Quiver Financial News

UPS reduces pilots force heading into the holiday season? But the US economy is Strong according to Janet Yellen. What gives? Tune into today’s Half-truth episode where we break apart the latest headlines that seem to only tell half the story. The Zweig Breadth Thrust Indicator Flashes on Friday. – Sounds kind of dirty to us.

The landscape for small business taxes in the U.S. has undergone significant changes over the last three years, presenting unique challenges and opportunities. As a business owner or sole proprietor, the changes that have probably impacted you the most are the new tax laws. There have been more updates to the tax code in the last 3 to 5 years than at any other time in history. Top that with a dwindling pool of qualified CPAs, and we have a perfect storm.
Staying abreast of the evolving tax code and leveraging tax planning strategies is crucial—not only for compliance but also for maximizing your financial potential. Remember that tax planning is a year-round endeavor, not a scramble, as the calendar year approaches its close.
But running your business is your top priority—not keeping up with the new tax laws. Hopefully, we can shine some light on the main topics you should consider.
Choosing the Right Tax Professional for Your Business Needs
First, it’s important to recognize that not all tax preparers have the expertise needed for effective business tax strategies. In an era where qualified CPAs are in short supply, distinguishing between mere tax filers and those capable of offering substantial tax advice is vital. As you focus on running your business, it’s advantageous to engage a tax professional who can navigate the complexities of taxable incomes and deductions for you.
Second, before diving into the nuances of recent tax law changes, consider implementing tax savings tactics now. Beyond well-known deductions, like travel, supplies, and retirement plan contributions, there are several underutilized tax credits and strategies that could significantly reduce your taxes filed and increase tax benefits:
Income splitting to lower overall tax rates
Capital gain exemptions for qualifying investments
Energy investment deductions, including oil, gas, and solar tax credits
Benefits under Puerto Rico Act 60
Leveraged charitable contributions for sizable tax deductions
Tax-free income opportunities by renting your primary residence
State and Local Tax (SALT) deduction workarounds
Utilizing Donor Advised Funds for charitable giving
The saying by Arthur Godfrey, “I am proud to pay taxes, but I would be just as proud to pay half as much,” captures the sentiment of intelligent tax management. It’s not about evasion but about employing smart business tax strategies to keep your hard-earned money working for you.
Navigating the New Tax Code: Key Changes for 2023
Some of the pivotal changes in the tax code affecting your business taxes for 2023 include:
Secure Act 2.0. 401(k) tax credits
Net Operating Rules
Excess business-loss Limitation rules
Interest Expense limitation rule
Goodbye to the first-year bonus depreciation
State Disability Insurance withholding (SDI)
These could have significant implications for your tax bill and should be reviewed with a financial advisor.
100% Tax Credit of New Plan Costs for First Three Years
The SECURE Act 2.0 has introduced enhanced 401(k) tax credits to benefit your bottom line and your employees’ retirement plans. These tax credits can cover 100% of new plan costs for the first three years, potentially offering up to $15,000 in savings. Moreover, providing an employer match now comes with additional tax credits for small business taxes—up to $1,000 per eligible employee, which can be a considerable tax benefit.
Employer Match Provides Tax Credits of $1,000 per Employee
When you opt to match an employee’s contribution, tax credits of up to $1,000 per employee may be available to you.
While employer matches are already a deductible expense, providing matches for businesses with fewer than 100 employees can now lead to additional tax credits. Companies with up to 100 workers may be eligible for these credits, receiving up to $1,000 for each of the first 50 employees, provided their annual earnings do not exceed $100,000.
For the initial two years of implementing the plan, the credit rate is 100% per employee, up to the $1,000 cap. Subsequently, the rate drops to 75% in the third year, is halved to 50% in the fourth year, and further reduced to 25% in the fifth year of the plan’s duration.
Beyond that, there are no credits for subsequent years. Please note that additional tax credits are available for employees numbered 51 through 100, although these are at a reduced rate. Because this focuses on small businesses, if you have more than 100 workers employed, tax laws haven’t added any new credits for you.
Lastly, it’s worth noting that contributions for which you obtain a tax credit may not be eligible for further tax deductions. Nonetheless, any portion of the contribution that exceeds the credit amount should remain deductible. It’s advisable to consult with your tax accountant for a thorough review of your situation.
Auto-Enrollment Credit
Certain employers that incorporate an auto-enrollment feature into their retirement plans may qualify for an annual tax credit of $500, spanning a period of three taxable years. This commences from the initial taxable year in which the employer integrates the auto-enrollment provision into their plan.
Proactive Steps Towards Compliance and Tax Efficiency
The Federal Government has already stated they will roll out a nationwide retirement mandate for small business owners. With this potential mandate on the horizon, acting now not only saves you headaches later but is also a proactive compliance step. This can include deferring income into a 401(k) yourself to meet personal future mandate requirements or establishing a 401(k) option for your employees.
Remember, tax deductions such as the home office deduction and other small business-related write-offs can still be leveraged to reduce your taxable income. To ensure you’re making the most of these opportunities, it’s recommended to file your tax return with the aid of seasoned professionals.
With the right tax strategies and professional guidance, reducing taxes while complying with the IRS becomes a more straightforward and less daunting process. Contact a trusted tax advisor to ensure you’re positioned for immediate and long-term tax savings.
 
 

As we journey through life, the nuances of financial planning and wealth management evolve. Especially during the golden years, when the complexities of retirement come to a head, creating a blueprint for financial stability becomes paramount.
This phase is marked by reflections on past financial decisions and anticipations about the future—balancing current needs with long-term security. The rising cost of living, the potential for unforeseen healthcare needs, and the innate desire to leave a legacy for our loved ones form a complex tapestry of considerations.
We deal with this a lot—and we love to help! So, let’s dissect the financial challenges seniors face and chart a roadmap to navigate this intricate landscape, ensuring peace of mind and sustained quality of life.
Challenges Seniors Face in Retirement Finances
As time marches forward, seniors confront a diverse array of financial challenges, especially when managing their nest egg during retirement. One might say it’s like navigating a maze – every turn leads to a new decision, and the path isn’t always clear.
A pressing question that haunts many is, “Will I outlive my retirement savings?” Such concerns are valid, especially in today’s economic landscape, where life expectancy and cost of living have increased. Compound this with the potential pitfalls of investing one’s savings. On one hand, there’s the aspiration to produce a sufficient income that keeps pace with inflation; on the other, there’s the inherent risk of market fluctuations.
Then, casting an even more daunting shadow is the potential price tag of long-term care. A prolonged stay in an assisted care facility can quickly erode even the most robust savings.
Each of these concerns has its own intricacies. Failing to prepare adequately for even one can jeopardize the serene retirement every senior hopes for. But with the right approach and guidance, these financial hurdles can be addressed, ensuring stability and peace of mind in the golden years.
Two Simple Strategies for Staying On-Course
Amidst the intricate financial considerations of planning for retirement, it’s easy to feel overwhelmed. Yet, sometimes, the simplest strategies can make the most significant impact. Focusing on two straightforward yet vital approaches can anchor your retirement planning and guide you toward a stable financial future.
Set Retirement Goals
You can further help relieve financial strains by adopting a few simple goal-setting strategies. While there’s no one-size-fits-all solution, these simple steps can at least help keep you informed and focused on your personal finance goals during retirement.
To help set effective goals in your retirement, consider:
Defining “Comfortable”: Understand what a comfortable lifestyle means to you. Whether it’s traveling, hobbies, or simply quiet days reading, define and quantify “comfortable.”
Creating a Realistic Retirement Budget: Forecast your future expenses by creating a comprehensive budget. This helps in planning, ensures your retirement savings align with the lifestyle you anticipate, and provides an estimate of your monthly bottom line.
Seek Professional Guidance
Tackling the financial intricacies of retirement can be daunting. For those feeling overwhelmed by the nuances of retirement savings, the challenges of post-retirement money management, or who want help with estate planning, a fee-based financial professional can offer invaluable insights, such as:
Tailored Strategies: A financial expert can provide personalized strategies that cater to your unique financial situation and help ensure optimal growth and preservation of your savings.
Navigating Market Fluctuations: With their finger on the pulse of financial markets, professionals can guide you through volatile times, offering advice on when to make strategic moves.
Legal and Tax Advantages: There are various regulations and tax benefits associated with retirement planning. An expert can help you take full advantage of these to maximize your savings and even reduce your income tax burden.
The Varying Roles of Financial Professionals
Not all financial professionals wear the same hat. Some primarily focus on retirement planning, helping clients prepare for their golden years. In contrast, others emphasize active asset management, constantly monitoring market fluctuations and making real-time decisions to optimize returns.
When seeking professional guidance, it’s crucial to ascertain their area of expertise. This ensures that the advice you receive aligns perfectly with your needs, whether you’re primarily concerned about active investment management or comprehensive retirement planning.
Here’s how they differ:
Active Asset Management: These investment managers are more hands-on. They continually assess market dynamics and, based on their analysis, make informed decisions to safeguard your investments, especially crucial as market downturn recovery time reduces with age.
Retirement-Centric Planning: On the other hand, some professionals are more attuned to the holistic needs of retirees. They focus on the investment portfolio and consider other facets like cost of living adjustments, potential healthcare expenses, and other post-retirement nuances.
Practical Approaches for Pre and Post-Retirement Planning
As we delve deeper into retirement strategies, it becomes evident that planning needs distinct approaches depending on which stage of the journey you’re on. The strategies for accumulating wealth differ from those for managing and preserving it.
Pre-Retirement Planning
The pre-retirement phase is a crucial period where the primary objective is building a substantial nest egg. This phase demands discipline, consistency, and forward thinking. As the foundation for your future, every decision you make here will echo into your retirement years.
Systematic Savings: The earlier you start to save for retirement, the better off you’ll be. Adopting a systematic savings approach—consistently setting aside a specific portion of your income—lays a solid foundation for your retirement.
Leverage Modern Tools: The digital age has provided us with invaluable resources. Reputable brokerage, mutual fund, and insurance companies offer online tools that demystify financial jargon and guide your savings journey. Use these platforms to understand where you stand and how far you need to go.
Post-Retirement Planning
Transitioning into post-retirement doesn’t mean putting your financial strategies to rest. If anything, this phase demands a shift in perspective. Now, it’s less about aggressive accumulation and more about judicious management, ensuring your funds last and serve you well through this chapter of life.
Factoring in Inflation and Growing Expenses: Retirement doesn’t shield you from economic realities. Inflation diminishes your purchasing power, and as the years go by, you might notice certain expenses, especially healthcare-related, creeping up. It’s paramount to account for these anticipated increases in your financial planning.
Annual Financial Checkups: Once retired, the financial landscape doesn’t remain static. You’ll experience market fluctuations, varying interest rates, and personal financial shifts. Performing an annual financial health checkup allows you to review and recalibrate your financial strategy. This helps ensure you remain on track, optimizing your savings for maximum benefit.
Delaying Social Security Benefits: One often overlooked strategy is the timing of when to start drawing on your social security benefits. By waiting a few years beyond your earliest eligibility, you can substantially increase the monthly benefits you receive. This tactic can add a significant buffer to your post-retirement income.
Navigating the Investment Terrain in Senior Years
As senior years approach, the terrain of investment changes. The winding roads of long-term investments shift to the cautious paths of short-term ones. Why? Because the buffer period to recover from financial hits dwindles.
Addressing Investment-Related Stress
We’ve seen seniors grapple with the stress of investments not meeting the mark. There are sleepless nights when savings aren’t enough to keep pace with inflation or when market fluctuations eat into their nest egg.
However, there are a few tried-and-tested investment strategies that can help relieve that stress:
Diversify Investments: By diversifying your investment portfolio, you distribute risk. Instead of putting all your eggs in one basket, spread them out. Consider mutual funds, which pool together multiple stocks and bonds.
Stay Updated with Economic Trends: Knowledge is power. Staying informed about interest rates, inflation, and market trends will allow you to make informed decisions.
Don’t Shy Away from Modern Investments: While traditional IRAs and 401(k) plans are staples in retirement planning, consider Roth IRAs for their specific tax advantages.
From Long-Term to Short-Term Mindset
The lens through which seniors view investments needs a paradigm shift. Earlier, a down market could be seen with the hope of an upturn. Now, there’s less room for error and less time to make up for losses.
Here are some strategies that can help shift the mindset from long- to short-term:
Stay Liquid: Ensure a portion of your investments is easily accessible, whether in savings accounts or short-term bonds. This ensures you’re never caught in a bind needing funds.
Risk Tolerance Check: As you age, your risk tolerance usually reduces. It might be wise to shift to more conservative investments.
Quarterly Portfolio Check-Ins
Remember when you’d glance at your investments maybe once a year? In retirement, those days are gone. With market volatility and the shorter runway, a quarterly review of your savings, risks, and returns is prudent. The key is to stay proactive, informed, and agile in the golden years. It’s not just about protecting your wealth but ensuring it serves you in the best way possible.
When checking in with your portfolio, consider:
Rebalancing Your Portfolio: Certain investments might outperform others over time, leading to an imbalance. Regularly adjust to maintain your desired asset mix.
Consulting a Financial Professional: Especially if you’re juggling multiple investment avenues, seeking advice ensures you’re on the right track.
Addressing the Costs of Long-Term Care
It’s essential to recognize that with medical advancements, many are living well beyond age 70. This longer lifespan underscores the importance of ensuring your funds can support potential long-term care needs.
The financial burden of long-term care can be immense—monthly costs of such facilities often exceed $3,000, and typical stays last around three years.
One approach to mitigate this concern is the “bucket strategy,” or categorizing your savings based on anticipated needs. By segmenting your savings, you can optimize investment strategies based on when you’ll need the funds. This proactive approach gives a clearer view of how your money will serve you in the future.
The three buckets used in this strategy are:
Immediate Needs Bucket: Funds for short-term expenses, like inflationary increases or general living expenses.
Medium-Term Bucket: Savings for projected costs a decade away, like a significant trip or supporting a grandchild’s education.
Long-Term Bucket: Allocate funds for potential long-term care needs two decades ahead. With the extended timeframe, this bucket can be more aggressively invested.

When planning for retirement, there’s no shortage of advice to guide you. Additionally, many institutions try to sell you financial products or services (such as savings accounts) that may actually hinder you from maximizing your savings.
That’s why, as you navigate through investment options, retirement accounts, and saving strategies, it’s crucial to avoid common pitfalls that can seriously hamper your financial future.
I’ve seen it all. So, I want to help you uncover the five common money traps that can undermine even the most well-intentioned retirement plans. From the importance of setting boundaries to the pitfalls of procrastination, I want to help you build a more secure retirement.
Understanding Money Traps: What They Are and Why They’re Dangerous
“Money traps” refer to financial behaviors, money habits, or decisions that seem harmless or insignificant in the short term but can have detrimental effects on your long-term financial security, particularly your retirement planning. They can come in various forms, from poor spending habits and lack of a systematic savings system to being too conservative with your investment choices.
The Long-Term Consequences of Money Traps
While the impact of these money traps might not be immediately apparent, their long-term consequences can be severe. For example, failing to put money into a dedicated retirement savings account regularly can lead to an underfunded retirement. Similarly, letting your savings sit in a low-interest bank account might feel safe. But inflation and missed opportunities for compound growth will erode your purchasing power over time.
Why Avoiding Money Traps Is Crucial for Financial Security
Avoiding money traps is essential for securing a stable and comfortable future, especially in retirement.
In an era where pension plans are becoming less common, and the responsibility for retirement saving increasingly falls on the individual, financial missteps can delay or even derail your retirement plans. Knowing these traps and how to avoid them will help you build a robust retirement savings plan and ensure your financial security.
Trap 1: Not Setting Boundaries for Retirement Savings
One of the most overlooked aspects of retirement planning is the importance of setting strong financial boundaries. In my 25-year career providing personal finance and retirement planning advice, I’ve seen how the absence of boundaries can seriously undermine even the most well-intentioned retirement goals.
Failing to set boundaries can lead to poor spending habits that eat away at your retirement savings. For example, if you don’t have a cap on discretionary spending money, you may find yourself dipping into your retirement savings accounts more frequently than you should. Without firm boundaries, you’re essentially putting your financial security at risk.
Another boundary issue comes into play when you sacrifice your own retirement savings to help loved ones financially. While the intention is noble, it compromises your ability to save effectively for your own future. I’ve seen many people tap into significant portions of their retirement savings accounts intending to be a “good” or “nice” person, only to find themselves financially strained later in life.
Trap 2: Not Having a Systematic Savings System
From what I’ve seen in my career, I would argue that as much as 98% of successful retirement planning stems from a systematic approach to savings. These savings plans involve regular, planned contributions, usually directly from each paycheck.
Creating a systematic savings plan isn’t complicated, but it’s critical for retirement saving. The most straightforward way to do it is to dedicate a certain percentage of each paycheck to a savings account designed for retirement. For instance, taking 10% of each paycheck and transferring it to a retirement savings account before budgeting for other expenses is a highly effective strategy. Depending on what your employer offers, you might even be able to set up an automatic transfer to a 401(k) plan or a Roth IRA. Maximizing any employer match offerings is crucial, as this is essentially free money deposited right into your retirement plan.
Neglecting to set up a systematic approach to retirement savings makes achieving your savings goals a matter of chance rather than planning. When retirement saving isn’t automated or regularly scheduled, you risk putting money into your bank account but failing to move it into a vehicle that grows over time. The lack of a systematic savings plan essentially leaves your financial security up to luck, a strategy that is as unreliable as it sounds.
Trap 3: Overly Conservative Investments
While it’s natural to exercise caution regarding retirement planning, being overly conservative can actually work against you. Stashing your hard-earned money in savings accounts or other financial products with low interest rates may feel safe, but it’s a trap that can keep you from reaching your savings goals.
Compound interest is often called the “8th wonder of the world” for good reason. By putting your money into investment vehicles that offer a higher interest rate, you can take advantage of the compounding effect. This allows your savings to grow exponentially over time, strengthening your financial security in the long run. A good financial advisor can guide you through diversifying your investments, helping you make the most of opportunities without taking unnecessary risks.
To make the most of this financial marvel, looking beyond traditional savings accounts is essential. Consider other retirement savings plans, like a 401(k) plan with employer match or a Roth IRA. These options often provide more attractive rates of return, making them an essential part of your retirement planning.
By avoiding overly conservative investment choices, you set yourself up for a more secure future, ensuring that your money is working as hard for you as you worked for it.
Trap 4: Choosing the Wrong Partner
Love might be blind, but it shouldn’t be financially reckless. When it comes to retirement planning, picking a partner with poor spending habits can jeopardize your relationship and your future. Your personal finance journey becomes a shared endeavor once you co-mingle funds and debt (such as the ever-present danger of outstanding student loans). A partner who spends carelessly can significantly disrupt your savings rate and goals.
If your partner’s spending habits are a roadblock to your savings plans, one option is to keep your finances separate. This can mean having individual bank accounts or designating one account for shared expenses and another for personal use. By doing this, you can maintain control over your portion of the funds while still contributing to joint financial responsibilities.
Should issues persist, it might be beneficial to consult a relationship coach or a psychologist who can provide strategies for harmonious financial coexistence. These professionals can provide specialized advice to help you pay off debt, put money towards retirement, and achieve other financial goals without straining your relationship.
Being on the same financial page as your partner is not just good for your relationship; it’s crucial for your long-term financial security.
Trap 5: Procrastination in Retirement Planning
The “I’ll do it tomorrow” syndrome is a formidable enemy of financial security. Procrastination in retirement planning, particularly among small business owners, can have significant long-term consequences. When it comes to securing your financial future, timing is everything. Putting off your retirement saving can severely impact the amount you’ll have available once you’re no longer earning a steady income.
One way to gauge the effect of starting late is by using a retirement calculator. These tools can help you understand the immense value of starting early and its compounding impact on your savings. For example, someone who starts saving at age 22 and continues until age 30 can, due to compound interest, end up with more money in their retirement account at age 65 than someone who starts at 40 and saves consistently till age 65. It vividly illustrates the importance of interest rates in retirement savings.
Consistency is critical, especially for small business owners who might not have employer match options or 401(k) plans. Developing and sticking to a strategy can make the difference between a comfortable retirement and financial struggle. A Roth IRA or other independent savings accounts can be particularly beneficial for self-employed people.
In summary, tomorrow may be too late regarding retirement planning. The sooner you start, the better off you’ll be in achieving your savings goals.
 
 

Buckle up butter cup this episode is a good one. This week on the Half-Truth.  We discuss what is half true behind Ryan Reynolds and Jim Cramer, Inflation and the CPI revisions that have been happening for the last year.  We talk about Real Estate Brokers 6% commission.  BlackRock getting into Target Date funds.  We poke fun at how stupid the” Ask the Advisor” articles are.  We even have a little fun about United Airlines.  Enjoy!

Taking control of your financial future often involves making decisions that ripple far beyond your own life.
One such decision is designating a 401(k) beneficiary—a choice that can secure a loved one’s financial stability long after you’re gone.
Navigating this essential aspect of estate planning involves more than just ticking a box. It’s a journey through complex rules, varying options, and sometimes emotionally charged family dynamics.
So, I wanted to dive in and steer you through the labyrinth of 401(k) beneficiary rules and offer insight into making the best choices for your unique circumstances.
What is a 401(k) Beneficiary and Why Are They Important?
When you have a 401(k) or IRA account, you’re not just saving for your future. You’re also paving the way for financial stability for your loved ones when you’re not around. A 401(k) beneficiary is someone you designate to receive the assets in your 401(k) account after you pass away. They are a critical part of your estate planning.
Why is naming a beneficiary so important? If you don’t set one, your assets could be tied up in a lengthy legal process. Even worse, they might not go to the person you’d have chosen. Let’s say you’re married but haven’t named your spouse the primary beneficiary. Depending on the laws of your state and the rules of your retirement plan, your hard-earned savings might not go to your spouse automatically.
So, a 401(k) beneficiary is not just a name on a form; it’s a crucial decision that impacts how your assets are distributed after your death. It’s not just about you; it’s about securing the financial future of the people you care about.
Contingent Beneficiaries
Contingent beneficiaries work precisely as the name implies: they act as backup beneficiaries if the primary beneficiary predeceases you or is otherwise unable to claim the assets. Naming contingent beneficiaries can help prevent your estate from experiencing legal holdups, such as an extended probate process. While not necessary, naming a contingent beneficiary can add more flexibility and security to your estate planning.
The Impact of the Secure Act on 401k Beneficiary Rules
In 2019, the landscape for naming 401(k) beneficiaries changed dramatically with the introduction of the Secure Act. This legislation separated beneficiaries into three categories: eligible designated beneficiaries, designated beneficiaries, and those who don’t fit into either of these classes. The legislation was popular and successful, leading to an update in 2022 under the new Secure Act 2.0.
So, what does this mean for you? First, it adds an extra layer of complexity when deciding who to name as a beneficiary. For instance, surviving spouses, minor children, and disabled individuals fall under “eligible designated beneficiaries (EDBs).” This category gets special tax treatment and more flexibility in withdrawing funds. Additionally, any individual not more than ten years younger than the deceased 401(k) owner can be named an EDB.
Others, like adult children or friends, fall under “designated beneficiaries.” Their withdrawal options might be more limited, affecting how quickly they must withdraw the money and whether they’ll face an early withdrawal penalty.
And finally, entities like charities or trusts, as well as individuals not clearly defined, fall into the last category. They have to adhere to different rules, often less advantageous.
Most beneficiaries must follow the 10-year rule. This rule stipulates that beneficiaries must take Required Minimum Distributions (RMDs) to completely empty the account by the 10th year following the original owner’s death. Spouses are the most flexible beneficiaries, as they can blend the inherited 401(k) with their own plan, allowing them to delay RMDs until they retire. Minor children can also delay RMDs, as we’ll see below.
To navigate this maze of rules, it’s advised to consult with an experienced financial advisor or a family law attorney, especially before naming a minor as a beneficiary.
The Complexity of Naming a Minor as a Beneficiary
Choosing a minor as a 401(k) beneficiary may seem like a generous gift for their future, but it’s a decision that comes with a set of complications. Minors, defined as individuals under the age of 18 who haven’t been emancipated, can’t directly manage a 401(k) account or a traditional IRA. So, if you do name them as beneficiaries, someone else has to step in and manage the assets until they reach the age of majority.
First, an executor must be appointed to oversee the management and disbursement of the 401(k) funds. This typically involves a legal process where someone petitions the state’s courts on behalf of the minor. Legal experts, such as a family law attorney, are generally necessary to file the appropriate paperwork.
Additionally, family dynamics can make this process even more challenging. For example, if the minor’s parents are going through a contentious divorce, the proceedings to name an executor could get complicated and prolonged. Moreover, other relatives like grandparents might need to be notified and could have a say in who gets appointed as the executor.
And here’s one last consideration when naming a minor child as your 401(k) beneficiary: while minor children who inherit a 401(k) can delay RMDs, they can only do so until they reach the age of the majority (in most places, 18 years old). At this point, the ten-year rule begins, giving them ten years to empty the account through RMDs.
For all these reasons, if you’re considering a minor as a beneficiary to your 401(k) plan, it’s crucial to consult with professionals versed in your state’s laws to make the process as smooth as possible.
Special Considerations for Spousal Beneficiaries
If your spouse is your 401(k) beneficiary, special rules come into play, largely thanks to the Secure Act. Surviving spouses are classified as “eligible designated beneficiaries,” which gives them more flexibility than other beneficiaries.
Spousal beneficiaries often have more options and flexibility. Still, each choice comes with its pros and cons. As always, it’s recommended to consult a financial advisor familiar with the laws of your state to make the most informed decision.
Understanding these rules and options empowers you to make the best financial decisions during a challenging time.
Options for Surviving Spouse Beneficiaries
Lump Sum Distribution: One option is to take the entire 401(k) balance as a lump sum. While this provides immediate access to funds, it’s crucial to consider the tax implications. The entire amount is taxable in the year it’s withdrawn, which could bump you into a higher tax bracket.
Rolling into Own IRA: A more tax-efficient approach is to roll the deceased’s traditional 401(k) account into your own traditional IRA. This option allows the assets to continue growing tax-free until you decide to make withdrawals. If the inherited plan is a Roth 401(k), you can only roll it over into another Roth account.
Family Trusts: An Alternative to Direct Beneficiary Designation
Not comfortable with naming a minor or even a spouse directly as your 401(k) beneficiary? You might want to consider naming a family trust as the beneficiary instead. Trusts can offer a layer of protection and control that individual beneficiaries cannot. They can also avoid the need for an executor when leaving your assets to a minor.
Setting up a trust requires careful planning and some legal paperwork, but it can give you greater peace of mind about how your 401(k) assets will be managed and disbursed. As with any complex financial decision, it’s best to consult with experienced professionals like financial advisors and family law attorneys to explore whether this option is right for you.
Benefits of “Conduit” and “Accumulation” Trusts as Named Beneficiaries
Two popular types of trusts often used are “conduit” and “accumulation.” Both types are recognized under the Secure Act, offering tax advantages and regulatory compliance.
Conduit Trusts: With a conduit trust, RMDs from the 401(k) pass directly to the trust and then must be distributed to the trust beneficiaries. This type of trust can help control how much money minor beneficiaries receive at a time.
Accumulation Trusts: Unlike a conduit trust, an accumulation trust allows the trustee to accumulate distributions within the trust. This can provide protection from creditors and more controlled disbursement of funds.
Practical Advice and Special Circumstances
When naming 401(k) beneficiaries, several variables must be considered. While the rules and regulations can be navigated, you should also account for the practical aspects and the unique circumstances your beneficiaries might face.
Naming a 401(k) beneficiary isn’t a decision that should be made lightly. It requires strategic planning and, often, professional advice to ensure that the account holder’s wishes are honored while safeguarding the beneficiaries’ financial future.
Age Considerations and Health
First, consider the minor beneficiaries’ ages and your health. If the child is 16 or 17 and you’re in good health, the risk of them facing complications may be lower. But remember, you’re essentially rolling the dice. If something unforeseen happens, the minor could still face challenges accessing and managing those assets.
Divorcing Parents and Contentious Divorces
The situation becomes even more complex when the minor’s parents are divorcing or are embroiled in a contentious divorce. These personal matters can slow down the already lengthy process of transferring assets and may require more legal maneuvering. Therefore, consider the family dynamics that could impact the minor’s ability to receive and manage the inheritance.
Consultation with a Family Law Attorney for State-Specific Rules and Advice on Trusts
Every state has its own set of laws on inheritance and trusts. Therefore, the textbook advice is to consult a family law attorney who is well-versed in your state’s regulations. They can guide you on how to set up a conduit or accumulation trust best and help you navigate the state-specific rules that ultimately determine how smoothly the process will go for the minor beneficiaries.

Financial planning is a critical aspect of starting and operating a successful business. It also plays a crucial role in your personal wealth management.
Whether you’re just starting or you’ve been in the game for a while, a well-thought-out financial plan is your roadmap to long-term success.
We want to help equip you with the necessary tools and knowledge to secure your financial future.
So, read on to discover tips for small business owners and entrepreneurs hoping to make the most of your business and personal finances.
The Importance of Separating Personal and Business Finances
When you’re an entrepreneur, mixing personal and business finances is tempting. After all, it’s all your money, right? But here’s the thing: blending them is a bad idea for a few key reasons.
Legal Protection
First off, you want to protect yourself legally. It helps create a clear line between you and your business. So, if your company faces legal issues, your personal assets—like your home or personal savings—are safer.
Easier Tax Management
Tax time is simpler when your finances are separate. You can more easily identify business expenses, income, and potential tax deductions. No one likes sifting through months of mixed expenses at the last minute. Plus, when you file your income tax return, it’s easier if everything is already sorted.
Clear Financial Picture
Having separate accounts gives you a clearer picture of how your business is doing. You can track income, manage business expenses, and see your bottom line at a glance. This helps when you’re making decisions. For example, you’ll know when you can afford to hire more staff or invest in new equipment.
How to Separate Finances
Navigating the financial landscape as a small business owner can be daunting, especially when personal and business finances intertwine. Separating these two financial realms is not just a good practice—it’s essential for transparent bookkeeping and stress-free tax preparation.
Here are some common steps that can help effectively separate your personal and business finances, paving the way for long-term success in both:
Establish a legal entity (LLC, S Corp, Sole Proprietor, etc.).
Open a checking account exclusively for the business.
Get a business credit or debit card for expenses.
Pay yourself a salary to separate your personal money from the company’s.
Keep track of receipts—both business and personal.
Track shared expenses (car, phone, or—for those who work from home—mortgage), as some may be deductible.
Financial Planning Tips for Entrepreneurs
In the world of entrepreneurship, financial planning is one of the most important steps you can take to maximize wealth. This requires steps like budgeting, expense management, and cash flow monitoring.
Mastering concepts like these is critical to ensuring the long-term financial health of your business. To build business wealth, consider:
Creating a Realistic Budget for Your Business
A realistic budget is integral to your business plan, helping you allocate resources efficiently. Assess your business for necessary expenditures, keep track of your income and expenses, and revisit your budget regularly to adjust as needed. With a realistic budget, you’re not just flying by the seat of your pants—you’re making data-driven decisions that can better your bottom line.
Identifying and Managing Business Expenses
Business expenses range from rent and utilities to customer service tools and marketing. Make a list of recurring expenses and one-off costs to get a complete picture of your spending. Once you identify these expenses, look for areas where you can cut costs without sacrificing quality. Effective expense management contributes to a more profitable business in the long term.
Monitoring Cash Flow for Long-term Success
Cash is king when it comes to business longevity. Monitoring your cash flow to understand how money moves in and out of your business is crucial. Use accounting software to track your cash flow and generate reports. Always aim for a positive cash flow—more money coming in than going out—to secure your business’s long-term success.
Consulting a Financial Advisor
Financial advisors can help with more than just personal finances—they can help you analyze your company’s finances and create a roadmap for how and where to invest in your business. The SBA (Small Business Administration) also offers counseling and other resources to small businesses and entrepreneurs in the United States.
Creating a Business Succession Plan
An effective business succession plan is not just a safety net—it’s a wealth-building strategy. Planning for succession early ensures that your business remains viable and profitable long after you’ve stepped away.
Identifying and grooming future leaders can make your business more attractive to potential buyers, significantly increasing its value. This builds wealth for you and sets the stage for long-term success, creating a lasting legacy that can provide financial benefits for generations.
Business Tax Planning
Taxes might not be the most exciting part of running a business, but they’re certainly one of the most important. Effective tax planning can save money and help you reinvest in your business.
Here are some crucial considerations for planning your business taxes:
Common Tax Deductions to Maximize Returns
As a small business owner, you can maximize your income by taking advantage of various tax deductions. From home office costs to business travel, keeping track of these expenses can significantly reduce your income tax liability. Store all receipts and maintain records to simplify the tax filing process and ensure you’re not leaving money on the table.
Employment Tax and Income Tax Returns
Employment taxes are a necessary part of doing business if you have employees. Make sure you understand your responsibilities regarding Social Security, Medicare, and withholding income taxes.
When filing your income tax return, consult a financial advisor to explore avenues for potential tax savings. To stay organized, make it a point to separate your employment tax from your general business account.
Tax Advantages Depending on Your Business Structure
The type of business structure you choose—whether it’s a sole proprietorship, LLC, S Corp, etc.—directly impacts your tax obligations. Each structure has its own set of tax advantages and disadvantages. For example, an LLC offers the flexibility of passing losses through to your personal tax return, potentially lowering your tax burden.
Always consult a financial advisor to determine the tax benefits that align best with your business objectives.
Solo & Small Business Retirement Plans
Long-term financial security is not just a dream but a necessity. Unfortunately, the immediate challenges of running a business cause many small business owners to overlook retirement planning. However, just as you plan for your business’s long-term success, you should also plan for your own long-term financial security. This ensures you’ll have the means to maintain a comfortable lifestyle after you stop working.
Choosing the right retirement plan is crucial. As a small business owner, you have several options designed to help you save for retirement while providing various tax benefits. Some of the most popular retirement plans for small business owners include:
SEP IRAs
SEP IRAs are especially beneficial for those who earn a substantial small business income and want a simple, straightforward way to contribute towards their retirement. With a SEP IRA, you can contribute up to 25% of your earnings, with an annual limit much higher than traditional IRAs. This flexible plan allows you to adjust your contributions each year based on your business’s profitability.
SIMPLE IRAs
SIMPLE IRAs are designed to be easy to set up and maintain. They’re ideal for small businesses and sole proprietorships that don’t want the administrative burden of more complex retirement plans. You and your employees can contribute, and a mandatory employer match makes it a win-win for both parties. The contribution limits are lower than for SEP IRAs but still offer a solid avenue for retirement savings.
Solo 401(k)s
If you’re a business owner with no employees other than your spouse, a Solo 401(k) could be your best option. These plans allow for high contribution limits and provide the opportunity for a Roth component, allowing for tax-free retirement withdrawals. This can be particularly useful for business owners who expect to be in a higher tax bracket during their retirement years.
Personal Investment Strategies
Apart from securing your business finances, focusing on personal wealth accumulation is equally crucial. Focusing on personal investments can be difficult for entrepreneurs—especially if you’re investing a significant amount of your personal wealth into your business.
However, some basic, powerful personal investment strategies can set you on the path to long-term financial freedom. Consider:
Build Personal Wealth with Diverse Portfolios
Investing wisely is critical to building personal wealth. There are multiple avenues for growing your money, from stocks and bonds to real estate. Diversification is essential. By not putting all your eggs in one basket, you can help mitigate losses from riskier investments by also investing in safe, slow-growing stocks and assets.
Remember that each type of investment has its own risk and return profile, so make your choices wisely. A balanced portfolio is generally a winning strategy in the long run.
Keep an Emergency Fund
Access to emergency funds for unexpected expenses—car & house repairs, life expenses, etc.—can help prevent you from dipping into your retirement accounts and other investments. This way, you can afford to pay those sudden expenses while your investments continue to grow uninterrupted.
Consult with a Financial Advisor
Financial advisors offer tailored investment advice that considers your income level, risk tolerance, and financial goals. If you’re new to investing or have a significant amount of capital, consulting a financial advisor can be a wise decision. They can help you understand tax implications, optimize for tax advantages, and avoid common investment pitfalls.
 
 

With Oil, Food and Housing on the rise can Inflation remain below 5%?  
Interest rates and inflation are turning out to be kryptonite for investors in 2023.  First half of 2023 was great if you were in only 7 stocks.  Second half of the year is killing your 60/40 portfolio.
Are interest rates and inflation headed higher for longer, or have they reached their peak? Find out what we are seeing and doing for our clients to help them prosper during rising rates and higher inflation. Not intended to be investment advice. Always consult your financial advisor or call us for a review prior to acting on any investment thoughts.
Advisory services offered through Quiver Financial Holdings, LLC www.quiverfinancial.com 949-492-6900.

Retirement is the ultimate goal for most of us. We dream of leaving work behind for relaxing days, hobbies, and spending time with loved ones.
But there’s a side to retirement that’s often overlooked: taxes. Understanding taxes is crucial whether you’re saving for retirement, nearing those golden years, or already there.
If you’re still saving for retirement, you might be trying to figure out how much money you’ll need in retirement. But have you considered how taxes can impact your retirement budget? Different retirement plans come with different tax burdens—and without a good tax plan, you might end up with less than you thought.
Believe it or not, the choices you make now can affect your taxes in retirement.
We want to help you keep more of your money and enjoy the retirement of your dreams. So, let’s explore various sources of retirement income, how they’re taxed, and strategies for navigating the complex world of retirement taxation.
How Is Retirement Income Taxed?
Understanding how different types of retirement income are taxed can help you plan better. In fact, falling into the Tax Trap is one of our top retirement mistakes to avoid. Learning more about taxes in retirement can help you decide when and how to withdraw from your accounts. And that kind of strategic planning can mean more money in your pocket in retirement.
Let’s break down the different types of retirement income and how they’re taxed.
Social Security Benefits
Social Security is a vital component of retirement for many Americans. After years of contributing to the system through payroll taxes, retirees anticipate receiving these benefits as a steady income stream. However, there’s a nuance that often catches retirees off-guard: taxation.
While it’s a common misconception that Social Security benefits are always tax-free, the reality is a bit more complex. The taxation of these benefits is contingent on your “combined income.” This term encompasses your adjusted gross income, non-taxable interest, and half of your Social Security benefits.
If your combined income surpasses a limit ($25,000 in 2023), a portion of your Social Security benefits becomes taxable. For individuals with a notably high combined income, this could mean paying taxes on up to 85% of their benefits.
401(k) Plans
The 401(k) plan has become a staple in retirement planning for many American workers. Offered by many employers, it allows employees to set aside a pre-tax portion of their paycheck into a retirement account. This means the money you contribute to a 401(k) reduces your taxable income for that year, providing immediate tax savings.
However, there’s a trade-off. While you benefit from these tax savings during your working years, the situation flips in retirement. When you start withdrawing from your 401(k) in retirement, the distributions are treated as regular income, and thus, they are subject to taxation. This is because the government hasn’t yet collected income tax on this money.
For example, if you’re in the 22% tax bracket in retirement and you withdraw $10,000 from your 401(k), you’d owe $2,200 in taxes on that distribution.
It’s also worth noting that there are rules about when you can start taking money out without penalties. The minimum withdrawal age for a 401(k) is 59½. This is when you can start withdrawals without incurring early withdrawal penalties. However, if you take money out before this age, you will not only pay taxes on the withdrawal but also a 10% penalty.
IRAs (Individual Retirement Accounts)
Individual Retirement Accounts, commonly known as IRAs, are versatile tools designed to help Americans save for retirement. Unlike 401(k) plans, which are often tied to an employer, IRAs are opened by individuals, offering more flexibility in terms of investment choices and providers.
There are two primary types of IRAs: Traditional and Roth, each with its unique tax characteristics.
Traditional IRA: Like a 401(k), contributions to a traditional IRA are pre-tax. This can lower your tax burden the year you make the contribution, but withdrawals in retirement are taxed as regular income.
Roth IRA: The Roth IRA is different. Contributions to a Roth IRA are made with after-tax dollars, meaning you don’t get a tax break when you put money in. However, the advantage comes in retirement. Qualified withdrawals from a Roth IRA are completely tax-free. This can be a significant benefit, especially if you expect to be in a higher tax bracket in retirement or if you believe tax rates will rise in the future.
Other Investments
Beyond traditional retirement accounts, many individuals diversify their portfolios with stocks, bonds, or real estate investments. These assets can be valuable sources of income during retirement, but they come with their own tax implications.
Stocks: When you sell stocks that have appreciated in value, you’re subject to capital gains tax. The rate you pay depends on how long you’ve held the stock. If you’ve owned it for over a year, it’s considered a long-term capital gain, which typically has a lower tax rate than short-term gains.
Bonds: Interest income from bonds is usually taxed at your ordinary income tax rate. However, there are exceptions. For instance, interest from municipal bonds is often tax-free at the federal level—but capital gains from the investment are taxable.
Real Estate: Owning property can provide rental income, which is taxable. However, it’s a very nuanced investment, with many different tax burdens and deductions depending on what kind of property you own, how you maintain it, where it’s located, and more. Additionally, when you sell a property at a profit, you may owe capital gains tax, though exclusions are available for primary residences.
RMDs: An Overview
As you approach retirement, you must be aware of Required Minimum Distributions (RMDs). These are mandatory withdrawals that you must take from your tax-deferred retirement accounts, like traditional IRAs and 401(k)s, starting at age 72.
The amount you must withdraw each year is based on a formula that considers your account balance and life expectancy. Failing to take out the correct amount can result in a hefty tax penalty, making it crucial to plan these distributions carefully.
RMDs can impact your tax situation in retirement. Large RMDs can push you into a higher tax bracket, increasing your tax liability. Therefore, understanding and strategizing around RMDs is critical to tax-efficient retirement planning.
Crafting a Tax-Efficient Retirement Strategy
With a grasp on how different retirement incomes are taxed, you’re in a prime position to strategize for a tax-efficient retirement. The goal is to maximize your income while minimizing taxes, ensuring you have a comfortable and financially secure retirement. By proactively planning and using the knowledge you’ve gained, you can navigate the complexities of retirement taxation.
Here are some popular strategies for turning this knowledge into a tax-efficient retirement:
Diversify Income Sources
In the realm of retirement tax planning, diversification isn’t just about spreading your investments across different asset classes—it’s also about diversifying your income sources. You gain flexibility by having a mix of tax-free, tax-deferred, and taxable accounts.
By balancing where your income comes from each year, you can strategically navigate your tax liability, ensuring you make the most of your retirement savings—as we’re about to see.
Strategic Withdrawals
Imagine entering retirement with three main pots of money: a savings account, a traditional IRA, and a Roth IRA. Each has its tax implications.
First, you dip into your savings account. This money has already faced taxes when you earned it, so there’s no additional tax hit now. Using these funds first means you’re not adding to your taxable income for the year. Keep in mind that interest earned in savings accounts is taxable whether you withdraw the money, transfer it, or keep it in your account.
Next, you turn to your 401(k). Withdrawals from this account are taxed as regular income. If you were to pull large sums from this account right away, it could push you into a higher tax bracket, meaning a heftier tax bill. By using your savings first and then gradually taking from your 401(k), you can manage your yearly income and potentially stay in a lower tax bracket. Waiting to dip into your tax-deferred accounts also helps ensure you won’t need to withdraw more than the required minimum.
Lastly, the Roth IRA is your safety net. You’ve already paid taxes on the money you contributed to this account. So, when you make withdrawals in retirement, they’re tax-free. If you need more money in a particular year, perhaps for a medical emergency or a dream vacation, you can pull from your Roth accounts without worrying about the tax implications.
This strategy of sequencing withdrawals can help you manage your tax bill each year, ensuring you get the most out of your hard-earned savings.
Roth Conversions
Roth conversions involve moving funds from a 401(k) or traditional IRA to a Roth IRA. While this means paying taxes on the converted amount now, it’s a strategic move for those expecting to be in a higher tax bracket in retirement. You’re paying taxes now to avoid paying them in retirement. And, by converting, you’re betting that your current tax rate is more favorable than future rates.
Additionally, Roth IRAs don’t have Required Minimum Distributions, offering more flexibility in managing retirement funds. For many, the upfront tax cost of a Roth Conversion is outweighed by its long-term tax advantages.
Capital Gains Management
Diversifying retirement savings often means investing in assets like stocks or real estate. When selling these investments at a profit, you’ll encounter capital gains. To mitigate the tax impact, consider strategies like tax-loss harvesting—offsetting gains with losses. Assets held over a year typically benefit from lower tax rates.
Also, always factor in state and local tax implications for capital gains from real estate, as they can influence your final tax bill.
Stay Informed
Tax laws and financial regulations are constantly evolving. As you journey through retirement, it’s crucial to stay updated. Whether through consultations with financial experts or keeping up with financial news, being informed allows you to adjust your strategy proactively.
By staying current, you ensure your retirement approach remains effective and tax-efficient.
 
 

What is hot and what is not in Stocks, Bonds, Real Estate, Interest Rates, Metals, Energy, and Inflation, we cover it all in this financial market update for October 2023. Is the stock market rally that started in October of 2023 over, or will it continue higher?
How much higher can interest rates go, and what may be their effects on the economy and real estate prices? With Oil prices headed to the moon, what should we expect for gas and food prices? Is inflation here to stay? Find out what we are doing in our portfolios in response to these pertinent questions.
Min 0-2 Intro Min 2-14
Stock Markets Min 14 - 24
Metals and Energy Min 24 - 29
Inflation and Interest Rates Min 29 - 39
Real Estate Min 39 - 48
Bottomline - What all this may mean for an investor needing their money for retirement or healthcare in the next 5-7 years? Not intended to be investment advice. Always consult your own financial professional or call us before acting on any investment idea. Advisory services offered through Quiver Financial Holdings, LLC
www.quiverfinancial.com 949-492-6900.
00:00 Introduction
01:19 What's Happening In Stocks
14:04 Metals and Energy - Looking Hot?
24:01 Inflation and Interest Rates - Higher for longer?
29:09 Real Estate - Crash, Boom or Stuck in the Mud?
39:02 Bottomline - What this can mean for you