With 2020 barely started, preparation for tax season is underway for many investors. Now in the second year of filing taxes under the Tax Cuts and Jobs Act of 2017 (TCJA), focusing your attention on deductions, you can use versus those that were eliminated will necessitate that you plan. The idea of TCJA was to increase the number of Americans who choose the standard deduction rather than itemizing. Here are a few standardized 2019 deductions you don’t want to miss:
Effective January 1, 2020, the SECURE Act, a progressive change to retirement savings plans, is now law. The last legislation to retirement savings happened when Congress allowed for the automatic enrollment of employees. Also the addition of Target Date funds to retirement plans in 2006.
While the new law intends to provide additional opportunities for Americans to save for retirement, other changes will affect both estate and retirement planning in these critical areas:
Many people refer to their retirement savings as a “retirement nest egg,” but in theory, it should be made up of many sources of retirement income-many eggs. Even if Social Security and a company retirement plan were their only retirement savings sources, likely they haven’t thought about their withdrawal strategy. It’s not as simple as just drawing down retirement income from one or two sources without a plan. Have the following been considered?
The U.S. population continues on growing older, with the baby boomer generation now the largest generation ever. By 2035, one in three heads of households will be someone age 65 and older. The American population will have one in five people age 65 or older, an increase of 30 million people over the next thirty years. Not all people in this group have recovered from The Great Recession, leaving them with lower incomes and homeownership rates than previous generations. As our population ages, the demand for affordable housing connected to accessible services will continue to increase, and many will find their own homes the only affordable option.
The thought the division of joint debt discussed when saying “I do,” to any relationship. For couples that combine both assets and liabilities, a split signals the dilemma of dividing both. About half of all marriages in the U.S. end, according to the American Psychological Association, making debt a significant hindrance to financial security for some divorcees.
Fixed income is something many Americans don’t understand, according to the 2019 survey, “Fixed Income, Not Fixed Thinking,” by BNY Mellon Investment Management, one of the largest asset managers in the world. The study revealed that the majority of Americans surveyed have a limited understanding of fixed income investments, regardless of age, income, education level, and other demographics. The lack of understanding ranged from bonds, different fixed-income solutions including fixed-income insurance products, comprehending how fixed-income plays into retirement planning, and understanding its risk in comparison to other asset classes.
Dreaming and goal setting are interrelated; first, you dream about what you want, then you determine how to obtain it. Our dreams should help guide us to make the right choices at the right time and in the proper manner. But merely dreaming about something is not enough; we must set goals to achieve it. In psychology, goal setting refers to a successful plan of action that we set for ourselves.
Psychologist Frank L. Smoll, a Ph.D. and working psychologist at the University of Washington, emphasized through his studies the three essential features of goal-setting, which he calls the A-B-Cs of goals. Smoll said that effective goals are:
Here we are, already to the end of 2019! The end of a year and the start of a new one is when most people decide to clean up and implement changes in some areas of their lives. Whether it is financial or health-related, starting the New Year off with tasks completed feels good! Here are ten financial tasks that can make a difference to you now, and later:
In November 2019, the Internal Revenue Service (IRS) announced the cost of living adjustments for 2020 for most retirement savings plans. However, IRA contribution limits will stay the same. If you plan to make the maximum contributions to your retirement plan in 2020, here’s what you need to know: