Category Archives: Why

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Tagged Cyber, Email, email scams, Statics and Data

June 2021 Financial Planning and Capital Market Review – By John Kvale

Posted on June 30, 2021 by John Kvale CFA, CFP | Leave a comment

Hello and Welcome to our June 2021 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

BREAK IN – HOLIDAY PARTY NOVEMBER 20 FROM 3-5 AT DALLAS ATHLETIC CLUB

Hope you enjoy!

June 2021 Video

YouTube

Financial Planning Tip(s)

Why Not to Overfund a Retirement Plan

In this updated post from a few years ago, we remind how easily it is to overfund a 401k plan and why, while it is not the end of the world, it is not a good tax situation….

Should you accidentally over fund your retirement plan … what occurs is a double taxation!

You do not get the deduction for the contribution
You will likely pay taxes on the eventual distribution

Job change is the most likely reason for overfunding!

Pesky Late Arriving Tax Form Reminder – Form 5498

In this mid month post we remind those of an extra late arriving tax form….

Murphy’s law being applied, the form just arrived last week….about two weeks after our post…..

Reason for receipt:

Rollover of a 401k or the like to an IRA – Most frequent
Contribution to an IRA
Contribution to a SEP

One of the most confusing parts of this form is that even though you may have made a qualified contribution for a prior year i.e. 2020, if you made that contribution in 2021, depending on the type of contribution the Form 5498 MAY show your contribution in year 2021.

Capital Market Comments

Inflation or No Inflation

In this part two post, “The Smartest Guys in the Room” post we discussed via interest rate futures graphs the movement after FOMC dot plot adjustments and the interest rate markets….

This is an updated Graph of the 2 year US Treasury, which is holding lower, (higher yield) possibly due to faster expected rate increases!

This is the ultra long 30 Year Treasury, which continues to trend higher (lower Yield) possible pricing less inflation from the above mentioned expected shorter term rate increases!

Ok…that’s a wrap for the June review…. Hello July!

Have a Great Day, Talk to You at the End of July!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

Posted in Audio, Clients/Clients Only, Economy, FOMC, General Financial Planning, Interest Rates, Investing/Financial Planning, Market Comments, Monthly Review, Retirement Planning, Why

Tagged 2 Year Treasury, 30 Year Treasury, 401k, FOMC, Form 5498, Inflation, Interest Rates

Why You Do Not Want to Overfund Your 401k or Other Retirement Plan and How it Can Happen !

Posted on June 14, 2021 by John Kvale CFA, CFP | Leave a comment

The most common type of Retirement Plan, the 401k in 2021 has a maximum deferral amount of $19,500 with a catch up provision for those age 50 or greater of $6.500 for a total of $26,000 again in year 2021.

Why You Do Not Want to Overfund Your Retirement Plan

Should you accidentally over fund your retirement plan … what occurs is a double taxation!

You do not get the deduction for the contribution
You will likely pay taxes on the eventual distribution

This is not the end of the world, especially if a very small dollar amount, but you still do not want this to happen…

How Does Overfunding a 401k Occur ? – Job Change

While it may seem puzzling at first, upon second thought the most common reason for overfunding a retirement plan is a job change.

It is impossible for your new employer to know your prior contributions, so an accidental overzealous withholding that throws you over the annual maximum will not be allowed from a IRS tax standpoint.

If you change jobs mid year, be sure to carefully determine your prior withholdings and monitor you new withholdings throughout the year as the burden is on us the employee to keep ourselves in check with the maximum.

For those gainfully employed at the same employer we have not seen an accidental over allowance in a very long time, so most employers have systems set up to automatically stop your contribution once the maximum is achieved. Should your employer merge with another company or change administrators, it is a good idea to make sure they pick up your prior contributions, which can be achieved by checking your paycheck’s ytd retirement plan withholdings after the change.

The good news is there are ways in certain cases to unwind this overpayment, but they are frequently very complicated, may create a tax issue for the IRS to review, and in some cases just not available.

Have a Great “No Overfunded 401k” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

Posted in Investing/Financial Planning, Retirement Planning, Tax Related, Why

Tagged 401k, 401k Maximums, 401k retirement, Overfund, Overfunding 401k, Overfunding Retirment Plan

Why You May Want to Accept that Seemingly Lowball Offer for that Small Royalty Interest You Have Acquired Some Time Ago …

Posted on April 7, 2021 by John Kvale CFA, CFP | Leave a comment

While we all envy the person on television like Jud Clampett that receives some great news on a royalty interest, (or misses a rabbit only to hit oil) …in real life frequently this can be more trouble than gift.

Living in Texas a state that produces oil and natural gas royalty rights are very popular and frequently handed down from one generation to the next.

Continued Disposition Problems

We are continuing to run into an ever increasing number of need to dispose of seemingly small mineral right properties that maybe had an offer at one time or another that actually cost more to dispose of them the offer.

Please don’t run out and dump that long ago relative’s income producing oil or gas property that has been in the family for years producing a nice monthly check … but the hundred dollar or seemingly worthless offer for that very small parcel of land that has a very small mineral right may be a good offer not only from a small tax reporting over the years that you may have to do but also from an organization standpoint in your estate.

While there are exceptions and of course when oil prices were in the mid 100s there were extreme cases of payments, it is very likely if you are receiving a very nominal amount of money from your mineral interest over the past decade that that mineral interest likely has very little value and maybe more of a burden to you from a tax standpoint and especially to your heirs from an estate cleaning standpoint than it’s worth.

No Need to Be Reckless – Do some Research

This is once again not an endorsement to go recklessly sell the mass form of income property but rather a recommendation to maybe think twice and do a little research when receiving a seemingly low offer by a professional mineral person who wants to consolidate his portfolio and take that interest off of your hands!

Have a Great “Cleaner Estate” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

Posted in Estate Planning, General Financial Planning, Investing/Financial Planning, Tax Related, Why

Tagged Estate Plan, Estate Planning, Mineral, Mineral Rights, Oil, Royalty Interest

Proxy Season is Here … Why We Vote For You and What to Do if You are Receiving Proxy Information

Posted on March 29, 2021 by John Kvale CFA, CFP | Leave a comment

Almost all public institutions of all shape and form have what is called a Proxy Vote.

The Proxy is an at least Annual Vote for various items such as approval for management salaries, mergers, company purchases and just an annual approval to continue current services.

Why We Vote Your Proxy

As a regular practice we vote Proxies for all clients. This accomplishes multiple items:

Much Greener – We get one statement for literally 100’s of client votes

We actually vote – always for management – if we disagreed we would not own the respective asset

We keep a permanent record of the vote

By voting for you, your mailbox is not stuffed full this time of the year

We try to receive electronic information as much as possible – this is once again green but much of this information is still delivered the old fashion way by snail mail

What to Do If You are Receiving Proxy Information

Occasionally Proxy directives for us to vote for you falls off the system …

When this occurs your mailbox will begin getting full…

No worry, just reach out and we can easily refresh your directives back to us and stop the pelting of mail.

Given the large number of collective votes, we do not know if you have fallen off the directives list, so please do not hesitate to ask us for a refresh.

Have a Great “Proxy Vote Update” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

Posted in Clients/Clients Only, General Financial Planning, Investing/Financial Planning, Why

Tagged Proxy, Proxy Reminder, Proxy Season, Proxy Vote

Why Student Loan Debt Has Grown So Fast – Change In US Household Types of Debt – Interesting Chart From HowMuch.net – Paired with Another Interesting Chart that Explains from Visual Capitalist

Posted on March 22, 2021 by John Kvale CFA, CFP | Leave a comment

We ran across this neat chart below from “HowMuch.net, a financial literacy website”… which stunned us.

The comparison growth of student loan growth versus other types of debt is amazing.

For the record we are huge fans of higher education, but not the debt that may come with it.

So we set off to see if there were a cause and effect for the above chart…

Thanks to our friends at Visual Capitalist the following chart answers a lot.

The small blue shaded area is inflation, compared to how fast Tuitions have increased… No wonder the gigantic growth in Student Debt…

Have a Great “Cause and Effect” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

Posted in Debt - Debt Management, Education, General Financial Planning, Investing/Financial Planning, Why

Tagged Debt, howmuch.net, Student Debt, Student Loan, Tuition, Visual Capitalist

Why You Should Check Your Social Security Earnings Credits No Matter Your Age

Posted on March 17, 2021 by John Kvale CFA, CFP | Leave a comment

While many may argue contrary to our fantastic Social Security speaker whom we have had twice now Mr. Tom Clark who assures us that Social Security will always be there, many do not believe this for various reasons.

No matter your beliefs or age we highly encourage you to check your Social Security Statement and most importantly your Social Security Earnings Record.

Earnings Benefit Credit Statement

Do not be concerned if just as this example, does not show your 2020 earnings posted as of yet there have been some delays and normally this is not posted at an early time in the year anyway .

What we want to be concerned about is if there are gaps in our earnings history or a partial credit (change of employers) that should have been credited. there are many reasons that this can occur such as just a lost document in the Mail or an employer was bought out or closed and did not report your hard earned earnings period.

How Do I Find This Statement?

In 1999, the Social Security Administration mailed a paper copy to everyone every year. Budget cuts a dozen years later stopped this handy paper copy, leaving all of us to easily forget to double check our statement annually.

For the record according to the Administration folks at age 60 are supposed to receive a paper copy, but our informal poll shows a low hit ratio.

Not to worry, it is not that hard set up an account, ESPECIALLY if it is your first time.

Go to www.ssa.gov and either log into your account or create an account and pull down your statement…

Oh, keep your credentials safe … lost mine and was a huge pain getting logged back into the site!

Have a Great “Social Security Earnings History Check Reminder” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

Posted in Annual Reviewed, Investing/Financial Planning, Reminder, Retirement Planning, Social Security, Tom Clark, Why

Tagged Paper Social Security Statement, Social Security, Social Security Earnings History, Social Security Statement

Why you need to know your Credit Score and where to get your Annual Free Credit Report – Re-run Annual Reminder

Posted on March 15, 2021 by John Kvale CFA, CFP | Leave a comment

As mentioned last week this is a re-run post that is timely and a good idea to do every year…. hat tip DK!

Knowing your credit score and your credit report has become increasingly important. With updates in technology and increases of consumer related fraud, we all need to keep an eye on our credit and our credit score for protection.

Why Do I need to Know or protect my score?

While you may not owe anyone, anything i.e. have a loan with anyone … well done by the way….. A bad credit score can still affect items such as your automobile and your homeowners premiums… no kidding (see this Forbes article.) We cannot blame them, there is data to check and it is their responsibility and ability to review it.

Bottom line a bad credit score or report may be costing you more money.

How do I get a copy of my credit report?

After you get your score, you may want to get a detailed copy of your credit report. Go to www.annualcreditreport.com, which is a free service offered for your own protection by the three agencies. There are tons of sites out there that are not free and try to seduce you into paying an unnecessary monthly fee, this site has been checked and is safe.

You may request all three services or just use one and keep the other two available at a later time. This may be handy as you only get one free report per agency per year. If you stagger the reports you can inquire at different times, keep later dates open for inquiry.

If your report is good, there is likely no reason to get more than one agency report. If your report has deficiencies you may protest from the site as it is reported.

Taking time to review your credit and credit score is easy and may save you angst and money!

Have a great “Safe Credit” day!

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

Posted in Investing/Financial Planning, John Kvale, Personal, Why

Tagged annualcreditreport.com, credit, credit score

Why Faster Money Transfer Might Create Happy Confusion … The ACH In and Virtual Deposit (Clients)

Posted on February 5, 2020 by John Kvale CFA, CFP | Leave a comment

Over the years we have grown to trust the linking of accounts, called Move Money, more than the postal system, especially around holidays or peak mail times i.e. Tax day, or Thanksgiving!

Linking of like titled or mutually owned account is the connection of accounts for easy movement of funds. These links stay in place for future use and if at least used every couple of years will stay connected. The recent SLOA (Standard Letter of Authorization) notice we mentioned here, was the annual notice of such links.

New Speed of Movement Has Caused (Good/Funny) Confusion

Due to new enhancements in the financial transactions systems ACH (Automated Clearing House) when a request is made to deposit funds from an outside account INTO your account here with our vendor, the funds show immediately in your account with our vendor before they are even drawn from the other account… until funds are actually drawn they will be visible in both places, seeming looking like you have double value (A Happy Feeling!)

Not to worry, within a day or two the ACH system will reach out and electronically grab the funds, easily moving from one account to the other.

Worth noting, due to this speed of deposit, if the ACH reaches out to grab the funds and they are not there, the deposit will be reversed in a couple of days. Prior to the immediate deposit, the ACH would try to grab again, but this is not longer the case.

Virtual Deposit

On a related note … talking of speed… several years back, we were enabled the ability to virtually deposit (via our scanner) an outside check directly into your account, making it visible in your account ….usually within 20 minutes or so!

Both of these transactions commence immediate interest draw on your funds – Cool!

Funds can reject up to five business days, so as a practice, it will be a business week before transactions are made in both cases above!

Have a Great “Understanding New Transaction Speed” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Posted in Clients/Clients Only, General Financial Planning, Investing/Financial Planning, Why

Tagged Account Linking, ACH, Money, Move money, Virtual Deposit

What to do When You’re in an Automobile Accident? Multiple Professional Interviews Done on the Subject … A Follow Up to Buy or Lease

Posted on December 18, 2019 by John Kvale CFA, CFP | Leave a comment

So after much deliberation from our post on Buy or Lease that Next Car, you are behind the seat of your “New to You” vehicle, and you did it with knowledge, style, and confidence.

Congratulations!

What’s Next? Not being negative here….

Recall the Scout Motto “Be Prepared”

What to Do When You are in an Automobile Accident

First and most importantly, if there is an injury of any seriousness immediately call 911 and get the EMT there to help. This sounds obvious, but in every case the following interviews and information was preceded by this fact.

Former Police Chief, Current Judge Offers Suggestions

“Use your camera as a weapon; Video tape and picture everything you possible can, including VIN numbers of the cars involved, and even get an interview with someone as a witness if you had someone that would do that.”

Police from Local Campus Near Home

A Second interview of a local campus police officer went like this – Upon request they would gladly do a police report and they could also call the local police, in this case Dallas. They would do a police report if the damage was more than $2000. otherwise, they would generally not do a police report unless asked. He also mentioned to take pictures of everything and if possible make sure automobile and license are both valid or legit.

Call to Insurance Company for Guidance

Per a call to my automobile insurance company the following were suggested:

Get a police report if possible especially if the damages are of substance
If you’re in a no-fault state you’ll need to contact your insurance carrier no matter if
Use Phone to take Pictures of everything – theme developing here

The idea for this article came on a chance plane ride with the former Police Chief sitting next to me as the Buy or Lease Article was being completed/edited on the plane ride….

Thanks Chief for the idea….

Let’s Be Careful Out There – Showing Age (Hill Street Blues)

Have A Great “Prepared if in an Accident” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents