There is good news and bad news in the interest rate of the newly issued I Bond. There are two components to the return for the bond — the fixed rate and the inflation rate. The good news is the fixed rate has increased from 0% in 2020 to 0.9%. However, the semi-annual inflation rate dropped from 4.81% last May to 1.69%. If inflation has peaked while the Fed may stop raising the interest rate, investing in I Bond now may not be a good investment.
At Vibrance Wealth Management, we focus on goal-based investing. Instead of asking if “Are they still worth it? ", we recommend to ask “Is it a good investment for me”? If you are conservative and seek safety with income, investing in I Bond for the long- term may suit you. But if you are a risk taker and just look for yield in the short-term, then I Bond would not be suitable for you.
Full story: The Washington Post
Celebrating our 10th anniversary of obtaining Certified Financial PlannerⓇ designation! Awarded by the Certified Financial Planner Board of Standards, Inc., the CFP® certification is one of the most recognized certifications in the financial services industry. CFP® professionals have to meet rigorous education, examination, experience and ethics requirements. We demonstrate extensive knowledge and skills, and take a holistic approach in analyzing, developing and executing strategies to fit clients’ short-term or long-term financial goals. What sets us apart is that CFP® professionals have fiduciary duties to our clients, always putting our clients’ interests first.
When building a house, we would need a blueprint to establish a sound foundation with help from a licensed architect and contractor. When building our financial life, we would want a written financial plan with a CFP® professional.
Learn more: CFP Board
Some parents are hesitant to contribute for their children’s education funding in a 529 plan because of its distribution restrictions. The 529 plan is one of a few tax-advantaged vehicles available. It is designed for saving for education expenses. In California, even the contributions are post-tax, the gains on the accounts are not taxable for qualified education expenses. The rules of 529 plan have been changing to provide flexibility and relieve parents’ worries about “What if my children do not go to college?”. In light of SECURE 2.0 Act of 2022, it allows unused funds in 529 plans to be transferred to beneficiaries’s ROTH IRAs up to $35,000 if the funds in the accounts are over 15 years. We highly recommend that parents with children especially under age 10 to consider using 529 plans to start saving and investing.
Full story: JOURNAL OF ACCOUNTANCY
Studies have shown that there is a high correlation between employees’ financial well-being and the bottom line of the businesses. Less financially stressed employees are more likely to be productive and loyal to their employers. To encourage small businesses owners to offer retirement plans, the State of California has been introducing the CalSavers Retirement Savings Program and now requires businesses with 4 or fewer employees to offer retirement plans at work by December 31, 2025. To add an extra boost, the SECURE 2.0 ACT of 2022 offers small businesses up to $16,500 tax credit when setting up a new retirement plan over three years with automatic enrollment.
At Vibrance Wealth Management, we specialize in managing corporate retirement plans. We realize that more and more business owners are aware of the importance of offering retirement plans to their employees not only for recruitment or retention purposes, but encouraging employees to take control of their financial lives. Nowadays, employers are more willing to provide matching and education to help employees get ready for their retirement. In return, they enjoy higher productivity and morale at work.
Full story: CPA Practice Advisor