July 18, 2024
By Kristi Sullivan
I’ll make this quick: Roth Conversions for people entering retirement are often not the best idea, despite what you read in (numerous, unending, relentless) articles in financial media.
Yes, some of you may have outsized buckets of tax-deferred money…
June 20, 2024
By Kristi Sullivan
The Oracle is not me.
It’s always good to hear wise words from someone who has been there and done that. When world news seems ever more dire, you may be wondering how to handle your investments in the face of uncertainty.
Who better than Warren Buffett to soothe our collective worried brow?
March 3, 2024
by Kristi Sullivan
Ahhh, sunsets. The word conjures beauty, peace, and signals that it’s time to rest after a busy day.
Unless you are a CPA. For those poor suckers, sunsets have them stressing over – eeeek – changing tax laws. Specifically, the pre-ordained ending of many tax code changes in the Tax Cuts and Jobs Act of 2017.
The TCJA did indeed cut taxes for many, but…
January 26, 2024
by Kristi Sullivan
No, not religions, although after the holidays spent with warring family factions, some people do question their faith.
Last week, I explained the basics of Roth conversions. For a little more detail, here are some pros and cons for making this transaction.
January 5, 2024
by Kristi Sullivan
Or is it? I hear a lot of confusion around taxes upon selling a primary residence.
People believe a mash up of rules that include those for selling a rental property or long outdated laws about downsizing as a retiree.
It’s fairly straightforward (as IRS rules go). If you are single, the first $250,000 of profit on the sale of your primary residence is tax free. Profits above $250,000 are taxed at capital gains rates.
For married couples, the tax-free profit is $500,000.
October 26, 2023
by Kristi Sullivan
Get your minds out of the marijuana plant. I’m not talking about that type of rolling. Rather, the pros and cons of rolling your old 401k/403b plans into a Rollover IRA.
Generally, I say YES, you should move money out of an old employer’s plan into a retirement account in your own name as soon as possible.
Here’s Why… Continue Reading…….
October 12, 2023 by Kristi Sullivan
To encourage you not to leave all the year-end tasks until, well, the end of the year, I’d like to explain a charitable gifting hack for readers aged 70 ½ and older.
The Qualified Charitable Distribution (aka QCD) allows people aged 70 ½ and older to gift money directly from their tax-deferred IRAs to a 501(c)3 charity (or multiple charities) of their choice. If you plan to gift to charity and fall into the right age group and have an IRA, this is the best way to make the gift.
September 8, 2023
Welcome back to the Back to School for Money series. Today, we will talk about one of the largest expenses for most people, housing.
If you are trying to decide how much rent or mortgage payment you can afford, the general rule of thumb is to spend no more than 30% of your net income on housing (rent/mortgage). So, if you are bringing home $4,000/month, your rent or mortgage should not exceed $1,200/month.
August 28, 2023
Contrary to what you read in the media – and so far this month in my blog – 529 accounts are not the only way to save for a child’s college education. Here are a few others.Continue Reading………..
August 21, 2023
The government just loves to roll out new investment tools and then spend the next 50 years tinkering with the rules. 529 college savings plans are no different. Lately there is good news and bad news on the legislative front.
by Kristi Sullivan, CFP
There are a lot of myths around 529 plan that keep people from opening an account. I’m not suggesting that everyone must use a 529 account to save for college (see next week’s blog for alternatives). However, it is a slick tool and I hate to see people NOT using it because of misinformation.
So here’s the quick and dirty on why you would or would not use a 529 account for kids savings.
August 8, 2023
Welcome to our new Wealth PARTNER TIPS AND RESOURCES communications! We are very pleased to begin offering our clients gems of wisdom, ideas and notices direct from our growing team of wealth management partners in tax, estate, and financial planning. Please enjoy our first edition from our newest partner, Kristi Sullivan CFP, as a series focusing on College Planning. On with the show!
Writing blogs every week is hard work. Therefore, I love a nice series. Even better when it coincides with a season. August being back-to-school month seemed like a good time to share some college planning info from Michael Van Boening at College Invest.First up, FREE MONEY! Did you know you may be able to get matching funds if you contribute to a Colorado 529 plan?
October 6, 2022
Wow! What a night! I am still buzzing after our first large group in-person client event since the start of the pandemic. I have so many takeaways from the event last evening I had a hard time deciding where to start. In no particular order:
First, a big thank you to everyone that was able to attend. It was so, so, so great to see all of you in person, and I wish we had more time to visit. There were so many of you that I was unable to connect with during the event—I hope we can get together soon.
Second, our apologies for the unfortunate scheduling of this years’ event—we will do our best moving forward to accommodate our entire community.
Third, we didn’t take any pictures. Note to self: take pictures next year.
Fourth, speaking of more time to visit—I think I am at a point where I am over virtual meetings. Zoom, for all of its convenience, leaves a lot to be desired in the personal department. So where do we go from here? Let’s get together! We have a great meeting space at 731 Sherman that sits mostly empty waiting for visitors. If that isn’t convenient, let us come to you. I would love to meet you on your turf or for coffee, breakfast, lunch, dinner, dessert (why not?), cocktails, golf, or skiing. I don’t ski, but if it means that we can get together in person, I will try.
Fifth, this goes for out-of-Denver clients too. I mean it.
And finally, our firm owes a huge debt of gratitude to Caroline Gaynor and Avantis Investors for delivering a tremendous key note presentation. Caroline is seriously an amazing person, and we are so thankful she was able to share some of her incredible stories with us. One story of hers, in particular, will stick with me forever.
After describing the high-highs and low-lows of a grueling sixteen-and-a-half hour Ironman Triathlon—one in which she guided a visually impaired South African athlete—Caroline (that’s her with the big smile on the right below) delved into why she guides triathlons. Spoiler alert, it isn’t to secure her place in the Ironman guiding record books (she claims they don’t even exist) or even to see her name on the leaderboard at the end of a race.
Take a look at the leaderboard below—can you find the name Caroline Gaynor anywhere?
Hint: It isn’t on there. And that’s the way it’s meant to be.
So, what’s Caroline’s why? Why does she spend countless hours away from her family training for races that won’t even lead to records or her name on leaderboards? She says (and I’m paraphrasing here) it’s the pure joy that she derives from helping others accomplish their goal of crossing the finish line.
What an incredible parallel to our work as your financial advisor.
That’s why we do it folks.
It’s not the accolades or awards or bold market calls. Helping you and your family prepare for and overcome obstacles enroute to accomplishing your financial goals brings us a sense of joy that I can’t even begin to describe. It’s our why. The reason we get up every day and go to work. Even on days when futures are down big after weeks of seemingly endless declines. We know that you or someone out there might need our guidance, reassurance, or just someone to listen. We also know that the sun will come up tomorrow and we can hear the music and crowd noise from the finish line up ahead.
Thank you, as always, for reading and I hope to see you in person very soon.
Will
September 20, 2022
But the years are short. As of this morning I have a one-year-old son. How is that even possible? Seems like yesterday we were packing an overnight bag enroute to the hospital.
Reflecting on the last three hundred and sixty-five days, I vaguely remember many a long day and sleepless nights, though none stick out to me individually. In looking back, I’ve assembled a list of some of the things I learned over the past year:
Most importantly, I’ve re-discovered that time is our most scarce resource. Maybe parenthood is giving me a glimpse into my own mortality or maybe I’m just getting older? I hope I have many birthdays left, but who knows.
Markets are down, interest rates are up and there’s a war raging on a different continent. Things are far from perfect but think about it this way…How many really good years do you have left? Summers fishing or on the links or trails? Weekends at the cabin? Winters on the slopes? Holidays with family or friends?
Call your family. Turn off the news. Take the risk. Go to the show. Share your feelings. Get outside. Take the trip. Order dessert. Enjoy the ride. Whatever you do, spend the time, I promise you won’t regret it.
Thank you for reading, I look forward to seeing you in person at the All Season Financial Advisors Annual Meeting on October 5th at the Wellshire!
Will
June 13, 2022
As of this morning, the S&P 500 has officially entered into bear market (down 20+%) territory. Inflation is still with us, economic growth is (maybe?) slowing, the entire crypto complex is imploding, corporate credit is back to levels not seen since the early days of the pandemic and I had to arm wrestle three other dads this morning at Target to secure the right to buy baby formula. The tide is going out in a hurry, and we are quickly finding out who’s been swimming naked.
So, what is an investor to do on a day like today? In the midst of so much negativity and pessimism, let’s step back and remember that 7 of the 10 BEST days in the stock market over the last 20 years have occurred within two weeks of the 10 WORST days in the stock market. Said another way: taking “control” of your portfolio by selling out on or after the worst days is likely to result in missing the best days that tend to follow. Missing the 10 best days in the stock market could cost you close to 50% of your annual returns over the course of 20 years (see the chart below from JP Morgan).
*Source: JP Morgan Asset Management
I hate to break it to you, times like these in the markets never get any easier. That said, making rash decisions in times of turmoil can lead to negative and/or catastrophic long-term outcomes. If you are feeling stressed or anxious about your situation and would like to revisit your financial plan, please give us a call or use our Calendly Link to schedule time for us to talk. If nothing else, we are here just to listen.
Hang in there, we will get through this.
Will
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May 26, 2022
Enjoy the holiday weekend everyone!
Will
April 19, 2022
If you are reading this, congratulations! You made it through another tax season! As one tax season ends, unfortunately a new tax season begins. More precisely, we find ourselves nearly a third of the way through the 2022 tax year at this point. With that in mind, we wanted to share a high-level overview of how the US tax system works and a couple of key tax-related items to keep in mind for 2022.
How the US Tax System Works at a High Level:
We add up our income from all sources while subtracting items like retirement plan contributions, HSA/FSA contributions and healthcare premiums (among others) to arrive at Adjusted Gross Income (AGI). Next, we apply a deduction (either standard or itemized) to arrive at taxable income. From there, we apply the applicable rate to the different types of income that we have and deduct any below the line tax credits (child tax credit, for instance) to arrive at tax liability. Once we understand our tax liability, we compare that to the amounts that we have had withheld for Federal Income Taxes (or paid via estimated tax payments) throughout the year to determine how much we owe (or are due to be refunded) at tax time.
Below is a listing of a couple of key tax-related items to keep in mind for 2022:
2022 Standard Deductions:
Single: $12,950
Married Filing Jointly: $25,900
Ordinary Income:
Ordinary income is taxed progressively according to the following brackets:
Items included in ordinary income include the following:
Long Term Capital Gains
Long Term Capital Gains and Qualified Dividends receive preferential income tax treatment according to the following brackets:
Did you realize that there is a 0% long term capital gains tax bracket? For tax year 2022, a married couple can realize $109,250 ($83,350 + Standard Deduction) of Long-Term Capital Gains and Qualified Dividends and pay $0 of tax. Pretty powerful when you step back and think about it.
2022 401k / 403b / 457 / TSP Plan Contribution Limits
Under Age 50: $20,500
Age 50+: $27,000
2022 Roth IRA Contribution Limits:
Under Age 50: $6,000
Age 50+: $7,000
*Modified Adjusted Gross Income must be under $204,000 for MFJ filers ($129,000 Single) to contribute the maximum amount to a Roth IRA for 2022. If your income is more than these figures (or close), please let us know and we can investigate whether you are eligible to make a backdoor Roth IRA conversion*
2022 Health Savings Account Contribution Limits:
Under Age 55: $7,300 ($3,650 Single)
Age 55+: Allowed an extra $1,000 per individual per account* *An additional HSA account may be necessary
All this information aside, it is never too early to start thinking about tax planning for this year and beyond. If you had an unusual or unexpected tax burden for 2021, please let us know so that we may find a time to review your specific situation in the coming weeks and months with an eye on working towards eliminating surprises for 2022. Who knows, maybe we can even find ways to improve your tax situation this year and on a going forwards basis. If nothing else, we can help you understand your tax situation so that you can feel more confident and in control rather than in a defensive position come tax time.
Will
March 29, 2022
To be overly clear, this is Will Brennan writing this post, not Sam Jones. It was brought to our attention that we did not make that abundantly clear during my first blog post. For anyone still wondering, Sam and his wife do not have a four-month-old son. 😉
Sam and I got together in the early stages of 2022 for a firm planning session. As we discussed goals for All Season for 2022 and beyond, I shared with Sam a few personal goals of my own. At the top of the list, I wanted to prioritize my own physical health in a way that I hadn’t since the start of the pandemic. And for the first 33 days of the new year, I did just that.
I had a lot to be excited about for 2022: My wife heading back to work after a long and well-deserved maternity leave. Our little guy starting daycare. A new golf season. And, like many of you, looking forward to a couple of vacations and generally hoping to get back to some semblance of normal as we learn to live with COVID. I wanted to make sure that I was fit enough and had the energy to experience and enjoy all these things with my family this year and for many years to come.
My wife and I made it almost two full years of the pandemic without encountering the virus. Our son made it nine days in daycare before he caught it and brought it home to share with us. Not to worry, the little guy was fine in less than 36 hours with no more than a mild cold. My wife had a similar experience–mild cold symptoms for around 3-4 days. Eight weeks in at this point, I am learning to live with ongoing issues in my throat and lungs. I still don’t have the energy to exercise or participate in social outings, especially not after a long day on Zoom. Less than three months into the new year and I am further behind today than I was at the start of the year, but I am still here. I am still in the fight.
I am going to get to where I want to be physically, but I will have to change my timeframe. A 12-month goal might have to morph into an 18–24-month goal. Between now and then I am going to try to make little changes and take things one day at a time to help get there.
I share my recent personal health struggles not to ask for your sympathy—I trust that you are going through your own personal struggles right now as well. I share my story as it is analogous to the work that we do in financial planning. Ultimately, we try to understand your personal situation as best we can and make predictions of its viability into the future using projections derived from past experiences. We work together to set goals and build portfolios to help you achieve them.
We do this knowing full well that there will be headwinds along the way. There will be accidents, family emergencies, water heaters and roofs that need replacing, health issues, market corrections, geopolitical events, and a myriad of other things that we can’t foresee happening this year or over the course of a 30+ year retirement. I can tell you with virtual certainty that these things will happen, I just don’t know when and to what extent. Setbacks are bound to happen—even for the best laid plans. It is how we respond to setbacks, however, that ultimately determines our long-term success or otherwise.
When life happens, know that our firm is here to help—if nothing else, just to listen. We can’t plan for everything, but we can help you build a margin of safety for when the rainy days do eventually appear. Furthermore, if you (or anyone you know) are feeling anxious or nervous about your financial future or if you are going through something personally or professionally, please do not ever hesitate to reach out. That is what we are here for.
Moving forward, I will be sharing my thoughts on a regular basis via a new blog, “Anecdotes for All Seasons.” This blog will focus on personal stories (like this one!) with more of a planning bent. I will leave the technical market commentary to Sam.
Thank you for reading!
Will
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