We carefully reviewed the disadvantages of AFTER tax funds in and IRA as we ALWAYS want good savings habits, but there are more and less efficient ways to save funds.
Here are the key challenges with after tax funds in an IRA:
Upon eventual distribution you must calculate a distribution basis which will be different from your actual distribution – Easy for the IRS to confuse
You must carry the basis on your tax return- forever- IRS Form 8606 must be filed to keep up with your basis
Your heirs may also have to deal with this basis upon your death
1 Minute New Vault Videos
The fun summer New Vault Videos have begun. Holding them to just one minute has been a formidable challenge, but so far we have done pretty well…
Resetting the password of Our New TOTAL Vault
Here is the post of one of the most common questions for our New TOTAL Vault….
Resetting or Acquiring a New Password
Remember you can always easily email us for a quick reset… but if you want to do it yourself… here you go
Capital Market Comments
Janet starts Shrinking “The Balance Sheet“
In this lengthy post, we take a complete dive into not only what is meant by “Shrinking” the Balance Sheet, but also how it was bulked up and what the next step may be.
The line on the far right should begin to drop soon, moving back towards a more normal size Balance Sheet, like it was prior to the “Great Recession of 07-09” , shown by the far left of the chart.
With a few services still showing too much confidential information such as social, bank and date of birth, in our post here we reminded everyone of how to easily hand-off that VERY confidential document.
Also as a reminder, one of our projects over the latter part of the summer will be a set of 1 minute videos on how to use the New Total Vault and feature such as this one … Looking forward to completing them !
Capital Market Comments
Rates are Rising
This chart shows does a great job of showing the rate increases as they have occurred. So far, market participants are taking the rate increases in stride.
We continue to believe higher/more normal rates are a good thing!
With today’s technology, it’s no surprise more data is being used by everyone from our Mortgage companies to our Insurance carriers to set rates charged to us.
Given the comprehensive use of our data it has become even more important to guard our credit reports.
In our post here, we discuss the importance of watching our credit and how to check your credit report as well as getting a copy of your report, along with ways to dispute difficiences as well.
Sharing your financial life without giving up control
In this post, one of the most popular of the month, we discussed the ability to give access to your financial life, but not control, to someone.
Our job is of course to always know where everything is located and help carry the spirit of your wishes, but the sharing option of our New Total Vault may be an easier introduction to the subject matter, should you desire to bring it up on your own.
You may even want to have a subtle suggestion for the access to a special person in your life …. we have you covered with our New Total Vault.
Capital Market Comments
Employment Update
With over two thirds of our GDP (Gross Domestic Production) aka broad measure of our economic growth, being consumer related consumption, an employed and happy consumer may likely lead to better growth prospects for the US Economy. Here is the full review!
The consumer is certainly employed, as shown by this chart of the falling unemployment rate!
Hello Swimming Pool, talk to you at the end of June !
Whew, that was easy…. tax season is finally mostly over ….
We wanted to look back one last time on our personal taxes before we sunset those tax strategies for the high point of the season….
As a reminder, we started with an Audio Podcast format for those that are unable to SEE the video or just prefer to listen to the audio… this makes the review slightly longer, but more descriptive.
What to do if you overfund your 401k/retirement plan
In our overfunding 401k post here, we discuss how your 401k/retirement plan can get overfunded….. here are the main points
Refund the extra amount ASAP
Apply the extra to the new year
If its a super small amount, its not the end of the world
Capital Market Comments
First Double Digit Earnings growth since 2011 expected
From our friends at Factset, who do a terrific job of outlining historic and future earnings.
Earnings are the ultimate driver of capital markets!
What is nice about these estimates are that historically companies have been beating the street estimates … if this continues, the actual earnings may be even better double digit growth…. time will tell and we will be watching!
As a reminder, we started with an Audio Podcast format for those that are unable to SEE the video or just prefer to listen to the audio… this makes the review slightly longer, but more descriptive.
Last month we created a new intro and music as well…
The following items can be done today and still help your 2016 taxes–
HSA – Health Savings Account- High Deductible Pre-Tax Savings account
SEP- Simplified Employee Pension- Souped Up IRA for Non-W-2 Income offset
IRA- Oldie but goodie- Prefer using ONLY if deductible
Costly Tax Mistakes we are seeing
In our post late this month, we highlight items we are seeing missed, resulting in extra tax costs.
Property Tax incorrect year – make sure you get credit in the year you pay
General Sales Tax missing- It’s your deduction, make darn sure you get it if you itemize
Missing Basis- An oldie but goodie, EVERYTHING has a basis- be sure one is included on your return
Missing a SEP (AKA Simplified Employee Pension) contribution – Souped up IRA that offsets non-W-2 income- Great Tax Saver- You can do both a SEP and 401k if you have both incomes under the appropriate scenario
Let us know if you have any questions, we are in full tax review mode!
FOMC Interest Rate Increase
Another Rate Increase
March also marked a month where the FOMC (Federal Open Market Committee) headed by Janet Yellen and fellow members raised short term interest rates another .25%. Now at a rate .75%, slowly rates are beginning to normalize.
We made the best of it, we covered a lot of ground!
Hope you like the new intro and music for our video!
As a reminder, we started with an Audio Podcast format for those that are unable to SEE the video or just prefer to listen to the audio… this makes the review slightly longer, but more descriptive.
Speaking of reminders, we continuously find that employers need to be reminded the year one turns 50 that you can actually add extra funds into that retirement savings program — give them a call !
Will the Euro Survive?
Marine Le Pen Win Means No
According to our experts from the Out West Meeting (the one Donald The Brain Crashed in 32 minutes) if Marine Le Pen wins the Euro will not survive. This was a cross over item, as several different experts said the same thing unknowingly.
April 23, 2017 is the final vote.
So why are we watching this? If Le Pen wins, this may be the final nail in the Euro coffin. Assuming all believe this, capital market uncertainty would likely bubble.
Brexit – Capital Market shakes 3 days
Unexpected US president – Capital Market shakes 3 hours
Euro Breakup – Capital Market shake Unknown –
Our experts acknowledged this time line and lack of concern, but cautioned on becoming over confident.
How Many times have you entered something with the date of 2016 ? If you are like me, SEVERAL…
Here is your January 2017… yes, new Month and new Year, Monthly review!
As a reminder, last month we started with an Audio Podcast format for those that are unable to SEE the video or just prefer to listen to the audio… this makes the review slightly longer, but more descriptive.
Thanks to all of the fantastic comments, shares, views and thank you’s .. here is a brief summary of the actual super popular post:
Grab that Last paycheck– .
RSU -Options- Grants– Don’t let them expire
Employee Stock Purchase Plan-Make sure you have control
Deferred Comp–May be a taxable event, find out when
Pension– Be Knowledgeable
Health Coverage– Don’t go a day without
401k– Old take control
New 401k– Be aggressive
Severance– Understand it
Social Security Withholding – Watch the double withholding
The underlying theme is making sure you know where everything is and any time deadlines you may now have due to the change… Your Vault is a great place for all this information !
Capital Market Movement
Rate Watch Still
Interest Rates have moved smartly higher and seem to be holding… signaling higher growth? This is the 10 year treasury rate, the benchmark in many cases for length of rates.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, please consult your financial advisor prior to investing!
Background
The is the vocal portion of J.K. Financial, Inc. a Dallas Texas Based Fee Only Total Wealth Financial Planning Firm. Founded by John Kvale, a Dallas Texas Fee only Financial Planner and Total Wealth Manager.
July 2017 Podcast Video, Financial Planning and Capital Market Update- By John Kvale
Here is our July 2017 Monthly review.
July 2017 Video
Financial Planning Tip(s)-
Why NOT to add After Tax funds to your IRA
We carefully reviewed the disadvantages of AFTER tax funds in and IRA as we ALWAYS want good savings habits, but there are more and less efficient ways to save funds.
Here are the key challenges with after tax funds in an IRA:
1 Minute New Vault Videos
The fun summer New Vault Videos have begun. Holding them to just one minute has been a formidable challenge, but so far we have done pretty well…
Resetting the password of Our New TOTAL Vault
Here is the post of one of the most common questions for our New TOTAL Vault….
Remember you can always easily email us for a quick reset… but if you want to do it yourself… here you go
Capital Market Comments
Janet starts Shrinking “The Balance Sheet“
In this lengthy post, we take a complete dive into not only what is meant by “Shrinking” the Balance Sheet, but also how it was bulked up and what the next step may be.
The line on the far right should begin to drop soon, moving back towards a more normal size Balance Sheet, like it was prior to the “Great Recession of 07-09” , shown by the far left of the chart.
See you at the end of August.
Happy Summer!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com
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Posted in FOMC, General Financial Planning, Investing/Financial Planning, Market Comments, Monthly Review, Tax Related, Video
Tagged Libor, New Vault, Rates