Philip Lee CFP®
This is the time of year when many may be spending time with family and/or friends while enjoying the holiday season. It's also the time when people typically make New Year resolutions – often centered around physical health or financial health.
These are some Frequently Asked Questions I get for those thinking about their finances. Of course there is more to financial planning and investment advisory services than these limits:
Q: What is the max I can contribute to my 401(k), 403(b), 457 plan in 2017?
A: There is no change in 2017. The elective deferral amount remains constant at $18,000 and if you are 50 years old or older you can defer an additional $6,000 for a total of $24,000
By Philip Lee, CFP®
Are you a Massachusetts resident and saving towards college via a 529 Plan?
Whew…... so, this current election cycle is over and soon there will be a new administration. In the past two weeks, I find clients who are overwhelmed with the election, the barrage of 24-hours news on social media and the radio, and have a multitude of questions or concerns about what may or may not happen with the markets. Might inflation start to flare? How many my taxes change? Will volatility increase?
While I cannot predict the future, I do encourage clients to focus on those things they can control, be it ensuring getting sufficient sleep, spending time with friends and family, or proactively making positive financial decisions. We didn’t see any major tax changes in 2016 which is common in an election year.
So with this in mind, here’s a reminder for year-end planning:
- Breathe, relax, be thankful. Repeat
- Convert your IRA (or a portion of) to a Roth IRA.
- Establish a solo 401(k) account for self-employed individuals wanting to defer income for the 2016 tax year. You can fund the solo 401(k) later.
There’s no denying that Americans are in love with their credit cards; but increasingly, the romance is rocked by the actions of unsavory characters seeking to come between them. More specifically, they’re seeking to steal your credit card information and they are relentless in pursuing any and all technological means to get it.
By Philip Lee, CFP®
There are a myriad of strategies for cutting your tax bill leading up to and during retirement.
Philip is quoted on Roth IRA Re-characterization deadlines, maxing out on retirement plans, as well as the need to establish solo 401(k) plans by December 31, 2016.
While everyone’s unemployment and financial situations are different, when one loses a job there are some helpful tips to consider in responding to the change:
Tip 1 – Don’t panic---while losing your job is surely a major life event, the emotional and financial implications can usually be overcome. You may be emotionally hurt but you must react to the situation to minimize the long-term financial burden related to being unemployed. While you may want to take a few weeks or so to sit back and appraise your situation -- in reality—you now have a new full-time job…that is to find another job. Join a job loss support group and start networking.
Tip 2 – Understand the conditions of your severance package (if you are offered one). Do you get a lump sum or salary over a fixed period and are there benefits of one option versus the other? When does your health insurance move to COBRA, what are the deadlines for signing the agreement or signing up for various benefits? Will your employer negotiate any additional benefits such as a longer severance package, or paying for outplacement or career services? Was your termination integrated into an early retirement package and what are the implications of that?
By Philip Lee, CFP®
Last week Kristen and Julia, our rising high-school senior, visited McGill University in Montreal, Canada. By all accounts it was a hugely successful trip. Julia is thrilled at the prospect of furthering her education and expanding her horizons. She will be 18-years old soon and "on her own" as a freshman, hopefully, at a college of her choice.
Students may be worried about making new friends, studying, and adjusting to college life. Parents or guardians may share these concerns too, but they should not neglect legal and financial matters. Our 18 year-olds are now adults who can enter into contracts, make their own health care decisions, and are afforded levels of privacy to which we may not be accustomed. Who will make medical decisions on behalf of your child if he or she is unable to do so? What will you do if you need to get medical information in a time of an emergency? Will you be able to have access or make decisions on financial/tuition matters with the bursar’s office? Is it important to have access to your child’s academic record? Consider these items allowing parents/guardians to assist their adult children before they leave for college: