1. In a survey of workers who participate in an employer-sponsored retirement plan, 71% said they wanted their employers to increase their savings rate automatically by 1% each year.1 Some plans have auto-escalation features that increase workers’ contributions by a percentage point on an annual basis.2 Regardless of whether you save by default or by choice, increasing your retirement contributions could make a big difference in the amount you accumulate during your working years (see chart).
    Although there’s nothing magical about a 1% annual increase, it may be a manageable way to get closer to an appropriate contribution level for your age and personal situation in Charleston SC, Miami FL, Charlotte NC or Atlanta GA. Industry estimates suggest that workers need to save 13% to 15% of salary throughout their careers in order to fund a retirement lifestyle equivalent to their pre-retirement standards of living.3 People who don’t start saving until later in life may have to save a higher percentage.
    Here are a few suggestions that could help you save more without making major changes to your current lifestyle.
    Save your raise. When you receive a raise, it’s tempting to increase your spending, but it’s also a great opportunity to increase your retirement savings. Even if you need some of the additional income for current expenses, you could divert a portion of it to your retirement account. And when you contribute on a pre-tax basis, the difference in your take-home pay may not be as significant as you might expect.
    Make payments to your future. If you pay off the balance on a car loan, student loan, or credit card, you could continue making the same monthly payments directly to your retirement account. Because the payment is already part of your monthly budget, this provides a way to help increase your savings without a major change to your cash flow.
    Pay as you go. Paying off a credit card may allow you to save more, but it might be wiser to avoid credit-card debt in the first place. Unless you pay off your balance in full each month, credit-card interest can grow quickly and could stand in the way of building the retirement savings you may need.
    Limit the daily treats. You deserve an occasional treat, but spending on “little things” can add up over time. For example, if you stop for a $3.50 latte each day on your way to work and have another one in the afternoon, you would spend about $150 each month. If this amount was instead invested in an account earning a 6% annual return, you could accumulate more than $100,000 after 25 years.
    This hypothetical example is used for illustrative purposes only and does not represent the performance of any specific investment. Fees, expenses, and taxes are not considered and would reduce the performance described if they were included. Actual results will vary.
    Saving for retirement may seem daunting, but small steps could make a big difference for your financial future.
    1) AdvisorOne.com, January 17, 2013
    2) Defined Contribution Institutional Investment Association, 2013
    3) Employee Benefit News, May 7, 2013
    The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald Publications.

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  2. Second thoughts are part of life, which may explain why some investors change their minds about the types of accounts they use for retirement savings in Charleston SC, Charlotte NC, Miami FL and Atlanta GA. This could be the case for traditional and Roth IRAs, which feature different tax treatments of contributions and distributions.
    The IRS allows taxpayers to convert traditional IRA assets to a Roth IRA — and even to recharacterize (revert assets back to a traditional IRA) under certain conditions. Until recently, however, assets in employer-sponsored 401(k), 403(b), and governmental 457(b) plans could be converted to a Roth account only if they were considered distributable assets. This typically applied to people who had assets in a former employer’s plan as well as those aged 59½ and older.
    The American Taxpayer Relief Act of 2012 provides a new opportunity to convert tax-deferred employer plan assets — including 401(k), 403(b), and 457(b) plans — to a Roth account offered by the same employer. Unlike Roth IRA conversions, however, in-plan Roth conversions are irrevocable and cannot be recharacterized.
    Taxed Now or Later
    Traditional IRAs and most employer-sponsored plans offer a current-year tax deduction for contributions, up to annual limits. However, distributions — including contributions and any earnings — are taxed as ordinary income. By contrast, contributions to a Roth account are not deductible. However, qualified withdrawals are generally free of federal income tax as long as they meet certain conditions (discussed below).
    Conversions of tax-deferred assets (from an employer’s retirement plan or a traditional IRA) to a Roth account are subject to federal income taxes in the year of the conversion. Under current tax law, if all conditions are met, the Roth account will incur no further income tax liability for the rest of the owner’s lifetime or for the lifetimes of the owner’s designated beneficiaries, regardless of how much growth the account experiences.
    The prospect of a substantial tax bill can be daunting, but trading current-year liability for tax-free income in retirement may be appealing if you expect to be in the same or a higher tax bracket in retirement, if you have unusually low income during a particular year, or if you want to take advantage of potential earnings growth free of federal income taxes. Conversions can be spread over a number of years, which may make the tax liability more manageable.
    To qualify for the tax-free and penalty-free withdrawal of earnings, a Roth account must meet the five-year holding requirement and the distribution must take place after age 59½ or result from certain conditions such as the owner’s death, disability, or a first-time home purchase ($10,000 lifetime maximum).
    Required minimum distributions from traditional IRAs and most employer-sponsored plans (including Roth employer plans) must begin by April 1 of the year following the year in which you turn age 70½. There are no mandatory distribution requirements from Roth IRAs. Beneficiaries of IRAs and employer-sponsored retirement plans are required to take mandatory distributions based on their own life expectancies.
    The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Brinker Capital.

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  3. The stock market has been on a wild ride since October 2007, when the Dow Jones Industrial Average and the S&P 500 index both hit record highs, only to lose more than 50% of their value over the next 15 months. It took over five years for both indexes to surpass their pre-recession levels, and they set new records in the spring of 2013.1–2
    This type of volatility can be hard on an investor’s nerves. It also can be hard on portfolio value if an investor reacts emotionally when buying and selling investments. One method that may help you weather market volatility is dollar-cost averaging.
    Dollar-cost averaging involves investing a fixed amount in a particular investment on a regular basis, regardless of market conditions. Theoretically, when the share price falls, you would purchase more shares for the same fixed investment. This may provide a greater opportunity to benefit when share prices rise and could result in a lower average cost per share (see chart).
    Of course, dollar-cost averaging does not ensure a profit or prevent a loss. Such a strategy involves continuous investments in securities regardless of fluctuating prices. You should consider your financial ability to continue making purchases during periods of low and high price levels. However, this can be an effective way for investors to accumulate shares to help meet long-term goals.
    All investments are subject to market fluctuation, risk, and loss of principal. When sold, they may be worth more or less than their original cost. The Dow and the S&P 500 are unmanaged groups of securities; the S&P 500 is considered to be representative of the U.S. stock market in general.
    1–2) The Wall Street Journal, March 5 and 28, 2013

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  4. Developed market equities have had an impressive run so far in 2013, while fixed income, emerging markets and commodities have lagged. After telegraphing a tapering of asset purchases, the Fed surprised investors on September 18 with a decision to keep the quantitative easing program in place, wanting to see greater clarity on economic growth and a waning of fiscal policy uncertainty before reducing the level of asset purchases.
    Asset prices moved immediately higher in response to the Fed’s decision; however that served to be the high-water mark for equities for the quarter.  Then concern over U.S. fiscal policy surfaced and has weighed on markets over the last few weeks. Unlike in previous years, deals to raise the debt ceiling and fund the government will result in limited fiscal drag; however, the headlines will serve to increase market volatility over the short term.

    U.S. equity markets posted solid gains in the third quarter, led by small caps and growth-oriented companies.  High-yielding equities continue to lag. Developed international equity markets meaningfully outpaced U.S. markets in the quarter, with most countries generating double-digit returns.  As a result, the gap of outperformance for U.S. markets has narrowed for the year.  Emerging economies have been negatively impacted by the discussion of the Fed reducing liquidity, slower economic growth and weaker currencies.  While emerging markets equities rebounded in the third quarter, as a group they are still negative for the year with Brazil and India especially weak.
    Interest rates continued their rise to start the quarter, with the 10-year Treasury note briefly hitting 3% in the beginning of September.  Rates then began to move lower, helped by an avoidance of conflict in Syria and the postponing of Fed tapering. All fixed income sectors were positive in the third quarter, led by high-yield credit.  Year to date through September, high yield has produced gains, while all other major fixed income sectors are negative. Outflows from taxable bond funds have slowed significantly in recent weeks, so the technical backdrop has improved somewhat.
    We believe that interest rates have begun the process of normalization, and over the long term, the bias is for higher interest rates.  However, this process will be prolonged and likely characterized by fits and starts. The Fed will soon face the decision to taper asset purchases again later this year, with the earliest action in December.  Despite their decision to reduce or end asset purchases, the Fed has signaled short-term rates will be on hold for some time. Rising longer-term interest rates in the context of stronger economic growth and low inflation is a satisfactory outcome. Our fixed income allocation is well positioned with less interest-rate risk and a yield premium versus the broad market.
    However, we continue to view a continued rapid rise in interest rates as one of the biggest threats to the U.S. economic recovery.  The recovery in the housing market, in both activity and prices, has been a positive contributor to growth this year.  Stable, and potentially rising, home prices help to boost consumer confidence and net worth, which impacts consumer spending in other areas of the economy.  Should mortgage rates move high enough to stall the housing market recovery, it would be a negative for economic growth.
    We continue to approach our broad macro view as a balance between headwinds and tailwinds. We believe the scale remains tipped in favor of tailwinds as we move into the final months of the year, and a number of factors should continue to support the economy and markets.
    • Monetary policy remains accommodative: The Fed remains accommodative (even with the eventual end of asset purchases, short-term interest rates will remain low for the foreseeable future), the ECB stands ready to provide additional support if necessary, and the Bank of Japan is embracing an aggressive monetary easing program in an attempt to boost growth and inflation.
    • Global growth strengthening: U.S. economic growth has been sluggish, but steady.  The manufacturing and service PMIs remain solidly in expansion territory. Outside of the U.S. growth has not been very robust, but it is positive. China appears to have avoided a hard landing.
    • Labor market progress: The recovery in the labor market has been slow, but stable. Initial jobless claims, a leading indicator, have declined to a new cycle low.
    • Housing market improvement: The improvement in home prices, typically a consumer’s largest asset, boosts net worth, and as a result, consumer confidence.  However, another move higher in mortgage rates could jeopardize the recovery.
    • U.S. companies remain in solid shape: U.S. companies have solid balance sheets that are flush with cash that could be reinvested or returned to shareholders. Corporate profits remain at high levels and margins have been resilient.
    However, risks facing the economy and markets remain, including:
    • Fiscal policy uncertainty: After Congress failed to agree on a continuing resolution to fund the government, we entered shutdown mode on October 1.  While the economic impact of a government shutdown is more limited, the failure to raise the debt ceiling (which will be reached on October 17) would have a more lasting impact. A default remains unlikely in our opinion, and there will be little fiscal drag as a result of a deal, but the debate does little to inspire confidence. The Fed continues to provide liquidity to offset the impact.
    • Fed mismanages exit: The Fed will soon have to face the decision of whether to scale back asset purchases, which could prompt further volatility in asset prices and interest rates. If the economy has not yet reached escape velocity when the Fed begins to scale back its asset purchases, risk assets could react negatively as they have in the past when monetary stimulus has been withdrawn.  The Fed will also be under new leadership next year, which could add to the uncertainty.  However, if the Fed does begin to slow asset purchases, it will be in the context of an improving economy.
    • Significantly higher interest rates: Rates moving significantly higher from here could stifle the economic recovery.
    • Europe: While the economic situation appears to be improving in Europe, the risk of policy error still exists.  The region has still not addressed its structural debt and growth problems; however, it seems leaders have realized that austerity alone will not solve its issues.
    Risk assets should continue to perform if real growth continues to recover despite the higher interest rate environment; however, we expect heightened volatility in the near term. Valuations in the U.S. equity market remain reasonable while valuations abroad look more attractive. We continue to emphasize high-conviction opportunities within asset classes, as well as strategies that can exploit market inefficiencies.
    Some areas of opportunity currently include:
    • Global Equity: Large-cap growth, dividend growers, Japan, frontier markets, international microcap
    • Fixed Income: MBS, global credit, short duration
    • Absolute Return: closed-end funds, relative value, long/short credit
    • Private Equity: company-specific opportunities













    The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Brinker Capital.

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  5. The Affordable Care Act Goes into Action - What should you do? Call us first.

    The Patient Protection and Affordable Care Act (ACA) has been the subject of speculation and uncertainty since it was passed by Congress in 2010.

    Nonetheless, the law’s provisions have been enacted according to a specified timetable, and after surviving legal and political challenges, the ACA enters a pivotal phase of implementation in 2013. This may be an appropriate time to consider how the ACA could impact your situation as a taxpayer and a consumer.

    New Taxes in 2013

    Some of the most immediate issues for high-income Americans are two taxes effective this year that are intended to help pay for the expansion of health coverage and other benefits under the law:
    • An additional 0.9% Medicare payroll tax on earned income (wages/salaries) exceeding $200,000 ($250,000 for joint filers).
    • A 3.8% Medicare unearned income tax on net investment income for people with adjusted gross incomes (AGIs) exceeding $200,000 ($250,000 for joint filers). Unearned income includes capital gains, dividends, interest, royalties, rents, and passive income.
    In addition to these Medicare taxes, two potential tax reductions could affect taxpayers regardless of income level:
    • The threshold for deducting unreimbursed, qualified medical expenses increases from 7.5% of AGI to 10% in 2013. However, this increase is postponed until 2017 for individuals aged 65 and older.
    • Flexible Spending Account (FSA) health-care contributions are capped at $2,500 in 2013, with adjustments for inflation in future years. Previously, FSA contributions were subject only to employer plan maximums.


    Employer Coverage

    Beginning in 2014, employers with 50 or more full-time employees will be required to provide minimum essential health coverage or face an annual penalty. Not surprisingly, many employers are now assessing their options. In a recent survey, 84% of U.S. employers reported that they are very likely or definitely will continue to provide health insurance to full-time employees in 2014. Only 1% indicate that they will not provide health coverage.1
    A temporary, three-year assessment to help fund the law’s requirements to cover pre-existing conditions may also impact employers. This fee, which will be assessed on all “major medical” insurance policies (employer-based and individual policies), begins at $63 per capita in 2014, drops to about $40 in 2015, and phases out completely by 2017. Because most large employers pay employee health insurance in advance, they are likely to owe this fee directly and could pass all or part of the cost to their employees.2


    Defined Contribution Health Plans

    With Zane Benefits' simple online health plans, you can:
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    Insurance Exchanges

    In 2014, individuals and small businesses (with up to 100 employees) will be able to purchase health insurance through exchanges. Some large companies that do not want to provide employee health coverage might be willing to pay the required penalties and allow their employees to obtain individual coverage through the exchanges.
    As of December 14, 2012 — the deadline for submitting plans for state-based insurance exchanges to the Department of Health and Human Services (HHS) — 18 states and the District of Columbia had declared that they will establish a state-based health exchange.3 Six of these have had their plans conditionally approved.4
    Of the remaining states, seven plan to participate in federal-state partnership exchanges, and 25 states would default to an exchange administered by the federal government.5
    HHS regulations for health insurance plans address cost-sharing limits and the valuation of coverage. Plans will be standardized based on the percentage of expected health-care costs they will cover: bronze (which covers 60% of the actuarial value of expenses), silver (70%), gold (80%), and platinum (90%).6
    Applications for the exchanges will begin in October 2013, with coverage beginning January 2014. If you think you might obtain insurance through an exchange, it might be wise to monitor developments in your state.
    Meanwhile, you might continue staying abreast of any developments with your employer coverage and include any additional taxes in your calculations for 2013.
    1) Employee Benefit News, December 10, 2012
    2) Huffington Post, December 10, 2012
    3, 5) Kaiser Family Foundation, 2012
    4) HealthCare.gov, December 10, 2012
    6) Employee Benefit Adviser, December 7, 2012
    The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald Connect.
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  6. In a recent survey of Generation Z (ages 13 to 22), 39% of teens and young adults said they expect to receive an inheritance and therefore don’t need to worry about saving for retirement! However, only 16% of Gen Z parents expect to provide an inheritance — and there’s no guarantee that an inheritance would be sufficient to replace retirement savings.¹

    This disconnect between expectation and reality highlights the need for financial literacy among young people. Teaching children about finances not only may help them handle their own financial matters but could encourage academic engagement and pursuit of higher education.
    Here are some steps to help develop your children’s financial knowledge.
    • Advocate saving. Sixty-three percent of kids 18 and under have a savings account, and almost three out of four accounts were opened before the kids were three.2 Encourage your children to set aside a portion of money they receive from an allowance, gift, or job. Talk about goals that require a financial commitment, such as a car, college, and travel. As an added incentive, consider matching the funds they save for worthy purposes.  
    • Show them the numbers. Use an online calculator to demonstrate the concept of long-term investing and the power of compound interest. Your children may be amazed to see how fast invested funds can accumulate.
    • Let them practice. About half of parents give their children a regular allowance.3 Let older teens become responsible for more of their own costs (such as clothing, activities, and car expenses). Running out of funds could require them to think about their spending choices and consider a budget.
    • Have fun. Check out online games, quizzes, and mobile apps that teach financial principles. Some schools offer “real life” classroom exercises such as business and stock market simulations.
    If an older child has a job with earnings, you could open a Roth IRA in the child’s name to help him or her save for retirement or college. A child can contribute up to $5,500 of earned income to a Roth IRA in 2013. Roth IRA assets accumulate tax deferred, and contributions can be withdrawn tax-free and penalty-free at any time for any reason.
    Roth IRA earnings may be withdrawn without federal income tax liability or penalties if used to pay qualified higher-education expenses, as well as for certain other purposes. In most cases, however, Roth IRA distributions must meet the five-year holding requirement and take place after age 59½ to qualify for a tax-free and penalty-free withdrawal of earnings.
    Finances may seem complicated, but a little education could go a long way. Do yourself and your children a favor by helping them develop financial awareness.
    1) Business Wire, August 28, 2012
    2–3) Jump$tart Coalition for Personal Financial Literacy, 2012
    The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald Connect.
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  7. Short-term interest rates have been at historic lows for more than four years, due in large part to Federal Reserve policies intended to stimulate the economy.1 The Fed’s actions have also suppressed longer-term rates, leading to low yields on new-issue bonds of varying maturities (see chart).

    Despite low rates, you might keep a portion of your assets in bonds or other fixed-income securities in order to balance more aggressive investments. And as you near retirement or progress through your retirement years, you may want to increase your bond holdings. This raises the question of how to keep an appropriate mix of bonds in your portfolio without tying up too much of your principal at low rates. Although no one can predict the future, rates are likely to rise over time, and some experts believe that when this happens the increase could be fairly rapid.²
    Preparing for Change
    One way to address fluctuating rates is to stagger the maturity dates of the bonds in your portfolio. This strategy, called a bond ladder, may help limit exposure to low interest rates while also increasing the likelihood that at least some principal may be available to reinvest when rates are rising.
    You could create a ladder over a period of time by purchasing bonds of the same maturity every year or two. Alternatively, you could create a ladder during the same time period by purchasing new-issue bonds of different maturities or by purchasing bonds on the secondary market that are scheduled to mature in different years. For the latter strategy, you might purchase 10-year bonds scheduled to mature in 2016, 2018, 2020, and 2022.
    Building a bond ladder is a form of diversification within the fixed-income portion of your portfolio, which in turn may be part of a broader asset allocation strategy. Of course, diversification and asset allocation do not guarantee against loss; they are methods used to help manage investment risk.
    Building by Units
    Although a bond ladder is often created by purchasing individual bonds, you could develop a similar and potentially more diversified strategy by purchasing unit investment trusts (UITs) with staggered termination dates. Bond-based UITs typically hold a varied portfolio of bonds with maturity dates that coincide with the trust termination date, at which point you could reinvest the proceeds as you wish. The UIT sponsor may offer investors the opportunity to roll over the proceeds to a new UIT, which typically incurs an additional sales charge.
    The return and principal value of bonds and UITs fluctuate with changes in market conditions. Bonds redeemed prior to maturity and UIT units, when sold, may be worth more or less than their original cost. Investments seeking to achieve higher yields also involve a higher degree of risk. UITs may carry additional risks, including the potential for a downturn in the financial condition of the issuers of the underlying securities.
    UITs are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
    1) Federal Reserve, 2013
    2) The Wall Street Journal, March 11, 2013
    The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald Connect.
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  8. Because of tax changes that take effect in 2013, some upper-income households are facing the prospect of higher tax rates on investment earnings. 
    The potential for taxes to claim a larger share of investment earnings means that many people might take advantage of opportunities to invest in tax-deferred retirement plans such as 401(k)s and IRAs. Of course, many factors other than taxes should influence investing decisions, including your investment goals, time horizon, and risk tolerance.
    The following rate increases explain why you might consider the tax implications of investment decisions.
    Top Brackets Targeted
    For taxpayers with modified adjusted gross incomes (AGIs) above $400,000 ($450,000 for married joint filers), the maximum tax rate for qualified dividends and long-term capital gains increased from 15% to 20% in 2013. Investors in tax brackets below that threshold will continue to pay the 15% rate. A 0% tax rate still applies for households with lower incomes (AGIs up to $36,250 for single filers and $72,500 for married joint filers).
    On top of these rates, investors with AGIs exceeding $200,000 (single filers) or $250,000 (married joint filers) may be subject to the new 3.8% Medicare tax on net investment income, which includes dividends and capital gains.
    Watch for Distributions
    Mutual funds must distribute capital gains that are not offset by losses to shareholders on an annual basis. Any interest or dividend income generated by a fund is also passed along to shareholders. When a distribution occurs, each investor receives a payment equal to the per-share distribution amount multiplied by the number of shares he or she owns, and the fund’s daily price (or net asset value) is reduced by the same amount.
    When mutual funds are held in taxable accounts, distributions are taxable to shareholders (as long-term and/or short-term capital gains, dividends, or interest) for the year in which they are received, even if the distribution is reinvested in new shares.
    Before purchasing mutual fund shares, you may want to check the timing and amount of upcoming distributions so you don’t incur unnecessary taxes on gains that you didn’t participate in.
    Of course, investors may also incur taxes when they sell fund shares for a profit. The return and principal value of mutual funds fluctuate with changes in market conditions. Shares, when sold, may be worth more or less than their original cost.
    Mutual funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
    Focus on Tax Efficiency
    Certain strategies and types of mutual fund holdings tend to run up larger tax bills. For example, some actively managed funds may turn over securities more frequently and trigger more taxes than do funds with passive investment styles. And investments that generate interest or produce short-term capital gains on the sale of assets held less than one year are taxed as ordinary income at higher rates than long-term capital gains and qualified dividends.
    Dividing investments strategically between taxable and tax-deferred accounts may help reduce the effect of taxes on your overall portfolio. Keep in mind that the maximum tax rates for long-term capital gains and qualified dividends, as well as the tax treatment of investment losses, could make the return on a taxable account more favorable than a tax-deferred account.
    The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald Connect.
    Click here for more Newsletters. Thank you.

    Miami FL, Charleston SC, Atlanta GA, Charlotte NC - Tax, Financial Planning, Investments & Insurance.




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    Hedges Wealth Management LLC - A Registered Investment Adviser
    Hedges Insurance Agency LLC
    Tax, Financial Planning, Investments & Insurance Advisors
    1300 Appling Drive #201 | Mt Pleasant | SC 29464
    T  +1 843 270 2534 | F 704 919 5946




     






    If you are looking for more information on any subject in this Blog, please Contact Us directly electronically or via phone. Thank you.


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    Location: Hedges Wealth Management LLC, 1300 Appling Drive, Mount Pleasant, SC 29464, USA
    Labels: Capital Gains Charleston Miami Charlotte Atlanta Financial Advisor SC NC FL GA Investment Earnings modified adjusted gross income Retirement Tax Rates




  9. Risk assets were off to a decent start in the second quarter but then retreated after Federal Reserve Chairman Ben Bernanke’s testimony to Congress on May 22 laid the ground work for a reduction in monetary policy accommodation through tapering their asset purchases as early as September. While the U.S. equity markets were able to end the quarter with decent gains, developed international markets were relatively flat and emerging markets experienced sizeable declines. Weaker currencies helped to exacerbate these losses.
    After starting to move higher in May, interest rates rose sharply in June and into early July, helped by the fears of Fed tapering. The yield 10-year U.S. Treasury has increased 100 basis points over the last two months to a level of 2.64% (through 7/10). The increase in rates was all in real terms as inflation expectations fell. Bonds experienced their worst first half of the year since 1994, in which we experienced four short-term rate hikes before June 30.
    7.12.13_Magnotta_MarketOutlook_2While we have seen these levels of rates in the recent past (we spent much of the 2009-2011 period above these levels), the sharpness of the move may have been a surprise to some fixed income investors who then began to de-risk portfolios. In June, higher-risk sectors like investment-grade credit, high-yield credit and emerging market debt, as well as longer duration assets like TIPS, fared the worst. With growth still sluggish and inflation low, we expect interest rates to remain relatively range-bound over the near term; however, we do expect more volatility in the bond market. Negative technical factors like continued outflows from fixed income funds could weigh on the asset class. Our portfolios remain positioned in defense of rising interest rates, with a shorter duration, emphasis on spread product and a healthy allocation to low volatility absolute return strategies.
    After weighing on the markets in June, investors have begun to digest the Fed’s plans to taper asset purchases at some point this year. Should the Fed follow through with their plans to reduce monetary policy accommodation, it will do so in the context of an improving economy, which should be a positive for equity markets.
    7.12.13_Magnotta_MarketOutlook_3We continue to approach our macro view as a balance between headwinds and tailwinds. We believe the scale remains tipped in favor of tailwinds as we move into the second half of the year. A number of factors should continue to support the economy and markets for the remainder of the year:
    • Monetary policy remains accommodative: The Fed remains accommodative (even with the scale back on asset purchases short-term interest rates will remain low), the ECB has pledged to support the euro, and now the Bank of Japan is embracing an aggressive monetary easing program in an attempt to boost growth and inflation. This liquidity has helped to boost markets.
    • Fiscal policy uncertainty has waned: After resolutions on the fiscal cliff, debt ceiling and sequester, the uncertainty surrounding fiscal policy has faded. The U.S. budget deficit has improved markedly, helped by stronger revenues. Fiscal drag will be much less of an issue in 2014.
    • Labor market steadily improving: The recovery in the labor market has been slow, but steady. Monthly payroll gains over the last three months have averaged 196,000 and the unemployment rate has fallen to 7.6%. The most recent employment report also showed gains in average hourly earnings.
    • Housing market improvement: An improvement in housing, typically a consumer’s largest asset, is a boost to net worth, and as a result, consumer confidence. However, a significant move higher in mortgage rates, which are now above 4.5%, could jeopardize the recovery.
    • U.S. companies remain in solid shape: U.S. companies have solid balance sheets that are flush with cash that could be reinvested or returned to shareholders. Corporate profits remain at high levels and margins have been resilient.



    However, risks facing the economy and markets remain, including:
    • 7.12.13_Magnotta_MarketOutlook_4Fed mismanages exit: If the economy has not yet reached escape velocity when the Fed begins to scale back its asset purchases, risk assets could react negatively as they have in the past when monetary stimulus has been withdrawn.
    • Significantly higher interest rates: Rates moving significantly higher from here could stifle the economic recovery.
    • Europe: The risk of policy error in Europe still exists. The region has still not addressed its debt and growth problems; however, it seems leaders have realized that austerity alone will not solve its problems.
    • China: A hard landing in China would have a major impact on global growth. A recent spike in the Chinese interbank lending market is cause for concern.
    We continue to seek high conviction opportunities and strategies within asset classes for our client portfolios. Some areas of opportunity currently include:
    • Domestic Equity: favor U.S. over international, dividend growers, financial healing (housing, autos)
    • International Equity: frontier markets, Japan, micro-cap
    • Fixed Income: non-Agency mortgage backed securities, short duration, emerging market corporates, global high yield and distressed
    • Real Assets: REIT Preferreds
    • Absolute Return: relative value, long/short credit, closed-end funds
    • Private Equity: company specific opportunities
    Asset Class Returns
    7.12.13_Magnotta_MarketOutlook_1
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    Location: Hedges Wealth Management LLC, 1300 Appling Drive, Mount Pleasant, SC 29464, USA
    Labels: Charleston Miami Charlotte Atlanta Financial Advisor SC NC FL GA Corporate Profits Debt Equity Markets Federal Reserve fixed income Housing Recovery interest rates


  10. In a recent study, 40% of consumers responded that they don’t have enough life insurance to meet their families’ long-term needs.1 This concern raises an obvious question: How much life insurance is enough? What might be appropriate for a family with two young children and a stay-at-home spouse could be significantly different from the needs of a working couple whose children are grown.

    Do the Math

    Rather than using the oft-recommended formula of replacing eight to ten times your annual income, a better tactic might be to calculate the life insurance benefit amount that could provide the income to meet your family’s long-term needs and goals.
    In the hypothetical example below, the family’s living expenses were $70,000 and the surviving spouse would have access to $40,000 of income, leaving $30,000 of annual income to replace. The next step is to determine the life insurance death benefit that could replace this annual income.
    In order to do this, you estimate an average annual rate of return that might be achieved if the death benefit amount were invested in income-producing financial vehicles, without reducing the principal. For this example, a 5% rate of return is used. Of course, this rate of return is not representative of any specific investment; actual circumstances and results will vary.
    Dividing $30,000 by 5% (.05) equals $600,000. A $600,000 life insurance benefit earning a 5% average annual rate of return could yield a $30,000 annual income.
    Although this worksheet is a good starting point, for a more accurate result you should include all the potential expenses that might enable your family to live the way you want them to live. For example, you could include funds for your child’s college education. If health insurance is paid for by your employer, your family may need replacement coverage. And don’t forget final expenses such as funeral and burial costs.
    The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable.
    As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. If a policy is surrendered prematurely, there may be surrender charges and income tax implications.
    Life insurance could be a key step toward providing security for your loved ones. It’s important to review your coverage regularly to make sure you have sufficient protection for your family’s situation.
    1) financial-planning.com, September 26, 2011
    The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by TravelInsuranceCenter.com.
    Click here for more Newsletters. Thank you.

    Miami FL, Charleston SC, Atlanta GA, Charlotte NC - Tax, Financial Planning, Investments & Insurance.




    Connect and Read More About Us    

    Hedges Wealth Management LLC - A Registered Investment Adviser
    Hedges Insurance Agency LLC
    Tax, Financial Planning, Investments & Insurance Advisors
    1300 Appling Drive #201 | Mt Pleasant | SC 29464
    T  +1 843 270 2534 | F 704 919 5946




     






    If you are looking for more information on any subject in this Blog, please Contact Us directly electronically or via phone. Thank you.


    Posted by
    Location: Hedges Wealth Management LLC, 1300 Appling Drive, Mount Pleasant, SC 29464, USA
    Labels: Charleston Miami Charlotte Atlanta Financial Advisor SC NC FL GA Family Protection Income Replacement life insurance surrender charges Tax Implications
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