Full story: Vanguard
We are an advocate of having money in our pocket and investing it as long as we can. If you usually get tax refunds , you may want to change that habit. Some argue that they rather have the IRS to keep the funds otherwise they would spend it. As such, they are forced to save. We strongly disagree with that because most will spend the tax refund when they receive it. The good news is that this habit can easily be changed.
We believe the first step to achieve financial independence and freedom is to be responsible for our spending and be disciplined to set up a plan to save and invest.
Instead of having the IRS holding your excess taxes for the year and waiting for refunding overpaid taxes to you without getting any interests or returns, we suggest adjusting the tax withholding information to reflect your accurate information to avoid either overpaid or underpaid taxes. With less tax withholding, you are able to save more from every payroll in your retirement plans with which you can also get tax deductions.
Full story: The Wall Street Journal
Pre-election year
While one camp is painting a dire picture in the market this year, another camp does not think it may not be that bad because of the historical election year market cycle. This year is the pre-election year. Historically, the stock market will do relatively well during the pre-election year after the midterm election.
We do not know whether the stock market this year will follow the election year pattern. What we already do know is that the major indices have dropped over 20% and 30%, not to mention some individual stocks have been cut in half or so. And when others fear buying, it would be a good time to invest. Having an investment plan of what and when to invest to make your money work for you will definitely help you capture the buying opportunities ahead of us.
Full story: The New York Times
After spending time with your loved ones during the holiday, many start setting up or reviewing their estate plans to protect their loved ones. Naming beneficiaries will be the first and crucial step to determine who gets what according to your wishes. It is advisable to review beneficiary designations once a year. Many assets pass by beneficiary designation, not by your will or trust, such as retirement plans and life insurance policies. You may have questions about, “Can I designate my children as primary benefits for my 401(k) plan account?, or “Should I appoint my trust as my beneficiaries?”. It will get more complicated especially when you have a more complex financial situation. Consult your financial advisor or estate planning attorney for guidance and ensure you are in control of your assets.
Full story: Kiplinger