6 Ways to Fight the Fear — Practical Strategies for Volatile Markets

stock-illustration-19954646-climb-up-and-down-graphFrom the hotly contested presidential race, to further hints that the fed might roll back the bond-buying stimulus program, to the lingering uncertainty that plagues a recovering economy, it comes as no surprise that many investors feel spooked by the market.
But while it’s to the Fed’s  true that the market is volatile — as evidenced by the CBOE Volatility Index, a.k.a. the “investor fear gauge,” — these ups and downs are simply part and parcel of investing. In the short-term, markets will trend up and they will trend down, and questioning your investment strategies with each shift simply isn’t a viable or profitable strategy. Instead of reacting to each movement, cultivate a long-term perspective. These 6 tips show you how.

1) Investigate your investment fears. A bit of navel-gazing – or self-psycho-analysis, if you prefer, will help you identify exactly which component is causing your unease. Are you afraid of not being able to retire the way you want? Worried about not being able to maintain your desired lifestyle? Or are you simply afraid of market volatility – or is the unknown itself keeping you awake at night?

2) Once you’ve determined from whence your anxiety flows, you can take steps to calm your mind and ease your fears. One of the best ways is tuning out the constant flow of panicky, doomsday headlines churned out by the financial media, pundits and politicians.

Remember, not only do these “experts” not possess a crystal ball that accurately predicts the markets’ future, they also don’t have your financial best interests at heart: Rather, their focus lies in garnering attention and high ratings. Try no to have knee jerk or emotional reactions to volatility.  Instead, accept that volatility is inevitable and realize that corrections are simply part of the investment process. Over time, the markets are resilient.

3) Hold to the course. The market may be moving, but that shouldn’t sway your commitment to hold steadily to your long-term financial plan. In fact, having a plan or an investment policy statement will help you stay grounded and improve your peace of mind.

While you don’t want to let your emotions get in the way of proper planning – i.e., obsessively checking your portfolio and the financial news for every drop or rise – you also don’t want to stick your head in the sand. Be sure to review your plan quarterly.

4) Use direct debit to help you stick to your long-term plan. Take advantage of modern technology and set up a monthly direct deposit or debit. Not only does this make it easier on you, automatic debits will help you hold steady to your financial plan and, over time, help you reach your financial goals.  term plan and financial peace of mind.

5) Learn about the differences and advantage of the many complex investment vehicles available. When it comes to investing, you have many options available that will help you deal with market volatility. Some plans even thrive in volatile market conditions. Educate and inform yourself as to your options, and don’t be afraid to ask your financial planner for advice.

Listen below as Stu Steinberg chats about the market with Win Damon on WNBP FM 106.1 Newburyport and WNBP.com

Post Excerpt
Market volatility got you spooked? These 6 practical strategies for volatile markets will help calm your fears.

Source
http://www.marketwatch.com/investing/index/vix

Stu Steinberg of Eaglerock Financial, Inc. has worked with families and businesses for more than 20 years, helping them work toward their financial goals through a holistic, well-rounded approach rooted in objectivity, education, and empowerment. Stu is highly regarded by clients and colleagues for his unique combination of investment, CPA and entrepreneurial experience in the high net worth market.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.
Advisory services offered through LPL Financial, A registered investment advisor.

What are the Rules for Withdrawing Money from an IRA?

Senior Couple At Home Meeting With Financial Advisor
Do you have questions about withdrawing from your IRA? We like to describe the IRA as a bell curve, hopefully growing up
over the years, and then slowly draining over the rest of your life expectancy, starting at age 70 ½.

There are three types of withdrawals, also known as distributions:

  • Owner withdrawal before age 59 ½, after age 59 ½, and after age 70 ½;
  • Owner passes away and the spouse inherits account;
  • Owner passes away and a non-spouse inherits the account.

Distributions before age 59 1/2. In addition to all applicable federal and state taxes, if you take distributions before age 50 1/2, you’ll also have to pay a 10-percent penalty. However, under certain extenuating circumstances, you may avoid the penalty—though you’ll still owe the taxes. Exempt situations may include:

  • Buying your first home;
  • Paying for a child, grandchild, or spouse’s school;
  • Unreimbursed medical costs that are more than 7.5 percent of your adjusted gross income;
  • Health insurance premium costs, if you’re unemployed for 12 weeks or more;
  • In the case of disability or death.

Distributions after age 59 1/2. There are no penalties or restrictions if you take disbursements between the ages of 59 1/2 and 70 1/2. Remember, your interest, dividends, and capital gains will be taxed as ordinary income, so you may owe state and federal taxes.

Distributions after age 70 1/2. Once you turn 70 1/2, you must take distributions. Also known as minimum required distributions or MRDs, if you don’t make these withdrawals, you’ll pay a penalty of up to 50 percent of the amount you should have taken.

If you pass away and your spouse inherits your account. Good news: if your spouse doesn’t need the funds right away, they can roll them over into their own IRA then take distributions after 59 1/2. If they need the funds early and are under age 59 1/2, they can roll the funds into a so-called “Inherited IRA” account and avoid the 10-percent penalty.

If you pass away and a non-spouse inherits your account. If your IRA passes to a non-spouse beneficiary, they may transfer the assets into an inherited IRA beneficiary account. Distributions will depend on your beneficiary’s age and life expectancy, and will be taxed as part of their income.

The rules that govern IRA distribution and inheritance are complex. Meet with a trusted financial advisor to work through the details.

Considering tapping into your IRA? Know the rules first to avoid fees and penalties.

Listen below to Win Damon and Stu review this topic on WNBP Fm 106.1 Newburyport and streaming live at WNBP.com

Sources:

https://www.fidelity.com/viewpoints/retirement/non-spouse-IRA, https://www.fidelity.com/viewpoints/retirement/surviving-spouse-IRA, http://www.schwab.com/public/schwab/investing/retirement_and_planning/understanding_iras/traditi onal_ira/withdrawal_rules, http://www.forbes.com/sites/investor/2011/08/16/15-ways-to-withdraw- from-your-ira-without-penalty/, http://www.schwab.com/public/schwab/investing/retirement_and_planning/understanding_iras/traditi onal_ira/withdrawal_rules, http://www.bankrate.com/finance/money-guides/when-it-s-ok-to-tap-your- ira-1.aspx, www.irs.gov/pub/irs-pdf/i5329.pdf

Stuart Steinberg, CPA, MBA has been dealing with families and their money issues since 1988. He can be reached at 55 Pleasant Street Newburyport and at (978)864-9581 and stu@eaglerockfinancial.net

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.

Securities Offered through LPL Financial, Member FINRA (www.FINRA.org) /SIPC

(http://www.sipc.org/)

 

6 Mistakes Retirees and Pre-Retirees Make with their Finances

Eaglerock Photo - older couple 2.9.2012

Are you trying to figure out what to save? How much? Where to put it? This can be very daunting. Make sure you sit with your financial advisor to go over the details of retirement planning. Here are a few items that come to mind that need to be known to make informed decisions.

1) Having the incorrect time horizon. People have the potential to live longer, healthier lives. You may be around for a while longer than you anticipate and modern medicine is doing a fine job at making this happen!

2) Not understanding the benefits of owning a Long-Term Care policy. Approximately 50% of the population will have a need for this insurance in the future.

3) Unaware of the costs and fees associated with your investment accounts and your financial plan. Review alternative options with your trusted advisor before making any important financial decision.

4) It is important to review your plan as it relates to the long-term and historical market trends. Do not get caught up in the emotions of the market. Do NOT believe everything you read or hear on TV!

5) Be open-minded to the possibility of owning an annuity – it may not be too expensive. There are many options which provide protection benefits (for a fee) that may be perfect for your individual plan.

6) Tax. Tax. Tax. Make sure any decision you make with your investments has tax implications in mind!

Listen below as Win Damon and I chat up this very subject on WNBP.com and FM Radio 106.1 in Newburyport.

 

Fixed annuities are long-term investment vehicles designed for retirement purposes. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 are subject to a 10% IRS penalty tax and surrender charges may apply.

Stu Steinberg of Eaglerock Financial, Inc. has worked with families and businesses for more than 20 years, helping them work toward their financial goals through a holistic, well-rounded approach rooted in objectivity, education, and empowerment. Stu is highly regarded by clients and colleagues for his unique combination of investment, CPA and entrepreneurial experience in the high net worth market.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.
Advisory services offered through LPL Financial, A registered investment advisor.

4 Major Issues to Consider When Planning for Retirement

retirement plan label on document folderIt is no secret that there are a lot of factors that go into planning for retirement.  It is also important that each one gets addressed individually, and carefully.  Many people stress over these issues, or even do not know what they are.  It is important to be proactive in knowing these issues and how to deal with them.  Here are four of the biggest issues to consider when planning for retirement:

1) Longer Life Expectancies. The greatest social program of our time, Social Security, and was passed in the 1930s when the life expectancy for men was around 59 years and women 63. At that time, folks could only take their social security at age 65, and many would not even receive the benefit! Now, a woman is expected to live over 80 years, and there is a 25% chance a woman will live into her 90s and beyond. I had to tell a woman in my office last week that according to our projections, she will run out of money at age 82. It is a very humbling experience to have to relay this information to someone, and we will most certainly make some adjustments to her investment program and spending habits to account for this potential pitfall.

2) Modern Medicine.  Modern medicine is keeping us alive in incredible ways, thus putting more pressure on the already over taxed social security system. In the 1950s, there were 16 workers to every beneficiary, and now it is down to below 3 workers. Retirees will most certainly have to consider how social security is paid out when planning for their own retirement. I am most certainly in favor of raising the social security retirement age as soon as possible to help combat this drastic future shortfall.

3) Rising Costs of Healthcare. Ask most seniors what rising cost they are most concerned with, and almost all will say healthcare. The consumer price index (CPI) rose 29% from 1999-2008, while healthcare costs rose a whopping 119%. President Obama addressed some of these issues with the sweeping healthcare reform in 2010. But not all of them. I still feel it starts at home with many of these major healthcare issues. America is obese, and if most of us lost some weight odds are we would contract fewer debilitating diseases that would require healthcare. It is also good to know that smoking rates by the younger generation are falling

4) The Sequence of Returns.  The sequencing of returns is a major issue that is often overlooked. It is one thing to say the market has returned 8% over a 10 year period, and it’s another to look at the individual years to see how the market preformed in each year. For example, what if you retired with 1 million at the beginning of 2008 only to see your conservative investment lose 10-20% of its value due to the economic crisis. You may not have had the stomach to hang in there and wait for the market to come back, which it certainly did from 2009-2012. The problem with retirement planning is the unpredictability of the investment return in the short run, and every individual should work closely with his/her advisor to plan for these potential pitfalls

Listen below as Win Damon and I chat up this topic on WNBP FM Radio 1061 in Newburyport and streaming at WNBP.com.

With more than 25 years of experience as a credentialed tax professional, Stu Steinberg brings a broad depth of knowledge to his work. Stu founded Erock Tax to help provide tax strategies to individuals, families and small businesses. He also uses his CPA expertise in many areas of personal finance.  Stu is passionate about empowering his clients through education about their tax health. He is highly energetic and brings a sense of optimism, creative problem-solving and a deep level of commitment to every Erock client.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Stock investing involves risk including loss of principal.

 

5 Ways 529 Plans Help Grandparents Save for Their Grandchildren’s College

Grandparents And Grandson Playing With Toy TogetherAs the workforce grows ever more competitive, obtaining that college degree is more important than ever. Unfortunately, the costs of secondary education are on the rise, increasing more than 75 percent in many areas of the country over the past five years. As many families struggle to get by, more and more grandparents are chipping in to help finance their grandchildren’s college education.

Here’s how you can help ensure that your grandkids can afford to attend college.

1) Set up a 529 plan. These accounts allow money to grow both federal- and state-tax-free, so it’ll be there when the kids are ready to go off to schoo Be sure that you maintain status as the owner of the plan; in other words, grandma and grandpa control the plan, and kids and parents don’t. (Bonus: If your grandchild comes home from high school with a nose ring, you can change the beneficiary on the plan by simply calling my office and notifying us of the change.)

2) If the funds remain under your control, it won’t affect the student’s government-based financial aid. Unlike 529 plans owned by a parent or a student, the contents of the 529 don’t count against the student when financial aid eligibility is being determined. However, keep in mind that qualified distributions from the 529 are treated as untaxed income for the beneficiary on next year’s FAFSA, which may affect financial aid eligibility.

3)  The 529 plan’s value is removed from your taxable estate. Yet, if you really need the funds — or you simply change your mind — you can access the money, minus a fee, at any time.

4) Money in the 529 grows tax-free if used for post-secondary school education. Eligible expenses include:

  • Tuition
  • Fees
  • Textbooks
  • Partial costs of room and board, if student qualifies as full-time

5) 529 plans allow for tax-free gifting. You can put a large sum into a 529 for your grandchild and avoid paying the gift tax, as long as you meet certain qualifications.

In today’s world, gaining an edge in the job market requires secondary education. 529 plans allow grandparents to help their grandkids get a leg up on the competition.

The cost of getting a college degree is on the rise, and the job market is more competitive than ever. More grandparents are helping fund their grandchildren’s secondary education; here’s why that’s a good idea.

Sources:

http://http://www.fastweb.com/financial-aid/articles/3486-how-do-grandparent-owned-529-college-savings-plans-affect-financial-aid-eligibility,

www.cnbc.com/id/100564195,

http://www.npr.org/2014/03/18/290868013/how-the-cost-of-college-went-from-affordable-to-sky-high

Stuart Steinberg, CPA, MBA has been dealing with families and their money issues since 1988. He can be reached at 55 Pleasant Street Newburyport and at (978)864-9581 and stu@eaglerockfinancial.net

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.

Prior to investing in a 529 Plan, investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

The LPL Financial Representative associated with this page may only discuss and/or transact business with residents of the following states: AZ, CA, CT, FL, MA, MD, ME, NH, NJ, NY, OH, RI, VA, VT

Securities Offered through LPL Financial, Member FINRA (www.FINRA.org) /SIPC (www.SIPC.org).

Eight Basic Money Lessons Everyone Should Know

iStock_000010555814_DoubleThe news is in, and it’s scary: Americans are falling behind the rest of the world when it comes to financial literacy. A recent study of 29,000 teens across 18 industrialized countries found that financial literacy rates in the United States fell right in the middle of the spectrum, just under Latvia and Poland and right above France and Russia. The most financially literate teens were in Shanghai.

But it’s not just the younger generation that’s lacking in financial know-how; research indicates that only
40 percent of U.S. adults keep a budget, and a third of Americans can’t answer three simple financial questions on topics such as how interest works, how inflation works, and the difference between stocks and funds.

Let’s combat this lack of financial literacy. Here are eight basic money lessons that everyone should know.

1. The earlier you start saving, the better off you’ll be when it’s time to retire, thanks to the “magic” of compounding interest. Saving your money in an interest-bearing account means that it compounds itself over time.
2. If you spend more than you earn, you’ll always be in debt. Simple rule: You must bring in more than you shell out in order to come out ahead. Living not only within, but also below your means is the key to financial security for the long term.
3. There is no reward without risk. If you keep your money safe in a low-interest account, such as a
bank account, you’re passing up on the the chance for higher returns. This may be fine for the short term, but over the long term, riskier investments — such as a highly diversified portfolio (see #4) — have a higher potential to produce significant rewards.
4. Diversification is key. Remember that old saying, “Don’t put all your eggs in one basket”? That really applies to your investments. True diversification is broad and deep, and it helps you weather the inevitable ups and downs of the market. Your financial advisor can help you ensure that your portfolio is truly diversified.
5. Treat managing your money as a lifestyle choice. Decide early on that you will control your money, and make it a habit. Create a balanced budget and stick to it, revisiting it when necessary.
6. Prioritize your spending. When it comes to spending money, what matters most? Is it saving for a new car each year, taking a vacation, or living in a nicer (more expensive) area? Does it make you happier to eat out or to renovate your kitchen? Figure out what is most fulfilling, and then prioritize. Differentiating between needs and wants can help you stay within your budget and still live comfortably.
7. Save smart. Create a financial plan that includes your long-term goals; then, adjust your savings
to meet that plan. Craft your investment and savings activities around your goals, so you can avoid surprises later.
8. Avoid debt. While some debts, such as student loans, mortgages and car loans, are almost unavoidable and help you get where you want to be in life, some types of debt — such as credit card debt — should be avoided if at all possible.

These basic tips are a start, but the financial industry is constantly changing. It’s essential to continue educating yourself and improving your financial literacy in order to make truly well-informed decisions.

10 Tips for Stronger Identity Theft Protection

iStock_000043931448_FullMore than 34 million Americans experienced identity theft in 2013 alone — that’s about 14 percent of the population — and the financial losses from this crime total more than $24.7 billion each year… almost twice as much as losses from reported burglaries, car theft, and other cases of property theft combined.

In fact, identity theft is the number one consumer complaint in the country, making it a serious and growing problem. From fraudulent credit card use to misuse of bank accounts to big data breaches, identity thieves use increasingly sophisticated methods to hack and steal personal, sensitive financial data.

Fortunately, there are ways to protect yourself. Don’t become one of the millions of victims of identity theft: These 10 tips will help you achieve stronger identity theft protection.

  • Monitor your credit report. You’re legally entitled to one free credit report per year from each of the bureaus: TransUnion, Experian, and Equifax. Request your report directly from a different bureau once every four months. 

  • Keep an eye on your bank and credit card statements. Look for purchases you didn’t make and call your financial institution immediately if you notice anything strange. 

  • Shred all documents that contain your personal info. Don’t just throw bills, statements, or even junk mail into the trash or recycle bin; thieves can use anything with your personal details on it to create a false identity. 

  • Don’t share personal information on social media or networking sites. Keep your security and privacy settings on “high” and don’t post information that could help thieves assume your identity, like your exact date of birth or your mother’s maiden name. 

  • Change your online passwords each month. This makes it harder for would-be hackers to steal your personal data. 

  • Use smart passwords. Avoid obvious passwords, like your child’s name, your birthday, or (need we say it) “password.” Instead, use a combination of capital and lowercase letters, numbers, and symbols that would be difficult for hackers to guess; random combinations are better than words from the dictionary. Clear your history, cookies, and saved passwords—especially if you work on a public or shared computer—and never save your passwords on financial sites. 

  • Don’t make online financial transactions on an unsecured WiFi connection. Wait to complete any financial transactions, including simply logging in to online accounts, until you’re on a secure network. 

  • Use your credit card to shop online. Credit cards tend to offer more protection against fraudulent purchases than do debit cards or online payment systems. 

  • Watch out for phishing scams. Be aware of emails or popups that look like they’re coming from your bank; before you enter any personal data, be sure to verify that a website is legit. 

  • Secure your mail. Invest in a P.O. box or a locking mailbox to keep thieves from stealing personal data in your incoming or outgoing mail.

Finally, if you suspect your data has been compromised, you can request that a fraud alert or a credit freeze be placed on your accounts. Though these aren’t always convenient, as you have to verify your identity before being issued credit, they may protect you from criminal activity.

Sources

http://www.bjs.gov/content/pub/press/vit12pr.cfm, http://www.dailyfinance.com/2013/12/31/scariest -identity-theft-
statistics/, https://www.ncjrs.gov/spotlight/identity_theft/facts.html, http://washington.cbslocal.com/2 014/07/01/report-10-million-identity-theft-cases-most-common-consumer-complaint-in-

us/, http://www.consumer.ftc.gov/articles/0271-signs-identity-
theft, http://www.bankrate.com/finance/personal-finance/7-ways-protect-yourself-id- theft.aspx#slide=1, http://guides.wsj.com/personal-finance/credit/how-to-protect-yourself-from- identity-theft/

Securities offered through LPL Financial. Member FINRA/SIPC.

Fun Economic facts about Thanksgiving

Happy Thanksgiving - text in vintage letterpress wood type blocks against rustic wood background with a pumpkin and dry leavesIf you are like me, Thanksgiving is the best of all the holidays. No wish lists, no gifts involved, no long lines in which to wait for unnecessary materialistic purchases; just family and friends. Thanksgiving is my favorite time of the year because it is all about being with family we do not often see.  Usually this involves sitting around the house while the conversations fly and turkey diners are consumed.  How much does this cost us?

The auto group AAA stated that last year 46.3 million people drove at least 50 miles for the festive weekend. That is up 4.2% than 2013. In 2013 gas was around $3.28/gallon for the Thanksgiving season, and dropped down to $2.85 last year. In many places now gas is below $2/gallon!

November and December are, obviously, the busiest times of the season for airlines. In 2014 24.6 million citizens flew somewhere within the country during the holiday period.  Air travel rose 1.5% from 2013 t0 2014 but number of passengers remained about 6% below the pre-recession level. Airfares rose 2.4% just for the Thanksgiving season alone.

According to the American Farm Bureau Federation’s annual price survey, the average cost of a Thanksgiving dinner for 10 people is about $49.41, which was a 37-cent increase from 2013. The typical 16-pound turkey ran people about $21.65 last year, which was an 11-cent decrease from 2013. Cranberries, stuffing, and various pie shells have declined in price, so the rise in overall meal cost can be blamed on sweat potatoes, milk and whipping cream.  Adjust all these costs upward of course for those of us in the Newburyport area for sure, as prices are higher than the rest of the country.

Many traditions provide economic booms for certain cities across America.  Take Dallas and Detroit for example.  These 2 cities get to host NFL games every year on Thanksgiving bringing much needed revenue to both local areas.  Or the Macy’s Day Parade in New York City where people flock to every year.

A word of caution:  Be careful of your caloric intake!  The average 180 pound man may tend to eat 4,500 calories on turkey day which is over 2 times the suggested intake.  It would take this man 5 hours to walk it off the next day, so make sure you balance yourself when eating and you may be thankful the next day!

It is important to remember the meaning of Thanksgiving. This holiday is all about giving thanks for what we have, spending time with friends and family, and taking care of those in need. Be present, and live in the moment.

Source:

http://www.npr.org/2014/11/24/365527590/the-economics-of-thanksgiving-2014

 

How to Survive in the Difficult World of the Middle Class

Family Football GameIs the middle class the “most endangered species in America“? Since the economic downturn of 2008, America’s middle class has been on the decline. Reports from the Pew Research Center show that both median income and median wealth have declined sharply—dropping 5 percent and 28 percent, respectively—and about 42 percent of those polled say that they’re worse off now than they were before the financial crisis.

So what’s a middle-class American to do? These tips will help you survive in what seems to be, at least for now, the new normal.

1) Educate, educate, educate. Surround yourself with quality mentors, and seek advice from trusted professionals, such as financial advisors, attorneys, and accountants.

2) If possible, buy a home Securing a mortgage loan now, while interest rates are still at historic lows, will give you time to build equity (hopefully), as well as offer some tax relief; in many circumstances, you can write off mortgage interest and real estate taxes. The government offers a number of programs to help you purchase a house.

3) If you’ve got kids, make sure that you understand the associated tax breaks. Speak with an accountant about tax credits for child care and dependent care costs, the child tax credits, and proper filing st

4)Contribute to your 401 Even socking away small amounts provides benefits in the form of tax deferrals and compounding growth. If your company provides matching, be sure you’re taking full advantage.

5) Continually prioritize and evaluate your debt situation. Stop using credit cards and focus on paying down deb

6) Utilize 529 college savings account Getting a college education is more important than ever, and 529 savings accounts allow your investment to grow tax-free; distributions come out tax-free, too.

It’s scary out there, but you can use these simple steps to help you survive—and even thrive.  For decades the middle class has been in decline. Hope they help you survive in spite of these downward economic trends.

Listen below to Win Damon and I review this on FM 106.1 WNBP Newbuyrport and WNBP.com.

Sources:

http://www.pewsocialtrends.org/2012/08/22/the-lost-decade-of- the-middle-class/, http://www.npr.org/2013/03/26/175274579/american-winter-families-struggle-to- survive-fall-from-middle-class, portal.hud.gov/hudportal/HUD?src=/topics/buying_a_home,

www.nolo.com/legal-encyclopedia/tax-breaks-for-parents-30180.html

Stuart Steinberg, CPA, MBA has been dealing with families and their money issues since 1988. He can be reached at 55 Pleasant Street Newburyport and at (978)864-9581 and stu@eaglerockfinancial.net

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.

Prior to investing in a 529 Plan, investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

Securities Offered through LPL Financial, Member FINRA (www.FINRA.org) /SIPC (www.SIPC.org).

5 Tips for Handling a Windfall from an Inheritance

Eaglerock Photo - Financial Planning - Money Analysis 2.17.2012On the list of problems you really wouldn’t mind having, receiving an unexpected windfall in the form of an inheritance may just be at the top. Unfortunately, without careful planning and management, this dream can turn into a nightmare — with your lucky jackpot dwindling away all too quickly.

Here’s how to protect, manage and maximize your lucky break.

1) Do your research. After you’ve taken time to catch your breath and start healing from your loss, set up a meeting with a trusted financial planner and your attorney. Why? Because the rules and regulations surrounding inherited retirement plans, homes and other investments are extremely complicated. It’s essential that you do your homework while paying full attention.

2) Sit down with your insurance and legal advisors to develop a carefully considered plan. Remember, you probably have far more assets now than ever before, and professional guidance can help you maximize your windfall.

3) Meet with your siblings and other important family members. Ensure that the assets are divided in a manner all can agree with, especially emphasizing fulfilling the wishes of the deceased.

4) Reconsider your own budget and determine changes in your fixed and variable costs. You should also reevaluate your own personal strategies; keep in mind that Mom’s investment plan may have worked well for her, but it may not be the best choice for your situation.

5) Beware of lurking taxes! While some inheritance types are tax-free, such as insurance payouts, others require you to pay federal and/or state estate taxes.

Remember, inheriting a windfall isn’t just about money — it’s also about change and transaction. Give yourself time — from a few months to a full year — to adjust to your new financial reality.

Click below to hear my chat with Win Damon on WNBP.com and FM radio 106.1 WNBP in Newburyport, MA.

Stuart Steinberg, CPA, MBA has been dealing with families and their money issues since 1988. He can be reached at 55 Pleasant Street Newburyport and at (978)864-9581 and stu@eaglerockfinancial.net

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

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