MONTHLY FOCUS

2012

JANUARY: Financial Planning

Financial planning is mostly about setting goals, monitoring progress, and adapting to change. Goals may include, but are not limited to: balancing your budget, preparing for unexpected emergencies, protecting against disability, premature death, or long term care, saving for education, major purchases, or retirement, minimizing taxes, and planning one's estate.

Financial planning is also about education - teaching you about the options you have for reaching your specific goals and letting you choose what you are most comfortable with. There is never a single, best answer. Your risk tolerance and level of comfort with a specific option is often more important than what might look like the best solution. We are here to help you calculate your needs and put your goals on paper so that we can give you independent, unbiased advice.

We recommend reviewing your financial plan annually in order to stay on course. It's easier to make small changes once a year than to make major changes less often -- or too late.

Want to know more?  Send us your question or give us a call at (800) 264-8034.

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2011

DECEMBER: Year-End Tax Planning

December is such a busy month for most Americans. Our prayer is that you will be intentional about not getting overrun by the hustle and bustle of the season and, instead, take time to enjoy your family while celebrating Christ together.

This is also the time to be intentional about tax planning. Though some strategies can wait until April of 2012, others must be done before the end of 2011.

Not all of the following tips apply to everyone, but these are common approaches:

1. Make gifts to charity- cash donations above $250 require a receipt from the organization. For non-monetary gifts (such as clothes), be sure to make a list with each item's estimated value.
2. Individual gifting- each taxpayer is permitted to give $13,000 ($26,000 for married couples) to as many individuals as they choose without having to pay gift or estate taxes. Gifting does not result in a current year tax deduction, but it can be a significant estate planning and wealth transfer tool.
3. Take investment losses- if you have non-qualified investments that are under water, you may consider selling them for a capital loss and using the loss to offset capital gains. Even if you have no gains to offset, you can deduct up to $3,000 of such losses for 2011, and losses in excess of $3,000 will carry forward to future tax years.
4. Maximize retirement contributions- You have until the tax filing deadline to make IRA and many profit-sharing contributions, but employee contributions to retirement plans must be made in the year the income is earned.
5. Deplete your Flexible Spending Account- if you have a flexible spending account (FSA) with your employer, remember that any funds unspent by December 31st will be lost.

To be clear, we are not accountants, and we recommend consulting your tax professional regarding the strategies that are most appropriate for you and your family. However, we are happy to work in cooperation with your accountant to help facilitate any of the strategies that they find most suitable to your specific situation. Additionally, there may be strategies other than those listed above which will benefit you as well. Be sure to call your advisor before the end of the year to discuss your plan. 

As always, if you have questions about tax planning or want to explore other potential strategies, send us your question or give us a call at (800) 264-8034.

Additional Resources:

Tax Library - Calculators, IRA Forms, Glossary, and more.

NOVEMBER: IRA Rollovers

A couple of generations ago, the average person spent his or her entire career with the same employer. This isn't true today.  Many people, whether seeking better opportunities, rethinking career choices, or coping with a tough economy, will have mutilple employers, even multiple careers. 

One result is that, over time, people accumulate multiple retirement accounts. We frequently get asked, "Should I leave my retirement funds at my previous employer, or do I have better options?"

 Often, an Individual Retirement Account (IRA) makes sense for someone in this situation.  Some of the benefits of IRAs include:

• Tax-free rollover of assets into the IRA
• Continued tax-deferred growth
• Potential of making future contributions to the IRA
• Better control and centralized management of the assets
• More investment options inside the IRA

Making the deicison to roll over your retirement savings should be done in consultation with your financial advisor and tax advisor.  We strongly recommend looking at your overall financial situation before doing so.  If you still have assets in a former employer's retirement plan, though, setting up an IRA might be a good option for you.

If you want to discuss whether an IRA rollover makes sense for you, call us at (800) 264-8034 or send us your question.  We'll contact you as soon as possible.

Additional Resources: