HHFA Blog

Mon, 13 Apr 2026 17:22:29 GMT

What ‘April Theory’ Is And Why It’s Trending In The Workplace

A viral social media trend, dubbed “The April Theory,” claims that April is the “real New Year,” when people finally reset their lives. After decades of Western culture becoming increasingly disembodied from nature and natural patterns, more people are going back to nature bathing and nature awe walks. “The April Theory” is another example of how you can align with natural elements and reset your career and your life.

What ‘The April Theory’ Is And Why It’s Trending

April is a natural reset point—a time when people feel more motivated to change, start fresh and take action on goals. Dr. Kyra Bobinet , a physician and brain science expert, believes “The April Theory” is trending because of the time of year. We feel more energy with the decrease in melatonin as the days get longer.

She says we associate April with certain traditions. The spring equinox. Easter and Passover. Warmer weather. Longer daylight. Blooming flowers. Spring gardens. New beginnings. Bird’s nest and bird song.

Bobinet points out that April is a reflection of our biological circadian rhythm, aligning with Earth’s rhythms of light and dark, setting off all kinds of natural events like horses shedding their winter coats, hibernating animals waking up and bud germination.

Kaz Hassan, Principal, community & market insights at Unily , told me he agrees there’s something to the seasonal shift. He says that nature renews in spring and people respond to that, whether they’re conscious of it or not.

“Energy lifts. Optimism comes back. Employees are more open to change and growth,” he observes. “It’s a genuinely good time to ask more of people and to give more back to them.”

How ‘The April Theory’ Aligns With How We Work

Many experts I spoke with believe “The April Theory" aligns with how employees work and how modern HR teams are measuring performance. According to Macaire Montini, vice president of people and culture at HiBob , “The April theory,” serving as a spring reset moment, has people reflecting on their careers, including what they love about work and what they want to change or double-down on,"

She adds that people aren’t just setting new goals, they’re actively looking for community to help them reach them. She sees this as a real shift, going back to real life connections as a critical part of professional growth.

“This is partly due to an uptick in networking happening with people seeing the value in connecting with others in their role and yearning for community. It’s how people are learning faster, upskilling in critical areas like AI, building confidence and sharing ideas.”

Hassan told me “The April theory” makes intuitive sense when you think about how organizations actually operate. He is convinced when organizations treat April as a reset point, not just a continuation of Q1, they tend to come out of the year in better shape.

“January is still Q4 hangover for most teams,” he explains. “The planning cycles, the priorities, none of it is really settled. By spring, you’re in execution mode, which means you can actually see what’s working rather than just hoping the new year plan holds.”

Sandra Moran, chief customer experience officer at Schoox agrees that “The April Theory” is a time to refresh and start anew. “In the workplace, it creates a moment for introspection. As leaders, we can think about what we are doing right, what we want to change and how we can level up the workplace experiences for people at every level of the company."

Ali Gohar, CHRO, Software Finder , believes that “By April, employees and managers have real data on workload, productivity, and team dynamics,” he notes. “This makes career resets more grounded than goal-setting in January.”

He says from an HR perspective, April is becoming a natural second planning cycle driven by real insights over assumptions. These early spring insights are increasingly supported by platforms that help organizations evaluate and implement the right tools to turn that data into smarter, more confident decisions.”

“The April Theory" represents a shift toward continuous, data-driven talent management. Gohar describes how employees are using real-time feedback and performance insights to reassess their direction.

HR leaders are relying on more transparent, review-driven ecosystems to guide those decisions. Platforms that help teams discover, compare and evaluate workplace tools are becoming critical because better software leads to better workforce clarity and more confident career moves.

Gohar points out that April is becoming a pivotal moment for retention and engagement, adding that when employees gain clarity and energy in the spring, they’re more likely to reevaluate their roles or explore new opportunities.

“HR teams that get ahead of this by engaging in growth conversations and ensuring employees have access to the right tools and systems can turn momentum into retention” he states. "Otherwise, HR risks avoid attrition from employees with goals and the data to realize them."

A Final Takeaway On 'The April Theory’

Bobinet believes it’s healthy to align our biological energy to the seasons and natural rhythms. She reminds us that humans share the same biology and nervous system functionality as other animals, which means the more we embrace and participate in the patterns and rhythms of nature, the healthier we get.

“This is true for being out in nature for mental health, serotonin-stimulating soil micro-organisms, the health benefits of full spectrum infrared light, whole foods, positive relationships and socialization, stretching in the natural movement and so forth.”

She explains that our circadian rhythms are controlled by specific brain areas that, when turned off, also stop triggering depression and anxiety, partly explaining why we feel better when the days are longer and have more alignment with our energy and sunlight hours.

There’s a reason night shift workers don’t experience the same energy surge as day workers in the spring. Science-backed studies show that night-shift work is a risk factor for obesity, diabetes, cardiovascular diseases and various types of cancer. The research raises the question that if you’re a flight attendant, police officer or emergency-room physician, could working the night-shift slowly and quietly be harmful to your health?

Bobinet emphasizes that just like night-shift workers, if you don’t get outdoors, April Theory won’t work for you. She concludes that it’s very powerful to lean into the spring circadian rhythm alignment that comes with “The April Theory” because it offers a multitude of metabolic, emotional and cognitive benefits.

Consider April as a second chance at making New Year resolutions that, for some by now, might’ve become a distant memory. Take a few minutes to ask yourself what specific actions you can take to improve your wellness habits, reset career goals and make overall improvement in the quality of your life.

By Bryan Robinson, Ph.D., Senior Contributor

This Forbes article was legally licensed through AdvisorStream.

Bryan Robinson, Ph.D., Senior Contributor

April 5, 2026

Dollar Cost Averaging

Fri, 13 Mar 2026 16:04:19 GMT

If you haven't started investing towards a long-term goal because you're worried about short-term market volatility, consider using a common investment strategy called dollar cost averaging. Dollar cost averaging takes some of the guesswork out of investing in the stock market. Instead of waiting to invest a single lump sum until you feel prices are at their lowest point, you invest smaller amounts of money at regular intervals — the same amount each time — no matter how the market is performing. Your goal is to potentially reduce the overall cost of investing by purchasing more shares when the price is low and fewer shares when the price is high. Although dollar cost averaging can't guarantee a profit or protect against investment loss in a declining market, over time your average cost per share is likely to be less than the average market share price.

How does dollar cost averaging work?

To illustrate how dollar cost averaging works, let's say that you want to save $3,000 each year. To help reduce the risk of buying when the market is high, you decide to invest $250 in a mutual fund each month. As the following chart shows, this approach can help you take advantage of fluctuating markets because your $250 automatically buys fewer shares when prices are higher and more shares when prices are lower.

If you calculate the average market price per share over the 12-month period ($141 divided by 12), the result is $11.75. However, if you calculate your average cost per share over the same period ($3,000 divided by 259 shares), you'll see that on average, you've paid only $11.58 per share.

Mutual funds are sold by prospectus. Consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional.

Putting dollar cost averaging to work for you You may not realize it, but if you're investing a regular amount in a 401(k) or another employersponsored retirement plan via payroll deduction, you're already using dollar cost averaging. In fact, you can use dollar cost averaging to invest for any long-term goal. It's easy to get started, too. Many mutual funds, 529 plans and other investment accounts allow you to begin investing with a minimal amount as long as you have future contributions deducted regularly from your paycheck or bank account and invested automatically.

If you're interested in dollar cost averaging, consider these tips to help you put this strategy to work:

Get started as soon as possible. Once you've decided that dollar cost averaging is appropriate for you, start investing right away. The longer you have to ride out the ups and downs of the market, the more opportunity you have to build a sizeable investment account over time.

Stick with it. Dollar cost averaging is a long-term investment strategy. Make sure that you have the financial resources and the discipline to invest continuously through all types of markets, regardless of price fluctuations.

Take advantage of automatic deductions. Having your investment contributions deducted and invested automatically makes the process easy and convenient.

This content has been reviewed by FINRA.

Prepared by Broadridge Advisor Solutions. © 2026 Broadridge Financial Services, Inc.
Securities and investment advisory services are offered through Osaic Wealth, Inc., broker-dealer, registered investment adviser and member of FINRA and SIPC. Osaic Wealth, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth, Inc.

It’s Time to File Your 2025 Tax Return. Here’s What to Know.

Mon, 09 Feb 2026 19:27:43 GMT

Millions of Americans will collect bigger tax refunds this filing season, thanks to an assortment of new tax breaks legislators introduced in a landmark tax and spending bill last summer. Affluent households are more likely to benefit the most.

Taxpayers will inevitably have questions — and the IRS has far fewer staffers to answer them this year. The agency is more than 25% leaner than it was last tax season, which could strain customer service.

There’s a lot to consider. The new law made permanent some of the expiring tax breaks that legislators passed during President Donald Trump’s first term, including a larger standard deduction. It also introduced several that you probably heard about. “No taxes on tips and overtime” sounds simple, but it’s more complex (and less generous) in practice.

The bill stands to reduce individual taxes by $129 billion in 2025, according to estimates from the Tax Foundation. The average taxpayer should receive a tax cut of $611, according to those estimates. The typical refund may be as much as $1,000 more than usual.

Here’s a rundown of the largest changes to consider as the filing deadline, April 15, approaches.

And one note: When we refer to a “tax year,” this is what we mean: If we’re describing “tax year 2025,” that’s the year of financial activity you are summing up on the tax forms that you file the following year.

Should I consider any strategic changes to filing this year?

Possibly. The standard deduction has risen slightly for tax year 2025 to $15,750 for singles, $31,500 for married joint filers and $23,625 for heads of household.

Taking the standard deduction will make sense for many taxpayers, since they won’t have enough individual deductions to make it worth itemizing them.

That said, more filers may want to contemplate itemizing because of other changes, namely, a more generous deduction on state and local taxes (known as SALT).

How did the tax treatment of SALT (state and local taxes) change?

During Trump’s first term, Congress passed the Tax Cuts and Jobs Act, which created a $10,000 cap on the deduction that people could take on their federal tax return for state and local taxes (on earned income and property taxes, for example) if they itemized their deductions. The cap offset the costs of many other tax cuts in the 2017 law — but many residents in high-tax states like New York, California and New Jersey took a big hit.

For tax year 2025, the cap is rising to $40,000. The full deduction then decreases incrementally for single people and married joint filers with modified adjusted gross income of more than $500,000, and the $10,000 ceiling returns for those with income of $600,000 or more.

While a heftier standard deduction makes it less likely that many filers will want or need to itemize their deductions, the larger SALT deduction may make using it worthwhile again for people in states with higher income and property taxes (at least through tax year 2029, after which it reverts back to $10,000).

Have the rules around deducting mortgage costs finally stopped changing?

The maximum mortgage interest you can deduct is not rising from its current $750,000 level for more recent mortgages. Without the 2025 tax bill, the cap would have gone up.

What’s changing with the tax breaks for charitable deductions?

Two main things are happening here, and they take effect in the 2026 tax year.

First, if you take the standard deduction you’ll still be able to deduct some charitable contributions.

Single people will be able to deduct up to $1,000 in cash contributions and couples who are married and filing jointly will get $2,000. You can’t use this particular deduction, however, if you donate to a donor-advised fund and certain other entities.

Second, for the more affluent filers who itemize their deductions: Starting in the 2026 tax year, people in the 37% tax bracket won’t get the full benefit of the deduction for their charitable contributions. Instead, they’ll get a deduction as if they were in the 35% bracket.

And some more bad news that applies to everyone who itemizes: The only contributions that will be deductible are ones that are above 0.5% of your adjusted gross income.

Seniors are getting an extra tax break. How does it work?

People who are 65 and older (by Dec. 31 of the tax year you’re filing for) are eligible for a tax deduction of up to $6,000 for individuals and $12,000 for married couples, as long as both spouses qualify.

The deduction begins to gradually fade once your modified adjusted gross income passes certain thresholds — $75,000 for single filers or $150,000 for married joint filers. Above those amounts, the deduction begins to decrease, and it goes away once single taxpayers’ income reaches $175,000 ($250,000 for couples).

The tax break — in place for tax years 2025 through 2028 — is available to filers who take the standard deduction, as well as those who itemize deductions.

I bought a new car. Am I eligible for a break?

That largely depends on your income and where the car was assembled.

If you bought a new vehicle in 2025 for personal use, or plan to before the end of 2028, you may be eligible to deduct up to $10,000 in interest that you pay that tax year on debt that you incurred for the purchase. (Vehicles includes new cars, minivans, SUVs, pickup trucks and motorcycles.)

But there are limitations: The deduction begins to phase out for single filers with modified adjusted gross incomes of more than $100,000 (or more than $200,000 for married couples filing jointly) — and the vehicle must undergo final assembly in the United States.

You can find the assembly location by checking the vehicle label at the dealership, through the vehicle identification number or through the National Highway Traffic Safety Administration’s website.

This is also open to filers who do not itemize their deductions.

How has the child tax credit changed?

For the 2025 tax year, the child tax credit is now worth up to $2,200 per qualifying child under 17, up from $2,000, but it declines for married joint filers if their modified adjusted gross income exceeds $400,000 or $200,000 for singles and heads of household.

It gets complicated, but some people may be able to get some money in the form of a refundable credit: up to $1,700. That means if the credit reduces the amount of taxes you owe to zero, any remaining credit would come back to you as a refund.

At least one parent’s Social Security number, along with the child’s, is necessary to qualify. (The IRS’ Interactive Tax Assistant can help determine eligibility.)

Are the tax breaks that help defray caregiving costs changing?

Yes, but not for the 2025 tax year — they become more generous in 2026.

Here’s how they work in most cases: If you paid someone to care for a child under the age of 13 — or another dependent, like a disabled spouse, older disabled child or aging parent — so that you could work or look for work, you may qualify for the child and dependent care tax credit.

For tax year 2025, you can claim 20% to 35% of qualified expenses, up to a maximum of $3,000 for one qualifying dependent, or $6,000 for two or more. For tax year 2026, you can claim up to 50% of those expenses, and more filers will capture a larger portion of the credit than in 2025, depending on their income.

There are too many nuances to list here, but here’s a big one: You can’t double-dip if you’re using an employer-provided dependent care flexible spending account. That allowed you to set aside a maximum of $5,000 in pretax dollars per household for tax year 2025 and has jumped to $7,500 for tax year 2026.

The federal government is offering free money to young children. Is my child eligible?

Last year’s tax bill created so-called Trump accounts, which are tax-deferred investment accounts for children under 18 that allow parents, guardians and others to contribute up to $5,000 annually.

Many children may be eligible for some free money.

Here’s what’s on offer: For U.S. citizens born between Jan. 1, 2025 and Dec. 31, 2028, the government will provide a one-time contribution of $1,000 (the money will land in open accounts automatically, but not until July at the earliest). Some employers and others are providing their own contributions.

Older children may also benefit: Michael and Susan Dell have said they will seed the accounts of children born in 2016 and through 2024 with $250, as long as they live in ZIP codes where median household incomes are below $150,000.

To get any of the free money, you’ll have to open an account first — and you can do that via your federal tax return. You’ll need to fill out IRS Form 4547 (which you can also submit through a government portal after you file your taxes). H&R Block explains how the accounts work on its website.

Will adoptive parents benefit from any changes?

Yes. Families who paid adoption expenses can take a credit of up to $17,280 per child, and the credit became partially refundable in tax year 2025 via last year’s new law. That means filers can get up to $5,000 of the credit back — in other words, it reduces the taxes you owe and you get anything back that is left over as a refund.

A separate tax break lets adoptive families exclude up to $17,280 in employer-provided financial assistance from their income. Households can combine the two breaks, as long as they’re used for different expenses. If you take the exclusion, you have to use that up first.

These tax breaks, however, have limitations for higher-income taxpayers.

What about ‘no tax on tips’?

If you work in a job where tipping is typical, then you may be able to deduct up to $25,000 of your tips from your federal income taxes for tax years 2025 through 2028. But other taxes (like for Social Security and Medicare) could still apply.

There are other nuances: Tips must be voluntary — servers who receive an automatic 18% for waiting on big tables, for example, couldn’t deduct that. But they are permitted to deduct any extra tip they receive above the automatic amount.

The tax break, which requires a Social Security number, is reduced for single filers with modified adjusted gross income over $150,000 (or $300,000 for joint filers). Filers who are married but filing separately are not eligible.

People who own or work for what the IRS calls a “specified service trade or business” — which include occupations like accounting, law and health care — are also ineligible.

What about overtime?

Eligible workers who receive overtime pay may be able to deduct up to $12,500 annually (or $25,000 for joint filers) on their federal tax return. But the break doesn’t eliminate your liability — payroll taxes, and perhaps state and local taxes, will still apply.

Simply clocking overtime doesn’t make you eligible. The deduction only applies to workers covered under the Fair Labor Standards Act, a federal law that requires a minimum wage and overtime pay for work exceeding 40 hours weekly. It’s best to check with your employer.

Workers who do qualify can deduct only the earnings that exceed their regular pay — the “half” portion of “time and a half,” in other words. (If an employer pays more than time and a half, however, the law prevents that extra amount from being deductible.)

Starting next year, it should be easier to determine that amount, because employers will have to specify any eligible overtime on your W-2 form.

This year will be trickier. While some employers may give you a separate statement showing your overtime, not all will — and some workers may need to analyze their pay stub, said Andy Phillips, vice president at the Tax Institute, part of H&R Block, and it’s wise to double check with any benefits department or payroll provider.

There are also income limitations: The full deduction amount is available to single filers with modified adjusted gross income of up to $150,000 ($300,000 for joint filers) — above that, the deduction declines.

You need a Social Security number to be eligible, married people filing separately are ineligible and the benefit runs from tax years 2025 through 2028.

Is it too late to get tax breaks for an electric vehicle or solar panels for my home?

For the 2026 tax year, the federal tax breaks for electric vehicles and a variety of home improvements that help people use less energy or create less environmental damage will be disappearing.

Last year, however, many tax breaks were available that you can take advantage of now, for the last time (at least until a different Congress brings them back). The rules were complicated, however.

If your state has an income tax, all may not be lost. Many states have their own tax incentives, both for vehicles and for a variety of things related to your residence.

What’s happening with those pass-through deductions for people who own businesses?

The big tax bill passed in 2017 created a new deduction for owners of many small businesses. It was supposed to expire at the end of last year.

But last year’s tax bill extended (and slightly expanded) it. That means owners of these so-called “pass-through” businesses will continue to benefit from the tax break, which allows them to deduct up to 20% of their qualifying business income.

My student debt was canceled last year. Are there any tax implications?

You’re in luck. Canceled student debt usually counts as taxable income (there are exceptions, including for debt that goes away via the Public Service Loan Forgiveness program). But a temporary tax break made loan discharges from the 2021 through 2025 tax years exempt from federal taxation (some states may apply their own taxes).

If you reached the end of a federal income-driven repayment plan in 2025 and haven’t had your loans officially forgiven yet, you will still be eligible for the break — as long as you had enough qualifying payments in tax year 2025 that brought you past the forgiveness threshold, experts said.

I bought or sold crypto. Anything I should know?

Crypto and taxes can be complicated. The IRS had already required you to report any capital gains or losses tied to crypto or other digital assets on your federal tax return.

But for tax year 2025, crypto exchanges and brokerages are required to send taxpayers a new form, called the 1099-DA, which will detail taxable transactions that they must report.

If you receive a 1099-DA, that means you sold, exchanged or redeemed digital assets, tax experts said, or maybe you used crypto or other digital coins to pay for something. Make sure to double-check that you haven’t missed any texts, email messages or other alerts telling you to log in to an account to download the form.

The form is designed to help calculate your tax liability. But there is a quirk, at least for the 2025 tax year: While the form will include your proceeds, your cost basis — or the amount you originally paid for the assets — may not be on the form. (Brokers will have to report much of this information for the 2026 tax year.)

That means you may need to track that information down yourself or use a tool to properly calculate any gains or losses, said Andy Phillips, vice president of H&R Block’s Tax Institute. Otherwise, you risk paying the wrong amount.

Please tell me that the alternative minimum tax has not come back. (Pretty please.)

It’s back. We’re sorry. And it could cause you to pay more in taxes for tax year 2026 than you might have the previous year, all things being equal.

As a reminder, the alternative minimum tax, or AMT, is what it says — another way of calculating individuals’ tax liability to make sure that high-income people pay at least something.

The big tax bill in 2017 helped nearly everyone avoid getting stuck paying the AMT. But the 2025 tax bill changed the math. It’s complicated, but people with income over $500,000 in tax year 2026 will now be more likely to have to pay the AMT. This is especially true for people who live in a state with high income taxes, get incentive stock options at work and have a lot of capital gains.

It’s important to consider the AMT now, not at tax time next year. If there’s a chance that you might end up in AMT territory, you can plan around factors that you may be able to control.

Consider hiring a human being to help with AMT planning. Software and artificial intelligence may not be good at it.

Any other updates or last words of advice?

Plenty. We’re nerds.

You can no longer use the IRS’ Direct File program to do your taxes for free with the agency itself. Its Free File program still exists, however, for eligible people.

Filing returns on paper is always a bit dodgy. Will your return get lost? Stolen? Mired in delays in some remote IRS mail center? And this year, these returns may face even longer delays given the agency’s reduced staffing.

Wondering where your refund is? Check the IRS website first.

Speaking of refunds, bad actors often file fake returns in other people’s names and steal the refunds. Fixing the problem can take years. The IRS can issue you a PIN to use that can help prevent this from happening.

And speaking of problem-fixing, the IRS uses voice technology when people call the agency for help. Plenty of callers dislike it. If you are among them, good luck to you if you wish to talk to a human during tax season.

If you need to call the IRS, keep in mind that you may reach inexperienced people — like employees on loan from human resources or the tech department, according to the trade publication Government Executive.

But if you must call, try the trick you may have used with Ticketron in the 1980s to chase front-row seats for Journey concerts. Start calling 60 seconds before the opening minute and keep at it until you get through.

There’s a decent chance the wait will be short. And if you end up with a tax refund, you can use that money to go see a concert.

Journey is playing in Spokane, Washington, on April 15.

This article originally appeared in The New York Times.

c.2026 The New York Times Company

This New York Times article was legally licensed by AdvisorStream

Paper Tax Refund Checks Being Phased Out by the IRS

Thu, 29 Jan 2026 16:36:16 GMT

During the 2025 tax filing season, the IRS issued more than 93.5 million tax refunds to individual tax filers, and 93% of those, almost 87 million refunds, were issued through direct deposit.

Source: Internal Revenue Service, 2025

Paper Tax Refund Checks Being Phased Out by the IRS

As part of a broader U.S. Department of the Treasury initiative to transition to fully electronic federal payments, the Internal Revenue Service (IRS) is phasing out paper tax refund checks for individual taxpayers for the 2026 federal tax filing season.1

Why is the IRS making this change?

The move towards electronic payments is designed to protect taxpayers from the possibility of a paper refund check being lost, stolen, altered, delayed, or returned to the IRS as undeliverable. Electronic refunds are also more cost efficient and faster than nonelectronic payments, which can take six weeks or longer to process.2

What does this mean for taxpayers?

No changes are being made to the process of filing a tax return. Taxpayers should continue to file their tax returns as they normally would, using one of the existing filing options. However, refund delivery will be shifting towards electronic payment methods. As a result, taxpayers should have all of their banking information (e.g., account and routing numbers) readily available when filing their returns.

While most tax refunds will be delivered by direct deposit or other secure electronic methods, there will still be alternative options available, such as prepaid debit cards or digital wallets, for those taxpayers who do not have access to a bank account.3

What if I owe the IRS money?

The IRS has stated that taxpayers should continue to use existing payment options until further notice but is strongly encouraging individuals and businesses to use electronic payment options, since they are easier, faster, and more secure. Further IRS guidance is expected soon.4

The IRS offers the following electronic payment options:

IRS Direct Pay, which pays the IRS directly from your bank account without fees

Electronic Federal Tax Payment System (EFTPS), a free system offered by the U.S. Department of the Treasury to pay your federal taxes

IRS2Go, an IRS mobile app for easy and secure mobile payments

Debit card, credit card, or digital wallet

For more information on the IRS transition towards electronic payments, visit irs.gov.

1-4) Internal Revenue Service, 2025

Securities and investment advisory services are offered through Osaic Wealth, Inc., broker-dealer, registered investment adviser and member of FINRA and SIPC. Osaic Wealth, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth, Inc.

Resolutions vs. Reality

Thu, 22 Jan 2026 14:32:39 GMT

Setting the Stage for Success

Disclosures

The statements provided herein are based solely on the opinions of the Osaic Research Team and are being provided for general information purposes only. Neither the information nor any opinion expressed constitutes an offer or a solicitation to buy or sell any securities or other financial instruments. Any opinions provided herein should not be relied upon for investment decisions and may differ from those of other departments or divisions of Osaic Wealth, Inc. (“Osaic”) or its affiliates. Certain information may be based on information received from sources the Osaic Research Team considers reliable; however, the accuracy and completeness of such information cannot be guaranteed. Certain statements contained herein may constitute “projections,” “forecasts” and other “forward-looking statements” which do not reflect actual results and are based primarily upon applying retroactively a hypothetical set of assumptions to certain historical financial information. Any opinions, projections, forecasts and forward-looking statements presented herein reflect the judgment of the Osaic Research Team only as of the date of this document and are subject to change without notice. Osaic has no obligation to provide updates or changes to these opinions, projections, forecasts and forward-looking statements. Osaic is not soliciting or recommending any action based on any information in this document. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. In general, the bond market is volatile; bond prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer-term securities. Any fixed-income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. Vehicles that invest in lower-rated debt securities (commonly referred to as junk bonds or high-yield bonds) involve additional risks because of the lower credit quality of the securities in the portfolio. International investing involves special risks not

present with U.S. investments due to factors such as increased volatility, currency fluctuation, and differences in auditing and other financial standards. These risks can be accentuated in emerging markets.

Index performance does not reflect the deduction of any fees and expenses, and if deducted, performance would be reduced. Indexes are unmanaged and investors are not able to invest directly into any index. Past performance cannot guarantee future results. Securities and investment advisory services are offered through the firms: Osaic Wealth, Inc. and Osaic Institutions, Inc., broker-dealers, registered investment advisers, and members of FINRA and SIPC. Securities are offered through Osaic Services, Inc. and Ladenburg Thalmann & Co., broker-dealers and members of FINRA and SIPC. Advisory services are offered through Ladenburg Thalmann Asset Management, Inc., Osaic Advisory Services, LLC. and CW Advisors, LLC., registered investment advisers. Advisory programs offered by Osaic Wealth, Inc. are sponsored by VISION2020 Wealth Management Corp., an affiliated registered investment adviser. 8703471 1 How Many People Break New Year Resolutions Before February? 2 New_Years_Resolutions_poll_results.pdf

The Financial Hierarchy Of Needs In Retirement

Fri, 07 Nov 2025 15:09:39 GMT

Retirement often conjures images of freedom—more time, less stress, and finally getting to enjoy the fruits of decades of labor. But the financial side of retirement requires more than just a healthy nest egg . It requires thoughtful planning, with priorities that evolve over time.

Borrowing from the logic of Maslow’s famous hierarchy of needs, individuals can apply a similar framework to their financial lives. This “financial hierarchy of needs in retirement” offers a simple but powerful guide to help retirees prioritize their resources and decision-making—from basic income all the way to legacy planning .

1. Income: The Foundation Of Retirement Planning

Just as air and water sit at the bottom of Maslow’s pyramid, income forms the base of any retirement plan. Without dependable income sources, even the best-laid financial plans fall apart.

This foundation is typically built from Social Security, pensions, annuities, rental income, and systematic withdrawals from retirement accounts. Ensuring these income streams are stable, diversified, and tax-efficient is the first step toward a sustainable retirement.

2. Protection: Safeguarding The Plan

Once income is established, the next layer focuses on protection—both personal and financial. This includes insurance coverage for health, life, and long-term care, as well as legal documents like wills, powers of attorney, and healthcare proxies.

Retirement is filled with unpredictability. Whether it’s a medical event, a market downturn, or an unexpected death in the family, having protection in place shields the retiree—and their loved ones—from unnecessary hardship.

3. Emergency Reserves: Planning For The Unplanned

An emergency fund may look different in retirement than it does during working years, but it’s no less critical. Instead of income loss, retirees may need quick access to funds for medical expenses, home repairs, or helping a loved one in need.

These reserves help prevent the need to draw from investment accounts during downturns—buying both time and peace of mind.

4. Debt Management: Eliminating Financial Drag

Managing debt in retirement is about creating flexibility. While some debt—like a manageable mortgage—might be strategic, high-interest obligations such as credit card balances can quickly erode financial security.

Paying down toxic debt should be a priority. Reducing monthly obligations increases financial resilience and gives retirees more control over their spending.

5. Retirement Savings: Sustaining The Lifestyle

At this stage of life, the focus shifts from accumulating to preserving and distributing assets. But savings still play a vital role, especially in the context of longevity.

Strategic withdrawals, Roth conversions, and tax-aware drawdowns can help stretch savings further. Retirees should aim for a sustainable withdrawal rate while also considering market conditions and life expectancy.

6. Tax And Estate Planning: Optimizing For Efficiency And Legacy

Once income and lifestyle needs are secure, attention turns to reducing tax liability and ensuring assets transfer smoothly to heirs or charities. This might include reviewing estate documents, updating beneficiary designations, and using strategies like donor-advised funds, trusts, or gifting plans.

Proper estate and tax planning doesn’t just preserve wealth—it simplifies life for beneficiaries and ensures wishes are honored.

7. Aspirational Goals: College Funding, Travel, And Gifting

At the top of the pyramid sit aspirational goals—the wants, rather than the needs. This includes things like funding a grandchild’s education, buying a vacation home, or supporting causes that matter.

These goals can be incredibly fulfilling, but they should only be pursued once the core levels of the financial hierarchy are secure. Otherwise, there’s a risk of jeopardizing long-term stability for short-term desires.

The Value Of A Hierarchical Mindset

The idea behind a financial hierarchy of needs in retirement isn’t about rigid rules—it’s about intentionality. It offers a framework to evaluate trade-offs, reduce stress, and make complex decisions feel more manageable.

Retirement comes with freedom, but also responsibility. By approaching it with a structured mindset—prioritizing income, protection, savings, and legacy—retirees can spend more time enjoying life and less time worrying about it.

By Andrew Rosen, Contributor

This Forbes article was legally licensed through AdvisorStream.

Budget Tips

Tue, 28 Oct 2025 18:20:06 GMT

5 Budget Best Practices to Improve Your Financial Management Today

A well-crafted budget can help transform your financial life. It is a personalized roadmap that ensures every dollar is used to fuel your most important goals. This article discusses five budgeting best practices that can help improve your financial management and lead to financial freedom.

1. Know Your Numbers

Before you can budget, you need to understand where you are. This step is about getting a clear picture of where your money is actually going.

Track Your Spending

This will reveal a lot about your financial habits and guide you moving forward. For at least 30 days, meticulously track every expense, no matter how small. Use a spreadsheet, a budgeting app, or even a notebook.

Your goal is to understand your actual spending habits. You might be surprised to see how much miscellaneous spending — like coffee runs or impulse purchases — is chipping away at your available funds. If you can, make expense tracking a continuous part of your financial management. It will promote mindful spending.

Distinguish Between Fixed and Variable Expenses

To create a functional budget, you must categorize your outflows. Fixed expenses are predictable and generally the same every month. Think of rent or mortgage, car payments, insurance premiums, and debt obligations.

On the other hand, variable expenses fluctuate based on usage or choice. These include groceries, electricity or gas bills, entertainment, and dining out.

This distinction is essential because your variable expenses are where you have the most control. It’s where you can tweak your budget in case you need to allocate more for savings or other financial goals.

Base Your Budget on Net Income

Also known as your take-home pay, net income is the amount you receive in your bank account after regular deductions, such as taxes and retirement contributions, are taken out.

Never budget based on your gross income because that’s a sure way of coming up short every month.

2. Choose a Method That Fits You

There is no one-size-fits-all approach to budgeting. The best budgeting method is the one you can actually stick with. Find a system that aligns with your personality, financial goals, and situation. Below are examples of popular approaches.

The 50/30/20 Rule

This is a simple guideline that divides your net income into three categories. You allocate 50% for needs (such as housing, food, transportation, and utilities), 30% for wants (such as dining out, going to the movies, vacations), and 20% for savings and debt repayment (rainy day fund, retirement savings, investing, or paying off credit card bills).

You may also adjust the percentages depending on your goals. For example, if you want to increase your savings rate or get out of debt faster, you can set it to 35% and leave just 15% for wants.

Zero-Based Budgeting

You may use this method if you want to have maximum control over your income. You assign a purpose for every dollar before the month begins, so that your total income minus total expenses (including savings) equals zero.

It doesn’t mean your bank balance becomes zero or that you spend away all your money, but it guarantees you are spending and saving with intention. This method can be very effective, especially for curbing overspending. It eliminates mystery or miscellaneous money because all your dollars are accounted for at the beginning of the budgeting process.

Envelope System

This is a cash-based method in which you assign a set amount to variable categories, such as groceries, entertainment, or personal spending, and place the money in envelopes.

When the cash in each envelope is gone, you stop spending in that category until the next budgeting cycle. This system makes spending more visible and enforces a tangible limit.

3. Be Goal-Driven

Without a purpose, your budget is just a spreadsheet or a list of bills. Having goals will provide motivation and maintain discipline. When you know why you are saying no to a potential purchase, it becomes much easier.

Set Clear Goals

Don’t just say you want to save money. Define what you are saving for. Is it for a down payment on a house? Do you want to buy a new car? Are you saving up for a child’s college education?

Better yet, use the SMART criteria: make your goals specific, measurable, achievable, relevant, and time-bound. For example, instead of saying “I want to save for a vacation,” you could say “I will save $5,000 for a trip to the Philippines by December 31 next year.”

Setting clear, realistic goals makes it easier to track your progress and be purposeful with your savings targets. It can also help you stick to your budget.

Pay Yourself First

A typical money mistake people make is saving what’s left after expenses — don’t. Shift your mindset and always save first. Treat savings as a non-negotiable. Consider it a payment to your future self.

This way, you ensure there is money allocated to your savings, potentially earning interest and generating wealth, regardless of what else happens during the month.

Prioritize Debt Repayment

It will be hard to achieve financial progress if you carry debt, especially high-interest ones. You must target these debts as soon as you can.

You may even consider prioritizing debt repayment over savings , as this can save you more money in the long run by reducing your total interest payments.

4. Optimize and Automate

The key to long-term budgeting success is creating a system that works in the background, not relying on willpower every day. Automation removes friction and lessens the chances of human error in your process.

Automate Fixed Bills and Savings

With technology, it’s pretty easy to set up automatic transfers through banking apps or even your payroll system. This ensures you never miss a due date and incur late fees on your bills. You should also maximize this option for your savings and investment contributions. Set it up so that they transfer on the day you receive your paycheck.

This can be a set-it-and-forget-it system that forces you to take care of priorities before you even have a chance to spend your money on other things.

Plan for Irregular Expenses

Life is rarely consistent. Expenses like annual insurance premiums, holiday shopping, vehicle registration, and property taxes can wreck your budget if you don’t plan for them.

Create a separate sinking fund category in your budget. For example, if a $1,200 expense is due in December, set aside $100 a month in a dedicated account starting in January.

You should also build an emergency fund to cover emergencies. Ideally, this fund should have at least six months’ worth of living expenses, kept in a separate savings account, and used solely for emergencies. Remember to replenish your emergency fund as soon as you can whenever you dip into it.

5. Review, Adjust, and Be Patient

Treat your budget as a living document, not a rigid contract. It needs constant attention and refinement to remain effective.

Conduct Regular Reviews

At least once a month, preferably right before a new one starts, sit down and review your actual spending against your planned budget. Were you over or under? Where did you succeed?

Do this monthly review to catch problems early, reallocate funds as needed, and gain valuable insights into your habits.

Stick to Your Budget but Be Flexible

While discipline is crucial when budgeting, nobody’s perfect. For example, say you spend more than your budget for groceries, don’t give up. Instead, adjust the plan for the rest of the month. Perhaps you can temporarily cut back on dining out to compensate.

Take it as a learning experience and do better next month. Don’t be too hard on yourself. Expect mistakes, surprises, and temptations. Keep in mind that disciplined budgeting takes time. The key is consistency, and it always beats perfection.

Final Thoughts

Implement these five best practices to improve your budgeting and achieve financial freedom. Remember to treat your budget not as a punishment or restriction but as a way to organize and plan your finances. Let it be a liberating practice that generates wealth in the long run. For expert guidance and tailored advice, you may consult a financial advisor.

By True Tamplin, Contributor

This Forbes article was legally licensed through AdvisorStream.

401k News

Tue, 07 Oct 2025 14:11:34 GMT

This 401(k) Change Could Impact How You Make Catch-Up Contributions

Ke y Takeaways

Starting in 2026, workers aged 50 and older earning over $145,000 will have to make 401(k) catch-up contributions on a Roth basis rather than pre-tax.

The $145,000 income threshold is indexed to inflation, and not all plans may offer a Roth feature—meaning some high earners may lose access to catch-up contributions altogether.

While Roth contributions require upfront taxes, they allow for tax-free withdrawals in retirement, which could benefit those expecting higher tax rates later.

Starting next year, some older workers making catch-up contributions to retirement plans, like 401(k)s, may have to do so on a Roth basis.

Secure 2.0, a federal retirement law passed in 2022, states that workers earning more than $145,000 must make catch-up contributions with money that's already been taxed.1 Other workers are still eligible to make pre-tax catch-up contributions.

While Secure 2.0 had stipulated that this change should go into effect in tax year 2024, the IRS postponed it for two years.2

Now, many workers will see the change reflected in their retirement plans starting in 2026—although employers will have until tax year 2027 to fully comply with the regulations laid out by the IRS.3

"Hopefully, in the end, people will enjoy tax-free earnings," said Elizabeth Thomas Dold, a Principal at Groom Law Group. "Change is not easy for anyone, it’s hard for record-keepers and plan participants."

Will This Change Help or Hurt Your Retirement Savings?

This new change won't impact all retirement savers—only older workers who make catch-up contributions and who earned more than $145,000 in the previous year with their employer.4 This income threshold is indexed to inflation, so it may increase for the 2026 tax year.

This means that, for 2026, your income will be determined by your wages on your W-2 form for 2025, according to Dold.

As of 2025, employees aged 50 and over are eligible to make catch-up contributions worth up to $7,500 to a 401(k), for a total employee contribution limit of $31,000.5

Additionally, those aged 60 to 63 qualify for an even higher catch-up contribution. In 2025, these employees can contribute a total of $11,250 in catch-up contributions, for a total employee contribution limit of $34,750.

Unlike traditional 401(k) contributions, Roth contributions require that people pay tax upfront, forgoing an immediate deduction from their income. However, once they reach age 59½, they can withdraw their earnings tax-free.

This could be beneficial for those who believe that they'll be in a higher tax bracket in retirement or who want to stash money away for tax-free growth.

The new change is also beneficial for the federal government, as it enables them to collect taxes on upfront contributions rather than wait until people take withdrawals.

"This makes them [the government] a lot of money, and that [allows] them do other things that they could pay for," Dold said.

However, Dold said that some higher-income workers may not be able to make catch-up contributions at all if their plan sponsor chooses not to offer the Roth feature.

"The IRS clarified in the proposed and final regulations that plan sponsors do not have to eliminate catch-up contributions if they don’t want to add a Roth feature—it is only those $145,000 [earners who] will not be eligible to make any catch-ups, but everyone else 50 or older can still make pre-tax catch-ups," Dold said.

The Bottom Line

If you're an older worker who plans to make catch-up contributions next year to help bolster your retirement nest egg, you could be in for a substantial change.

Those who earned more than $145,000 this year with their current employer may be required to make their catch-up contributions on a Roth basis, meaning they pay taxes on the upfront contributions in 2026.

However, you may be excluded from this change if your employer doesn't offer a Roth feature or you earned less than the income threshold in 2025.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

United States Senate Committee on Finance. "SECURE 2.0 Act of 2022." page 18.

IRS. "IRS Announces Administrative Transition Period For New Roth Catch Up Requirement; Catch-up Contributions Still Permitted After 2023."

IRS. "Treasury, IRS Issue Final Regulations on New Roth Catch-Up Rule, Other SECURE 2.0 Act Provisions."

National Register. "Catch-Up Contributions."

IRS. "401(k) Limit Increases to $23,500 for 2025, IRA Limit Remains $7,000."

This Investopedia article was legally licensed by AdvisorStream.

Protect yourself (& your money) from scammers

Wed, 14 May 2025 17:52:09 GMT

Spot, avoid & report scams

There are a number of basic steps you can take to safeguard your personal information and financial accounts, as well as some more advanced services you can tap to automate your ability to track suspicious activity and potential exposure of your data.

Consider using credit freezes or fraud alerts . These make it more difficult for fraudsters to secure loans or credit cards in your name. A credit freeze prevents anyone from checking your credit report or credit score (typically the first step creditors will take in reviewing applications for loans or credit cards). A fraud alert requires creditors to verify your identity before processing any application made in your name. Both of these free services make it harder for criminals to seek credit using your identity.

How long does a security freeze last?

A security freeze will remain on your credit file until you remove it.

How can I unfreeze my credit file?

You can permanently remove/lift a security freeze on your credit file with one click or schedule an unfreeze for a specified time period. A security freeze can limit access to your credit, even if it was authorized by you. If you know you are going to apply for new credit, you can plan ahead and unfreeze or schedule an unfreeze, before you apply.

How long does it take to place or remove a security freeze?

You can freeze and unfreeze your Experian credit file in real time using the online services.

Explore each of the credit reporting agencies below by clicking the link under the logo. If you place a security freeze on your one credit report, it is not automatically shared with other credit reporting agencies. We suggest, at minimum, you freeze all 3.

Links are below:

Experian

Equifax

TransUnion

IRS: Get an identity protection PIN (IP PIN)

An identity protection PIN(IP PIN) is a six-digit number that prevents someone else from filing a tax return using your Social Security number (SSN) or individual taxpayer identification number (ITIN). The IP PIN is known only to you and the IRS. It helps us verify your identity when you file your electronic or paper tax return. Even though you may not have a filing requirement, an IP PIN still protects your account.

SSA

April 1, 2025: The Social Security Administration (SSA) Office of the Inspector General (OIG) is cautioning the public to be aware of emails that appear to be from SSA and include a link to download their Social Security statement.

"Be on the lookout for fake calls, texts, emails, websites, messages on social media, or letters in the mail."

Scammers have also been known to:

• Use legitimate names of Office of Inspector General or Social Security Administration employees.

• “Spoof” official government phone numbers, or even numbers for local police departments.

• Send official-looking documents by U.S. mail or attachments through email, text, or social media message.

Known Tactics Scammers Use

These are red flags; you can trust that Social Security will never

• Threaten you with arrest or legal action because you don't agree to pay money immediately.

• Suspend your Social Security number.

• Claim to need personal information or payment to activate a cost-of-living adjustment (COLA) or other benefit increase.

• Pressure you to take immediate action, including sharing personal information.

• Ask you to pay with gift cards, prepaid debit cards, wire transfers, cryptocurrency, or by mailing cash.

• Threaten to seize your bank account.

• Offer to move your money to a “protected” bank account.

• Demand secrecy.

• Direct message you on social media.

We urge you to stay vigilant.

If you are a victim of a scam properly report it, as well as let our office know.

Advisory services offered through Osaic Wealth, Inc. Securities offered through Osaic Wealth, Inc. Member FINRA/SIPC. Securities offered through Osaic Wealth, Inc. member FINRA/SIPC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth. Heritage Harbor Financial Associates and Osaic Wealth, Inc are separate entities.

Navigating Post-Tax Season

Thu, 08 May 2025 14:50:11 GMT

With the April 15th tax deadline behind us, it’s time to shift our focus from tax preparation to

post-tax season strategies that can enhance your financial well-being.

While the pressure of filing taxes may have subsided, there are still important steps you can take to optimize your finances & prepare for the future.

Here are some essential strategies to consider now that tax season has come to a close:

Review Your Tax Return & Plan for Next Year

Reviewing your current tax situation may help you identify potential tax-saving opportunities for the upcoming year.

Organize Your Financial Records

Use the post-tax season period to organize your financial records and documents. Proper record-keeping is essential for tax compliance and financial planning. Create a system for storing and managing your financial documents, including receipts, statements, and tax returns, to ensure easy access when needed.

Consider Tax-Efficient Investment Strategies

Explore tax-efficient investment strategies that can help minimize your tax liability and maximize your after-tax returns.

New Year, New Financial Game Plan

Thu, 16 Jan 2025 13:44:35 GMT

8 Steps To Kickstart 2025

As we enter 2025, it’s the perfect time to set goals and establish a financial game plan for the year ahead. Whether it's adjusting to a new salary, planning for big expenses, or refining life goals, now is the ideal moment to lay the groundwork for success. To help start the year strong, here’s a roadmap to organize your finances and set yourself up for a prosperous year.

1. Build a Small-Scale Budget

Begin by understanding your household’s monthly expenses. Establish a budget—whether detailed or loose—that accounts for your monthly spending. This foundational step is crucial for maintaining healthy, sustainable finances .

2. Plan for Big Expenses

Anticipate non-regular expenditures like vacations, kids’ camps, home projects, and charitable contributions. Estimate the total cost of these items for the year and create a plan to fund them using monthly income or year-end bonuses.

3. Adjust Your Savings

A new year often comes with changes to your income. Dedicate a portion of those additional funds to retirement savings. Even small increases, such as raising your 401(k) contribution by 1%, can make a significant impact over time. Incremental changes are often easier to sustain and can lead to meaningful progress.

4. Plan for Bonuses

If you’re fortunate enough to receive a bonus, decide how to allocate it before it hits your account. Having no plan often leads to wasted opportunities. Use bonuses strategically for savings, debt repayment, or planned expenses.

5. Organize for Tax Season

Tax documents will soon start arriving. Keep them organized to streamline your preparation process. If you pay quarterly taxes, plan accordingly. For those with significant non-qualified investment accounts, prepare for potential capital gains taxes following a strong year in the markets.

6. Tackle High-Interest Debt

Destructive debt, such as credit card balances with high interest rates, requires immediate attention. Create a detailed plan to pay it off aggressively. Unchecked debt can derail even the best financial plans, so prioritize eliminating it.

7. Set a Big Financial Goal

Identify one major financial objective for the year—whether it’s paying off debt, reaching a specific savings milestone, or achieving another significant target. Write it down and review it regularly to stay motivated.

8. Address Long-Overdue Tasks

Choose one neglected financial task to tackle this year, such as drafting a will, purchasing life insurance , or updating an estate plan. Write it down and commit to completing it.

As the new year begins, these steps can help pave the way for a healthier financial future . Here's to making progress, staying focused, and striving for incremental improvements throughout 2025!

Wishing everyone a happy, healthy, and prosperous New Year!

This Forbes article was legally licensed through AdvisorStream. By Andrew Rosen, Contributor

Investment Spotlight

Wed, 20 Nov 2024 19:13:26 GMT

History of The S&P 500

Markets are ever-changing, and though downturns may capture headlines, the S&P 500® Index has historically enjoyed more positive years than negative.

Life Insurance Awareness Month

agonzalez@hhfa.org (Amanda Gonzalez) — Wed, 25 Sep 2024 17:10:26 GMT

>Why is Life Insurance worth it?

There are many answers to the question of why is life insurance important. But by and large, the most important one is ensuring your family’s financial security and peace of mind.

If anyone depends on your income, they would most likely struggle if you were to pass away. That’s why life insurance is so important to have. There are different types of life insurance policies, but essentially they all pay cash to your loved ones when you die. Money from life insurance can be used to cover daily living expenses, a mortgage or rent payments, outstanding loans, college tuition and other essential expenses. Life insurance is the best way to ensure that your loved ones would be in a good financial place if you and your income were no longer in the picture.

>What does Life Insurance cover?

...Anything! Some examples include...

Immediate Expenses

Funeral and burial costs

Uncovered medical expenses

Mortgage or rent

Car loans

Credit card debt

Taxes

Estate settlement costs

Ongoing Expenses

Food

Housing

Utilities

Child care

Transportation

Health care and insurance

Continue a family business

Future Expenses

College costs

Retirement

>Do I need Life Insurance?

If someone depends on you financially, you are most likely someone who needs life insurance.

Life insurance provides cash to your family or loved ones after your death. This cash, known as the death benefit, replaces your income and the many non-paid ways you support your household. Your family can use this cash to pay for expenses like funeral costs, a mortgage, college tuition and more.

Just a few examples of people who often answer “yes” to the question of “Should I get life insurance?” include:

Married or partnered couples

Many partners find it difficult to make ends meet without the other earner’s income in the picture.

Married or partnered couples with kids

In addition to losing one partner’s income, the surviving parent may have to pay for childcare and more without the other parent around to pitch in.

Single parents

As the sole income earner for your family, you’ll want to think about how to replace your child’s only source of financial support.

Stay-at-home parents

From cooking meals to shuttling kids to school to helping with homework, stay-at-home parents perform many critical responsibilities that would be costly to outsource.

Empty nesters

Many surviving partners would not be able to maintain the lifestyle they worked so hard to achieve without life insurance.

Retirees

Depending on the size of your estate, your heirs could be hit with an estate-tax rate of up to 45%. Fortunately, cash from a life insurance policy gives heirs access to tax-free money to pay for immediate costs and more.

Business owners

Life insurance can help your business in many ways if you, a fellow owner or a key employee were to pass away

>How often should I review my Life Insurance policy?

As a general rule of the thumb, it’s a good idea to touch base with a financial professional at least once a year or whenever a life change happens. A life insurance review will help ensure your coverage is at the right level to protect your loved ones.

>How does a Life Insurance policy pay out?

In most cases, the life insurance pay out is a lump sum paid to beneficiaries when the policyholder dies. To receive the life insurance pay out, you will have to file a claim with the insurer. They will need a certified copy of the death certificate in order to process the claim.

Information from: https://lifehappens.org/life-insurance-101/

Average 401(k) Balance by Age in 2024

Wed, 31 Jul 2024 18:32:20 GMT

Benchmarking Your Retirement Savings

Article by Business Insider: Tessa Campbell and Paul Kim. July 30, 2024

A 401(k) account is an employee-sponsored retirement vehicle that allows you to contribute pre-tax income toward your retirement. As one of the best retirement plans for US employees, a 401(k) lets you reduce the amount of income you're taxed on and lets your funds grow tax-free.

Every year, Vanguard analyzes account data from millions of retirement accounts in a report titled "How America Saves."

Knowing the average 401(k) balance by age group and income level can help you determine how much you need to retire. Here's the average 401(k) account balance based on age in 2024.

Understanding the average 401(k) balance in 2024

According to Vanguard's annual data report, the average 401(k) account balance in 2024 was $134,128, an increase from 2023's average balance of $112,572.

Across these accounts, the typical account balances vary widely by the method used to calculate it — while the average 401(k) savings balance is well over $100,000, the median account balance is much less at $35,286, according to Vanguard's latest data.

The Vanguard data is broken down by demographics, showing a wide range of average account balances across various age ranges, income levels, industries, and genders. Here's a breakdown of those balances.

Average 401(k) balance by age

Retirement savings grow with compound interest, which means account balances increase with time. Like other types of retirement accounts, money saved in a 401(k) grows like a snowball, with interest earning interest on itself. The older you are, the more time you've had to build up your savings.

With compounding interest, the earlier money is put into an account, the more opportunity it has to grow and the greater the possible returns. In retirement accounts like 401(k)s, building retirement savings early means a greater opportunity for growth.

In 2024, employees can contribute up to $23,000 in their traditional and Roth 401(k). Folks aged 50 or older can contribute an additional catch-up contribution of $7,500 in 2024.

According to Vanguard, here's the average amount people have saved for retirement by age group.

Ages 20-29: Laying the foundation

Most 20-year-olds are just starting to contribute a small amount of money toward a 401(k) or equivalent retirement plan. Between lower salaries, rent payments, student loans, and other living expenses, younger individuals typically can't contribute much toward retirement. But that's okay as folks in their 20s have time on their side.

Contributing a little here and there is better than nothing at all.

Ages 30-39: Building momentum

People in their 30s often have increased financial freedom to put more money toward retirement. Contributions should be increasing annually. However, you may be distributing funds between different savings and investment accounts if you're planning for other big life events like having kids or buying a home.

This a good time to make calculated risks, as you still have time to recover from larger losses.

Ages 40-49: Mid-career financial growth

Folks in their 40s should be contributing a much larger portion of their income toward retirement. Aim to maximize your contributions and take full advantage of employer benefits like 401(k) matches. Start shifting your investment portfolio to a more conservative risk tolerance so that a larger percentage of your money is invested in low-risk bonds and other fixed-income securities.

Ages 50-59: Preparing for the transition

As you near retirement age in your 50s, take advantage of catch-up contributions, maximize your 401(k) savings, and avoid high-risk investments. Finalize your retirement goals and continue storing as much as possible in a retirement account.

You might also consider adjusting your retirement timeline. Pushing back your retirement date allows you to put more of your employment income aside for retirement and may increase the amount you receive in Social Security benefits.

Quick tip: Employees age 50 and up are eligible to contribute an additional 401(k) catch-up contribution. Catch-up contributions can significantly boost your retirement savings, especially if you had a late start.

Ages 60 and up: Finalizing the retirement strategy

Adjust your investment portfolio as needed, and make sure you understand the tax implications of withdrawing funds. Depending on your retirement account type (traditional or Roth), you may have to pay taxes on your withdrawals. Moreover, your portfolio should be adequately adjusted for stability and should provide a steady source of reliable income.

Average 401(k) balance by income level

Vanguard's data shows that 401(k) balances are greatly influenced by annual income. Across all age groups, the amount people save for retirement increases with their earnings. However, households with a higher annual income had lower average and median 401(k) balances than in previous years.

Here's the annual income compared against the average 401(k) balance and median 401(k) balance:

Average 401(k) balance between men and women

On average, men save more for retirement than women.

Across all age levels, Vanguard's data indicates that women have a median 401(k) account balance of just over $11,099 less than men's.

A 2023 report from the Bureau of Labor Statistics shows that the average woman makes around 86 cents for every man's dollar, which affects how much women can put away for retirement.

While a large disparity in savings exists, women often need greater retirement savings than men to retire comfortably. Women tend to live longer and, therefore, need more long-term care than men, which could require greater spending in retirement.

Average 401(k) balance by industry

Balances also vary widely among industries. One possible explanation is that employer match benefits, in which an employer matches an employee's contributions to their savings up to a given percentage, may be more common in some industries than others. Earnings could also affect how workers in a specific industry save.

Here's how the average balances break down by industry.

People who work in agriculture, mining, and construction contribute significantly to retirement, with the average industry worker's account balance well over $180,000. However, teachers, healthcare workers, and people who work in wholesale and retail tend to lag behind, with average account balances under $97,000.

Enhancing your 401(k): Strategies for success

1. Start early, contribute often

Time is a crucial part of financial planning for retirement. Contributing money toward retirement savings allows compound interest to work magic and combat inflation. Even modest contributions can grow into significant savings over time when deposited regularly.

Ideally, you'll be able to contribute more as your salary increases and your financial situation improves. However, ensure not to over-contribute and lose access to money you'll need shortly. Setting aside cash in an emergency fund is a great way to avoid a 401(k) early withdrawal before your 59 1/2.

2. Take advantage of employer-match benefits

A common benefit with 401(k)s is an employer match benefit, and it's essentially free money. Employers can match a dollar-for-dollar or partial match of an employee's retirement saving contributions. If you can swing it, contribute enough to unlock your employer's full contribution amount and hit your retirement saving benchmarks.

Under the Secure 2.0 Act, employers can now offer a student loan match to their employees' retirement savings plans when they make qualifying student loan payments.

Quick tip: Vesting signifies that an employee has fulfilled specific criteria to claim ownership over a designated portion of their retirement savings. This may take up to three to five years. Employers may also contribute a matching amount to an employee's yearly savings (up to a predetermined limit). Once an employee reaches a 100% vested status, they possess complete ownership of the accumulated funds in their 401(k) or similar retirement plan.

3. Diversify investments

Diversifying your investment is key to managing risk and volatility in your portfolio. Investment diversification in a 401(k) may also boost growth by getting exposure across multiple market sectors and different kinds of assets.

You can easily diversify your investment portfolio by investing in different stocks, bonds, ETFs, mutual funds, and alternative investment options like real-estate and commodities.

4. Mind the fees

High management fees can erode your savings over time. Pay attention to the fee schedules and manage 401(k) fees in your plan by investing in low-cost funds like ETFs. If you have an old employer's 401(k) plan, consider rolling over the assets into a new IRA because IRAs vs 401(k)s offer lower fees and more investment opportunities.

5. Regular rebalancing

As the market fluctuates, so will the composition of your investment portfolio. Your age and proximity to retirement also influence how your portfolio should be allocated. Regular rebalancing is key to keeping your investments on track and maximizing your 401(k) contributions to reach your goals and stay aligned with your risk tolerance.

Average 401(k) balance FAQs

How much should you save in 401(k) by age?

How much you should save in your 401(k) varies by age. You should aim to save 1x your annual salary by 30, 3x by age 40, 6x by age 50, and 8x by age 60. The best way to reach these age markers is by starting early, consistently contributing, and adjusting based on income, lifestyle, and retirement goals to ensure financial security.

How much do most people have in 401(k)?

The average 401(k) balance varies by age. Generally, individuals under age 25 have around $7,000 in retirement savings, and individuals between 25 and 34 have around $37,000 in retirement savings. People aged 55 and 64 have around $244,000.

Your 401(k) is your future

A 401(k), 403(b), or other retirement plan is more than a savings account. Retirement savings plans are a wealth-building tool to ensure a comfortable, secure, and stress-free retirement. By understanding how age, income, and gender impact your retirement savings, you can make better-informed decisions that align with your demographic and investment goals.

But you'll need a well-thought-out financial plan before you can reap the rewards of your retirement savings. Consult a financial expert like a fiduciary or CFP for professional management and guidance.

This Business Insider article was legally licensed by AdvisorStream

Securities and investment advisory services are offered through Osaic Wealth, Inc., broker-dealer, registered investment adviser and member of FINRA and SIPC.

Osaic Wealth, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth, Inc.

529

Mon, 25 Mar 2024 15:56:21 GMT

Your 529 Plan Just Got A Juicy New Perk

F‍orbes: Sara Stanich, Contributor - March 12, 2024

If you're using a 529 plan to save for your child's higher education, a recent legislative update could be a game-changer. The SECURE 2.0 Act, approved in late 2022, introduces a new perk for 529 plan holders. Starting in 2024, you may be eligible to transfer your unused 529 funds into a Roth IRA retirement plan free from taxes and penalties.

Before unraveling the changes brought by the SECURE 2.0 Act, it’s important to briefly recap what a 529 plan is. A 529 plan is a savings plan with tax advantages designed to aid families in saving for future college expenses. Over the years, these plans have grown in popularity due to their tax advantages and flexibility.

However, many families have been concerned about what happens to the funds if they remain unused for educational expenses. The SECURE 2.0 Act has brought a solution to address this concern.

The Impact Of The SECURE 2.0 Act

The SECURE 2.0 Act, passed by Congress on December 23, 2022, and signed into law by President Joe Biden a few days later, made a significant amendment to the Internal Revenue Code. This amendment allows for tax and penalty-free rollovers from 529 plans to Roth IRA retirement plan accounts starting in 2024.

This new provision brings a sigh of relief to families who are apprehensive about not utilizing the money they've saved in their 529 plans.

Before the SECURE 2.0 Act, you'd have to make a non-qualified withdrawal if you wished to withdraw funds from your 529 plan for non-educational expenses. Such a withdrawal is subject to income tax and a 10% federal tax penalty on earnings.

But with the new regulations, you can roll over 529 funds into a beneficiary-owned Roth IRA tax-free and penalty-free starting this tax year.

How Much Can Be Rolled Over?

The amount you can roll over from a 529 plan into a Roth IRA account is subject to the annual Roth IRA contribution limits set by the IRS. For 2024, the annual Roth IRA contribution limit is $7,000, with an additional $1,000 allowed for individuals over 50 with the catch-up limit allowance.

Moreover, there's a lifetime limit of $35,000 per beneficiary for 529 plan rollover contributions to Roth IRAs.

Special Rules For 529 Plan Roth IRA Rollovers

While the rollover rules are relatively straightforward, there are a few special conditions to consider:

While Roth IRA contributions are usually subject to income limits, these limits are waived when rolling over from a 529 plan. This means even higher-income people can contribute to a Roth IRA through a rollover.

The 529 plan must have existed for at least 15 years before any rollovers can take place. According to Saving For College, changing designated beneficiaries will likely restart this 15-year clock.

You cannot roll over any contributions or earnings on contributions made in the last five years.

Should You Convert Your 529 Funds To A Roth IRA Now?

Transferring leftover 529 funds to a beneficiary’s Roth IRA can be an excellent way to kickstart their retirement savings. However, you may not need to rush into this.

Some states that offer tax benefits for 529 contributions may not recognize these rollovers as a qualified expense; this could lead to state tax penalties. Some states must update their laws to include these rollovers as a qualified expense, while others may choose not to.

It’s wise to monitor the evolving regulations and consult a tax professional for personalized advice.

Other Options For Leftover 529 Funds

While the new rollover option is exciting, it's not the only avenue available for your leftover 529 funds. Here are a few other options to consider:

Keep the money in the account. There is currently no time limit on when funds must be withdrawn. This allows your money to continue growing tax-deferred until it's needed.

Use the funds to make up to $10,000 in payments for qualified student loans for the beneficiary or their sibling.

Transfer the savings to another eligible family member. You could even use it for your own higher education!

Withdraw the money and use it however you like. However, this would incur taxes on any earnings, plus a 10% penalty on those earnings.

If funds are leftover because the beneficiary received a scholarship, you can withdraw up to the amount of the scholarship. This withdrawal will be subject to taxation, but it avoids the 10% penalty.

The SECURE 2.0 Act has brought an important change to 529 plans, giving families another reason to save for college without added concerns around unused funds. While there are limits and potential tax implications to consider, it's a significant step in the right direction, providing families with more financial flexibility and confidence.

It's typically best to consult with a financial advisor or tax professional to understand the best course of action for your specific situation. With that said, here's to more financial freedom and this exciting new perk for your 529 plan.

By Sara Stanich, Contributor

This Forbes article was legally licensed through AdvisorStream.

Solo Years of Retirement

Mon, 04 Mar 2024 18:43:25 GMT

Why The Solo Years Of Retirement Are The Most Critical
And How To Plan For Them

Article from Forbes, written by Bob Carlson, Senior Contributor

Feb. 23, 2024

Married couples in or near retirement should know that the solo years, the period after one spouse passed away, usually are the most difficult period in retirement both financially and emotionally.

The solo years are when most retirement plans are likely to fail or falter. The financial difficulties of the period could be reduced with proper financial planning, something missing from most retirement plans.

Consider these major changes in household finances and management to which most surviving spouses must adapt:

* One Social Security benefit will end.

* Other sources of income, such as pensions and annuities, might end or be reduced.

* Some household expenses are likely to increase. People often have to be hired to do many chores and activities the deceased spouse used to do or both spouses did together.

* Income taxes are likely to increase, even after income declines, because the surviving spouse has a different filing status.

Many surviving spouses are surprised to find that federal income taxes can increase substantially after one spouse passes away, even if there’s been a decline in household income. This doesn’t happen to all surviving spouses, but it happens often enough that tax and financial planners recognize it and often call the phenomenon the widow’s penalty tax.

It’s more-accurately called the survivor’s penalty tax, because it applies equally to widows and widowers.

The less income declines, the more significant the tax penalty is.

This isn’t a separate penalty in the tax code, such as the penalty for underpaying estimated taxes. It’s a result of how the tax code interacts with the changes that occur after one spouse passes away.

When both spouses are alive, the couple’s tax return filing status is married filing jointly. A surviving spouse is allowed to use the married filing jointly filing status only for the year in which the other spouse died. Beginning the first full year after one spouse passes away, the surviving spouse’s filing status changes to single. The married filing jointly status is the most beneficial while the single filing status is comparatively unfavorable.

(Most widowed retirees don’t qualify for the favorable surviving spouse filing status.)

Here's how the change in filing status affects a surviving spouse.

In 2024, taxpayers who are married filing jointly stay in the 12 percent tax bracket until their taxable income exceeded $94,300. But a single taxpayer stayed in the 12 percent bracket only until taxable income exceeded $47,150. The 22 percent tax bracket applied to a married couple filing jointly until taxable income exceeded $201,150 but for a single taxpayer the ceiling for the 22 percent bracket was taxable income of $100,525. (The break points of the income tax brackets change each year because of inflation adjustments.)

You can see the surviving spouse is hit with a double whammy.

First as I said earlier, income is likely to decline. The household begins receiving only one Social Security check instead of two. Other sources of income also might decline.

Second, the surviving spouse is pushed into a higher tax bracket. The income usually doesn’t decline enough to keep the surviving spouse in the same tax bracket after becoming a single taxpayer. If it did, that would be a very significant decline, requiring the income to be cut in half. Instead, the surviving spouse loses some income but also pays a higher income tax rate on the remaining income because of the change in filing status.

That’s not the only federal tax penalty on a surviving spouse. Medicare beneficiaries with higher incomes are subject to a Medicare premium surtax, also known as IRMAA (income-related monthly adjustment amount). The higher a beneficiary’s modified adjusted gross income, the more Medicare premiums increase.

As with income taxes, the Medicare premium surtax is imposed at different income levels on people with different tax filing statuses. A single taxpayer with the same modified adjusted gross income as a married couple will pay twice the Medicare surtax as the couple. A newly-widowed taxpayer could pay a Medicare premium surtax equal to or exceeding what the couple paid jointly.

The same interplay applies to income taxes on Social Security benefits, creating another survivor’s penalty tax.

The financial changes in the solo years are one reason I recommend that the spouse with the higher lifetime earnings delay receiving Social Security benefits as long as possible, preferably until age 70 when benefits are maximized. That ensures whichever spouse survives the other, the Social Security benefit coming in to the household will be as high as possible.

It’s also a good idea while both spouses are alive for them to review the cost of maintaining the residence and discuss the actions the surviving spouse should take regarding the residence. That makes it likely a more thorough, less emotional decision is made and takes a burden off the surviving spouse.

The couple also needs to consider other ways to counter the negative effects of the solo years, such as by obtaining permanent life insurance or spending less while both spouses are alive.

By Bob Carlson, Senior Contributor

This Forbes article was legally licensed through AdvisorStream.

Top 10 trends for 2024

Tue, 16 Jan 2024 18:00:10 GMT

Europe’s economy will be more resilient than the US, the dollar will weaken and investors will demand a premium on long-term debt.

Financial Times - Written by Ruchir Sharma Jan. 10, 2024

The year gone by played out as if the pandemic had never happened. The widely anticipated global recession never came. Markets surged. Disinflation was the buzzword. The post-pandemic world unexpectedly resembled 2019 — the year before the coronavirus supposedly changed our lives forever.

Yet in the end, 2023 was a reminder that most years turn out to be a mix of the surprising and the predictable. Not all the purely contrarian bets would have paid off. Europe’s economy fell farther behind the US. American mega cap tech stocks again led the charge.

With that in mind, my top 10 predictions for 2024 focus on how current trends will evolve. The price of money, inflation and big tech will remain at the heart of the global conversation, though not in quite the same ways. Meanwhile, politics will command centre stage for a simple reason: the world has never seen a bigger year for elections.

Democracy in overdrive

Elections are scheduled to occur in more than 30 democracies including the three largest — the US, India and Indonesia. In all, 46 per cent of the global population will have an opportunity to vote, the largest share since 1800 when such records first began, says Deutsche Bank research. And voters will bring their dissatisfaction with them.

The recent rise of angry populists reflects a deeper trend — distrust of incumbents. In the 50 most populated democracies, seated politicians won re-election 70 per cent of the time in the late 2000s; now they win 30 per cent of the time. Leaders of India and Indonesia buck this trend but US president Joe Biden exemplifies it.

Incumbents used to enjoy the obvious advantage of high office and high visibility, but that is no longer a guarantee of popularity. Over the past 30 years, US presidents have seen their approval ratings wither away in their first terms, to lower and lower levels. At just 38 per cent, Biden’s approval rating is at a record low for this stage of a presidency. And many of his developed world peers are no more popular. These trends foretell upheaval in the roster of world leaders.

Bond vigilantes versus politicians

The surreal calm of 2023 gave way to mild euphoria in the closing weeks of the year as inflation fell faster than expected, creating hopes that interest rates will keep falling. This overlooks one key trend.

In a campaign season political leaders are much more likely to raise than cut spending, which means mounting deficits. In the US, Biden spending programmes have already pushed the deficit up to 6 per cent of GDP, double its long-term trend and five times the average for developed economies.

The key issue is the “term premium”, or the added pay-off bond investors demand for the risk of holding long-term debt. In the 2010s, with inflation low and central banks buying bonds by the billions, that risk disappeared. Only now, debts and deficits are much larger than before the pandemic, inflation has not fully retreated, and central banks are no longer big bond buyers. Even if inflation fades further, investors probably will demand something extra to keep absorbing the huge supply of government bonds. That means interest rates, long-term rates in particular, will not fall anywhere near as much as they did in previous disinflation cycles.

Backlash against immigration

For many reasons — from labour market shortages in the western world to war in Ukraine — immigration has exploded, up since 2019 by 20 per cent in Canada, near 35 per cent in the US and near 45 per cent in the UK.

These flows are a huge plus to economies facing worker shortages, even if they are unpopular. Dutch rightwing populist Geert Wilders came first in the national ballot last year on a migrant-bashing platform. Migrants also became a campaign issue in Poland, which has become less welcoming of new waves of refugees — despite a particularly dire need. Poland’s working age population growth rate had turned negative, before the influx of immigrants turned it around.

The next hotspot is the US, the largest nation with surging immigration and a 2024 election. Though the immigrants are reducing wage pressure, helping to lower inflation, the blowback is already loud and clear, led by Donald Trump. Its main target is illegal immigrants, who outnumbered legal immigrants by 2mn to 1.6mn in 2023. Whoever wins the election, the backlash is likely to spill over and slow the flow of immigrants — and the benefits they bring.

The no-bust cycle

Interest rates rose so sharply, it seemed almost certain that indebted businesses would fail quickly, consumers would hunker down immediately, markets would tank, recession would strike, and the world would face a classic bust in 2023.

But the economy, at least in the US, proved remarkably resilient. One reason: Americans are locked into lower rates. Investment grade companies have been selling bonds with longer terms, which now average 12 years, so the burden of recent rate hikes has yet to strike. US homeowners still pay an average mortgage rate of 3.75 per cent — roughly half the rate on new mortgages.

Another: during the 2010s action shifted from public to private financial markets, where there are signs of weakening, including slower flows to private funds and fewer sales of PE-owned companies. But private firms don’t have to report returns as frequently as public funds do, so the weakness won’t be fully visible for a while.

The air could still come out slowly of both the economy and the markets. In a way that’s already happening, as seen in the public markets. The S&P 500 has not made a new high in two years, and is now 20 per cent above its 150-year trend, down from 45 per cent in late 2021. With borrowing costs still relatively high, the economy is likely to slide downward as well, though possibly avoiding the classic bust.

European resilience

In 2023, the US economy grew at 2.5 per cent, five times faster than Europe, widening a gap that has been growing for years if not decades. Europe can seem hopeless, and trashing its economic prospects rarely inspires much pushback.

But against a backdrop of zero expectations, even small changes for the better can rekindle animal spirits and Japan demonstrated that point last year. Europe could do the same this year. As the Ukraine war-related energy crunch eases, inflation has collapsed from over 10 per cent to 2.5 per cent. Real wages were falling, now they are growing at a pace of 3 per cent, the fastest in three decades, giving consumers a lot of spending power.

Europeans were hit harder by recent rate hikes than Americans because they have more mortgages and other long-term loans with floating rates. Now, having absorbed much of the pain of tighter money, Europe faces less pain down the road than the US does. Also, the trillions amassed by consumers during the pandemic are largely spent in the US, but continue to grow in Europe. Excess household savings currently amount to 14 per cent of annual incomes, up from 11 per cent two years ago, according to JPMorgan.

The markets are taking notice. Excluding the mega cap stocks, which juiced US returns, the average stock in Europe outperformed the mighty US market in 2023. And the signs above point to a wider comeback in 2024.

China fading

Many China watchers continue to parrot the Beijing party line, that growth is purring along at 5 per cent — perhaps double its real potential. Asked why Beijing is not taking more aggressive steps to rescue a faltering economy, the answer from Chinese policymakers is, well, the official growth rate is fine, why take more action?

Behind this absurdity are global bragging rights. President Xi Jinping aims for China to overtake the US as the world’s dominant economy, and his officials closely track its progress in nominal dollar terms — not in PPP terms, which is commonly used among western academics. In nominal terms, China’s GDP is now 66 per cent of US GDP, down from 76 per cent in 2021. Aggressive stimulus could weaken the renminbi, further shrinking the economy in dollar terms — and leaving the paramount leader farther from his goal. Better to keep up the charade, and pretend China is not fading.

Global investors are looking past this nonsense, and will continue to reduce their exposure to China. Net foreign direct investment into the country has just turned negative for the first time. Beijing can avoid a crisis with this extend-and-pretend game, but that won’t keep its economy and markets from losing share to its peers.

Emerging outside China

Not so long ago, many smaller emerging economies thrived by selling raw materials to the largest one and grew in lockstep with China. No longer. The link has broken. Now a fading China is more of an opportunity than a challenge for the rest of the emerging world.

China until recently was drawing more than 10 per cent of global foreign direct investment, and as those flows reversed, the big gainers were rival emerging countries, led by Vietnam, India, Indonesia, Poland and above all Mexico, which has seen its share more than double to 4.2 per cent.

Investors are moving to countries where they can trust the economic authorities. During the pandemic, emerging world governments refrained from borrowing too heavily. Central banks avoided large bond purchases, and moved more quickly than developed world peers to raise rates when inflation returned. Even Turkey and Argentina, once emblems of irresponsibility, have embraced policy orthodoxy.

At the start of 2023, many observers feared that rising rates would rekindle the instability of the 1990s, when dozens of emerging nations were defaulting each year. What happened? Two minor emerging markets (Ghana and Ethiopia) and not a single major one defaulted in the course of the year. Emerging nations are surprising for their resilience, not their fragility, and the world is likely to start taking notice in the coming year.

Dollar decline

Late in 2022, the value of the dollar hit a two-decade high against other major currencies and has since drifted downward. History suggests that dollar down-cycles last around seven years. And signs are the decline could accelerate. Even now, the dollar remains overvalued against every major currency.

Most economists are still confident that the dollar won’t fall much because there is no alternative and investors will never tire of buying US debt. Too confident. At over 10 per cent of GDP, the US twin deficit — including the government budget and the current account — is more than twice the average for other countries. Since 2000 US net debts to the rest of the world have more than quadrupled to 66 per cent of GDP — while on average other developed countries were reducing their debt load and emerging as net creditors.

The search for alternatives is on. Foreign central banks are moving reserves to rival currencies and buying gold at a record pace. The United Arab Emirates recently joined Russia and other oil producers who accept payment in currencies other than the dollar. And if America’s rising debt burden slows its economy faster than expected — a real possibility — the dollar faces a double-barrelled threat in 2024.

Splintering the Magnificent Seven

In 2023 the big US tech stocks boomed anew on the widespread assumption that they are the only firms rich enough to capitalise on the next big thing, artificial intelligence. Yet only three of the seven are major players in AI: Microsoft, Alphabet and Nvidia. Only one, Nvidia, is making real money on AI. The rest, blessed by association with the buzzword du jour, saw their stock market value rise well in excess of their earnings growth.

This is a familiar syndrome: a new innovation excites investors, who pour money into any company loosely related to that innovation, until they realise that most aren’t going to make money on it anytime soon. This happened in the dotcom era, and it is happening now. Already expectations for 2024 earnings by the big seven are fracturing: rising rapidly for Nvidia, barely at all for Apple, and shrinking for Tesla.

AI mania is unfolding against an unusual backdrop, in that the rest of the tech sector is in a mini recession. Venture capital funding has fallen sharply. Led by Amazon, Alphabet and Microsoft, more than 1,100 technology firms laid off workers last year; the net loss of 70,000 jobs made tech the only sector, outside motion pictures, to downsize in 2023. A further culling, not a boom, is more likely in 2024.

Hollywood’s Napoleon complex

No doubt the pandemic left many people leery of indoor spaces, but for the most part bars, restaurants and other entertainments are packed again. Movie theatres, however, are not. Ticket sales have yet to top 900mn in the US domestic market, down from 1.2bn in 2019 and nearly 1.6bn at the peak in 2002.

Hollywood’s problems are well known, including the challenges from streaming services and other online media, and the limits of its blockbuster action film formula. Underplayed in all this is a growing tendency to filter scripts through a progressive lens, increasing their appeal to the liberal 30 per cent of the population, at the risk of alienating the rest. One can hear the axes grinding in many new releases but perhaps most crudely in Napoleon, a politicised parody of one of history’s most complex figures.

In Ridley Scott’s telling, the emperor was neither grand military strategist, nor champion of republican revolution, nor civil service and education reformer — just a cranky little murderer. The film ends with a scroll of battlefield death tolls. Asked whether he had seen it, a French-born conservative friend told me “of course not”. He knew Hollywood would render Napoleon to fit its own political worldview. That may draw applause from the Academy — it won’t help revive box office revenues.

The writer is chair of Rockefeller International and an FT columnist

This article was legally licensed by AdvisorStream

RMD

Fri, 15 Dec 2023 16:10:47 GMT

Required Minimum Distributions-
As the deadline for taking required minimum distributions nears, about 20% of retirement account holders who must make these withdrawals this year have yet to do so, data from Fidelity Investments suggests.

Barron's Article By Elizabeth O'Brien Dec. 15, 2023

The data used in Fidelity's estimate was current as of Nov. 28. The deadline for taking RMDs is Dec. 31, so it isn't too late, but waiting until the last minute is risky because the transactions involved often require a few business days.

RMDs are the government's way of getting its share of retirement savings that has grown tax-deferred for decades. Starting in your early 70s— or possibly earlier, if you inherit an account—you must withdraw a certain sum from your qualifying retirement accounts each year. Generally, that means your traditional requirement accounts; Roth 401(k)s are subject to RMDs this year but will become exempt starting in 2024. The amount withdrawn counts toward your taxable income.

This year is unusual in that there isn't a big cohort of 70-somethings taking their RMDs for the first time. The starting age had been 72 until the Secure 2.0 Act passed at the end of 2022 bumped it up to 73, effective this year. People turning 73 this year were subject to the requirement last year at age 72, while people turning 72 this year got a reprieve until 2024.

When it comes to timing your RMD, there's no right or wrong answer—unless you blow the deadline, that is. In that case, you're subject to penalties of up to 25% of the amount not taken on time. The amount you must withdraw is based on your age and your account balances at the end of the prior year, so waiting until the end of the year won't impact the number. (The amount is calculated across all of your qualifying retirement accounts. Financial firms usually calculate their clients' RMDs, but it's up to you to tally the total if you have accounts across multiple firms.)

If you need your RMD to meet living expenses, a good approach is to automate withdrawals on a schedule. A regular, paycheck-like withdrawal helps both with budgeting and satisfying your RMD, says Chris Briscoe, director of financial planning at Girard Advisory Services in King of Prussia, Pa. About 40% of Fidelity's RMD-eligible customers choose to automate their withdrawals, according to Rita Assaf, vice president of retirement products.

Fidelity defaults to withdrawing 10% of RMDs for federal taxes—customers can change that amount if they wish—and state taxes are withheld according to state-specific requirements, according to a spokesperson. If you don't have enough withheld from your withdrawals, you risk owing money at tax time.

Those who don't need their RMD for living expenses often like to see how the market performs before taking their withdrawal. Waiting has paid off in 2023: Hanging onto your RMD has allowed that money to benefit from the stock market's strong gains in Novemberand so far this month. Last year was a different story, as stocks and bonds both tanked.

People who don't need their RMD can donate it to charity through a qualifying charitable distribution (QCD). In this approach, account holders never touch their withdrawal—it goes directly from their brokerage firm to a qualifying nonprofit. This process typically involves a check going via mail, so it's important to act soon if you'd like to pursue it for this year, Assaf says.

Unlike regular RMDs, withdrawals donated through a QCD do not count toward your taxable income for the year. This can be particularly beneficial for those whose RMDs would otherwise bump them into a higher income-tax bracket or a higher income tier for Medicare premiums.

Briscoe says he's noticed an uptick in clients interested in QCDs this year. Despite his best efforts to nudge them into action, some clients always go down to the wire with their RMD. His advice: "Just get it over with."

Fiduciary

Wed, 29 Nov 2023 19:15:58 GMT

Advisory services offered through Securities America Advisors, Inc. Securities offered through Securities America, Inc. Member FINRA/SIPC.

Heritage Harbor Financial Associates and Securities America are separate entities.

Your cooperation is appreciated.

Five Ways to Prepare Your Finances for the Holidays

Thu, 16 Nov 2023 13:22:22 GMT

As you prepare for the holidays and take stock of the gifts, decorations and other seasonal purchases you expect to make, you might be surprised just how easily holiday spending can get out of control.

If being more thoughtful about managing your money is at the top of your New Year's resolutions, start your holiday planning now.

Make a holiday budget, well before the holidays.

Make a list of all of your essential holiday-related expenses. But be as specific as you can, since extra expenses like stamps for your holiday cards or extra rolls of wrapping paper can tack on a significant layer of cost that goes well beyond gifts and travel. Decide how much money you can afford to spend in total, and then divvy it up by item, recipient, etc. Most importantly, stick to the plan as the season progresses. It's easy to be swept up in holiday cheer or caught off guard with last-minute purchases. Setting a budget in advance will help you figure out how much money you can devote to each category of expenses, including gifts, food, entertaining and other holiday cheer.

Be careful of spending on your credit cards.

Credit cards can be a useful tool to cover some of your holiday spending. That said, it's important not to get so carried away that you overuse or even max out your available credit. Before sitting down to map out your holiday spending, make a list of how much debt you're already carrying on your credit cards. Also, be aware of how that debt reflects your total debt-to-credit ratio, which most lenders prefer to see at or below 30 percent. Set a hard limit on the amount of credit you'll use throughout the season and be firm about not spending more than you can realistically pay back.

Save now—spend later.

Socking away small, affordable amounts is a great way to build a lifelong savings habit. It can also take the edge off when it comes to the holiday season. Find a way to easily set aside a few dollars from each paycheck, whether it's monthly, semi-monthly or weekly, and make sure that cash goes directly into a separate savings account. If you save $5 per day, that's $35 per week or $1,820 over the course of a year, which you can use to fully fund your holiday spending, pay down debt or prepare for retirement. Once you get used to saving $35 each week, try upping that to $40 and then $50. You'll create a manageable savings strategy that will help you develop true financial stability.

Get crafty when you can.

Nothing says “I love you” quite like a homemade gift. Plus, it ensures the recipient will become the proud owner of a one-of-a-kind item or get to enjoy a tasty treat. If you're not especially crafty but lack the funds to buy something for everyone on your list, consider creating your own “gift cards.” For example, you could pledge to lend your time and energy to help a relative or friend clean their home or volunteer to babysit for friends with children who could use a night out. The spirit of giving shows someone you care about them, and some gifts—whether you spend money, make something from scratch or donate your time—are priceless.

Make your travel plans as early as possible.

If you're one of the more than 115 million Americans who travel during the holidays, you probably already know firsthand that booking flights, renting a car and paying for gas or other travel expenses can add up quickly. Airlines, train stations, hotels and others in the travel industry tend to charge higher rates around the holidays, and those prices only rise as year-end approaches.

Although it's hard to not be sucked into the spending cycle of the holidays, a bit of forethought and budgeting will go a long way toward getting you through the end of the year with your finances intact.

Source: https://www.equifax.com/personal/education/personal-finance/articles/-/learn/prepare-your-finances-for-holidays/?emlid=703965&Et_rid=81930103

Important Information from FINRA to consider before transferring your account. Trading instructions sent via email may not be honored. Please contact my office at 631-331-6599 or Securities America, Inc. at 800‐747‐6111 for all buy/sell orders. Please be advised that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets. Advisory services offered through Securities America Advisors , Inc. Securities offered through Securities America, Inc. Member FINRA/SIPC. Heritage Harbor Financial Associates and Securities America are separate entities.Your cooperation is appreciated.

October

Fri, 13 Oct 2023 14:26:32 GMT

National Financial Planning & Estate Planning Month this October

Financial Planning

Some of the soundest financial advice is the advice that has stood the test of time.

Consider these:

1. Review and revise your budget. With just three months to go in 2023, now is a great time to review your budget, highlight areas of lifestyle creep, and make sure you and your finances are ready for the holiday rush. If the 2023 holiday shopping season is anything like last year, Americans will spend close to $1,500 on average.

Assess and add to your emergency fund. As you know, a critical pillar of financial security is a robust emergency fund of three to six months of expenses. But remember, an emergency fund isn’t simply your monthly needs times three. In a true emergency, you’d pare down discretionary spending, so when calculating your fund goal, keep this in mind.

2. Evaluate your retirement savings. Regardless of your age, planning for retirement should be a priority. The power of compound interest means the earlier you start saving, the more your money grows. Aiming to contribute a minimum of 10-15% of your income towards your retirement savings account can build a substantial nest egg for your future–but you don’t have to hit 15% overnight. Even increasing your contributions by 1% before the end of the year is a worthwhile goal. Remember, retirement isn't about reaching an age but achieving financial freedom.

3. Meet with your Advisor/Tax Professional/Legal Professional. Have a well trusted team on your side.

Estate Planning

An opportune time to consider or revisit your estate plan and its vital role in securing your financial future.

Remember, an estate plan includes important legal documents such as a will, trust, durable power of attorney, healthcare power of attorney, advance directive, and beneficiary designations. And while estate planning can be an uncomfortable topic to consider, it is something that shouldn't be put off and is critical at every age.

Within financial planning, an estate plan serves as a fundamental tool in mitigating taxes, protecting your assets, and ensuring a seamless transfer of wealth to your beneficiaries. It allows you to strategically plan for the future, minimize tax liabilities, and provide for your loved ones according to your wishes.

We’ve witnessed first-hand the hardships families face when a loved one passes without a will–and we don't want you and your loved ones to experience a similar situation. That said, we thought we’d share common estate planning mistakes to avoid as you think about your estate plan:

7 Common Estate Planning Mistakes

1. Making no last will and testament or living will

2. Identifying only one beneficiary

3. Not discussing your end-of-life wishes with loved ones

4. Designating assets that may change or no longer exist at the time of your death

5. Not accounting or planning for estate taxes

6. Never updating your will after making one

S ecurities offered through Securities America , Inc. Member FINRA/SIPC. Advisory services offered through Securities America Advisors , Inc.

Heritage Harbor Financial Associates and Securities America are separate entities.Your cooperation is appreciated.

Women's Executive (WE) Summit

Thu, 24 Aug 2023 14:13:55 GMT

August 7, 2023

This August 7th we attended LI Herald Women's Executive (WE) Summit, a unique and exclusive women's leadership conference where executives and entrepreneurs come together to discover new paths to work-life balance and self-care. This is a wellness and leadership conference, where attendees are encouraged to discover new paths to self-care and balance to bring out the best in themselves and those they empower and lead. As we continue to navigate a time of pivotal change, speakers shared tangible advice and techniques for leveraging professional & personal growth. The WE Summit, hosted by WABC-7's Kristin Thorne, took place at the The Crescent Beach Club located in Bayville, New York.

FAFSA

Wed, 26 Jul 2023 16:11:14 GMT

Free Application for Federal Student Aid

Since many of our clients have children or grandchildren nearing college age,

we wanted to reach out about some changes to the

Free Application for Federal Student Aid (FAFSA), courtesy of the FAFSA Simplification Act.

As you may know, FAFSA is the form that college students must complete to apply for federal financial aid and, in the past, has been known for being extremely convoluted.

The FAFSA Simplification Act was passed in 2020, but several of the changes are being rolled out with aid applications for the 2024-25 school year.

They include:

Simplification of FAFSA process - The number of questions on the FAFSA form is being reduced from 108 to around 40 questions max, aiming to streamline the application and make it less time-consuming for applicants. Additionally, the new system will facilitate the submission of tax information through IRS Direct Data Exchange, making it easier for applicants to provide the required financial details without having to dig up tax returns.

Changes to Pell Grant eligibility - The Pell Grant Program is geared toward students who have exceptional financial needs and the FSA amendments have changed how eligibility and award amounts are calculated. Additional amendments reduce award amounts for students who are not enrolled full-time.

Elimination of discounts for multiple children in college - In the past, families with multiple children enrolled in college at the same time were eligible for additional financial aid. This change eliminates this discount and reduces financial eligibility for these families moving forward.

Discontinued Selective Service requirement for males - While men between the ages of 18 and 25 in the U.S. are still required to register for Selective Service, regardless of their college plans, it is no longer a requirement to receive financial aid.

Drug conviction changes - Previously, students with drug convictions could face disqualification from financial aid. The question about drug convictions will no longer be included in the FAFSA, allowing convicted but not currently incarcerated students to be eligible for all financial aid.

Changes for incarcerated students - The FAFSA Simplification Act allows incarcerated students enrolled in prison education programs to be eligible for Pell Grants, provided certain eligibility criteria are met. However, incarcerated individuals are not eligible for federal student loans.

Changes for divorced or separated families - Previously, when parents were divorced or separated, either parent could complete the FAFSA. For parents who are still living together, divorced or not, this remains true. For parents who are divorced or separated and not living together, a recent change now requires the "custodial parent" to be the one filling out the FAFSA. The custodial parent is determined as the parent that the child lived with most often over the last 12 months or the one who provided the most financial support over the last 12 months.

Changes to reporting grandparent contributions - Grandparent-owned 529 plans used to count against financial aid eligibility, but new rules mean they no longer do.

Due to the number of changes made to the process, the FAFSA availability date is postponed to December 2023. Students and caregivers can access the FAFSA, look up the deadline, and check the status of their application for free on the Federal Student Aid website.

That said, we are here to assist you in planning for your financial future and that of your loved ones.

Securities America, Inc. at 800-747-6111 || Address: Securities America, Inc. 12325 Port Grace Blvd, La Vista, NE 68128

3 Myths: About Annuities

Wed, 19 Jul 2023 15:37:49 GMT

In today’s customizable, satisfaction-guaranteed world, it’s no surprise that you want a financial option in retirement that provides both
guaranteed income and protection from market volatility.

There is a solution that offers both: Annuities.

Annuities can be the cornerstone of your financial plan. But are misconceptions about annuities holding you back from securing the income protection and tax-deferred growth your plan is missing?

Myth #1: Annuities have high fees

Truth : Annuities typically are less costly than you may think. Some have no direct costs, and for those that do, the costs are usually relative to the benefits they provide—stabilizing your retirement with guaranteed income for life, tax-deferral opportunities, protection of principal from market volatility.

Myth #2: Annuities lock in your money forever

Truth : Annuities were designed for the long haul, not for short- term gain. However, shorter term annuity products are available— such as a 5-year—for those looking for “bridge” income over a smaller time period. In addition, most annuities allow owners access to a portion of their money each year, and some allow a return of premium or the ability to withdraw 10% or less of the annuity’s value annually with no charge.

Myth #3: Annuities don’t grow

Truth : As an indexed annuity owner, you can help significantly reduce your risk, while also providing the growth you’re looking for. No yearly contribution limits and compounded tax- deferred earnings in the accumulation stage allow you to safely and steadily increase your retirement savings.

Don’t believe the myths.

Learn about the benefits that annuities provide.

Schedule an appointment directly on our website.

Any decision to implement the ideas or concepts discussed herein shall be made solely by the client on the advice or his or her legal and tax advisors. Any guarantees in the annuity referenced here are subject to the claims-paying ability of the issuing insurance company. Annuities are not a deposit, are not insured by the FDIC or by any government agency, and may lose value.

Advisory services offered through Securities America Advisors, Inc. Securities offered through Securities America, Inc. Member FINRA/SIPC. Heritage Harbor Financial Associates and Securities America are separate entities.Your cooperation is appreciated. Securities America, Inc. at 800-747-6111 || Address: Securities America, Inc. 12325 Port Grace Blvd, La Vista, NE 68128

4262083

Secure Act

Fri, 07 Jul 2023 15:54:36 GMT

How does this new law impact your retirement savings plan?

We want to keep you informed about changes in the financial landscape that may impact your retirement savings. Today we're discussing the SECURE 2.0 spending bill, which President Biden recently signed into law.

The truth is only about a third of U.S. workers have retirement plans, a serious issue that the SECURE 2.0 Act hopes to address with the following provisions.

6 Changes Taking Effect Immediately

1. 401(k) hardship withdrawals: Employees can take one penalty-free 401(k) distribution per year of up to $1,000, with the option to repay the distribution within three years. These withdrawals can be used for medical expenses, funeral expenses, or tuition and related educational expenses. However, a withdrawal must be due to an "immediate and heavy financial need,” according to the IRS.

2. Part-time hours: Part-time workers now only need to work between 500 and 999 hours for two consecutive years to be eligible for their company's 401(k) plans, rather than the previous requirement of three consecutive years.

3. Saver’s match: Workers at a low- to mid-income level will receive a 50% match up to $2,000 from the government when they save through a workplace retirement plan. This contribution will be deposited into the retirement accounts and cannot be withdrawn without penalty. The match phases out completely at $71,000 for married couples filing jointly, $35,500 for single filers, and $53,250 for heads of households.

4. RMDs: Previously, people with 401(k) plans were required to take out money from their accounts starting at age 72 to ensure they use it rather than pass it down through their estates. The SECURE Act increases that mandatory age to 73 in 2023 and 75 in 2033.

5. Employer-based emergency savings account: Unless an employee opts out, employers can automatically opt workers into a savings account, contributing no more than 3% of the employee’s salary, up to $2,500 per year. Contributions to these accounts are made with already-taxed money, and withdrawals are tax-free.

6. Roth IRA matching for employer plans: Employers now have the ability to offer their employees the choice of receiving vested matching contributions to their Roth accounts. It’s important to note that it may take some time for plan providers to make this option available and for payroll systems to update accordingly.

4 Changes Taking Effect at a Later Date

1. 529 college savings plans: Beginning in 2024, 529 plan assets can be rolled over to a Roth IRA for the beneficiary. The rollover is subject to annual Roth contribution limits and a lifetime limit of $35,000.

2. Student loan repayments: Beginning in 2024, student loan payments will count as retirement contributions and will be eligible for employer matching.

3. Automatic enrollment in retirement plans: Starting in 2025, employers will be required to automatically enroll employees in 401(k) and 403(b) plans. Exceptions include small businesses with fewer than ten employees, churches, and governmental plans.

4. Catch-up contributions: Starting in 2025, those 60 to 63 can direct an extra $10,000 annually towards their 401(k)s (currently, it's $7,500).

It may be worth reviewing your retirement savings strategy in light of these legislative changes. If you’d like help or want to discuss your options further, please don't hesitate to reach out to our team.

Advisory services offered through Securities America Advisors, Inc. Securities offered through Securities America, Inc. Member FINRA/SIPC.

Heritage Harbor Financial Associates and Securities America are separate entities.Your cooperation is appreciated.

Tue, 23 May 2023 19:26:58 GMT

"Lunch with Leaders" - Special guest speaker Rodney K. Harrison, the Commissioner of the Suffolk County Police Department.

We were able to attend this Suffolk PAL Luncheon with the Commissioner of the SCPD.

The Suffolk County Police Athletic League is one of the largest and most successful juvenile crime prevention and recreational programs in the country.

Suffolk County PAL realizes that every child is unique in ability and interests so we have tried to offer as many activities as possible. Some of the programs we offer include baseball, basketball, bowling, football, boxing, cheerleading, golf, soccer, lacrosse, track and field, fishing trips, karate. PAL also offers many different camps and clinics for children during the summer.

PAL touches the lives of over 20,000 boys and girls, many who would have no organized sports in their lives without PAL.

Not long ago people looked out for one another. Many of today’s families feel isolated. The Suffolk County PAL is working together with Business and Community leaders, Clergy, Teachers, and Parents to revitalize the concept of “neighborhood”, by involving the Community in the fight against juvenile crime, drugs, alcohol, and violence in a way that kids respect. Our kids are 25% of our population and 100% of our future.

Here is a message from the Police Commissioner:

"The COPS Youth Engagement Program has supported the Suffolk County Police Department in our goal to provide positive interactions between local law enforcement and youth in the community, specifically unsheltered youth. Our Community Relations Bureau partnered with the Police Athletic League to create meaningful relationships with at-risk youth living in temporary housing shelters across Suffolk County.

The COPS Youth Engagement Program has proven to be beneficial to both police officers and youth in that it has fostered increased knowledge and understanding of each other through the implementation of these programs. We successfully increased the number of events that engage both youth and officers together. We surveyed local youth to develop activities that are of interest and will continue to encourage officers to engage with youth in fun and informal unplanned interactions while on patrol. With Department support of this initiative and by increasing the number of activities that are provided with officer engagement we developed a pattern of regular and positive interactions with community youth to foster understanding between all groups.

I am committed to working with and strengthening the relationships between members of the Suffolk County Police Department and members of the community, especially underserved youth. Through COPS Community Policing Development Microgrant funding, we were able to create instrumental initiatives to get our youth involved with community events and exposing them to the amazing men and woman of the Suffolk County Police Department, who are acting as mentors, coaches and friends. My love for sports started as a child and has continued as I watch my own children play. I look forward to sharing my love for sports, educational events and community with you."

Important Information from FINRA to consider before transferring your account. Trading instructions sent via email may not be honored. Please contact my office at 631-331-6599 or Securities America, Inc. at 800‐747‐6111 for all buy/sell orders. Advisory services offered through Securities America Advisors, Inc. Securities offered through Securities America, Inc. Member FINRA/SIPC. Heritage Harbor Financial Associates and Securities America are separate entities.Your cooperation is appreciated.

First Republic Collapse

Tue, 09 May 2023 16:39:09 GMT

Echoing the failures of Silicon Valley Bank and Signature Bank, First Republic collapsed

With more banking turmoil in the headlines, we thought we would reach out with some helpful context about the collapse of First Republic Bank. We also want to offer a quick reminder about our objectives as long-term investors.

What Happened to First Republic Bank

In a nutshell, First Republic had a business model of providing ultra-low rate mortgages (including interest-only loans) to wealthy customers in exchange for them keeping deposits with the bank.

That business model doesn't work as well when interest rates rise sharply. First Republic was taking large paper losses on its mortgage book as interest rates continued their rise, and the bank’s wealthy client base was demanding more interest to keep cash at the bank.

As the events of Silicon Valley Bank (SVB) and Signature Bank of New York unfolded in March, First Republic shares began to fall, as many deemed it SVB’s closest peer. However, First Republic and other regional banks held mostly steady amidst quiet trade into April after the shock of SVB.

Ultimately, though, First Republic’s earnings reported on April 24th were a dagger for the troubled institution, showing its deposits fell 40.8% in the first quarter.

The deposit outflows resulted in reports that the Biden administration was scrambling to find a solution, and the stock traded down to $8, nearly 95% below its early March share price.

First Republic Seized, Acquired

First Republic officially became the second-largest bank failure in American history on May 1, replacing the reigning silver medalist, Silicon Valley Bank.

First Republic stock was delisted on the New York Stock Exchange (NYSE) on Tuesday, May 2, days after the institution was seized by regulators and most of its assets were acquired by JPMorgan Chase & Co. for $10.6 billion.

The third failure of an American bank since March has investors rightfully scratching their heads.

Another Bank Failed. More On The Way?

"This part of the crisis is over," said JPMorgan Chase & Co. CEO Jamie Dimon after his bank’s acquisition of First Republic.

However, on the same day – and the day before the May Federal Reserve interest rate announcement – shares of PacWest Bancorp and Western Alliance Bancorporation were in focus as they both fell sharply.

While nobody knows with certainty if more trouble lies ahead, it could make sense for certain investors to review their investment objectives or risk tolerance, depending on their time horizons and/or other factors. If you would like to discuss your strategies, please let me know. We will review your investments together.

Is This Like 2008?

No, it is not. It is fair to say that there is a regional banking crisis, but many differences exist between the present landscape and 2008.

In 2008, a wide variety of institutions were overleveraged and owned complex subprime mortgage-backed securities that turned out to be worth a lot less than they anticipated. These were bad loans.

At present, the situation is much different and is instead tied to rising interest rates.

Higher Rates, Mortgage Losses

Sure, First Republic could have managed its risk better, and it had the wrong business model in place before interest rates rose. But rising interest rates ultimately caused the steep losses in value and ultimate collapse that First Republic experienced.

Remember, bond prices and interest rates have an inverse relationship. When interest rates rise, bond values fall. And when you are a bank like First Republic or Silicon Valley Bank holding long-term debt (like mortgage bonds), the value of these assets deteriorates as interest rates rise.

When investors and depositors with deep pockets catch wind of a bank holding large amounts of deteriorating asset values that they may be forced to sell, they often pull their money out. This dynamic can create a bank run, and it did.

It is a fair statement that the recent turmoil in regional banks may not have occurred if the Fed did not raise rates so sharply or so quickly. But, on the flip side, inflation is plaguing Americans, which is why the Fed has hiked interest rates. In this case, it seems the solution to one problem has been the cause of another.

Fed Rate Hike

Speaking of rising rates, the Fed raised rates by 25 basis points on May 3, as widely expected. The move comes just days after First Republic’s demise and is reminiscent of the March rate hike following the collapse of Silicon Valley Bank and Signature Bank.

A notable omission of verbiage in the accompanying Fed statement hinted at a potential end to rate hikes.

FDIC Reforms On Table

As you may know, the Federal Deposit Insurance Corporation (FDIC) provides deposit insurance for deposits up to $250,000 per depositor, per insured bank, for each account ownership category.

Well, that might be about to change.

On Monday, May 1st, the FDIC proposed three new options to either change the coverage limit, have unlimited coverage, or offer targeted coverage for business payment accounts. All of the newly proposed options would require approval by Congress.

Remember, FDIC does not cover securities accounts; those are covered by SIPC. Here is how SIPC works.

Impact on Economy

So, how does a regional bank collapse (or multiple) affect the economy and lives of average Americans? For one, it concentrates deposits in larger banks as depositors move away from their regional counterparts.

Another pressing issue is accountability, a point of contention raised by Kevin O’Leary of Shark Tank fame, among others. O’Leary asserted that banks effectively become nationalized post-SVB and said that "you have zero risk, and that has consequences."

His no-risk comment refers to the assertion that banks can take excessive risks, and should they not work out, the government will be standing by to rescue them. Does that inherently allow banks to take too much risk at the expense of the taxpayer or FDIC?

The thing is, the "risk" taken by First Republic was a relatively low one (lending large mortgages to wealthy borrowers with excellent credit) when measured by conventional methods in a normal market. Sharply rising interest rates quickly changed the risk profile of their business model.

Economic Perception

There are varying opinions on whether the current crisis is over or if there are more risks in the market. Even if the Fed is finished or close to the end of its rate hike cycle and pauses hikes for a while, other institutions with similar risks may face issues.

Let’s also point out here that bank failures create tightening credit markets and lending pullbacks. So, events like the First Republic collapse help to do the Fed’s job for them. Perhaps the recent bank failures and the potential for more of them have been priced into the market’s expectation of May being the final hike and a pausing Fed at the June Fed Meeting.

So, while the headlines of bank failures are ugly and some individuals have certainly been hurt by banking turmoil, it’s possible these failures will help the broader economy normalize more quickly than if they did not occur at all. Food for thought, but likely not much comfort for those negatively impacted.

Remaining Objective

We seem to be at a pivotal point for financial markets, amid rapidly rising interest rates, sticky inflation, regional banking system issues, debt ceiling woes, and other headwinds. Yet, the broadest measure of the U.S. economy, the S&P 500, has remained resilient thus far in 2023.

While banking indexes and ETFs like the $KRE and $KBE have fallen in 2023, large-cap technology has been supportive. The broader market has been quiet and has been having trouble breaking out in either direction recently.

Should the broader markets experience a pullback on the heels of banking woes, opportunities could arise for long- term investors with certain risk tolerances and investment time horizons.

On that note, let’s remember our long-term investing mission, regardless of the news. We’ll leave you with a weekly chart of the S&P 500 from 2000 until now. Emotional investors that lost their resolve after the 2000 tech bubble, the 2008 financial crisis, and the 2020 pandemic have missed out on a U.S. economy that has moved from the bottom left corner to the top right corner of the chart. The data matters!

With that said, we know recent months have been stressful for many Americans. If recent events are on your mind, let’s touch base. We are happy to talk with you further about the economy, the markets, and your portfolio. Reach out by phone or email anytime.

For more details sign up for our email blasts by emailing info@hhfa.org

Important Information from FINRA to consider before transferring your account. Trading instructions sent via email may not be honored. Please contact my office at 631-331-6599 or Securities America, Inc. at 800-747-6111 for all buy/sell orders. Please be advised that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets. The text of this communication is confidential and use by any person who is not the intended recipient is prohibited. Advisory services offered through Securities America Advisors, Inc. Securities offered through Securities America, Inc. Member FINRA/SIPC. Heritage Harbor Financial Associates and Securities America are separate entities.Your cooperation is appreciated.

Spring Clean Your Finances

Tue, 02 May 2023 18:02:32 GMT

8 Tips to Spring Clean Your Finances

Now that 2023 is in full bloom, we wanted to share 8 tips to help you spring-clean your finances.

With a fresh picture of the year ahead, this spring is the perfect time for a quick financial clean-out.

8 Tips to Spring Clean Your Finances

1. Revisit your budget and retirement contributions. Take another look at your monthly budget and adjust your expenses based on your year-to-date spending. If possible, increase your retirement savings by 1-2 percentage points (until you reach 15%).

2. Boost your emergency fund. If you received a tax refund this year, use a portion to boost your emergency fund. Work towards 3-6 months' worth of expenses.

3. Prioritize paying down debt. Designate another portion of your tax refund to get a jump start on paying off debt. Even more important? Commit to no new debt.

4. Declutter your subscriptions. Fifty-one percent of Americans have subscriptions they don’t use or have forgotten about. Look through your account registers to identify recurring charges you’ve overlooked. No time to scroll transactions? Apps like Rocket Money or Hiatus can help, too.

5. Pull your free credit report. If you haven’t in the past year, get your free annual credit report. Scan for errors and ensure all inquiries are legitimate.

6. Review your insurance and plan for changes in coverage. If you know you’ll be adding a driver, selling a car, or purchasing another life insurance policy this year, get several quotes to plan for the added expense and get the best rates.

7. Shred old financial documents. The IRS recommends keeping at least three years of tax returns. You should also keep documents related to your house, car, or stocks. The rest? Shred away!

8. Meet with your Financial Advisor.

Heritage Harbor Financial Associates and Securities America are separate entities.Your cooperation is appreciated.

Update RE: Economy, Inflation, and Fed

Wed, 05 Apr 2023 15:02:30 GMT

1st Quarter 2023

It was a remarkable first quarter of 2023, and many questions now exist about the financial markets and the economy at large.

With that in mind, we wanted to reach out with a summary of some of the key developments to keep in mind as the second quarter begins in earnest.

Economy

Some cracks in the economy became evident during the first quarter, with banking system uncertainty in the spotlight. The banking turmoil towards the end of the quarter rightfully rattled investors and sent volatility soaring.

However, the market volatility was short-lived, as the first quarter concluded with buyers emerging in major U.S. stock indexes.

S&P 500: Two Consecutive Positive Quarters

The first quarter of 2023 was the second consecutive positive quarter for the S&P 500 and the Dow Jones Industrial Average. The Nasdaq 100 had the biggest gain of the three major indexes after experiencing a slightly lower fourth quarter of 2022.

Overall, during the first quarter of 2023, the S&P 500 increased by 7.03%, the Nasdaq 100 rose by a mammoth 20.49%, and the Dow Jones Industrial Average was marginally higher, by 0.38%.

Q1 Tech Rally & Fixed Income

If the stock market had awards like the Emmys, the first quarter’s winner would have been technology. Here are a few highlights of widely followed stocks and ETFs for the first quarter of 2023.

VanEck Semiconductor ETF (NASDAQ: SMH) +29.69% in Q1 2023.

Apple, Inc. (NASDAQ: AAPL) +26.91% in Q1 2023.

Netflix, Inc. (NASDAQ: NFLX) +17.16% in Q1 2023.

Tesla, Inc. (NASDAQ: TSLA) +64.42% in Q1 2023.

Labor Market

In the first quarter, strength continued for the labor market, with solid payroll gains of 311,000 in February & 517,000 in January. The unemployment rate did edge higher in February (from 3.4% to 3.6%), but the labor force participation rate was little changed at 62.5 % in February.

U.S. Federal Reserve Governor Christopher Waller said in late March that inflation could decrease without harming the labor market.

Inflation

The quarter’s last Consumer Price Index (CPI) data release showed consumer pricing declining in February from January levels. However, prices remained elevated. Core CPI (which removes volatile food and energy) remains firm—potentially firmer than the Federal Reserve would like to see.

The inflation battle has resulted in the fastest pace of Federal Reserve rate hikes in decades.

Quarterly Fed Decisions

The first quarter featured one Fed meeting in March, resulting in a 25-basis-point hike. The hike was largely expected, although some participants wanted to see a pause in the wake of the banking turmoil.

The Fed’s 2% inflation target is still far away, with the last CPI reading of the first quarter showing inflation running at 6% year-over-year.

The second quarter features two Fed meetings on May 3rd and June 14th, with continued rate hikes possible. However, rate hikes are not the only tools at the Fed’s disposal.

Other tools the Fed could use to tame inflation are known as Open Market Operations (OMO).

While these events were not an OMO, there have been discussions that the Q1 banking turmoil had a similar effect as a rate hike. Credit markets tightened after the collapse of SVB, and the resulting environment could help to slow the economy.

Putting Q1 Together

Starting out 2023, the Nasdaq had its best January since 2001, a welcome way to start the year and quarter.

Major U.S. stock indexes traded lower in February as markets braced for additional interest rate hikes and economic headwinds were in focus. And March had it all: banking turmoil, a spike in volatility, and ultimately, a rally in the major U.S. stock indexes.

At the close of the first quarter, market expectations seemingly shifted towards a more gentle Fed for the remainder of 2023, with one more rate hike being the consensus. The Fed has also forecasted one more rate hike.

Active market participants are currently debating whether the market is getting ahead of itself, with some expecting rate cuts later in the year, even as the Fed suggests that will not be the case.

Amid all of this first-quarter speculation and turmoil, remaining focused on the long term became all the more important. A long-term focus prevents investors from getting caught up in quickly changing narratives that could trigger emotional decisions.

With that said, if you have questions about first-quarter developments or if there is anything else we can help with, please reply to this email or give our office a call. We are always here as a resource!

Securities offered through Securities America, Inc. Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Heritage Harbor Financial Associates and Securities America are separate entities. Securities America and its representatives do not provide tax or legal advice; therefore it is important to coordinate with your tax or legal advisor regarding your specific situation. This site is published for residents of the United States and is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security or product that may be referenced herein. Persons mentioned on this website may only offer services and transact business and/or respond to inquiries in states or jurisdictions in which they have been properly registered or are exempt from registration. Not all products and services referenced on this site are available in every state, jurisdiction or from every person listed." Mailing Address: Securities America, INC., 12325 Port Grace Blvd, La Vista, NE 68128. Securities America Phone #: 800-747-6111

Fixed Annuity

Thu, 16 Mar 2023 15:16:51 GMT

A deeper dive into fixed annuities...

We have recently had many clients ask questions regarding fixed annuities and felt this might provide some insight.

A fixed annuity is an insurance contract that guarantees the buyer a fixed rate of return on their contribution for a specific period of time. A fixed annuity is best suited for investors looking to preserve their principal - but who want their money to grow at a rate faster than a savings account or a CD. It can act as a safe place for cash to accumulate interest tax deferred.

How exactly does a fixed annuity work?

When an insurance company receives your premium, it adds it to its general account pool of incoming premiums. The company then invests that money - usually in government securities or high-quality corporate bonds that earn a slightly higher interest rate than the insurance company pays you.

Your fixed annuity contract will include a minimum guaranteed rate. The guarantee from the annuity company is that the interest on your fixed annuity will not dip below that rate. The company also guarantees the principal investment.

Are there differences between fixed annuities and CDs?

CDs are typically purchased from banks or credit unions. While fixed annuities are purchased from an insurance company.

Fixed annuities can also offer more attractive tax advantages than CDs.

Unless a CD is purchased within an IRA or other retirement account, the interest it earns is subject to federal and state income tax each year. In contrast, interest earned within a fixed annuity is tax deferred. You won’t pay tax on the interest until you withdraw it.

CDs impose high penalties if you withdraw money before the maturity date. With fixed annuities, many insurance companies allow you to withdraw up to 10% of your accounts value without a surrender charge. However, other annuity penalties may apply

Key Takeaways

- A fixed annuity guarantees a fixed rate of return on your contributions

- Fixed annuities are not indexed to stock market performance, but grow at a fixed interest rate determined by the issuing insurance company

- Because the rate of return is constant, there is no protection from inflation

- Simplicity

If you’d like to discuss fixed annuities further, know that our team of experts would be happy to share more information and recommendations based on the current market and rates. Reach out by phone or email, and we can set aside some time to chat.

Important Information from FINRA to consider before transferring your account. Trading instructions sent via email may not be honored. Please contact my office at 631-331-6599 or Securities America, Inc. at 800‐747‐6111 for all buy/sell orders. Please be advised that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets. The text of this communication is confidential and use by any person who is not the intended recipient is prohibited. Any person who receives this communication in error is requested to immediately destroy the text of this communication without copying or further dissemination. Advisory services offered through Securities America Advisors, Inc. Securities offered through Securities America, Inc. Member FINRA/SIPC. Heritage Harbor Financial Associates and Securities America are separate entities.Your cooperation is appreciated.

RE: What Happened with Silicon Valley Bank

agonzalez@hhfa.org (Amanda Gonzalez) — Wed, 15 Mar 2023 16:40:21 GMT

Silicon Valley Bank and its parent company SVB Financial Group failed as a bank.

Given that this is a concerning event, we wanted to answer some of the questions you may have about what’s happening.

How It Happened: There were a number of influences that together spelled the downfall of the bank.

From 2020 through 2021, Silicon Valley Bank took in incredibly high deposits through PPP loans and through clients that were taking their companies public through a Special Purpose Acquisition Vehicle (SPAC). SVB took those deposits and decided to invest in long-term bonds, such as mortgages and treasuries, while interest rates were low.

2022 was a very different year. Silicon Valley Bank’s unique customer base of private companies started to need cash and, as a result, pull their deposits. In addition, interest rates also increased, which negatively impacted the mark-to-market value of its longer-term bonds.

In an effort to appropriately deal with the impacts of its mark-to-market losses, the bank used a valid accounting change to consider those bonds “held to maturity.” (Any bonds that are held to maturity do not need to be updated with the market value but can be held on the books at cost.)

Unfortunately, you cannot hedge interest rate risk for bonds in the “held to maturity” category, meaning the bank could not appropriately hedge interest rate risk for these longer-term bonds (of which they had many).

The combination of reducing deposits, too few assets that were marked at the market (or consistent with the current market value), and growing withdrawals forced the bank to sell their held-to-maturity bonds. When they sold these assets, the paper losses became realized, and those losses effectively overwhelmed the bank's equity, causing the bank to fail.

All of this happened over the course of a week — and mostly over a two-day period. The stock was worth $267.83 close of business Wednesday and worthless by the close of business Friday.

Did Silicon Valley Bank do anything wrong? SVB did not break any written rules, but they did not effectively hedge their interest rate risk. Poor risk management ultimately spelled their doom. It would have been easy enough to reduce purchases of so many long-term bonds back in 2021, but the appeal for the bank to make a little bit more money on their deposits was likely too strong.

Also, how many market participants expected the Federal Reserve to raise interest rates so much so quickly? They were unprepared for the shifting market environment.

Some have said it was a “bank run.” Is that right? Yes, there are really three reasons why depositors pulled their money out. Many depositors needed money because their startup businesses were not as successful as anticipated due to the market environment.

In addition, some depositors wanted higher interest rates they could achieve with a money market fund (4.5% vs. 1% at many banks). And when depositors realized that the bank’s tangible equity was falling, those with more than the FDIC-insured limit of $250,000 on deposit decided to take their additional savings out to be safe.

Is this a risk for the big banks (over $250B in assets)? Big banks are stress-tested regularly and are required to hedge their interest rate risk. As a result, those banks are not at risk of the same problems as Silicon Valley Bank.

What about smaller banks? Yes, some smaller banks with more aggressive treasury operations (what they choose to do with the deposits and how they hedge or not) are at risk. Signature Bank of New York has been seized by regulators. Other midsize banks (which have less than $250 billion in assets) seem to have low tangible equity. Banks can be notoriously difficult to analyze, so I expect many who invest for dividends to find greener pastures.

Impact on the market? We’re not sure yet how this will impact the market other than introducing more volatility. Some believe that the Fed must stop raising interest rates immediately to stem the losses of these poorly performing long-term bonds on bank balance sheets, while others think the Fed needs to continue to raise rates to combat inflation.

One thing is certain: bond market volatility, as measured by the MOVE Index, is likely to be heading higher. Last year, when the MOVE index increased, financial conditions tightened, the stock market declined, and the economy slowed. A similar scenario could be the case again in 2023.

That said, it’s important to recognize events like this do happen and keep in mind that we invest for long-term returns. Depositors will be okay as FDIC insures deposits up to certain limits. Equity holders of the banks may not.

We encourage you to follow reputable news sources for more minute-to-minute developments. But rest assured, we will be paying careful attention and will reach out if needed. If you have any questions about this or your portfolio, please call our office.

Important Information from FINRA to consider before transferring your account. Trading instructions sent via email may not be honored. Please contact my office at 631-331-6599 or Securities America, Inc. at 800‐747‐6111 for all buy/sell orders. Please be advised that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets. The text of this communication is confidential and use by any person who is not the intended recipient is prohibited. Any person who receives this communication in error is requested to immediately destroy the text of this communication without copying or further dissemination. Advisory services offered through Securities America Advisors, Inc. Securities offered through Securities America, Inc. Member FINRA/SIPC. Heritage Harbor Financial Associates and Securities America are separate entities.Your cooperation is appreciated.

2/27/23 Market Update

Wed, 01 Mar 2023 14:47:06 GMT

After starting 2023 with a boom in January, major U.S. stock indexes fell last week, marking the third straight week of declines for the S&P 500.

Summarizing last week’s U.S. equity market index activity, the large-cap S&P 500 shed 2.67%, the Nasdaq 100 decreased by 3.14%, and the Dow Jones Industrial Average dropped by 2.99%.

Inflation Acceleration?

Factoring into the equity market declines last week was the Federal Reserve’s inflation gauge of choice: core personal consumption expenditures. Last week’s reading, representing the month of January, showed a monthly rise of 0.6% and a yearly uptick of 4.7% versus expectations for 0.5% and 4.4%, respectively.

The higher-than-expected Core PCE data should keep the Fed on alert and could contribute to a " higher rates for longer" narrative.

U.S. Government Bond Yields Rise

U.S. 10-year note yields settled higher last week, finishing the holiday-shortened trading week near 15-week highs.

Friday’s 10-year note yield settlement was 3.948%, up from its 3.827% settlement the previous week.

Rate hike uncertainty and renewed inflationary concerns contributed to the rally in yields. For those keeping score at home, the 2-year/10-year Treasury yield curve remains inverted.

Big Retailers Offer Cautious Outlooks

It was a tough week for the retail sector. In fact, it was the worst one since July 2022, as both Walmart and Home Depot issued cautious guidance.

Walmart topped consensus estimates for the fourth quarter but issued a cautious sales outlook for 2023.

Walmart’s Chief Financial Officer John David Rainey said, “Our value proposition is certainly resonating with consumers right now, but there’s a lot of macroeconomic uncertainty. We’re adopting a cautious outlook, and we want to make sure we’re responsive to whatever environment we’re going to find ourselves in.”

Home Depot struck a similar tone albeit with less positive results, as the retailer's Q4 revenue missed analyst expectations for the first time since 2019.

The home improvement retailer saw outsized growth over the last couple of years, boosted by the pandemic home improvement boom. The current macroeconomic backdrop seems to be impacting sales, however.

Home Depot FCO Richard McPhail said, “So we work from kind of a fundamental assumption that consumer spending will be flat. We know that our market has seen a gradual shift that reflects the broader shift in the economy, in consumer spending from goods to services.”

Q4 GDP Revised

Fourth quarter gross domestic product (GDP) data was revised lower last week, with revised data showing a 2.7% year-over-year gain versus the 2.9% initial estimate.

The GDP revision was linked to a downward revision in consumer spending, while the Federal Reserve's key inflation metrics were revised higher.

Between the GDP revision, CPI, and Core PCE, the cumulative data contributes to a backdrop that favors more interest rate hikes.

Quiet Economic Calendar

The economic calendar is a quiet one this week. The environment could be a good backdrop for the markets to catch their breath after factoring in more rate hikes at future Fed meetings.

Consumer confidence, ISM Manufacturing Purchasing Managers’ Index, and ISM Services Purchasing Managers’ Index are the major economic data points for release this week.

Present Theme

The Fed has broadcasted several clues over the last month that its rate hike crusade may not be over. Now, the Fed has more data in the form of higher Core PCE to use as ammo for future rate hikes. Let’s remember that the Fed has communicated that their policy decisions will be “data-dependent.” Well, the most recent inflation data points have been higher than expected.

A Reminder Regarding Our Commitment

As we continue on our long-term investing journey, it’s important to stay focused on long-term goals, not short-term developments. Markets do not move up or down in a straight line.

With that said, we are always here when you have questions or financial needs.

401k

Thu, 02 Feb 2023 18:22:27 GMT

401k Rollovers

With any type of job change, resignation or lay off, many people often forget one vital task – transferring their 401(k). This may sound complicated, but we have broken it down into a few steps:

Compare plans. Contact your old company’s plan provider for more information on your current plan. Also connect with a representative at your new company who can tell you more about the new 401(k) offering. Review the investment returns and expenses for each plan to determine which is best.

Make your choice. You can either keep your 401(k) with your old employer (you will lose the ability to use it as a basis for loans), or you can roll it over into your new employer’s plan. Note that the decision may be made for you based on how much money is in your account. For example, accounts with less than $5,000 are typically required to be rolled over into a new account. And in cases of accounts with less than $1,000, your former employer will often send a check for the amount, and you will need to deposit the amount into a 401(k) or IRA within 60 days or risk associated taxes or penalties.

Rolling it over. To move your 401(k) to your new employer, contact the 401(k) administrator at the new company and request a new account address. Once you receive it, you can give this new address to your old employer – the money from your old plan will either transfer into the new account directly or you will be sent a check made out for the new address. This process is called a direct rollover, and it is the least risky method due to the fact that it can be done with no taxes or penalties. Other options include a direct trustee-to-trustee transfer, which is done for you electronically by your plan administrator. In addition, you can roll over your 401(k) into an IRA, but that does come with its own set of tax implications.

We are here to work together discussing all of the above with you.

If you have any questions or need assistance walking through this process, know that we are always here to help. Feel free to reach out to me anytime by phone or email.

Important Information from FINRA to consider before transferring your account. Trading instructions sent via email may not be honored. Please contact my office at 631-331-6599 or Securities America, Inc. at 800‐747‐6111 for all buy/sell orders. Please be advised that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets. The text of this communication is confidential and use by any person who is not the intended recipient is prohibited. Any person who receives this communication in error is requested to immediately destroy the text of this communication without copying or further dissemination. Advisory services offered through Securities America Advisors, Inc. Heritage Harbor Financial Associates and Securities America are separate entities.Your cooperation is appreciated.

IRS Announces New Limits

Mon, 30 Jan 2023 18:22:03 GMT

IRS Retirement Account Limits for 2023

401(k), 403(b), 457 plans, and Thrift Savings Plan

The amount individuals can contribute to their 401(k) plans in 2023 has increased to $22,500, up from $20,500 in 2022.

The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan has increased to $7,500, up from $6,500.

In total, participants 50 and over can contribute up to $30,000 ($22,500 + $7,500) beginning in 2023.

Traditional and Roth IRA

The limit on annual contributions to an IRA increased to $6,500, up from $6,000 in 2022.

The IRA catch-up contribution remains $1,000 for individuals 50 (and is not subject to an annual cost-of-living adjustment).

The income phase-out range for taxpayers making contributions to a Roth IRA has increased to between $138,000 and $153,000 for singles and heads of household, up from between $129,000 and $144,000.

The income phase-out range has increased for married couples filing jointly to between $218,000 and $228,000, up from between $204,000 and $214,000.

Please note: You can expect any tax documents to come directly from each company. If you need assistance with gathering the documents please give our office a call.*

New Year

Sun, 08 Jan 2023 23:35:17 GMT

2022 recap and a look into 2023

Goodbye, 2022

A challenging year for investors is now in the books. Higher interest rates, war, recession fears, and inflation quickly changed the market landscape for short-term investors, with long-term investors simply riding out the cycle. Investing with emotion tends to result in poorer long-term performance historically, and the folks that hold diversified portfolios simply stick to the plan while making adjustments.

The Federal Reserve raised interest rates seven times in 2022, with the major hikes being four 75-basis-point hikes in a row. Since the rate hikes have not really cooled the economy (yet), concerns over recession have weighed on sentiment.

Overall in 2022, the large-cap S&P 500 notched a 19.44% decline, the Nasdaq 100 declined by 32.97%, and the Dow Jones Industrial Average fell by 8.78%.

Value, Dividends, Defensiveness

High dividend-paying in defensive names and industrial sectors have been the themes of recent capital infusions. The Dow’s smaller decline than the Nasdaq and even the S&P 500 is an excellent illustration of this trend.

In fact, companies paid record dividends in 2022, increasing 10% year-over-year to $564.6 billion versus $511.2 billion in 2021, according to data from S&P Global Indices.

Rising interest rates could continue to play a role in corporate dividend payouts in 2023. With the 10-year note yield near 3.88% at the time of writing, higher corporate dividends are essential in order to compete.

Defensive sectors with high relative dividend yields, like utilities and consumer staples, have done well avoiding the bear market pinch of 2022.

Big Year for Energy

The lone S&P 500 sector with positive returns for 2022 was the S&P 500 Energy Index. Tacking on gains of 59.04% in 2022, the S&P 500 Energy Index became the market’s darling for ROI-hungry investors looking for a place to park capital in 2022.

The popular exchange-traded fund (ETF) SPDR Energy Select Sector fund ended the year with a 57.60% gain, its best year on record.

December: Bullish Manufacturing Surprise

The last trading week of 2022 was quiet for economic data releases, but the Chicago Purchasing Managers’ Index provided an upside surprise: 44.9 versus a 41.0 consensus and a nice rise from the November reading of 37.2.

While the metric still remains in contraction territory (under 50.0), upward movement is welcome, and the data comes just days after the Richmond Fed’s manufacturing survey showed modest improvement.

A potential shift to “Made in the USA” could be underway, courtesy of supply chain issues.

The Takeaway

December's market performance was a fitting end to a dismal year and was a microcosm of 2022.

In the short term, the prevailing market themes remain centered around interest rates and inflation. Uncertainty over the global recession is still a factor in broad sentiment as we put 2022 to rest. Higher interest rates are likely to persist early in 2023, and once the effects have sufficiently cooled the economy, the Fed could strike a different tone later in the year.

With that overview completed, if your New Year’s resolution is financially based, or if there is anything our team can help you with heading into 2023, please feel free to contact us.

We look forward to working together in 2023!

Fiduciary Financial Advisor

Tue, 20 Dec 2022 14:30:09 GMT

At HHFA, all our advisors are fiduciaries .
"An advisor that calls themselves a fiduciary seeks to minimize conflicts of interest, be transparent and live up to the trust placed in them."

Fiduciary is a good word to hear when you’re searching for a financial advisor. An advisor that calls themselves a fiduciary seeks to minimize conflicts of interest, be transparent and live up to the trust placed in them.

More specifically, fiduciary financial advisors must:

Put their client’s best interests before their own, seeking the best prices and terms.
Act in good faith and provide all relevant facts to clients.
Avoid conflicts of interest and disclose any potential conflicts of interest to clients.
Do their best to ensure the advice they provide is accurate and thorough.
Avoid using a client’s assets to benefit themselves, such as purchasing securities for their own account before buying them for a client.
Fiduciary usually refers to someone who manages assets on the behalf of an individual, a family, a company or any other entity.

The Bottom Line

When you’re working with a financial professional, it’s key to find out if he or she follows the fiduciary standard. A fiduciary has different obligations than someone bound only by the suitability rule. Fiduciaries must always act in their client’s best interest.

Next Step: Book an appointment today with one of our financial advisors near you.

HHFA Blog

What ‘April Theory’ Is And Why It’s Trending In The Workplace

Dollar Cost Averaging

It’s Time to File Your 2025 Tax Return. Here’s What to Know.

Paper Tax Refund Checks Being Phased Out by the IRS

During the 2025 tax filing season, the IRS issued more than 93.5 million tax refunds to individual tax filers, and 93% of those, almost 87 million refunds, were issued through direct deposit. Source: Internal Revenue Service, 2025

Resolutions vs. Reality

Setting the Stage for Success

The Financial Hierarchy Of Needs In Retirement

Budget Tips

5 Budget Best Practices to Improve Your Financial Management Today

401k News

Protect yourself (& your money) from scammers

Spot, avoid & report scams

Navigating Post-Tax Season

New Year, New Financial Game Plan

8 Steps To Kickstart 2025

Investment Spotlight

History of The S&P 500

Life Insurance Awareness Month

Average 401(k) Balance by Age in 2024

Benchmarking Your Retirement Savings

529

Your 529 Plan Just Got A Juicy New Perk

Solo Years of Retirement

Why The Solo Years Of Retirement Are The Most Critical And How To Plan For Them

Top 10 trends for 2024

Europe’s economy will be more resilient than the US, the dollar will weaken and investors will demand a premium on long-term debt.

RMD

Required Minimum Distributions- As the deadline for taking required minimum distributions nears, about 20% of retirement account holders who must make these withdrawals this year have yet to do so, data from Fidelity Investments suggests.

Fiduciary

Five Ways to Prepare Your Finances for the Holidays

October

National Financial Planning & Estate Planning Month this October

Women's Executive (WE) Summit

August 7, 2023

FAFSA

Free Application for Federal Student Aid

3 Myths: About Annuities

In today’s customizable, satisfaction-guaranteed world, it’s no surprise that you want a financial option in retirement that provides both guaranteed income and protection from market volatility. There is a solution that offers both: Annuities.

Secure Act

How does this new law impact your retirement savings plan?

"Lunch with Leaders" - Special guest speaker Rodney K. Harrison, the Commissioner of the Suffolk County Police Department.

First Republic Collapse

Echoing the failures of Silicon Valley Bank and Signature Bank, First Republic collapsed

Spring Clean Your Finances

8 Tips to Spring Clean Your Finances

Update RE: Economy, Inflation, and Fed

1st Quarter 2023

Fixed Annuity

A deeper dive into fixed annuities...

RE: What Happened with Silicon Valley Bank

Silicon Valley Bank and its parent company SVB Financial Group failed as a bank.

2/27/23 Market Update

After starting 2023 with a boom in January, major U.S. stock indexes fell last week, marking the third straight week of declines for the S&P 500.

401k

401k Rollovers

IRS Announces New Limits

IRS Retirement Account Limits for 2023

New Year

2022 recap and a look into 2023

Fiduciary Financial Advisor

At HHFA, all our advisors are fiduciaries . "An advisor that calls themselves a fiduciary seeks to minimize conflicts of interest, be transparent and live up to the trust placed in them."

During the 2025 tax filing season, the IRS issued more than 93.5 million tax refunds to individual tax filers, and 93% of those, almost 87 million refunds, were issued through direct deposit.

Source: Internal Revenue Service, 2025

Why The Solo Years Of Retirement Are The Most Critical
And How To Plan For Them

Required Minimum Distributions-
As the deadline for taking required minimum distributions nears, about 20% of retirement account holders who must make these withdrawals this year have yet to do so, data from Fidelity Investments suggests.

In today’s customizable, satisfaction-guaranteed world, it’s no surprise that you want a financial option in retirement that provides both
guaranteed income and protection from market volatility.

There is a solution that offers both: Annuities.

At HHFA, all our advisors are fiduciaries .
"An advisor that calls themselves a fiduciary seeks to minimize conflicts of interest, be transparent and live up to the trust placed in them."