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Accretive Wealth Blog

Be Conscious of Taxes When You Invest

Friday, April 4, 2014

CG TaxesIt’s tax time again. While many high earners were aware that rate increases and new taxes went into effect for the 2013 tax year, the full impact won’t hit until they find out what their full tax liabilities are.

Here is a re-cap of the tax-rate changes:

The top federal marginal income tax rate for 2013 is 39.6%, up from 35% for 2012. This rate kicks in for all taxable income above $450,000 for a couple filing jointly, or $400,000 for a single filer (income below those amounts is taxed at lower rates). Continue reading “Be Conscious of Taxes When You Invest” »

Traditional IRAs and Roth IRAs: What’s the Difference?

Tuesday, January 28, 2014

IRA vs ROTH IRAYou can save money for retirement with either a traditional individual retirement account (IRA) or a Roth IRA. Both offer valuable tax advantages, but there are significant differences between them. Tax season is coming up, so we thought it was a good time to look at those differences so that you can determine which type is right for you. Continue reading “Traditional IRAs and Roth IRAs: What’s the Difference?” »

What Will the Markets Do This Year?

Wednesday, January 15, 2014

Chart1We asked Advisor Partners, LLC, to give us their market outlook for 2014. Advisor Partners handles portfolio management for many of our clients. Here’s what CEO Daniel Kern told us:

Advisor Partners enters 2014 with a favorable outlook for equities, continuing the generally positive view we have had for the equity markets over the past two years. I would characterize us as “reluctant bulls,” similar to many advisors who have large allocations to equities but worry about a market correction. Our overall equity outlook has not changed dramatically as we enter 2014, but our outlook about the relative attractiveness of different equity asset classes has changed over recent weeks. Continue reading “What Will the Markets Do This Year?” »

Tax Rates Are Going Up—Are You Ready?

Tuesday, November 12, 2013

Some big changes to federal income tax rates went into effect this year. Investors, small-business owners, and high-earners could have a rude jolt when they file 2013 tax returns, so we’d like to explain the changes and suggest some steps you could take to minimize the burden.

Here’s a look at the changes in 2013 tax rates that we think will have the greatest effect on our clients and friends:

  • The federal rate for long-term capital gains has gone up from 15% to 20% for a single person with taxable income above $400,000 or a married couple with income above $450,000. People in a 25% or 35% tax bracket will continue to pay 15%, while those in a 10% or 15% bracket do not have to pay capital gains taxes. Continue reading “Tax Rates Are Going Up—Are You Ready?” »

Defined Benefit Pension Plans: Worth Considering

Wednesday, October 2, 2013

Employers have various ways to offer retirement benefits to their employees—and to themselves. The amount that a retiree will receive from defined contribution options such as 401(k) and profit-sharing plans is uncertain; all that is certain is the amount that is contributed.

Another option is a defined benefit plan (DB plan). As its name implies, the retirement benefits that an employee will receive are defined by the plan’s formula. Plan formulas vary according to the company, but typically benefits are calculated by using individual factors such as salary and length of employment. Continue reading “Defined Benefit Pension Plans: Worth Considering” »

Are Stocks the New Bonds?

Wednesday, July 10, 2013

Some of our clients and friends have asked us what strategy they could use in this market to generate income from their investment portfolios. Bond yields are low, and bond risk is rising as issuers take advantage of today’s low rates to extend duration. Fixed-income securities as a source of income don’t look very compelling. What’s an investor to do?

Luckily, there is an option that many investors find attractive: portfolios that focus on growth and income through high dividend yield (HDY). A manager selects the stocks in these portfolios by identifying high-quality companies that offer a higher-than-average dividend yield. An HDY portfolio is characterized by: Continue reading “Are Stocks the New Bonds?” »

Be Smart About Retirement

Wednesday, June 26, 2013

Last week we talked about saving for your children’s education, but it’s even more important to create realistic plans for your own retirement. While you want to do the best for your children, you don’t want to ignore your own interests and jeopardize your ability to live comfortably later on. Retirement lasts longer than it used to: A man who’s 50 years old now is expected to live to be 82, while a woman is expected to reach 85.

Many of us don’t realistically think about our retirement, if we think about it at all. Let’s take a look at some numbers from the National Institute on Retirement Security’s June 2013 report, The Retirement Savings Crisis: Is It Worse Than We Think? (The answer is a resounding yes.) Continue reading “Be Smart About Retirement” »

529 Plans: College Savings with Flexibility & Tax Protection

Wednesday, June 19, 2013

Some of our clients and friends weren’t able to attend our dinner meeting on June 17, when BlackRock VP Vivian Tsai gave an illuminating presentation about 529 plans. In this week’s blog post, we’d like to share some of the information she provided.

Let’s start by taking a look at college costs, which are high now and expected to continue rising. According to Sallie Mae’s How America Saves for College 2013, the cost of attending a four-year college in 10 years is estimated to be $139,028 at a public institution, or $248,878 at a private institution. Clearly, you need to begin saving for your children’s education as early as possible. If you started putting just $200 a month into a tax-free investment vehicle when your baby was born, by the time the child turned 21 you’d have about $120,000 (assuming a 7% annual return, gross of fees). Continue reading “529 Plans: College Savings with Flexibility & Tax Protection” »