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Accretive Wealth Blog

So What Are CRUTs and What Can They Do for Me?

Wednesday, June 11, 2014

CRUTYou may have heard of a CRUT, which is a rather unpleasant acronym that stands for charitable remainder unitrust. While the acronym may be unattractive, a charitable remainder trust can be a very valuable tool that high-net-worth individuals can use for estate planning, income generation, tax savings, and charitable giving.

Basics

There are a number of charitable remainder trusts and other trusts that allow you to pass on assets to a charitable organization, and the rules for each of them are quite complicated. Continue reading “So What Are CRUTs and What Can They Do for Me?” »

Diversification May Help to Reduce Risk

Wednesday, May 28, 2014

Asset Class Chart.jpgDiversifying your investments is as much common sense as it is investment science. You can diversify by investing across asset classes and by geographic regions. Asset classes include stocks, bonds, cash, real assets, and alternative investment strategies, and within those asset classes are other opportunities for diversification.

The price of stocks, bonds, and other investments don’t all move in tandem. The price of each stock is affected by a combination of different elements, including not just the company’s own performance and the health of the company’s industry but also consumer worries and the health of domestic and global economies. Continue reading “Diversification May Help to Reduce Risk” »

What’s the Market Going to Do Next?

Wednesday, April 23, 2014

Market UpdateNobody can predict market behavior with any certainty, but we do think highly of the views held by the folks at Advisor Partners (AP), the firm that manages many of our clients’ assets. We had a conversation with Daniel Kern, president and CIO, and Gerard Cronin, portfolio manager, about the economy and their expectations of market behavior in the upcoming months. Continue reading “What’s the Market Going to Do Next?” »

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” »

Trusts and Wills Can Prevent Complex Estate Problems

Friday, March 28, 2014

TrustsEven though it can be emotionally difficult, establishing a trust is a very important estate planning tool that can protect your family’s assets and determine what they will receive after your death. Properly designed trusts can also reduce the tax impact on your estate and help avoid probate.

Your goal is to maximize the wealth you leave to your heirs, and trusts are an invaluable tool. We will take a quick look at some basic information about common types of trusts: Continue reading “Trusts and Wills Can Prevent Complex Estate Problems” »

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” »

Is Tax-Loss Harvesting Right for You?

Thursday, September 19, 2013

While we’re all happy to see gains in the value of our portfolios, we’re not so happy to pay capital gains taxes on them. In this post, we’ll discuss tax-loss harvesting, which can help investors reduce their capital gains tax liability. This may be particularly important for high-earners in 2013.

First, let’s examine how much of a burden capital gains taxes can be for 2013: Continue reading “Is Tax-Loss Harvesting Right for You?” »

Islamic-Value Investing: A Closer Look

Thursday, September 5, 2013

Our clients and friends have been expressing a lot of interest in Sharia-compliant investing lately, so this week we would like to discuss the topic in greater depth than we did in our June blog posting.

We know that some Muslims have totally avoided investing in the stock market thereby missing out on the economy’s rebound. Accretive Wealth’s mission is to provide financial planning and investment advice that aligns with each investor’s beliefs and values, and we want to offer our Muslim clients ways to take part in economic growth through the markets without contravening Islamic values. Let’s begin by reviewing the basics. Continue reading “Islamic-Value Investing: A Closer Look” »

European Equities Offer Promise

Friday, August 23, 2013

After all the recent headlines about the European fiscal crisis and the impending doom of the euro, investing in the European equity markets may sound like folly. Taking a closer look at the developed markets of Europe, however, we think we’re approaching a good time to buy their equities. We don’t think these markets are going to turn around overnight, but we do agree with Wall Street powerhouses such as Credit Suisse and Bank of America Merrill Lynch that European equity markets are a good bet for the future.

In this blog post, we’re going to take a look at the international markets represented in the MSCI EAFE Index. “EAFE” stands for Europe, Australia, and the Far East, but the index actually includes only the developed countries in these regions: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. Continue reading “European Equities Offer Promise” »

Why We Still Like Emerging Markets

Thursday, August 15, 2013

Our clients are concerned about where to invest during these volatile economic times. Should they seek the stable haven of fixed-income securities or should they go into the more volatile equity markets? And if they have the stomach for equities, should they flee from emerging market indexes that have seem to have lost their luster or should they stick with the US equity markets that have posted outstanding returns?

Here at Accretive Wealth, we believe the best long-term strategy for our clients is to remain with the domestic equity market but very gradually begin increasing their emerging markets allocation. We think emerging markets are somewhat undervalued at current levels and have more robust growth prospects in the long run. Continue reading “Why We Still Like Emerging Markets” »

Asset Allocation 101

Wednesday, July 17, 2013

This week we look at one of the key steps in building an effective portfolio strategy: asset allocation.

Allocating your assets effectively simply means building a portfolio across different types of securities in alignment with your situation, goals, and objectives. Investments are typically broken down into these asset classes:

  • Cash (including money market funds)
  • Equities (stocks)
  • Fixed income (bonds and notes)
  • Real assets (metals, commodities, real estate, collectibles, agricultural land, and oil)
  • Alternatives (such as private equity, hedge funds, and master limited partnerships)

Continue reading “Asset Allocation 101” »

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” »

Putting the Horse Before the Cart

Wednesday, May 22, 2013

In this post, rather than talk about what you invest your money in, let’s discuss instead how to build a framework for your investments.

Building an investment portfolio before you’ve developed a financial plan is typically not the wisest course. First, know what you want, then figure out how to build the framework you need to reach your goals.

It’s imperative that you factor in your entire financial picture when you make investment decisions. Look at your investments in the context of all your other holdings. Consider every type of account you have—including brokerage accounts, 401(k)s, IRAs, and trusts. Understand what your needs are for the short term, medium term, and long term. Continue reading “Putting the Horse Before the Cart” »