughout the year, versus taking a lump sum withdrawal at the beginning of the year. If you don’t need the regular income, waiting until year-end to take a lump sum distribution may also help bolster tax-deferred growth, as your money remains invested in your account(s) throughout the year. However, because markets fluctuate over time, there is no guarantee that account values will be higher or lower at the time you take your distribution(s). In addition, taking a large lump sum withdrawal may also create the need to rebalance your portfolio.

    Managing Your Tax Burden

    There are many ways to help manage taxes associated with RMDs. Those who may not need the income from an RMD, and are seeking to avoid taxable distributions, may choose to make a qualified charitable distribution (QCDs). A QCD allows you to donate up to $100,000 annually directly from a traditional IRA to an eligible charitable organization without counting that amount as taxable income. Instead, it would count toward your RMD and reduce the taxable amount of your mandatory withdrawal.  Other options for managing taxes on income in retirement may include a Roth IRA conversion, which requires paying taxes on any amounts converted in the year assets are converted. (Roth IRA accounts are not subject to RMDs). Since these strategies are complex and may have significant tax consequences, it’s important to meet with your tax and financial professionals before taking action.

    If you have questions, call the office to schedule time to talk about your retirement income strategy.

    5 Ways to Bring More Balance to Your Life in 2021

    The COVID-19 pandemic has up-ended many norms and routines from family and social gatherings, to community activities, how we shop, and how we access services, such as healthcare and transportation. That’s a lot of change to digest in a relatively short period of time. It’s no wonder that separate surveys conducted by researchers at the Boston University (B.U.) School of Public Health and Johns Hopkins University found that the prevalence of depressive symptoms (B.U.) and “serious psychological distress” (Hopkins) reported during the COVID-19 pandemic were triple the level measured in 2018. According to the B.U. study, these rates were higher than those seen after other large-scale traumas like September 11 and Hurricane Katrina.1

    If you’re feeling somewhat off-kilter, consider the following steps to help restore a sense of balance in your life. 

    1. Recognize when life feels unbalanced: The first step is acknowledging that some anxiety is natural. Whether you’re feeling sad, stressed, or anxious, know that you’re not alone. Take time to understand how you’re feeling and why. It may be helpful to talk through your emotions with a therapist or a friend for support.

    2. Find the tools that work for you: Instead of focusing on what is out of your control, try to channel your energy toward familiar things that provide you with a sense of comfort, whether that’s reading mystery novels, baking, painting, gardening, or other activities and pastimes.

    3. Set goals: Goals give you something to work toward, which can be particularly helpful when it becomes hard to differentiate one day from the next. You don’t have to take up a new hobby or activity to challenge yourself, either. Maybe there’s a yoga pose you have yet to master, you’re looking to improve your golf game, or you finally have a chance to organize that box of old photos. Completing a goal of any size provides a sense of accomplishment, which can go a long way toward restoring a sense of meaning and order in your life.

    4. Meditate: The pandemic has created a cottage industry of self-help tools, including online and mobile meditation apps and podcasts. If you’re new to meditation, consider a guided progr While some apps are free, most offer trial periods before requiring a paid subscription, so you can determine which work best for you.

    5. Find opportunities to laugh: Laughter really is some of the best medicine. Not only does it release endorphins, the body’s “feel good” hormones, but it helps lower levels of cortisol (a stress hormone) and epinephrine (adrenaline). It also affects your dopamine and serotonin levels, which are neurotransmitters that play a role in happiness and pleasure.2

    1 https://www.scientificamerican.com/article/the-surprising-mental-toll-of-covid/

    2 https://www.mayoclinic.org/healthy-lifestyle/stress-management/in-depth/stress-relief/art-20044456

    This communication is designed to provide accurate and authoritative information on the subjects covered. It is not however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.

    January 2021

    It's 2021: Time to Check Your Tax Bracket

    Will your tax bracket change in 2021? Each year the tax rate schedules are adjusted for inflation. That could result in your income being subject to a higher or lower tax rate in the new year. It’s especially important to check your tax bracket for this year if your taxable income was lower in 2020, due to:

    • Experiencing a reduction in full or part-time work-related income during the pandemic

    • Taking less income from your investment portfolio to avoid cementing loses during periods of increased market volatility

    • Suspending required minimum distributions (RMDs) under the CARES Act

    • Other circumstances resulting in a temporary reduction in income

    For tax year 2021, the top tax rate of 37% will apply to income above $523,600 for individuals ($628,300 for married couples filing jointly), compared to income above $518,400 for individuals ($622,050 for married couples filing jointly) in 2020.

    The Standard Deduction Increases in 2021

    The standard deduction increases to $12,550 for single filers ($25,100 for married couple filing jointly) for tax-year 2021, up from $12,400 ($24,800 for couples) for 2020.1 Taxpayers over age 65 taking the standard deduction receive even more. For single filers age 65 and older, the standard deduction increases by $1,700 to $15,750. Joint filers can increase the standard deduction by $1,350 each for a total of $27,800 if both joint filers are age 65 or over. Keep in mind, if you’re considering itemizing on your 2020 or 2021 returns, your total tax deductions will need to exceed the amount of your applicable standard deduction for that tax year to make itemizing worthwhile.3

    Taxes are one of the biggest risks to income in retirement. Having a plan in place to manage your tax bill in retirement is critical to helping to ensure your income will last as long as you will need it.

    If you have questions about tax-smart strategies for managing your income in retirement, call the office to schedule time to talk.

    1 https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2021

    2 https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2020

    https://www.aarp.org/money/taxes/info-2020/income-tax-brackets.html

    5 Ways to Reduce Pandemic-Related Stress in 2021

    If you’re suffering from pandemic fatigue, you’re far from alone. The distribution of the first COVID-19 vaccines in December marked a major milestone in the fight to end the global pandemic. However, public health experts urge patience, warning that it could take until the summer or fall to administer the vaccine to enough Americans to achieve herd immunity. In the meantime, here are five ways to help boost your emotional and physical health to maintain a positive outlook in the months ahead.

    1. Stay informed. It’s important to remain informed about the latest news and information regarding the COVID-19 vaccine distribution and related public health guidance. However, information overload can increase anxiety. Take regular breaks from news coverage of the pandemic to engage in programs or activities that you find helpful for lowering stress. These could include hobbies, watching a favorite show or movie, or calling a friend or family member.

    2. Maintain social connections. For years, studies have pointed to the importance of maintaining meaningful social connections as we age. However, months of social distancing and isolation have made it difficult for many older Americans to engage with family and friends. While digital platforms are no replacement for a hug or gathering with others to share a meal, it’s important to find ways to keep in touch with friends and family on a regular basis. If feelings of sadness or isolation persist or worsen, talk to family, friends or a healthcare professional about what you are feeling.

    3. Add healthy choices to your diet. A top resolution for many Americans in 2021 is to lose the “quarantine 15.” That refers to those extra pounds many of us gained last year, often due to an increase in comfort food and a decrease in physical activity. The Cleveland Clinic suggests that instead of focusing solely on eliminating certain foods from your diet, consider adding more healthy choices to your meals. Fruits, vegetables and grains can help you feel fuller so you can cut back on your main-course portions to accommodate the extra calories.1
    4. Exercise. Exercise is a great way to help reduce stress and anxiety. Best of all, you may not have to work out that hard to see benefits. According to a recent study, “higher levels of physical activity—regardless of intensity—are associated with a lower risk of early death in middle-aged and older people.” Conversely, the study found, being sedentary for 9½ hours a day or more (not counting sleeping) can increase your risk of early death.2

    5. Stay positive. While maintaining a positive outlook can be difficult during challenging times, it’s important for both mental and emotional health. Consider making a list of the things you’re grateful for and the things that bring you joy. Writing these things down and reviewing your list from time to time can be a great reminder of the people and things you cherish most in life. Also, take time to reflect on and give yourself credit for getting through the physical and emotional challenges of the past few months. Finally, embrace a sense of hope for the future as administration of the vaccines gains momentum in the months ahead.

    1 https://health.clevelandclinic.org/can-eat-still-lose-weight/

    2 https://www.sciencedaily.com/releases/2019/08/190821185336.htm