Wednesday, May 3, 2017

Combining Your Finances When You Marry


How separate (or intertwined) should your financial lives be?

Provided by Benjamin Bogetto



Some spouses share everything with each other – including the smallest details of their personal finances. Other spouses decide to keep some individual financial decisions and details to themselves, and their relationship is just fine.   

Just as a marriage requires understanding, respect, and compromise, so does the financial life of a married couple. If you are marrying soon or have just married, you may be surprised (and encouraged) by the way your individual finances may and may not need to change.

If you are like most single people, you have two or three bank accounts. Besides your savings account and your checking account, you may also have a “dream account” where you park your travel money or your future down payment on a home. You can retain all three after you marry, of course – but when it comes to your expenses, you have a fundamental decision to make.

After you marry, the two of you may also find it best to have three checking accounts. Yours, mine, and ours? Essentially. A joint account can be set up specifically for household expenses, with each spouse retaining an individual checking account. Of course, each spouse might also maintain an individual savings account.

Do you want to have a joint bank account? The optimal move is to create it as soon as you marry. Some newlyweds find they need a joint bank account only after some financial trial-and-error; they would have been better off starting out married life with one.  
  
If you only have individual checking accounts, that forces some decisions. Who pays what bill? Should one of you pay most of the bills? If you have a shared dream (like buying a home), how will you each save for it? How will you finance or pay for major purchases?

It is certainly possible to answer these money questions without going out and creating a joint account. Some marrying couples never create one – they already have a bunch of accounts, so why add another? There can be a downside, though, to not wedding your finances together in some fashion.

Privacy is good, but secrecy can be an issue. Over time, that is what plagues some married couples. Even when one spouse’s savings or investments are individually held, effects from that individual’s finances may spill into the whole of the household finances. A spouse who has poor borrowing or spending habits, an addiction, a sudden major debt issue, or an entirely secret bank account may be positioning himself or herself for a money argument. The financial impact of these matters may affect both spouses, not just one.

A recent Ameriprise Financial survey of 1,500 couples found that nearly a third of them argued about money matters at least once per month. About 70% of the respondents in that survey reported making purchases without informing their spouse or partner. Seventy-three percent said that they made money decisions differently than their better half did. In households like these, a little communication could help put both spouses or partners on the same page.1 

So above all, talk. Talk to each other about how you want to handle the bills and other recurring expenses. Discuss how you want to save for a dream. Chat about the way you want to invest and the amount of risk and debt you think you can tolerate. Combine your finances to the degree you see fit, while keeping the lines of communication ever open.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

Citations.
1 - bloomberg.com/news/features/2016-09-29/couples-can-spy-on-each-other-s-spending-with-this-new-bank-account [9/29/16]

Financial Health...For Now & Tomorrow



Contact us Today

Telephone - 314-858-1602

10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127

Follow Us

at No comments:
Labels: , , ,
Location: St. Louis, MO 63127, USA

Thursday, April 27, 2017

Have a Plan, Not Just a Stock Portfolio


Diversification still matters. One day, this bull market will end.

Provided by Benjamin Bogetto 


In the first quarter of 2017, the bull market seemed unstoppable. The Dow Jones Industrial Average soared past 20,000 and closed at all-time highs on 12 consecutive trading days. The Nasdaq Composite gained almost 10% in three months.1

An eight-year-old bull market is rare. This current bull is the second longest since the end of World War II; only the 1990-2000 bull run surpasses it. Since 1945, the average bull market has lasted 57 months.2
 
Everyone knows this bull market will someday end – but who wants to acknowledge that fact when equities have performed so well?
 
Overly exuberant investors might want to pay attention to the words of Sam Stovall, a longtime, bullish investment strategist and market analyst. Stovall, who used to work for Standard & Poor’s and now works for CFRA, has seen bull and bear markets come and go. As he recently noted to Fortune, epic bull markets usually end “with a bang and not a whimper. Like an incandescent light bulb, they tend to glow brightest just before they go out.”2
 
History is riddled with examples. Think of the dot-com bust of 2000, the credit crisis of 2008, and the skyrocketing inflation of 1974. These developments wiped out bull markets; this bull market could potentially end as dramatically as those three did.3
 
A 20% correction would take the Dow down into the 16,000s. Emotionally, that would feel like a much more significant market drop – after all, the last time the blue chips fell 4,000 points was during the 2007-09 bear market.4
  
Investors must prepare for the worst, even as they celebrate the best. A stock portfolio is not a retirement plan. A diversified investment mix of equity and fixed-income vehicles, augmented by a strong cash position, is wise in any market climate. Those entering retirement should have realistic assessments of the annual income they can withdraw from their savings and the potential returns from their invested assets.

Now is not the time to be greedy. With the markets near historic peaks, diversification still matters, and it can potentially provide a degree of financial insulation when stocks fall. Many investors are tempted to chase the return right now, but their real mission should be chasing their retirement objectives in line with the strategy defined in their retirement plans. In a sense, this record-setting bull market amounts to a distraction – a distraction worth celebrating, but a distraction, nonetheless.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.


Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

 Citations.
1 - money.cnn.com/2017/03/31/investing/trump-rally-first-quarter-wall-street/index.html [3/31/17]
2 - fortune.com/2017/03/09/stock-market-bull-market-longest/ [3/9/17]
3 - kiplinger.com/article/investing/T052-C008-S002-5-reasons-bull-markets-end.html [4/3/14]
4 - thebalance.com/stock-market-crash-of-2008-3305535 [4/3/17]

Financial Health...For Now & Tomorrow



Contact us Today

Telephone - 314-858-1602

10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127

Follow Us

at No comments:
Labels: , , ,
Location: St. Louis, MO 63127, USA

Wednesday, April 19, 2017

Retirement Insight



Presented by: Benjamin Bogetto


Why You Might Not Want a Lump-Sum Retirement Payout
Do you have the option of receiving your retirement money as a lump sum? You may want to turn that choice down. A new MetLife study, Paycheck or Pot of Gold, warns of the “lottery effect” that can occur when all that money makes its way into a household at once. Surveying more than 1,050 retirement plan participants who had taken lump-sum payouts, MetLife found that 21% had already used up 100% of that money; on average, it had disappeared in less than six years.

Like a lottery winner bereft of financial counseling, a recipient of a lump-sum retirement payout can too easily find ways to part with those dollars. What did the respondents to the MetLife survey do within a year of taking their lump sums? In some cases, the money was practically spent: 27% used the funds to attack debt, and 20% said that they made home improvements. On the other hand, 22% gave some of the money away (sometimes to family members and friends), and 12% bought a new car or took a major vacation. Looking back, 31% lamented some of their buying and spending decisions in the first year after taking the lump sum, and 23% regretted financial gifts they had made. Education about the merits and demerits of lump-sum payouts may be insufficient – in the survey, only 45% of pension plan participants offered the choice between a lump sum or a lifelong income stream remembered being given a comparison of the two options.1   
    
Baby Boomers Redefine the Recliner
The easy chair – a mainstay of living rooms during the 1960s and 1970s – is making a comeback thanks to demand from boomers. Recliners back then were often big, bulky, and ugly; now, they have cleaner lines and smaller footprints. Lift chairs, which help seated people rise more easily, are also losing their institutional look.
  
La-Z-Boy introduced the recliner back in 1928, and if the furniture makers who came up with that first design were to see recliners today, they would undoubtedly be impressed with their evolution. Some of the new reclining chairs and sectionals are “wall huggers” – the seat moves forward when the unit reclines, which means you can place the recliner against a wall. Many have better lumbar and neck support than their predecessors, and some will even charge your phone or keep your drink cool. A 2015 Furniture Today study showed that 40% of recliners were being bought by baby boomer households.2

On the BRIGHT SIDE
A little-known IRA fact: if you retire, but your spouse keeps working, your spouse may be eligible to contribute up to $6,500 a year to an IRA (or IRAs) you own.3

Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

CITATIONS.
1 - nextavenue.org/lump-sum-annuity-retirement/ [4/11/17]
2 - mercurynews.com/2017/03/27/embraced-by-baby-boomers-recliners-get-a-makeover/ [3/27/17]
3 - kiplinger.com/article/retirement/T054-C000-S001-4-overlooked-tax-breaks-for-retirees.html [3/14/17]
4 - todayifoundout.com/index.php/2015/01/plain-old-soap-doesnt-kill-bacteria-can-really-effective-getting-rid/ [1/8/15]

Financial Health...For Now & Tomorrow



Contact us Today

Telephone - 314-858-1602

10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127

Follow Us

at No comments:
Labels: , , ,
Location: St. Louis, MO 63127, USA

Monday, April 17, 2017

Bogetto & Associates Presents: Monthly Economic Update

April 2017

THE MONTH IN BRIEF
Stocks went sideways rather than north in March, with the S&P 500 losing just 0.04%. The Federal Reserve made another quarter-point interest rate move, and overseas, the United Kingdom initiated Brexit proceedings. While new data showed weak consumer spending, consumer optimism remained high and hiring was once again strong. A subpar month for commodities did bring major gains for two energy futures. In the housing market, existing home sales decelerated, while new home sales picked up. A little volatility did not upset the primarily bullish outlook on Wall Street.1
    

DOMESTIC ECONOMIC HEALTH
On March 15, the Federal Reserve felt confident enough in the economy to raise the benchmark interest rate to the 0.75%-1.00% range. The central bank left its 2017 dot-plot unchanged – its forecast still calls for a total of three rate hikes this year.2 
  
Last month, most of the major indicators affirmed the health of the economy. The only question mark concerned household spending, and the 0.1% February gain may have just been an aberration. Consumer incomes did increase 0.4% in February, so it appeared households were pocketing more of what they had made; in fact, there was only a 0.1% February rise in retail sales. Speaking of consumer spending, the Bureau of Economic Analysis revised fourth-quarter growth up to 2.1% as the month ended; even with that upgrade to the Q4 GDP number, the economy grew just 1.6% last year, a full percentage point less than in 2015.3,4

Americans felt very confident about the state of the economy in March. The Conference Board’s index jumped up 9.5 points in a month to a remarkably high reading of 125.6. The University of Michigan’s monthly index of consumer sentiment finished March at 96.9, up 0.6 points from its final February mark.5,6

The labor market showed further strength. Department of Labor data showed the economy adding 235,000 net new jobs in February, with the construction and education/health care sectors accounting for 120,000 of them. This sent the U-3 unemployment rate down 0.1% further to 4.7%, while the U-6 rate measuring “total” unemployment declined another 0.2% to 9.2%.7

In the opening week of March, the latest Institute for Supply Management gauges of manufacturing and service sector activity showed both sectors in good shape during February. At 57.6, the ISM services PMI reached its highest point since October 2015; the U.S. service sector saw its eighty-sixth straight month of expansion. The ISM factory PMI rose 1.7 points in February to 57.7.8
                
The Federal Reserve’s preferred inflation gauge, the PCE price index, showed a 2.1% annualized gain for the year ending in February. That was a 5-year peak. Surpassing that, the headline Consumer Price Index rose 2.7% in the 12 months concluding in February, even with a mere 0.1% monthly advance. Producer prices were up 2.2% year-over-year with a February increase of 0.3%.3,5

GLOBAL ECONOMIC HEALTH
Just before March ended, United Kingdom Prime Minister Theresa May invoked Article 50 of the Lisbon Treaty, formally triggering the start of the Brexit process. The clock is now ticking: within two years, the U.K. will make either a “hard” or “soft” exit from the European Union, with the first round of negotiations getting underway at an E.U. summit commencing April 29. The big question is whether the U.K. will be able to stay in the E.U.’s single market after the Brexit; it has said it might forfeit such trade access in exchange for curbing immigration from other E.U. member nations. Should it retain that trade access, U.K. citizens will still be allowed to work and live in other E.U. countries without getting visas. If negotiations somehow do not result in an exit deal by April 2019, then the terms of the Brexit could be left to the courts and/or the rules of the World Trade Organization.9
    
By World Bank projections, five Asian economies will expand by 6.5% or more this year: Laos (7.0%); Cambodia, Myanmar, and the Philippines (6.9%); and China (6.5%). China’s growth is at a 26-year low in 2017, but foreign investment in the Chinese economy is forecast to rise to 15.0% this year, compared to only 4.1% in 2016. The March impeachment of South Korean President Park Geun-hye delivered another black eye to the fourth largest economy in Asia; Park and several Samsung officials were disgraced with corruption charges this winter, an especially troubling development given that the Samsung conglomerate accounts for about 15% of the South Korean economy. South Korea has already seen the collapse of Hanjin Shipping, one of the world’s major cargo lines, and its government also recently bailed out its major shipbuilders.10,11
         
WORLD MARKETS
March saw many foreign benchmarks advance. At the forefront was Spain’s IBEX 35. It rose 9.50% for the month. Several other indices added 3% or more in March: Argentina’s MERVAL, 5.92%; France’s CAC 40, 5.43%; Germany’s DAX, 4.04%; Mexico’s Bolsa, 3.60%; Korea’s KOSPI, 3.28%; India’s Sensex, 3.05%; the FTSE Eurofirst 300, 3.03%. Other March gains: Australia’s All Ordinaries, 2.48%; MSCI Emerging Markets, 2.35%; Hong Kong’s Hang Seng, 1.56%; Canada’s TSX Composite, 0.96%; the United Kingdom’s FTSE 100, 0.82%; MSCI World, 0.82%.12,13

There were also three notable retreats. China’s Shanghai Composite declined 0.59%; Japan’s Nikkei 225 lost 1.10%; and Russia’s MICEX fell 1.96%.12
          
COMMODITIES MARKETS
The price of both natural gas and unleaded gasoline climbed in March: the first of those two commodities gained 15.28%, the second 12.17%. Cocoa futures added 3.87% last month; wheat futures, 0.29%. In sum, that was the good news.14

Unfortunately, many commodities turned south in March. Oil made a 5.83% descent on the NYMEX, settling at $50.85 as the month ended. Copper fell 2.07%; heating oil, 3.17%; platinum, 7.39%; soybeans, 7.75%; and sugar, 12.95%. Losses of less than 1% were incurred by silver (0.14%), cotton (0.21%), corn (0.48%), and coffee (0.64%). Gold closed March at $1,247.40; silver at $18.28. The U.S. Dollar Index fell 0.79% to 100.56, slipping to -1.61% YTD.1,14
     
REAL ESTATE
Reports from the National Association of Realtors brought good news and bad news. February had seen a 3.7% dip in existing home sales; on the other hand, there was a 5.5% gain for pending home sales. A Census Bureau report showed new home buying improving 6.1% in February; this was on the heels of a 5.3% gain in January.5
 
The latest (January) edition of the 20-city S&P/Case-Shiller home price index displayed a 0.2% monthly gain, which left its 12-month advance at 5.7%. Housing starts rose 3.0% in February after a 1.9% dip in January, while permits for future construction fell 6.2% after a 4.6% January boost.5  

Home loan rates did creep a bit higher across March. In Freddie Mac’s March 30 Primary Mortgage Market Survey, the 30-year fixed had an average interest rate of 4.14%, up from 4.10% on March 2. In the same period, the average interest rate on the 15-year FRM moved from 3.32% to 3.39%, while the average rate on the 5/1-year ARM increased from 3.14% to 3.18%.15
        
LOOKING BACK…LOOKING FORWARD
The Nasdaq Composite was the only one of the three major indices to post a March gain, adding a healthy 1.48%. Both the S&P 500 and Russell 2000 took tiny losses, respectively declining 0.04% and 0.05%. The Dow Jones Industrial Average fell 0.72%. The CBOE VIX pulled back 4.26%. When Wall Street closed on March 31, these indices settled as follows: S&P, 2,362.72; DJIA, 20,663.22; NASDAQ, 5,911.74; RUT, 1,385.92; VIX, 12.37. Looking further at market statistics, one notices a 28.30% 52-week gain for the Russell 2000 through the end of March. The best performer last month was the PHLX Semiconductor Sector index, which rose 4.33% to take its 52-week advance to 52.04%.1


March ended quietly, with the bulls taking a breather. Will investors find hopes or fundamentals to rally around in April? The next earnings season is two weeks ahead, and FactSet forecasts annualized earnings growth of 9.1% for S&P 500 firms – a bullish projection, indeed, that would represent the best year-over-year improvement since Q4 2011. Any nascent plans for tax reform could also stoke bullish sentiment, even though reforms could take many months to enact. While the rally waned at the end of March, it could find some fresh legs as the second quarter begins, with the markets experiencing relatively placid weather so far in 2017.19

UPCOMING ECONOMIC RELEASES: What major news items will Wall Street watch for in April? The March Challenger job-cut report (4/6), the Department of Labor’s March employment report (4/7), the March PPI and the preliminary April consumer sentiment index from the University of Michigan (4/13), March retail sales and the March CPI (4/14), March industrial production, housing starts and building permits (4/18), a new Federal Reserve Beige Book (4/19), the Conference Board’s latest leading indicators report (4/20), March existing home sales (4/21), the April Conference Board consumer confidence index and March new home sales (4/25), March hard goods orders and pending home sales (4/27), and then, the federal government’s initial estimate of first-quarter growth and the final April consumer sentiment index from the University of Michigan (4/28). The March consumer spending report and PCE price index will both be released on May 1.

Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The CBOE Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The IBEX 35 is the benchmark stock market index of the Bolsa de Madrid, Spain's principal stock exchange. The MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The Mexican Stock Exchange, commonly known as Mexican Bolsa, Mexbol, or BMV, is the only stock exchange in Mexico. The Korea Composite Stock Price Index or KOSPI is the major stock market index of South Korea, representing all common stocks traded on the Korea Exchange. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). The FTSE Eurofirst 300 measures the performance of Europe's largest 300 companies by market capitalization and covers 70% of Europe's market cap. The All Ordinaries (XAO) is considered a total market barometer for the Australian stock market and contains the 500 largest ASX-listed companies by way of market capitalization. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The Hang Seng Index is a free float-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets.  The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE).  The Nikkei average is the most watched index of Asian stocks. The MICEX 10 Index (Russian: Индекс ММВБ10) is an unweighted price index that tracks the ten most liquid Russian stocks listed on MICEX-RTS in Moscow. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. PHLX Semiconductor Sector (SOX) is a Philadelphia Stock Exchange capitalization-weighted index composed of companies primarily involved in the design, distribution, manufacture, and sale of semiconductors. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.
1 - barchart.com/stocks/indices#/viewName=performance [3/31/17]
2 - marketwatch.com/story/fed-raises-interest-rates-by-a-quarter-point-sees-two-move-moves-this-year-2017-03-15 [3/15/17]
3 - schaeffersresearch.com/content/ezines/2017/03/31/dow-jones-industrial-average-futures-slip-but-stocks-set-for-strong-quarter [3/31/17]
4 - reuters.com/article/us-usa-economy-gdp-idUSKBN1711MX [3/31/17]
5 - investing.com/economic-calendar/ [3/31/17]
6 - sca.isr.umich.edu/ [3/31/17]
7 - equities.com/news/a-strong-jobs-report-and-a-growing-divergence-between-jobs-and-employment [3/10/17]
8 - instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm [3/3/17]
9 - usatoday.com/story/news/world/2017/03/29/britain-invokes-article-50-4-things-know-brexit/99769996/ [3/29/17]   
10 - forbes.com/sites/ralphjennings/2017/03/23/east-asias-5-fastest-growing-countries-in-2017/ [3/23/17]
11 - money.cnn.com/2017/03/10/news/economy/south-korea-economy-president-park-out/ [3/10/17]
12 - markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [3/31/17]
13 - msci.com/end-of-day-data-search [3/31/17]
14 - money.cnn.com/data/commodities/ [3/31/17]
15 - freddiemac.com/pmms/archive.html?year=2017 [4/2/17]
16 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F31%2F16&x=0&y=0 [3/31/17]
16 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F31%2F16&x=0&y=0 [3/31/17]
16 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F31%2F16&x=0&y=0 [3/31/17]
16 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F30%2F12&x=0&y=0 [3/31/17]
16 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F30%2F12&x=0&y=0 [3/31/17]
16 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F30%2F12&x=0&y=0 [3/31/17]
16 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F30%2F07&x=0&y=0 [3/31/17]
16 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F30%2F07&x=0&y=0 [3/31/17]
16 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F30%2F07&x=0&y=0 [3/31/17]
17 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/31/17]
18 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/31/17]
19 - kiplinger.com/article/investing/T052-C008-S001-market-outlook-for-q2.html [3/31/17]

Financial Health...For Now & Tomorrow



Contact us Today

Telephone - 314-858-1602

10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127

Follow Us

at No comments:
Labels: , ,
Location: St. Louis, MO 63127, USA

Tuesday, April 4, 2017

Using an IRA Trust

What is it? What kind of benefit could it provide?

Provided by Benjamin Bogetto


Seemingly everyone has heard of an IRA, but few people know about IRA trusts. Perhaps more people should, for an IRA trust may provide a way to “stretch” IRA assets for decades to benefit multiple generations.
   
An IRA trust is simply a revocable living trust designed to hold IRA assets. It will continue to house them after your death, but that will not prevent you from distributing those assets to your heirs. This is because an IRA trust also contains one or more sub-trusts, which can be designated and customized for your beneficiaries.1
 
At your option, these sub-trusts can be made lifetime dynasty trusts (sometimes called generation-skipping trusts). Dynasty trusts are complex, but they can potentially allow your grandchildren and great-grandchildren to receive distributions of IRA assets. The distributions may occur decades from now. That may be exactly what you prefer; you may want to give your IRA assets to your grandkids when they are in their forties instead of their twenties.1,2
 
Alternately, you can draft the sub-trusts as accumulation trusts or conduit trusts. An accumulation trust accepts the Required Minimum Distributions (RMDs) from the IRA, and the trust may only distribute them to the beneficiary at the discretion of the trustee. A conduit trust can pay out IRA RMDs to the beneficiaries as soon as the trust receives them (and as the trustee permits).1
 
IRA trusts are designed to guard against two things happening to your IRA assets. If your children or grandchildren just inherit your IRA, they could ask the IRA custodian to pay out its entire balance to them in a lump-sum distribution. That would waste the chance to “stretch” the invested IRA assets. In an IRA trust, a trustee oversees the IRA assets, effectively serving as a barrier to such a decision. In addition, since the IRA assets are parked within a trust, they are out of the reach of “predators and creditors,” ex-spouses, and the courts.1,3  

You can also set up an IRA trust sub-trust as a special needs trust to benefit a disabled adult. Funds from a special needs trust will not impact the government assistance that person receives.3

Since an IRA trust is a revocable living trust, you are free to revise its terms at any point before your death (at which time the trust becomes irrevocable).1
    
You need a competent estate planner to create an IRA trust. An attorney designing one should be well versed in the specific legal terminology pertaining to inherited IRAs. Omitting or misusing key phrases could make the trust invalid or break IRS rules. Sub-trusts created within the IRA trust need to be named as primary or secondary beneficiaries of the IRA assets. As an example, naming the IRA trust as the beneficiary of your IRA is inconsistent with the purpose of the sub-trusts.1,4
   
A properly structured IRA trust can potentially “stretch” IRA assets for decades. If you have a large IRA and want your IRA assets to be carefully distributed after you pass away, this estate planning vehicle is worth exploring.  

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

Citations.
1 - thebalance.com/ira-trust-a-special-type-of-revocable-trust-for-your-ira-3505399 [6/25/16]
2 - fool.com/investing/2016/08/17/do-you-need-a-generation-skipping-trust.aspx [8/17/16]
3 - thebalance.com/what-are-the-benefits-of-an-ira-trust-3505398 [6/29/16]
4 - bankrate.com/finance/retirement/naming-trust-ira-beneficiary.aspx [1/14/16]

Financial Health...For Now & Tomorrow



Contact us Today

Telephone - 314-858-1602

10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127

Follow Us

at No comments:
Labels: , , ,
Location: St. Louis, MO 63127, USA

Wednesday, March 29, 2017

Key Estate Planning Mistakes to Avoid

Too many people make these common errors.

Provided by Benjamin Bogetto 



Many affluent professionals and business owners put estate planning on hold. Only the courts and lawyers stand to benefit from their procrastination. While inaction is the biggest estate planning error, several other major mistakes can occur. The following blunders can lead to major problems.
   
Failing to revise an estate plan after a spouse or child dies. This is truly a devastating event, and the grief that follows may be so deep and prolonged that attention may not be paid to this. A death in the family commonly requires a change in the terms of how family assets will be distributed. Without an update, questions (and squabbles) may emerge later.
   
Going years without updating beneficiaries. Beneficiary designations on qualified retirement plans and life insurance policies usually override bequests made in wills or trusts. Many people never review beneficiary designations over time, and the estate planning consequences of this inattention can be serious. For example, a woman can leave an IRA to her granddaughter in a will, but if her ex-husband is listed as the primary beneficiary of that IRA, those IRA assets will go to him per the beneficiary form. Beneficiary designations have an advantage – they allow assets to transfer to heirs without going through probate. If beneficiary designations are outdated, that advantage matters little.1,2
   
Thinking of a will as a shield against probate. Having a will in place does not automatically prevent assets from being probated. A living trust is designed to provide that kind of protection for assets; a will is not. An individual can clearly express “who gets what” in a will, yet end up having the courts determine the distribution of his or her assets.2 

Supposing minor heirs will handle money well when they become young adults. There are multi-millionaires who go no further than a will when it comes to estate planning. When a will is the only estate planning tool directing the transfer of assets at death, assets can transfer to heirs aged 18 or older in many states without prohibitions. Imagine an 18-year-old inheriting several million dollars in liquid or illiquid assets. How many 18-year-olds (or 25-year-olds, for that matter) have the skill set to manage that kind of inheritance? If a trust exists and a trustee can control the distribution of assets to heirs, then situations such as these may be averted. A well-written trust may also help to prevent arguments among young heirs about who was meant to receive this or that asset.3   

Too many people do too little estate planning. Avoid joining their ranks, and plan thoroughly to avoid these all-too-frequent mistakes. 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

Citations.
1 - thebalance.com/why-beneficiary-designations-override-your-will-2388824 [10/8/16]
2 - fool.com/retirement/2017/03/03/3-ways-to-keep-your-estate-out-of-probate.aspx [3/3/17]
3 - info.legalzoom.com/legal-age-inherit-21002.html [3/16/17]

Financial Health...For Now & Tomorrow



Contact us Today

Telephone - 314-858-1602

10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127

Follow Us

at No comments:
Labels: , , ,
Location: St. Louis, MO 63127, USA
Subscribe to: Posts (Atom)