Tag Archives: Wells Fargo Advisors

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Money Matters | Help Protect Your Finances in a Natural Disaster

This article was written by Wells Fargo Advisors and provided courtesy of Michelle Konkle, CFP®, Financial Consiltant with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN at 812-948-8475.

This article was written by Wells Fargo Advisors and provided courtesy of Michelle Konkle, CFP®, Financial Consiltant with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN at 812-948-8475.

From blazing wildfires and floods to hurricanes and tornadoes, natural disasters make front-page news whenever and wherever they happen. Less headline-worthy are the financial repercussions that follow, which tens of thousands of people are dealing with right now. These types of tragedies are unavoidable — the most you can do is prepare to minimize the time it takes to put the pieces of your life back together.

Creating a plan that addresses your finances and insurance beforehand can make it easier to recover from a devastating event.

  1. Stockpile savings. Maintaining an emergency fund with three to six months’ worth of savings is a key part of any household budget. But it’s also important in an emergency: Funds that you can draw on quickly and easily can be a lifesaver in the wake of a natural disaster. Also consider keeping a few hundred dollars in cash on hand to see you through if your area loses power or banks and ATMs are out of commission.
  2. Gather key documents. Make sure you have important legal and financial documents with you if you have to evacuate. These may include copies of insurance policies and even bank account numbers. Keep these documents easily accessible, as you would flashlights and spare batteries. That way you’re less likely to leave them behind — even if you have to abandon your house quickly.
  3. Protect your credit. Part of protecting your finances involves protecting your credit. Include the contact information for your creditors — such as your mortgage lender, credit card companies and utilities — in your financial preparedness kit. If you have to evacuate, reach out to your creditors as soon as possible to request a temporary reprieve from payments. Make sure you reach out to your employer as well, to provide as much warning as possible if you won’t be able to work in the aftermath of a disaster.
  4. Review your insurance. Your insurance policies can help you recover financially from a disaster, provided you have the right coverage. Review your property, flood, life and disability insurance policies once a year when you receive the new documents from your insurer. And don’t focus only on your deductibles and coverage amounts – pay attention to the riders as well.

For instance, does your property insurance cover temporary food and housing costs if you’ve had to evacuate but your home is undamaged? If you miss work for a week because you’ve had to evacuate, will your disability policy cover your lost income? Talk to your agent about covering any gaps in your policies, and make sure you know whom to contact and what documentation you’ll need to file a claim.

  1. Use a checklist. Include your financial preparations in your overall disaster recovery plan. Review the Wells Fargo Advisors’ “In Case of an Emergency” checklist to make sure you are giving yourself the best chance of recovering from a natural disaster. The list suggests a range of critical first-response tactics, from stockpiling fresh drinking water to recording possessions as proof of ownership. Just remember that the more you prepare now, the less you’ll have to do if disaster strikes.

This article was written by Wells Fargo Advisors and provided courtesy of Michelle Konkle, CFP®, Financial Consiltant with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN at 812-948-8475.

Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

©2018 Wells Fargo Clearing Services, LLC. All rights reserved.   CAR 0118-01444

 

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Money Matters | Retirement Plans Can Be SIMPLE

Sponsored Post by Todd Harrett

If you own a small business (or are self-employed), there are many retirement plan alternatives available to help you and your employees plan your financial future. One popular option for organizations such as sole proprietorship’s, partnerships, corporations, and non-profit organizations to consider is the SIMPLE (Savings Incentive Match Plan for Employees) Individual Retirement Account (IRA).

Unlike some retirement plans, there are specific criteria a business must meet to participate in a SIMPLE IRA plan. Here are the answers to some commonly asked questions about this type of retirement plan:

Can any business establish a SIMPLE IRA plan? Self-employed individuals and employers with fewer than 100 employees may adopt a SIMPLE plan. However, the business must not maintain any other employer-sponsored retirement plan where contributions are made or accrued during the calendar year in which the SIMPLE plan is effective. (This does not apply to plans that cover only union employees who are excluded from the SIMPLE plan.)

What is the deadline for establishing such a plan in order for it to qualify for the 2018 tax year? The IRS deadline for establishing SIMPLE IRA plans for the current year is October 1. After October 1, plans can only be established for the next tax year. An exception to October 1 exists if the business is a newly established company and has never sponsored a SIMPLE IRA plan.

Which employees are eligible to participate in this type of plan? An eligible employee is one who has received at least $5,000 in compensation from the employer during any two prior calendar years (does not need to be consecutive years) and who is reasonably expected to receive at least $5,000 compensation during the current year. In the plan’s initial agreement, the employer is able to reduce the amount of compensation and the number of years required. However, there is no required participation for this plan – eligible employees can choose whether or not they want to participate and contribute.

How much can employees contribute to the plan through salary deferral? The maximum salary deferral limit to a SIMPLE IRA plan for 2018 cannot exceed $12,500. If an employee is age 50 or older before December 31, then an additional catch-up contribution of $3,000 is permitted.

What are the maximum employer contribution limits for a SIMPLE IRA? Each year the employer must decide to do either a matching contribution (the lesser of the employee’s salary deferral or 3% of the employee’s compensation) or non-matching contribution of 2% of an employee’s compensation (limited to $275,000 for 2018). All participants in the plan must be notified of the employer’s decision. 

When must contributions be deposited? Employee deferrals should be deposited as soon as administratively feasible, but no later than 30 days following the last day of the month in which the amounts would otherwise have been payable to the employee. These rules also apply to self-employed individuals. The employer contributions deadline is the due date of the employer’s tax return, including extensions.

Can there be a vesting scheduled with a SIMPLE IRA? There is no vesting schedule with this type of plan – both employer and employee are immediately 100% vested.

How are withdrawals from SIMPLE IRAs taxed? Withdrawals from this type of account are taxed as ordinary income. However, if a participant is younger than age 59½ and makes a withdrawal within the first two years of plan participation, he or she will owe a 25% IRS penalty and ordinary income taxes on the amount withdrawn.  After the initial two years of plan participation, the 25% IRS penalty is reduced to 10% for pre 59½ withdrawals.  Exceptions to the 10% penalty on traditional IRAs are also exceptions to the 25% penalty for SIMPLE IRAs. Direct transfers to another SIMPLE IRA will not be subject to this penalty.

Can the assets in a SIMPLE IRA be rolled over? Participants are able to roll over funds from one SIMPLE plan to another at any time. After two years of participation, employees may roll assets to a traditional or SEP IRA without tax penalties.

As with any investment alternative, you should check with your Financial Advisor to evaluate the best option for your financial situation.

Wells Fargo Advisors does not provide legal or tax advice. Be sure to consult with your tax and legal advisors before taking any action that could have tax or legal consequences. Please keep in mind that transferring or rolling over assets to an IRA is just one of multiple options for your retirement plan. Each option has advantages and disadvantages, including investment options and fees and expenses, which should be understood and carefully considered.

This article was written by/for Wells Fargo Advisors and provided courtesy of Todd Harrett, Financial Advisor with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN at 812-948-8475.

Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

© 2018 Wells Fargo Clearing Services, LLC. All rights reserved.    Car 0118-00640

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Money Matters | Are You Prepared to Handle a Personal Financial Crisis?

michelle-head-shot
Michelle Floyd, CFP,
Financial Consultant

Are You Prepared to Handle a Personal Financial Crisis?

Individuals who are married or in a committed relationship face the possibility they’ll end up managing finances alone at some point in their lives. Unfortunately, the first time many experience handling complicated financial matters alone is during a personal crisis following the death or divorce of a spouse or partner.

We’ve prepared a list of thought-provoking questions pertaining to financial fitness and crisis preparedness. You can use these as a starting point to check how prepared you are to handle a personal financial crisis in your life. Begin by reviewing the questions, determine what you’ve already done, and check those items off the list. For the questions you need to address or take action on, seek the advice of professional advisors and trusted family members.

Asset management

• Do I have a clear picture of where my assets are located?
• Will my retirement assets provide a comfortable retirement for my life expectancy?
• Do I have a well-diversified portfolio?
• Are my investments appropriate in today’s economy?
• Are my assets titled properly?
• Do I have an emergency fund?
• Am I taking advantage of techniques to reduce my taxes?

Estate planning

• Do I have a will?
• Is my will current?
• Have I determined what my family may owe in estate taxes?
• Have I funded my estate-tax liability?
• Have I explored and taken advantage of wealth-transfer techniques?
• Do I wish to provide for charitable giving?
• Are my power of attorney and my living will up to date?

Debt management

• Do I know my credit rating?
• Could I get a loan if I applied?

Insurance

• Do I have enough insurance coverage to cover medical expenses?
• To provide for disability/long-term care?
• To provide for family members’ security?
• To fund estate-tax liability?

In addition …

• Have I coordinated my advisors’ (attorney, CPA, banker) activities?
• What changes in my life are likely to occur within the next three years?
• Do I know the status of my parents’/children’s financial situation and the implications for my financial well-being?
• Would I be prepared for a family emergency if it happened tomorrow?

Our firm does not provide legal or tax advice. Be sure to consult with your own tax and legal advisors before taking any action that could have tax consequences. Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state
This article was written by/for Wells Fargo Advisors and provided courtesy of Michelle Konkle, CFP®, Financial Consultant with Axiom Financial Strategies Group in New Albany, IN at 812-948-8475.
Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

© 2017 Wells Fargo Clearing Services, LLC. All rights reserved. CAR 0217-04864

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Money Matters | What to Expect as an Executor or Trustee

Todd Harrett, Financial Advisor with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, Ind.

Todd Harrett, Financial Advisor with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, Ind.

What to Expect as an Executor or Trustee

Being asked to serve as an executor or a trustee for an estate is certainly an honor, but it’s also a considerable responsibility. And knowing and understanding those responsibilities can help you be prepared.

Many people don’t realize what they are taking on and all the duties required, says Lisa Montano, an Estate Planning Strategist for Wells Fargo Advisors. “Depending on the estate’s level of complexity and the assets in the estate that need to be administered, it can be very time-consuming,” she says.

Here are five things you need to know now:

It’s not an easy job. Serving as executor or trustee typically requires a significant amount of time, patience, and organization. It can take up to a year, maybe longer, to completely wrap up someone’s financial affairs, Montano says.

You need to know what the assets are and how to find them. Ask where the will or trust is located and how you will be able to access those documents when the time comes. Also, consider
asking for a detailed list of assets and where they can be found.

You can seek professional help. You can hire a lawyer to help you manage the most complicated duties or to oversee the whole process. You can also engage a CPA to help with tax issues. “Even if the estate is simple, consulting with an attorney is a good idea. There are responsibilities and deadlines you have to meet that are laid out by state law. You also need to follow the instructions as laid out in the will or trust. Sometimes people do things on their own and it gets them in trouble. The court may remove them as executor or trustee, or they may be held personally liable for actions they have taken,” Montano says.

You may be entitled to compensation. Trustees and executors are typically entitled to collect a
reasonable fee, Montano says. The amount may be regulated by state law or specified in the will or trust. You may choose to waive the fee, but you might still want to be reimbursed for travel and other expenses.

You can decline to serve. It’s okay to say you are not comfortable serving, Montano says. If you do, then someone else or a corporate trustee or a third-party executor such as a bank, trust company, or a professional who has experience dealing with estates will need to be chosen.

Our firm does not provide tax or legal advice.

Trust services available through banking and trust affiliates in addition to non-affiliated companies of Wells Fargo Advisors. Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.

This article was written by/for Wells Fargo Advisors and provided courtesy of Todd Harrett, Financial Advisor with Axiom Financial Strategies Group in New Albany, IN at 812-948-8475.
Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

© 2018 Wells Fargo Clearing Services, LLC. All rights reserved. 0218-01932

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Money Matters | Debt Management Solutions

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Michelle Floyd, CFP,
Financial Consultant

Debt Management Solutions

Balancing debt repayment with investing goals takes some strategy and planning. Some consider investing as a first line of defense while paying down debt as a second.

The debt dilemma

The process for eliminating debt is anything but an easy-to-solve financial equation. Many people wonder if they should pay off their debt as quickly as possible or invest their money, letting debt payments run their course.

The answer depends on whom you ask. Theories about balancing investing with debt vary widely. Some financial experts say freedom from debt is the most important goal. Others say it’s more about the math: Your money should go toward investing if your investments earn a higher rate of return than your debts cost you. Still others focus on the emotional aspect: How comfortable are you with a certain level of debt?

Neither one nor the other

Better yet, perhaps, is a balanced approach to wealth management. If you’re like most people, you’ll need to manage finances for both present and future needs. That means paying off some debt today while simultaneously investing with an eye on the future.

Although your decisions should take into account your own needs and circumstances, consider the following guidelines for handling debt in light of investing goals:

Save for a rainy day. Before paying down debt (beyond required payments) or settling on an investment strategy, make it your first priority to put funds aside for an emergency reserve. We recommend six months or more of living expenses; an absolute minimum is three months’ worth. These funds should be in traditional savings or very short-term, highly liquid, low-volatility investments.

Put your future first. As a general rule, your long-term investment plan should take priority over applying extra amounts toward debt. Be careful as well not to let “lifestyle creep,” a tendency toward more expensive tastes and luxury consumption, impede your investment outlook.

By contributing to a long-term investment plan as early as possible, you may set yourself up for a brighter future. If paying down debt is also a priority, you’ll want to examine your personal budget to decide how much to direct each month toward investing and how much toward debt repayment. Just remember, there are no magic numbers. In general, the best advice is to make sure your investment strategy fits your financial expectations for the future.

Prioritize your debts. With an emergency fund in place and your investment strategy up and running, putting any extra money toward your debts is also a smart way to go. But how do you decide which debts to pay down first?

One approach is to start with the smallest debts first to eliminate at least some of your debt burden and interest payments in a timely manner. It also makes sense to pay off high-interest debts like private student loans and credit card debt more quickly.

Federal student loans and mortgages might be lower priorities, because their rates are often lower and their terms are longer. Vehicle loans might fall somewhere in the middle. Tax considerations might also come into play.

It’s personal. As you divide and conquer debt, don’t forget to consider the emotional side of your strategy. If paying off a certain debt will help you feel more secure, you might want to go with your gut feeling.You’ll enjoy a growing sense of financial freedom as you stay on course and get your debt under control. As it shrinks over time, you may find you have more funds available for enjoying the present and focusing on the future.

This article was written by/for Wells Fargo Advisors and provided courtesy of Michelle Konkle, CFP®, Financial Consultant with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN at 812-948-8475.
Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

© 2017 Wells Fargo Clearing Services, LLC. All rights reserved. CAR 0717-05089

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Money Matters | Elder Financial Abuse: The Silent Crime

 

Michelle Floyd, CFP, Financial Consultant

Michelle Floyd, CFP, Financial Consultant

Elder financial abuse has the potential to impact all of us on some level. Whether you are protecting a loved one from becoming a victim or actively taking precautions to protect your personal estate, fraud and exploitation is a risk that grows as people age.

It is important for individuals to understand the magnitude of this crime, identify ways to both actively prevent and stop abuse, as well as understand how to escalate if it is suspected.

Understand. Seniors lose an estimated $36.5 billion every year to the crime of elder financial abuse.i In fact, according to the 2010 Investor Protection Trust (IPT) Elder Fraud Survey, more than seven million older Americans — one out of every five over the age of 65 — have fallen victim to a financial swindle. [i]i As Baby Boomers turn 65 at a rate of 10,000 a day, the threat of potential abuse heightens.

It is imperative we take preventative measures to confront this epidemic, including educating ourselves on the potential warning signs and using the resources and tools available to stop fraud and abuse from occurring.

Identify. Spotting exploitation can be difficult as the perpetrators of these crimes tend to be close friends or relatives. Studies project that approximately 70 percent of elder financial abuse is committed by family members, friends, trusted persons or others known to the individual being exploited.[ii]i This increasingly blurred line of those who have one’s best interest at heart and those who don’t makes spotting these scams a challenge.

Here are a few warning signs:

  • Sudden reluctance to discuss financial matters
  • Sudden, atypical, or unexplained withdrawals or wire transfers from their accounts, or other changes in their financial situations
  • New best friends and “sweethearts”
  • Behavioral changes, such as fear or submissiveness, social isolation, withdrawn behavior, disheveled appearance, and forgetfulness
  • Changes in the will, especially when they might not fully understand the implications
  • Large, frequent “gifts” to a caregiver
  • Missing personal belongings

Report. Reporting is single-handedly the most important step to escalating suspected elder financial abuse. Studies show that as few as one in 44 cases of elder financial abuse are reported.iv Victims tend to keep details secret for a number of reasons – fear of being victimized again, reluctance to incriminate a family member or friend, or admitting vulnerability are among them. To properly report suspected elder financial abuse, contact a state agency or the National Center on Elder Abuse.

Remember, elder financial exploitation is not exclusive. Consider the below to help protect yourself from potential abuse:

  • Organize your estate. No matter how old you are, it’s a good idea to update and organize all your financial documentation, including your will, financial powers of attorney, real estate deeds, insurance policies, pension and trust documents, birth and marriage certificates, and Social Security paperwork. Maintaining an organized file, and helping others (such as a parent, uncle or close friend) do the same, can make it easier to spot the inconsistencies and red flags that could signal financial abuse.
  • Make a list of financial contacts. Bankers, insurance agents, attorneys, accountants, stockbrokers, and other professionals should be on it. Share your list with these professionals and with family members you trust. In addition, ensure you have a trusted contact on file. This is an individual who the advisor could contact in the event of an emergency or suspected abuse.

i True Link Financial. “True Link Report on Elder Financial Abuse,” 2015.

ii Investor Protection Trust (IPT). “IPT Elder Fraud Survey,” 2010.

iii Jewish Council for the Aging, National Center for Elder Abuse. Paley Rothman article, “Who Commits Elder Financial Abuse and Why Isn’t It Reported?” 2016.

iv National Adult Protective Services Association. “Policy and Advocacy.” www.napsa-now.org. 2017.

 

This article was written by Wells Fargo Advisors and provided courtesy of Michelle Floyd, CFP®, Financial Consultant with Axiom Financial Strategies Group in New Albany, IN 47150 at 812-948-8475.

Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

© 2017 Wells Fargo Clearing Services, LLC. All rights reserved. 0617-01508

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Money Matters | Is Divorce on the Horizon?

Todd Harrett, Financial Advisor with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, Ind.

Todd Harrett, Financial Advisor with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, Ind.

A divorce is obviously an emotionally charged time for you and your family. You’re juggling a lot of arrangements and financial details. Most divorce attorneys suggest thinking about how to divide your financial responsibilities as early as possible ‒ particularly if you have shared debt.

Look at shared debt. With the help of a mediator and/or your financial advisor, you may be able to decide which of you will take which debts. You may consider paying off or closing any credit accounts before you divorce. Most states allow you to settle debt issues between you. If you can’t come to an agreement and the court has to decide for you, the divorce can get very complex and expensive.

Another reason to be proactive about your shared debt: It can help you both maintain good credit ratings after your split and, perhaps most important, prevent uncomfortable conversations about unresolved debts with your ex-spouse in the future.

Get help as soon as you consider a separation. Meet with your financial advisor at the first hint of impending separation. A good financial advisor will be compassionate and willing to remain neutral if he or she serves both you and your soon-to-be-ex. Your advisor can revisit your investment portfolio and do a cash-flow analysis to illustrate what you might draw as future income. He or she can also offer advice about which shared debts might be best for you to take on (or avoid), given the amount of risk with which you are comfortable.

Start with your credit report. A smart way to begin reviewing your debts is to request a copy of your credit report so you can verify which liabilities are in your name. If your spouse is willing to share his or her credit report, that can help you get a full breakdown of all shared debts. Your obligations might include assets such as a primary home, vacation home, vehicles, credit cards and lines of credit, family business–related debt, and possibly student loan debt.

Once you have a full picture of your debts and assets, you can discuss dividing them.

What about the house? Research confirms most divorcing women want to keep the matrimonial home whenever possible, especially when children are still living there. The spouse who keeps each home should also take responsibility for its loan, refinancing it in their name if at all possible.

Information is important to handling debt well during a divorce. One situation where you might have to continue working together with your ex-spouse on a shared debt is if you have an unresolved tax obligation. You should talk to the IRS about setting up separate payments on that joint debt.

You may not agree on how to split contentious debts, such as secret credit card debt created by your spouse. In that case, your state’s laws will come into play. For instance, in most states, ownership of debts is decided by “equitable distribution.” A judge or mediator assigns debts to spouses according to factors such as who signed for it, got greatest value from it, or has the larger income.

Overall, information is the most important key to handling debt well during a divorce. Collect tax returns, credit reports, and bank and brokerage statements as early as possible. The more you know about your marital finances, the easier it should be for you to negotiate over outstanding debts at the settlement table.

 

This article was written by/for Wells Fargo Advisors and provided courtesy of Todd Harrett, Financial Advisor with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN at 812-948-8475.

Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

© 2017 Wells Fargo Clearing Services, LLC. All rights reserved.  CAR 0217-04883

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Money Matters | Focus on Year-End Tax Planning

 

Michelle Floyd, CFP, Financial Consultant

Michelle Floyd, CFP, Financial Consultant

Our company is committed to helping you succeed across all areas of your financial life.  Here are five considerations to think about when it comes to tax planning.

Five areas to consider at year-end:

  1. Analyze your investment portfolio.
  • Review your portfolio to help ensure your allocation still aligns with your goals.
  • Assess tax consequences if you have sold assets earlier in the year.
  • Review tax-loss selling strategies if you have capital gains but wish to keep exposure to a depreciated sector or security.
  1. Manage your taxes.
  • Evaluate the pros and cons of deferring taxable income, if you expect to be in the same or a lower tax bracket next year.
  • Talk to your CPA about increasing your tax deductions.
  1. Maximize your tax-saving opportunities.
  • Consider increasing your retirement savings for the year.
  • Find the right type of IRA for you.
  • If suitable for your circumstances, consider consolidating your assets.
  • Take advantage of an FSA or HSA for health care expenses.
  1. Protect what matters.
  • Review your insurance coverage to help make sure it is adequate for your needs.
  • Review your beneficiary designations and make any necessary adjustments due to life changes (i.e., marriage, divorce, birth of child/grandchild, death, etc.).
  1. Leave a legacy.
  • Review your estate plan to help ensure it is aligned with your wishes.
  • Think about creating or adding to a tax-advantaged college savings plan.
  • Consider developing a plan to complete charitable and family member gifts by year-end.

Taking the time to create, review, or update your investment plan can help you reach your short-term and long-term financial goals. Contact us to schedule a review of your financial situation.

Wells Fargo Advisors is not a legal or tax advisor. However, we will be glad to work with you, your accountant, tax advisor, and/or attorney to help you meet your financial goals.

This article was written by/for Wells Fargo Advisors and provided courtesy of Michelle Floyd, CFP®, Financial Consultant with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN.  She can be reached at 812-948-8475.  Visit our website at www.AxiomFSG.com.

Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

© 2017 Wells Fargo Clearing Services, LLC. All rights reserved.   0817-02327

 

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Money Matters | Which Retirement Plan Is Right for Your Business?

By Todd Harrett | Financial Advisor with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany

Todd Harrett, Financial Advisor with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, Ind.

Todd Harrett, Financial Advisor with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, Ind.

If you own a small business, there are many retirement plan alternatives available to help you and your eligible employees save for retirement. For most closely-held business owners, a Simplified Employee Pension Individual Retirement Account (SEP IRA) was once the most cost-effective choice. Then the Savings Incentive Match Plan for Employees (SIMPLE IRA) became a viable alternative. Today you may find that a defined benefit or 401(k) plan best suits your needs. To make an informed decision on which plan is right for your business, review the differences carefully before you choose.

Simplified Employee Pension Individual Retirement Account (SEP IRA). This plan is flexible, easy to set up, and has low administrative costs. An employer signs a plan adoption agreement, and IRAs are set up for each eligible employee. When choosing this plan, keep in mind that it does not allow employees to save through payroll deductions, and contributions are immediately 100% vested.

The maximum an employer can contribute each year is 25% of an employee’s eligible compensation, up to a maximum of $270,000 for 2017. However, the contribution for any individual cannot exceed $54,000 in 2017. Employer contributions are typically discretionary and may vary from year to year. With this plan, the same formula must be used to calculate the contribution amount for all eligible employees, including any owners. Eligible employees include those who are age 21 and older and those employed (both part time and full time) for three of the last five years.

Savings Incentive Match Plan for Employees (SIMPLE). If you want a plan that encourages employees to save for retirement, a SIMPLE IRA might be appropriate for you. In order to select this plan, you must have 100 or fewer eligible employees who earned $5,000 or more in compensation in the preceding year and have no other employer-sponsored retirement plans to which contributions were made or accrued during that calendar year. There are no annual IRS fillings or complex paperwork, and employer contributions are tax deductible for your business. The plan encourages employees to save for retirement through payroll deductions; contributions are immediately 100% vested.

The maximum salary deferral limit to a SIMPLE IRA plan cannot exceed $12,500 for 2017. If an employee is age 50 or older before December 31, then an additional catch-up contribution of $3,000 is permitted. Each year the employer must decide to do either a matching contribution (the lesser of the employee’s salary deferral or 3% of the employee’s compensation) or non-matching contribution of 2% of an employee’s compensation (limited to $270,000 for 2017). All participants in the plan must be notified of the employer’s decision.

Defined benefit pension plan. This type of plan helps build savings quickly. It generally produces a much larger tax-deductible contribution for your business than a defined contribution plan; however, annual employer contributions are mandatory since each participant is promised a monthly benefit at retirement age. Since this plan is more complex to administer, the services of an enrolled actuary are required. All plan assets must be held in a pooled account, and your employees cannot direct their investments.

Certain factors affect an employer’s contribution for a plan, such as current value of the plan assets, the ages of employees, date of hire, and compensation. A participating employee with a large projected benefit and only a few years until normal retirement age generates a large contribution because there is little time to accumulate the necessary value to produce the stated benefit at retirement. The maximum annual benefit at retirement is the lesser of 100% of the employee’s compensation or $215,000 per year in 2017 (indexed for inflation).

401(k) plans. This plan may be right for your company if you want to motivate your employees to save towards retirement and give them a way to share in the firm’s profitability. 401(k) plans are best suited for companies seeking flexible contribution methods.

When choosing this plan type, keep in mind that the employee and employer have the ability to make contributions. The maximum salary deferral limit for a 401(k) plan is $18,000 for 2017.  If an employee is age 50 or older before December 31, then an additional catch-up contribution of $6,000 is permitted. The maximum amount you, as the employer, can contribute is 25% of the eligible employee’s total compensation (capped at $270,000 for 2017). Individual allocations for each employee cannot exceed the lesser of 100% of compensation or $54,000 in 2017. The allocation of employer profit-sharing contributions can be skewed to favor older employees, if using age-weighted and new comparability features. Generally, IRS Forms 5500 and 5500-EZ (along with applicable schedules) must be filed each year.

Once you have reviewed your business’s goals and objectives, you should check with your Financial Advisor to evaluate the best retirement plan option for your financial situation.

This article was written by Wells Fargo Advisors and provided courtesy of Todd Harrett, Financial Advisor with Axiom Financial Strategies Group of Wells Fargo Advisors in New Albany, IN at 812-948-8475.  Visit our website at www.AxiomFSG.com.

Wells Fargo Advisors does not provide legal or tax advice. Be sure to consult with your tax and legal advisors before taking any action that could have tax consequences.

Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.

©2016 Wells Fargo Clearing Services, LLC.   All rights reserved.         1216-01966 [86913-v6] 1115 e6830

2017-money-matters-feature-podcast

Money Matters | Episode 6: What to Do, Before the I Do’s

Are you ready when the wedding bells ring?
The team from Axiom talk about the financial side — and contract side — of what a wedding brings.
So again, I ask you, are you ready when the wedding bells ring?
Money Matters: The Podcast is sponsored by Axiom Financial Strategies Group of Wells Fargo Advisors.  This monthly podcast is in addition to a monthly article titled, “Money Matters,” that is posted online at www.ExtolMag.com and www.axiomfsg.com.
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At Axiom Financial Strategies Group of Wells Fargo Advisors we sincerely appreciate our clients making opportunities like this possible. Without their support of our business, we would not be able to support programs like this.
Axiom Financial Strategies Group
of Wells Fargo Advisors
101 W Spring Street, Fifth Floor
New Albany, IN  47150
P 812.542.6475 | F 812.948.8732 | www.axiomfsg.com
At Axiom Financial Strategies Group of Wells Fargo Advisors, our team caters to a select group of family-owned businesses, entrepreneurs, individuals, institutions, and foundations, helping them build, manage, preserve, and transition wealth. We accomplish this while providing top-notch service through a team approach that puts our clients’ needs, goals, and interests first. To learn more visit our website at www.axiomfsg.com. Wells Fargo Advisors. Member SIPC.
The information provided is general in nature and may not apply to your personal investment situation. Individuals should consult with their chosen financial professional before making any decisions.

Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.  Insurance products are offered through our affiliated nonbank insurance agencies.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.
Video: CAR# 0817-03149.
Podcast: CAR#  0817-04140