With all the bustle of the holidays right around the corner, the end of the year will be here before we know it. While there’s still time, consider checking off a few of these year-end financial planning items from your to-do list.
When speaking with clients, peers, and friends alike, there are some common questions: "When will this bull market end?" or "It's too late to buy stocks, right? They have to go down from here." Sometimes they even use the word "bubble!" The short answer is: I have no idea and anyone who tells you they do is probably lying, misguided, or foolish. The long answer is more complicated, and involves taking many factors into consideration, especially global interest rates. Also, bubbles require exuberance and leverage. The fact that the questions above are being asked so often indicates that exuberance is low and leverage likely is too.
It’s known as account sprawl and longtime investors know how easily it happens. You switch jobs and leave behind the 401k. The local bank was offering that great introductory CD rate. Your spouse inherited a brokerage account with all those utility stocks. There are also the savings bonds Aunt Lucille gave you on your birthdays. Don't forget about your old company stock in that dividend reinvestment plan. Accounts accumulate over the years and you end up with assets spread out over an assortment of financial institutions. They clutter up over time to the point where you are unsure of what you have or exactly where everything is. Staying on top of it all becomes an increasingly difficult task. While consolidating all your assets is likely not possible, effectively limiting the number of accounts, service providers and investment relationships can provide more than just simplicity and convenience.
The Social Security Administration (SSA) recently released its planned changes for calendar year 2018. Not surprisingly, to both current beneficiaries and those weighing the pros and cons of starting to collect, the item of greatest interest is the cost-of-living adjustment (COLA) planned for the year ahead.
The Good News
The SSA calls for a 2.0% COLA which compares nicely to the near-zero percent increase of 2017 and the goose egg received in 3 of the previous 8 years. In fact, this is the highest COLA since 2012.
The Bad News
For most beneficiaries, Medicare Part B premiums are deducted from Social Security and, while the impact of the Part B premium on net benefits next year will vary due to the "hold harmless" provision, it's likely most Medicare enrolees will pay higher premiums.
Nervous yet? I can't imagine why not. After all, aren't we living in the age of the "everything bubble"? Real estate, stock prices, crypto-currencies, credit, you name it, valuations seemingly lurch from one peak to the next...and each peak ratchets the altimeter up to a level never before seen. Like poor Daedalus escaping the bonds of captivity while watching his reckless son Icarus soar higher and closer to the sun, investors yearn for the rewards of flight and are simultaneously scared witless whenever they glance down.
By now nearly everyone is aware of the recent security breach at Equifax that reportedly has touched 150 million Americans. While this certainly doesn't mean half the country had their identities stolen, given the scope and nature of this hack it's just common sense to spend a few minutes and find out if your personal data may have been compromised. Here's some quick tips we think will be useful:
In recent days Hurricane Harvey has already cut a broad swath of destruction through Houston and up along the Texas coastline. The devastation caused by Hurricane Irma's post Labor Day path through the eastern Caribbean and up the gulf coast of Florida is still being tallied. While the loss of life won't be as horrific as some feared before the storm made landfall, one thing is certain...the bill for all the property damage is going to be a whopper.
By some estimates, in the US alone the total combined clean-up costs of these two powerful storms will exceed $100 billion and could swell to 2 or 3 times that amount by the time the water recedes.
To put that number in perspective, the low end of the cleanup estimate is enough to hand out a $100,000 no-strings-attached scholarship to every single U.S. student currently enrolled in a 4 year college or university. Sadly, many of the hurricane losses will be completely uninsured and the financial and emotional burden will likely fall on the shoulders of some of the most vulnerable.
When it comes to planning for the future, it can be hard for entrepreneurs to focus on anything beyond their current endeavor. Managing personal finances is often an afterthought as so much time and energy is poured into creating and growing a business. Fortunately, there are a number of strategies entrepreneurs can utilize to help set themselves up for financial independence while they concentrate on their true passion.
Research has revealed that spending money on others actually makes us happier than spending it on ourselves. According to the Giving USA Foundation, a record amount of money was given to U.S. charities in 2016. The rise in total giving was spurred largely by giving from individuals versus foundations, estates and corporations. Apparently we've discovered a loophole in the old adage "Money doesn't buy happiness". If you are considering making a relatively substantial donation to a charitable organization, it is in your best interest, as well as the cause that is important to you, to seek out the most effective manner to bring about maximum benefit.