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Weekly Market Update, December 9, 2019

 General Market News

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Retirement Numbers You Need To Know for 2020

Posted by The Axial Company

These are the retirement numbers you need to know for 2020

With a new year comes a new start, and your retirement is no exception.

That's because the limits for pretax saving have gone up for aspiring retirees. And those already in retirement will see a modest boost to their Social Security retirement benefits, along with increased Medicare Part B premiums.

These charts give you an idea of how these changes may pad or pinch your wallet.

 

Retirement savings

Next year, you will be able to save as much as $19,500 in your 401(k) plan and up to $6,000 in your individual retirement account.

Savers who are age 50 and over will be eligible to put away up to $6,500 more in their 401(k) plans or another $1,000 in their IRAs.

The chart below shows how those limits have changed since last year.

 

Social Security benefits

If you are receiving Social Security benefits, you can expect a modest increase to your checks next year.

That extra 1.6% for 2020 is less than the 2.8% boost retirees received in 2019. But it is in line with the average 1.4% cost-of-living adjustments over the past decade. The changes are calculated based on inflation.

The chart below shows exactly how much of an increase you can expect based on the level of benefits you're receiving.

 

Medicare premiums

You may need to brace yourself for higher costs next year if you are on Medicare.

Standard monthly Part B premiums will increase to $144.60 in 2020, up from $135.50 in 2019.

But how much you will pay depends a lot on your income.

One rule, called the hold harmless provision, prevents individuals from having their Social Security benefits reduced because of higher Medicare premiums.

But many individuals will pay more for their premiums based on income-adjusted amounts.

The chart below shows how much coverage will cost you if you have income in excess of $87,000 individually, or $174,000 if you're married and filing joint tax returns.

 

The accompanying pages have been developed by an independent third party. Commonwealth Financial Network is not responsible for their content and does not guarantee their accuracy or completeness, and they should not be relied upon as such. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your representative. Commonwealth does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. Securities and advisory services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services offered through Axial Financial Group are separate and unrelated to Commonwealth.

 

© The Axial Company. All Rights reserved. 5 Burlington Woods, Suite 102 Burlington, Massachusetts 01803 781.273.1400

 

© 2019 CNBC LLC. All Rights Reserved. A Division of NBCUniversal

 

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Weekly Market Update, December 3, 2019

 General Market News

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Giving Tuesday - Axial Drops Off Over 2,000 lbs. of Food to Pantry

Posted by The Axial Company

December 3rd is Giving Tuesday! Great timing for our quarterly donation pick-up and drop-off from the The Greater Boston Food Bank to the Burlington Food Pantry.

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5 Finance Lessons Learned by Preparing Thanksgiving Dinner

Posted by The Axial Company

By KRISTI MUSE, staff writer for RetireBy40

 

Who doesn’t love eating a week’s worth of calories in one sitting? Thanksgiving is the one day each year it’s alright to indulge in too much food while celebrating with friends and family. I love the time spent with loved ones each year, eating good food, enjoying each other’s company, and kicking back a bit before the hustle and bustle of the holidays begin again.

Some of my favorite memories from childhood take place in the kitchen on Thanksgiving Day when I helped my mom to prepare the meal. Even though I didn’t realize it at the time, learning how to prepare Thanksgiving dinner was one of my first real life experiences in financial planning.

 

Here are 5 finance lessons that can be taught by preparing Thanksgiving dinner.

 

1) How to budget

Thanksgiving dinner is one of the most expensive meals of the year. Most families need to plan their budget for ingredients before they go to the store. Knowing how many people you need to feed, how much you have to spend, and what you need to buy to pull it off, is a great budget lesson for any kid.

It’s also a lesson in prudence. It would be ridiculous to indulge in that kind of food and lifestyle throughout the year, but by budgeting and setting money aside ahead of time, you can feel free to enjoy the gluttony of the celebration since it’s a special occasion.

 

2) How to plan

Thanksgiving dinner takes time to plan, not as much time as retirement planning, of course, but the lessons still apply. You need to find the recipes ahead of time, check your ingredients, fill in the gaps, and create a time schedule. Do you have all of the tools you need? Are your knives sharp enough for the job, and do you have enough dishes and space to accommodate everything?

Likewise, do you have enough investment options? Are you making smart decisions to prepare for your future? Do you have the right financial tools to help you accomplish your retirement goals? If you don’t take the time to plan out your actions, then you might end up struggling.

 

3) Learning when to wing it

Even the best-laid plans can fall to ruin. Sometimes you just have to wing it and make the most out of the situation. If you forget an essential ingredient and the store is already closed, how will you fix the recipe?

Puns aside, preparing Thanksgiving dinner teaches you how to be creative, know when substitute, and how to use the resources available to you.  Learning how to wing it with the resources you have on hand is a valuable life lesson, especially when applied to finances.

 

4) Planning for more than you think you’ll need

Life has a funny way of making you need more than you thought you might. Eggs crack on the floor, rolls burn, and your cousin shows up unannounced for dinner along with a guest. Planning Thanksgiving dinner helps you learn how to build in wiggle room for those little contingencies. Instead of planning for 2 rolls per person, plan for 4 rolls per person just in case.

You should plan for retirement like you would plan for Thanksgiving dinner. Always budget for more than you think you’ll need and make sure to have extra just in case something unexpected happens. Do you have a plan for if the market crashes? Do you have enough diversity in your investments to account for any shortcomings in your financial plan?

 

5) Protection to keep from getting burned

No one in their right mind would reach into an oven without putting protection on their hands first. Likewise, you wouldn’t carelessly thrust your investments into an account without making sure you’re protected.

You need to protect yourself and your finances by covering yourself from getting burned. Does your financial institution have fraud protection? Do your credit cards have microchip protection? How much will you be liable for in the case of identity theft?

 

Start them young

If you have kids, grandkids, or nieces and nephews, consider letting them help you prepare Thanksgiving dinner. Ask them to help you build a budget. Take them with you to the store for the ingredients and have them help calculate the costs of the ingredients. Help them to figure out a time schedule for when to put all of the food in the oven.

They may not realize it now, but you’ll be helping them to practice valuable finance skills. Along with the mashed potatoes, you’ll be serving them a big heaping pile of financial discipline for their futures.

 

The accompanying pages have been developed by an independent third party. Commonwealth Financial Network is not responsible for their content and does not guarantee their accuracy or completeness, and they should not be relied upon as such. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your representative. Commonwealth does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. Securities and advisory services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services offered through Axial Financial Group are separate and unrelated to Commonwealth.

 

© The Axial Company. All Rights reserved. 5 Burlington Woods, Suite 102 Burlington, Massachusetts 01803 781.273.1400

 

Copyright © 2010 to 2040 – Retire By 40

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Weekly Market Update, November 25, 2019

 General Market News

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The Problem With (And Solution To) Leaving Your 401(k) With Your Former Employer

Posted by The Axial Company

Authored By, Chris Carosa, Forbes Contributor, Oct 24, 2019

There should be a “Leave No 401(k) Behind Law.” Too many people forget to take their retirement savings with them when they clean out their desks at their old employer. Why is this so pandemic and what should you do to inoculate yourself from this potentially debilitating financial disease?

There’s a trend permeating throughout the retirement plan industry right now. Have you heard of it? It’s called “set-it-and-forget-it.” It’s generally credited with encouraging more people to save more for retirement.

That’s a good thing.

On the other hand, this same philosophy may also be responsible for people having less interest and even less awareness of their own retirement nest egg.

That’s a bad thing.  

“The biggest problem with the way people treat their 401(k) retirement savings accounts with former employers is that they ignore them altogether,” says Laura Davis, a Financial Planner at Cuthbert Financial Guidance in Decatur, Georgia.

This isn’t a temporary problem. It’s chronic. Once people have “set it,” they then naturally “forget it.” How long does it usually take before an ex-employee finally notices their orphan 401(k) account?

“Typically, the employee does nothing with it,” says Wesley Botto, a Partner at Botto Financial Planning & Advisory in Cincinnati. “It sits unmanaged for years before the employee makes any changes to it.”

This apathy can have long-term repercussions for your financial well-being. “When employees have old accounts, they risk losing track of them and they lose the ability to have an overall cohesive financial plan,” says Alexandra Demosthenes, Director of Financial Planning at Investment Advisory Professionals, LLC in Boca Raton, Florida.

Believe it or not, when it comes to their old 401(k) account, ex-employees often choose a far worse alternative to ignorance. They take it with them. “Another problem, and potentially more damaging than ignoring it, is cashing it out,” says Urban Adams, Investment Advisor at Dynamic Wealth Advisors in Orange County, California. “This creates tax liabilities, penalties and untold impact to their plan for securing retirement.”

“Nothing grinds my gears more than hearing otherwise intelligent Americans tell me, ‘I’ll just cash out my old 401(k) to cover myself until I get a new job or to pay for moving expenses,’” says Gary Herman, President of Consolidated Credit in Fort Lauderdale, Florida. “They see a 401(k) as free money today instead of an investment in their future. We chide our children for not thinking about what happens tomorrow if they eat a lot of candy right now, but we don’t take our own advice as adults. Trust me, if you raid your 401(k), you face an epic stomachache that will last the rest of your life.”

There’s a far better way to take your retirement savings with you—without the penalties, without the taxes and without harming your best interest. You simply roll it over. Do this and you increase the odds you won’t lose sight of decades-old savings when it comes time for you to retire.

“Depending on your circumstances, you should always roll your old plan into your new employer’s plan or into an IRA,” says Davis. “You would be surprised how many say they simply don’t remember if they contributed to an account and haven’t kept track of it, sometimes over more than a decade. You certainly don’t want missing money and the best way is to consolidate and simplify whenever possible.”

But, is it better to roll your precious retirement savings into your new employer’s plan or into your own personal IRA? (Or perhaps neither if you expect to be rejoining your old employer again sometime in the future.)

“Every situation is unique, so you’ll want to evaluate all the options—there are great reasons to roll your 401(k) together at your current job while someone else may find it’s best to rollover to an IRA,” says Kelley Long, Senior Financial Planner at Financial Finesse in Chicago and a member of the AICPA Consumer Financial Education Advocates. “There also may be a reason why you would leave your retirement savings at your former employer. The best news here is that this is not a time-sensitive decision unless your old employer requires that you make a withdrawal due to a low balance. In that case, this should be toward the top of your list, and you’ll want to explore the pros and cons of rolling your account to your new job versus to an IRA.”

Indeed, some will argue it’s better to leave your money in an old 401(k) plan. Still, it’s important to recognize the risks inherent in leaving your retirement savings behind.

“Often we assume the original selections we made when we started at our last company are still relevant, in terms of investment decisions, when in fact we should take a yearly look at things with our financial advisor,” says Matt Pietsch, Chief Revenue Officer for ENGAGE Talent in Charleston, South Carolina. “The best time to do this is when we change jobs.”

It’s not just a change in your personal circumstances. Your former employer might have changes of its own. As time goes by, and you move further from that firm, it only gets harder to reclaim your retirement assets.

“The old company could shut their doors or be acquired,” says Kelley Steven-Waiss, Founder of Hitch in Los Gatos, California. “It will become tedious to try to figure out what institution that account is still with. Additionally, you have the problem of forgetting passcodes or your email is no longer working. It just makes it that much more difficult. Make it a part of your onboarding or exit process!”

There’s also a risk in leaving lots of little baby retirement accounts strewn across your financial landscape. “Like anything else too much of something is bad for us,” says Raquel M. R. Thomas, CEO of Dream Catchers Corp in Columbia, South Carolina. “In the day-to-day of operating in the on-the-job space, having multiple IRA accounts could be mishandled or not handled at all due to having multiple accounts. Consolidating allows for a one stop shop.”

You can’t underestimate the value of “one stop shopping.” You shouldn’t misunderstand it, either. All it means is the ability to bring independent experts under one single umbrella. It’s easier for them, it’s easier for you and it improves your chances for success.

“Consolidating retirement savings from your old company into a single IRA account streamlines the management and administration of your retirement funds and makes it significantly easier to track and invest in the future,” says David Levine, COO at BerlinRosen in New York City. “In addition to being able to see all funds in one place, it’s easier to make changes to fund investments in one central location rather than several disjointed accounts. Additionally, consolidating into the right IRA may give you better investment options and lower administrative fees, ultimately helping you maximize your investments and get a better return.”

Eventually you’ll retire and you’ll need to roll over your retirement savings into a personal IRA. At the same time, you’ll want to have built your team of advisors well in advance of your retirement party. Why wait? You can begin this process the moment you leave your first job for your second. This will allow (and encourage) you to start working with the professionals you’ll need to work with down the road.

“It is beneficial to keep all of your retirement savings in a personal account with the help of an accountant or financial advisor as this will keep your funds safe from any change that might happen with you or the company itself,” says Sean Collins, VP of Operations at Maine Marketing Association in Portland, Maine. “This is an added safety measure that not many employees take advantage of.”

Don’t let the fear of the unknown keep you from acting. Ask around. See how others have addressed this same situation.

“The point of surrounding yourself with experts is genius,” says William Tincup, President of RecruitingDaily in the Dallas/Fort Worth Area. “We’re not taught personal finance in school. That’s why most Americans make horrible financial decisions.”

Don’t be like most Americans. Don’t make horrible financial decisions.

Seize the opportunity.

Even if retirement is years away, changing jobs provides you the opening to take your first step towards controlling your future.

 

The accompanying pages have been developed by an independent third party. Commonwealth Financial Network is not responsible for their content and does not guarantee their accuracy or completeness, and they should not be relied upon as such. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your representative. Commonwealth does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. Securities and advisory services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services offered through Axial Financial Group are separate and unrelated to Commonwealth.

© The Axial Company. All Rights reserved. 5 Burlington Woods, Suite 102 Burlington, Massachusetts 01803 781.273.1400

© 2019 Forbes Media LLC. All Rights Reserved.

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End of Year Moves to Trim Your 2019 Tax Tab

Posted by The Axial Company

It's time to look for last-minute moves that can shrink your 2019 tax bill. But the end of the year is coming fast, so don't procrastinate.
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Weekly Market Update, November 18, 2019

 General Market News

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Year-End Tax Planning 2019

Posted by The Axial Company

 

As the end of the year approaches, it's time to start planning ahead. Now is a good time to begin pulling out last year's tax return, along with your current pay stubs and account statements.

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Weekly Market Update, November 11, 2019

 General Market News

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Market Thoughts for November 2019

Posted by The Axial Company

By Brad McMillan, CFA, CAIA, MAI, November 1, 2019

October was a great month, with U.S. markets doing well and international markets doing even better.

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6 Money Tips for Caregivers

Posted by The Axial Company

According to the Caregiver Action Network, more than 90 million Americans care for a loved one living with a disability, disease or experiencing reduced financial capability as a result of aging.
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Could a Health Savings Account Help Strengthen Your Retirement Plan?

Posted by The Axial Company

 
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Weekly Market Update, November 4, 2019

 General Market News

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The Big Picture on the Economy

Posted by Brad McMillan, CFA, CAIA, MAI, Oct 30, 2019

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Weekly Market Update, October 28, 2019

 General Market News

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How Does the New Tax Law Affect Your Estate Plan?

Posted by The Axial Company

 
 
 

In December 2017, President Donald Trump signed a new tax bill into law. Known previously as the "Tax Cuts and Jobs Act," the reform will have far-reaching impacts on many areas of tax and financial planning. One significant area of impact is estate planning.

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Not having longterm care insurancecan be ‘the single biggest devastator’ of your financial plan

Posted by The Axial Company

Published Mon, Oct 14 2019, Michelle Fox @MFoxCNBC

No one likes to think about needing long-term care.

Yet the reality is that many people will at some point in their life.

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Key Estate Planning Documents You Need

Posted by The Axial Company

There are five estate planning documents you may need, regardless of your age, health, or wealth:
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