Author: Chris Blackmon, CFP®, CPA

Did Anything Perform Well Last Week?

Why do I have bonds in my portfolio in this low rate environment?  This is a reasonable question given the strong performance of the equity market in recent history.  Last week major equity indexes have gone into “correction” (defined as a drop of 10% or more from the index high.)  These sudden declines are the reason we have fixed income in most portfolios.  Bonds do not typically provide the same long-term returns as equities, but they also protect our portfolio by limiting volatility and providing a ballast in our portfolio.  Since the global financial crisis, we have had historically low interest rates and bond returns have not been what investors historically experienced.  This has left investors looking for higher returns with two choices, buy more equities or invest in lower credit-quality bonds which typically pay higher interest rates.  We have always…

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What is the SECURE Act and does it matter to me?

The Setting Every Community Up for Retirement Enhancement (“SECURE”) Act was signed into law on December 20, 2019.  With all of the discussion in the news around the political uncertainty, impeachment, and the looming trade war, one of the largest changes to retirement savings laws in recent years was passed with very little fanfare.  However, some of the changes will be significant.  I have tried to highlight what may impact the majority of our clients and readers.

The Act has a lot of positives such as simplifying rules and making 401k plans potentially available to more workers, pushing back the RMD age, and allowing contributions to IRAs past age 70.  The negative impact I see is the elimination of the stretch IRA which is a clear move by the government to raise tax revenues by forcing money out of inherited IRAs sooner.  I will discuss in more detail below, but this should be a time to review beneficiaries and discuss whether any change in your legacy planning should be made in response to the new laws. What do you need to pay attention to?

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Asking the Right Questions

People say the only bad questions are the ones you don’t ask. That can be true, and asking bad questions likely won’t hurt you, but it is more important to ask the “Right” questions. In the last year, I met with a potential client who asked me a question I want to share with you. After some “get to know you chat” he asked me, “So, how are your results?” to which I responded, “Very high.” I could see the confusion on his face, so I just waited. As I will explain later, this had nothing to do with guaranteeing results.

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Are you Paying More Than You Need in Taxes?

The Tax Cut and Jobs Act of 2017, which became effective for tax years starting in 2018, significantly impacted many taxpayers. The change impacting the most taxpayers was the enhanced standard deduction and loss of many itemized deductions. Tax forms were also presented differently making it difficult for taxpayers who reviewed their returns in detail to compare year-to-year. While there were many changes, there are still some important tax savings strategies that may help you pay less in taxes. Which ones apply to your situation?  Ask yourself the following questions…

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Financial Planning for Contractors

Are you considering taking the next step to work for yourself? Working for yourself as a business owner or with others in a contractor or consultant role can be very financially rewarding. It can also provide you with a sense of self-pride not found while working as an employee for someone else. While there are many benefits, there are several key decisions that must be made to operate
successfully in this new environment. The most commonly asked questions are…

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Financial Planning for Myself

As you know from my previous blog, I recently bought a new house (more house, bigger mortgage.) Also, my amazing wife Julie, and I, just had our second daughter, Elizabeth (another girl, another college, another wedding, more dresses and purses.) Since I don’t want to be guilty of planning better for my clients than my own family, I thought this was the ideal time to take a look at some of the plans I have in place for my family.

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