Jennifer's Compass

On Course - The New Secure Act 2.0 Tax Law

On Course | February 8, 2023 | Volume 23, #1     Welcome. We at Compass Planning continue to appreciate your support. Thank you.   Much of the new SECURE 2.0 tax law comes into effect in 2023, with other parts phasing in over the next couple of years. The act has even more provisions than the first SECURE act so we've sifted through the act to find the changes that affect most of our clients. As with all new tax laws, stay tuned here for more detailed information on how these new changes will work.   If you missed our series on retirement, you can still access the issues. For Retirement, Part 1 - Retirement Savings, click here. For Retirement, Part 2 - Social Security, click here. For Retirement, Part 3 - The Retirement Paycheck, click here.   SECURE 2.0 offers many changes that may benefit you. If you would like assistance with your tax planning, we are here to help you stay On Course!   Jennifer Lane, CFP   The SECURE 2.0 Act   Here are some key areas of change that may affect you.   Required Minimum Distributions (RMDs) are pushed back again for retirees and folks over age 72 The act moves the RMD to age 73 for everyone not yet taking them and to age 75 for those born in 1960 or later. If you're planning on making Roth IRA conversions before your RMDs start, this is a good opportunity as well as a break from the added income (and its potential effect on Medicare premiums), provided you don't need your RMDs toward expenses. Note that the eligibility age to make qualified charitable distributions (QCDs) has stayed at 70 1/2. QCDs are one way to make charitable contributions if you lose that deduction while the standard deduction remains high, expected at least through the 2025 tax year.   New access to work retirement plans for emergencies, for some workers who retire early, and those in a disaster Until now exceptions to the IRA 10 percent early withdrawal penalty were limited. Withdrawals for college expenses, inherited IRAs, and home down payments were the most common early withdrawals. The new act adds several exceptions for emergency withdrawals and expands the number of public safety workers eligible for penalty-free withdrawals, starting at age 50. The act also makes permanent the disaster area exception and adds an exception for victims of domestic abuse, those with a terminal illness, and those paying for long-term care insurance. These new exceptions (along with other parts of the act) phase in over the next few years.   Saving for retirement will be easier, which means you should annually review what you save and which accounts you use Until now, self-employed people could access Roth savings only by creating a Roth 401(k). SECURE 2.0 adds the Roth option to the much easier and less expensive to administer SEP IRAs and SIMPLE IRAs. Your employer may offer to match the Roth part of your retirement plan at work. The pre-tax option had been the only option prior to the act. And, starting in 2024, your employer can add a match based on your student loan payments in addition -- or in place of -- any amount you're contributing to your work plan. To help increase emergency savings (and, hopefully, reduce hardship withdrawals) your employer may also add a linked emergency savings account to your plan at work. Higher wage earners age 50+ who are eligible for an additional "catch-up" contribution to their retirement plans will see reduced tax savings because catch-up contributions will be to Roth instead of pre-tax. This limit applies if your wages in the prior year, from the employer sponsoring the plan, were over $145,000. To date, it seems that self-employed workers who receive distributions, not wages, or workers who change jobs thus making their wages from the current employer less than $145,000 are exempt from this limitation. Happily, the IRA catch-up amount will now be indexed for inflation, giving those age 50 and older the chance to increase their savings as inflation increases. SECURE 2.0 also allows work plans to offer new catch-up options for employees in their early 60s.   The provisions in the act help married couples and families with 529 college savings plans Currently, widowed spouses have the option to transfer their late partners' retirement accounts into their own or leave them as is and continue as beneficiaries. The first option is beneficial to a younger spouse who is not in need of withdrawals right away. Consolidation of the accounts serves to delay required withdrawals until the surviving spouse reaches the RMD age. Widowed spouses younger than age 59 1/2 and in need of penalty-free withdrawals sooner typically leave the account in their late spouse's name, making penalty-free withdrawals available right away. SECURE 2.0 adds the option for the surviving spouse to step into the shoes of the late spouse and effectively continue the account as the deceased partner. This new approach could benefit younger surviving spouses, particularly those with children with disabilities because of smaller RMD requirements and the ability for the children to stretch their own RMDs instead of being constrained by the 10-year withdrawal rule. Every so often we have a client who ends up with money left over in the child's savings plan. SECURE 2.0 provides a limited opportunity to rollover excess 529 funds to a Roth IRA for the beneficiary The 529 plan must be at least 15 years old and the Roth must belong to the same beneficiary. Since 529 plans can be transferred between family members, this new strategy may be a way to move unneeded 529 funds back into the parents' retirement nest egg.   Curious as to what SECURE stands for? Here you go: Setting Every Community Up for Retirement Enhancement!     Fortify your retirement nest egg and save money on interest, fees, and taxes by using different types of investments and accounts together with balancing debt reduction and retirement savings.   Get more tips in Jennifer's book Buy Now           Helpful Websites     Investopedia - SECURE 2.0   IRS   SECURE 2.0 Article                       Jennifer In The Media   Below are links to Jennifer's frequent contributions to financial planning articles.   NBC Boston turned to Jennifer for advice and tips on what to do if you win big in the lottery. Click here to watch or read the segment. Jennifer contributed to a WBUR Radio Boston segment, How to Look Before You Leap into the "Great Resignation." Click here to listen. NBC10 consumer investigative reporter Leslie Gaydos interviewed Jennifer for savings tips. For a great video, How to Save $1,000 in 5 Months, click here. For the written article, click here. Jennifer contributed to a timely article, How to seek forbearance on your mortgage, for The Boston Globe. Read article. If you’re interested in dividend funds, Jennifer contributed to The New York Times article, Dividend Funds Can Add Income, and Risk, to Your Portfolio. Read article. Jennifer contributed to a BankRate article, Should I combine my mortgage and student loans? Read article. Need help with your 401(k) during the pandemic? Jennifer contributed to a Boston Globe article, Five tips for managing a 401(k) during the pandemic's turbulence. Read article. Jennifer contributed to the Bottom Line Inc article Prepare your Finances for a Possible Recession. Read article. Jennifer contributed to The Wall Street Journal article If Saving During a Pandemic Is Hard, Here's How to Stay Motivated. Read article. The New York Times featured Jennifer in an article titled, Balanced Funds Don't Inspire Fear or Greed. That's Why They Are So Useful. Read article. With a contrarian view, Jennifer contributed to an article, People are enraged by the idea that you should have twice your salary saved by the time you're 35! published recently by Business Insider. Read article. Moving in together? Check this article from Business Insider, Five questions you and your partner should answer before taking the biggest step in your relationship. Read article. Insider asked Jennifer to contribute to an article on old fashioned ways to manage your money, Six money-saving tips your grandma used that are way more effective than any budgeting app. Read article. Jennifer contributed to an article on Business Insider, This is the best way to do your taxes online - according to experts. Read article. CNN Money's Money Moves featured Jennifer in an article on how to strike the right balance between retiring early and saving enough. Read article. Jennifer contributed to a CNN Money article When is the Right Time to See a Financial Advisor? Read article.   Compass Planning News   Compass Planning is a sponsor of YW Boston's 2022 two-part Elevating Lives Series. Compass Planning continues to meet with clients as well as those interested in learning more about the firm via phone and web-based video conferencing. Email [email protected] to learn more. Compass Planning has become a supporter of The Center for Financial Planning at the sustainer level. The CFP Board created the center to achieve a more diverse and sustainable financial planning profession so that every American has access to competent and ethical financial planning advice.   Compass Planning Associates helps families, individuals, and small-business clients achieve financial security, knowledge, and control over their money. Our fee-only, client-centered approach provides education and guidance for achieving financial goals and dreams.   This newsletter and any linked references are for informational purposes only and are not to be construed as tax, legal, or investment advice. Compass Planning has gathered the information from sources it believes are reliable, but your individual situation can vary, and you should consult with your investment, accounting, and/or tax professional before taking any action. ©2023

On Course - Great Ready for 2023

On Course | December 15, 2022 | Volume 22, #10     Welcome. We at Compass Planning continue to appreciate your support. We wish all of you happy holidays and the best for the new year! Thank you.   We're about to enter 2023! It's been a year. You still have time to make sure you're in the right financial place for the coming year. This month we're discuss mutual funds, retirement savings, interest rates, and charitable giving.   If you missed our series on retirement, you can still access the issues. For Retirement, Part 1 - Retirement Savings, click here. For Retirement, Part 2 - Social Security, click here. For Retirement, Part 3 - The Retirement Paycheck, click here.   If you would like assistance with year-end planning, we are here to help you stay On Course!   Jennifer Lane, CFP   Get Ready for 2023   Review these important areas to ensure a strong beginning for 2023.   Check for mutual fund capital gains distributions Mutual funds don’t pay their own taxes. Capital gains from sales in the funds are passed to the shareholders in the form of capital gains distributions. This can be a problem when a mutual fund is held in a taxable (non-retirement) account. Many fund distributions happen on 12/31 – not helpful if you were not anticipating the added income – but many distribute earlier in the year. It takes extra diligence in reviewing your statement to find those distributions. Pro tip: check the transactions page. Mutual Fund Observer publishes a list of the links to find past and planned distributions for your mutual fund. Click here to read about Mutual Fund Observer's discussion of 2022 year-end capital gains distribution. If you're facing a tax on a capital gain distribution (yes, you may owe taxes even if your fund lost value this year), you have until year-end to sell another investment at a loss to offset that gain. Click here to read Tax-Loss Harvesting: How it Works, Example, and Pitfalls to Avoid from Investopedia.   Adjust your paycheck deductions to take advantage of higher retirement savings limits Automatic savings is the best way to grow your savings toward a long-term -- or even short-term -- goal. New retirement account limits are higher next year because they adjust for inflation. Adjust your paycheck withholding or your monthly savings in order to get as much of the limit -- and the employer match -- as you can. If you’re self employed and want to start a 401(k) for 2022, you have until 12/31 to open the account. Funding can happen at tax time.   Think strategically about variable interest rate debt Credit cards are a clear payoff target. Pay off/pay down your Home Equity Line of Credit (HELOC) if it is still in the draw period and has a floating interest rate, which usually adjusts monthly. Review your variable rate mortgage documents. You may want to keep the mortgage if the annual interest rate increase limit and overall increase limit is low.   Review your charitable giving The 2021 special rule for charitable deduction when you take the standard deduction wasn’t extended, so you must itemize in order to get a deduction for charity. Give from your Required Minimum Distribution (RMD), which is called a Qualified Distribution to Charity (QDC). Click here for info from the IRS. If you contribute to a Donor-Advised Fund (DAF), itemize this year and take standard deduction next year.   Your kids may need to file an income tax return if they have income -- earned or investment -- in their name. This is the case whether or not you use them for an exemption on your tax return. Under the "kiddie tax" rule, the IRS says that the child pays at the tax rate of the custodial parent.   Get more tips in Jennifer's book Buy Now   Jennifer and Sarah were both named 2022 Boston Five Star Wealth Managers.   Helpful Websites     Investopedia   IRS   Mutual Fund Observer                       Jennifer In The Media   Below are links to Jennifer's frequent contributions to financial planning articles.   NBC Boston turned to Jennifer for advice and tips on what to do if you win big in the lottery. Click here to watch or read the segment. Jennifer contributed to a WBUR Radio Boston segment, How to Look Before You Leap into the "Great Resignation." Click here to listen. NBC10 consumer investigative reporter Leslie Gaydos interviewed Jennifer for savings tips. For a great video, How to Save $1,000 in 5 Months, click here. For the written article, click here. Jennifer contributed to a timely article, How to seek forbearance on your mortgage, for The Boston Globe. Read article. If you’re interested in dividend funds, Jennifer contributed to The New York Times article, Dividend Funds Can Add Income, and Risk, to Your Portfolio. Read article. Jennifer contributed to a BankRate article, Should I combine my mortgage and student loans? Read article. Need help with your 401(k) during the pandemic? Jennifer contributed to a Boston Globe article, Five tips for managing a 401(k) during the pandemic's turbulence. Read article. Jennifer contributed to the Bottom Line Inc article Prepare your Finances for a Possible Recession. Read article. Jennifer contributed to The Wall Street Journal article If Saving During a Pandemic Is Hard, Here's How to Stay Motivated. Read article. The New York Times featured Jennifer in an article titled, Balanced Funds Don't Inspire Fear or Greed. That's Why They Are So Useful. Read article. With a contrarian view, Jennifer contributed to an article, People are enraged by the idea that you should have twice your salary saved by the time you're 35! published recently by Business Insider. Read article. Moving in together? Check this article from Business Insider, Five questions you and your partner should answer before taking the biggest step in your relationship. Read article. Insider asked Jennifer to contribute to an article on old fashioned ways to manage your money, Six money-saving tips your grandma used that are way more effective than any budgeting app. Read article. Jennifer contributed to an article on Business Insider, This is the best way to do your taxes online - according to experts. Read article. CNN Money's Money Moves featured Jennifer in an article on how to strike the right balance between retiring early and saving enough. Read article. Jennifer contributed to a CNN Money article When is the Right Time to See a Financial Advisor? Read article.   Compass Planning News   Compass Planning is a sponsor of YW Boston's 2022 two-part Elevating Lives Series. Compass Planning continues to meet with clients as well as those interested in learning more about the firm via phone and web-based video conferencing. Email [email protected] to learn more. Compass Planning has become a supporter of The Center for Financial Planning at the sustainer level. The CFP Board created the center to achieve a more diverse and sustainable financial planning profession so that every American has access to competent and ethical financial planning advice. AdvisoryHQ named Compass Planning as one of the ten best Boston financial advisors. (Disclosures)   Compass Planning Associates helps families, individuals, and small-business clients achieve financial security, knowledge, and control over their money. Our fee-only, client-centered approach provides education and guidance for achieving financial goals and dreams.   This newsletter and any linked references are for informational purposes only and are not to be construed as tax, legal, or investment advice. Compass Planning has gathered the information from sources it believes are reliable, but your individual situation can vary, and you should consult with your investment, accounting, and/or tax professional before taking any action. ©2022   Compass Planning Associates, Inc     Contact Us  ‌  ‌  ‌   PO Box 917 Westwood, MA 02090 617-523-4666 [email protected]

On Course - Managing Bonds and Bond Funds

On Course | October 31, 2022 | Volume 22, #9     Welcome. We at Compass Planning continue to appreciate your support. Thank you.   If you've checked your portfolio lately, it's no secret that your bonds haven't delivered the portfolio cushion they were meant to. Bond interest payments and low-price volatility are supposed to function as a circuit breaker when stocks fall – cushioning the impact on your portfolio. In fact, the bond market has suffered its worst year since at least 1926. So, what to do now? Read on for strategies and suggestions.   If you missed our series on retirement, you can still access the issues. For Retirement, Part 1 - Retirement Savings, click here. For Retirement, Part 2 - Social Security, click here. For Retirement, Part 3 - The Retirement Paycheck, click here.   If you would like assistance with handling your bond holdings or balancing your portfolio, we are here to help you stay On Course!   Jennifer Lane, CFP   Managing Bonds and Bond Funds   Individual bonds and bond funds will start to recover as interest rates stabilize.   Don't sell - tried and true advice Individual bonds and bond funds will start to recover as interest rates stabilize. The trick is being able to wait, which means limiting withdrawals where you can. Reducing withdrawals helps minimize selling shares while they are down in value. If you have a financial plan that we have updated in the last year or two, then we've discussed withdrawals in this market.  If not, limiting the amount you take from your portfolio to 3-3.5 percent of the current value is a big help towards conserving principal.   Rebalancing is still important A fair number of the portfolios we've reviewed over the past few months are still in balance because the portfolio's bonds and stocks both went down similar amounts. When that happens, the pie chart pieces stay the same size relative to each other the whole pie is just smaller. Not a good thing whether you're talking about portfolio pie charts or real pies, but it's still worth a look.  Check your asset allocation. If the percentage of stocks to bonds is still the same, then you may not need to rebalance.  And while you're there, check for the silver lining. Look to see whether you have a chance to save taxes this year.   Silver Linings   First, the chance to buy shares cheaply and the chance to save taxes this year and perhaps into the future. If you're a long way from your savings goal, i.e., five years or more, resist the temptation to take your foot off the gas. Keep saving!  Whether it's your savings plan at work, your individual Roth or Traditional IRA, or your taxable investment account, if you've been saving per month or per paycheck, keep saving.  Sometimes investments are the only thing people are not excited about buying when they are on sale.  Continuing to invest when the markets are down is a key part of reaching long term financial goals.   Second silver lining is the chance to use losses in your portfolio to save current year taxes. In fact, it's been years since tax-loss harvesting was such a useful thing. If you sell an investment for a loss and buy an new investment that is not too similar to the first, you can realize the loss on the first investment while still staying in the market. Investopedia does a good job of explaining this in more detail - and they have more room than we do here. Check your taxable portfolio for investment positions that are down in value, remembering that retirement accounts are sheltered from current taxes so tax-loss harvesting works only for non-retirement accounts. Is there another investment you can buy to replace the investment that has lost value without triggering a problem called a wash sale. A wash sale happens when the investment you sell and the investment you buy are too much alike. IRS calls this similarity "Substantially Identical." This article from Morningstar explains this problem more fully. An example of a wash sale would be selling an S&P 500 stock fund from one fund family and buying an S&P 500 stock fund from another fund family or an S&P 500 ETF.  For a number of us, bond funds offer an opportunity to sell and harvest some losses.  Don't sell the funds and hold cash because then you've lost the bond part of your asset allocation.  Consider, instead, adjusting part of your bond strategy by selling some bond funds and buying individual bonds to replace that part of your portfolio.  Individual bonds don't have the liquidity of bond funds because you must wait for an individual bond to mature to reinvest your principal. Bond funds are doing this all the time: earning higher yields as they come available. This lack of liquidity is part of what makes an individual bond substantially different from a fund. You can take capital losses against capital gains (more details here...thanks IRS) and then carry them forward until used.   Researching, tracking, and buying individual bonds can be a full-time job. Many investors choose mutual funds to make investing easier. Bond mutual funds are run by a professional manager who selects, buys, and sells the bonds in the fund. Individual investors can deposit or withdraw money as any time.   Get more tips in Jennifer's book Buy Now   Jennifer and Sarah were both named 2022 Boston Five Star Wealth Managers.   Helpful Websites     Capital Gains and Losses   How Tax Loss Harvesting Works     Wash Sale Challenge                     Jennifer In The Media   Below are links to Jennifer's frequent contributions to financial planning articles.   NBC Boston turned to Jennifer for advice and tips on what to do if you win big in the lottery. Click here to watch or read the segment. Jennifer contributed to a WBUR Radio Boston segment, How to Look Before You Leap into the "Great Resignation." Click here to listen. NBC10 consumer investigative reporter Leslie Gaydos interviewed Jennifer for savings tips. For a great video, How to Save $1,000 in 5 Months, click here. For the written article, click here. Jennifer contributed to a timely article, How to seek forbearance on your mortgage, for The Boston Globe. Read article. If you’re interested in dividend funds, Jennifer contributed to The New York Times article, Dividend Funds Can Add Income, and Risk, to Your Portfolio. Read article. Jennifer contributed to a BankRate article, Should I combine my mortgage and student loans? Read article. Need help with your 401(k) during the pandemic? Jennifer contributed to a Boston Globe article, Five tips for managing a 401(k) during the pandemic's turbulence. Read article. Jennifer contributed to the Bottom Line Inc article Prepare your Finances for a Possible Recession. Read article. Jennifer contributed to The Wall Street Journal article If Saving During a Pandemic Is Hard, Here's How to Stay Motivated. Read article. The New York Times featured Jennifer in an article titled, Balanced Funds Don't Inspire Fear or Greed. That's Why They Are So Useful. Read article. With a contrarian view, Jennifer contributed to an article, People are enraged by the idea that you should have twice your salary saved by the time you're 35! published recently by Business Insider. Read article. Moving in together? Check this article from Business Insider, Five questions you and your partner should answer before taking the biggest step in your relationship. Read article. Insider asked Jennifer to contribute to an article on old fashioned ways to manage your money, Six money-saving tips your grandma used that are way more effective than any budgeting app. Read article. Jennifer contributed to an article on Business Insider, This is the best way to do your taxes online - according to experts. Read article. CNN Money's Money Moves featured Jennifer in an article on how to strike the right balance between retiring early and saving enough. Read article. Jennifer contributed to a CNN Money article When is the Right Time to See a Financial Advisor? Read article.   Compass Planning News   Compass Planning is a sponsor of YW Boston's 2022 two-part Elevating Lives Series. Compass Planning continues to meet with clients as well as those interested in learning more about the firm via phone and web-based video conferencing. Email [email protected] to learn more. Compass Planning has become a supporter of The Center for Financial Planning at the sustainer level. The CFP Board created the center to achieve a more diverse and sustainable financial planning profession so that every American has access to competent and ethical financial planning advice. AdvisoryHQ named Compass Planning as one of the ten best Boston financial advisors. (Disclosures)   Compass Planning Associates helps families, individuals, and small-business clients achieve financial security, knowledge, and control over their money. Our fee-only, client-centered approach provides education and guidance for achieving financial goals and dreams.   This newsletter and any linked references are for informational purposes only and are not to be construed as tax, legal, or investment advice. Compass Planning has gathered the information from sources it believes are reliable, but your individual situation can vary, and you should consult with your investment, accounting, and/or tax professional before taking any action. ©2022   Compass Planning Associates, Inc     Contact Us  ‌  ‌  ‌   PO Box 917 Westwood, MA 02090 617-523-4666 [email protected]

On Course - Student Debt Relief Plan

On Course | September 27, 2022 | Volume 22, #8     Welcome. We at Compass Planning continue to appreciate your support. Thank you.   For those of you who have college debt or have family members who do, this month we're highlighting key info for the newly passed student debt relief plan and providing links for more detailed information.   The Biden-Harris Administration expects that over 40 million borrowers are eligible for its student debt relief plan and nearly 20 million borrowers could see their entire remaining balance discharged. Nearly 90 percent of relief dollars will go to those earning less than $75,000 per year – with no relief going to any individual or household in the top 5 percent of incomes in the United States.   If you missed our series on retirement, you can still access the issues. For Retirement, Part 1 - Retirement Savings, click here. For Retirement, Part 2 - Social Security, click here. For Retirement, Part 3 - The Retirement Paycheck, click here.   If you would like assistance with student loan debt forgiveness, we are here to help you stay On Course!   Jennifer Lane, CFP   Student Debt Relief Plan   The program is a three-part plan to help working and middle-class federal student loan borrowers transition back to regular payment as pandemic-related support expires.   Three parts Part 1: The student loan payment pause is extended through December 31, 2022, with payments resuming in January 2023. This pause extends automatically. Part 2: Provide targeted debt relief to low- and middle-income families. The U.S. Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for households. Part 2: In addition, borrowers who are employed by non-profits, the military, or federal, state, Tribal, or local government may be eligible to have all of their student loans forgiven through the Public Service Loan Forgiveness (PSLF) program. This is because of time-limited changes that waive certain eligibility criteria in the PSLF program. These temporary changes expire on October 31, 2022. For more information on eligibility and requirements, go to PSLF.gov. Part 3: Make the student loan program more manageable for current and future borrowers. The administration is proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers.   Eligibility Your annual income must have fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households). If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt cancellation. If you did not receive a Pell Grant in college and meet the income threshold, you will be eligible for up to $10,000 in debt cancellation. Your relief is capped at the amount of your outstanding debt.   The process Nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available to the U.S. Department of Education. If the U.S. Department of Education doesn't have your income data, the administration will launch a simple application which will be available by early October. (See below.) Once borrowers complete the application, they can expect relief within 4-6 weeks. Everyone is eligible to file the application, but there are 8 million people for whom the government has data and who will get the relief automatically. Borrowers should apply before November 15th in order to receive relief before the payment pause expires on December 31, 2022. The Department of Education will continue to process applications as they are received, even after the pause expires on December 31, 2022.   To be notified when the process has officially opened, sign up for "Federal Student Loan Borrower Updates" at the Department of Education subscription page. Applicants will have until Dec. 31, 2023 to apply.   Get your kids involved as early as you can in college financial planning by including them in a monthly discussion about your money and theirs. You don't need to share your whole financial picture with them -- focus on their accounts and the accounts you own that are earmarked for their college costs.   Get more tips in Jennifer's book Buy Now   Jennifer and Sarah were both named 2022 Boston Five Star Wealth Managers.   Helpful Websites     Department of Education subscription page   One-Time Student Debt Relief   Public Service Loan Forgiveness   Student Debt Relief Plan   The White House Fact Sheet                   Jennifer In The Media   Below are links to Jennifer's frequent contributions to financial planning articles.   NBC Boston turned to Jennifer for advice and tips on what to do if you win big in the lottery. Click here to watch or read the segment. Jennifer contributed to a WBUR Radio Boston segment, How to Look Before You Leap into the "Great Resignation." Click here to listen. NBC10 consumer investigative reporter Leslie Gaydos interviewed Jennifer for savings tips. For a great video, How to Save $1,000 in 5 Months, click here. For the written article, click here. Jennifer contributed to a timely article, How to seek forbearance on your mortgage, for The Boston Globe. Read article. If you’re interested in dividend funds, Jennifer contributed to The New York Times article, Dividend Funds Can Add Income, and Risk, to Your Portfolio. Read article. Jennifer contributed to a BankRate article, Should I combine my mortgage and student loans? Read article. Need help with your 401(k) during the pandemic? Jennifer contributed to a Boston Globe article, Five tips for managing a 401(k) during the pandemic's turbulence. Read article. Jennifer contributed to the Bottom Line Inc article Prepare your Finances for a Possible Recession. Read article. Jennifer contributed to The Wall Street Journal article If Saving During a Pandemic Is Hard, Here's How to Stay Motivated. Read article. The New York Times featured Jennifer in an article titled, Balanced Funds Don't Inspire Fear or Greed. That's Why They Are So Useful. Read article. With a contrarian view, Jennifer contributed to an article, People are enraged by the idea that you should have twice your salary saved by the time you're 35! published recently by Business Insider. Read article. Moving in together? Check this article from Business Insider, Five questions you and your partner should answer before taking the biggest step in your relationship. Read article. Insider asked Jennifer to contribute to an article on old fashioned ways to manage your money, Six money-saving tips your grandma used that are way more effective than any budgeting app. Read article. Jennifer contributed to an article on Business Insider, This is the best way to do your taxes online - according to experts. Read article. CNN Money's Money Moves featured Jennifer in an article on how to strike the right balance between retiring early and saving enough. Read article. Jennifer contributed to a CNN Money article When is the Right Time to See a Financial Advisor? Read article.   Compass Planning News   Compass Planning is a sponsor of YW Boston's 2022 two-part Elevating Lives Series. Compass Planning continues to meet with clients as well as those interested in learning more about the firm via phone and web-based video conferencing. Email [email protected] to learn more. Compass Planning has become a supporter of The Center for Financial Planning at the sustainer level. The CFP Board created the center to achieve a more diverse and sustainable financial planning profession so that every American has access to competent and ethical financial planning advice. AdvisoryHQ named Compass Planning as one of the ten best Boston financial advisors. (Disclosures)   Compass Planning Associates helps families, individuals, and small-business clients achieve financial security, knowledge, and control over their money. Our fee-only, client-centered approach provides education and guidance for achieving financial goals and dreams.   This newsletter and any linked references are for informational purposes only and are not to be construed as tax, legal, or investment advice. Compass Planning has gathered the information from sources it believes are reliable, but your individual situation can vary, and you should consult with your investment, accounting, and/or tax professional before taking any action. ©2022   Compass Planning Associates, Inc     Contact Us  ‌  ‌  ‌   PO Box 917 Westwood, MA 02090 617-523-4666 [email protected]

On Course - Multigenerational Living

On Course | August 30, 2022 | Volume 22, #7     Welcome. We at Compass Planning continue to appreciate your support. Thank you.   So much of the work we do at Compass Planning is helping clients move through the phases of their lives. Retirement is a particularly big phase that often puts clients in the fortunate situation where they can afford to help their children out financially. And, in other cases, they may need some help for themselves. This month we're looking at how different forms of multigenerational housing can benefit everyone -- the parents, children, and grandchildren.   If you missed our series on retirement, you can still access the issues. For Retirement, Part 1 - Retirement Savings, click here. For Retirement, Part 2 - Social Security, click here. For Retirement, Part 3 - The Retirement Paycheck, click here.   If you would like assistance exploring generational planning options, we are here to help you stay On Course!   Jennifer Lane, CFP   Multigenerational Living   Whatever the need, multigenerational living should provide the support, security, and enjoyment of being close to your family.   The foundation Multigenerational housing works only when it's good for all involved. An open checkbook is not good for anybody. The decision has to be something the parents and the children decide together would be a good solution, for example buying a house in a location the kids might not have been able to afford or with a good school system. Because of its complexity, always seek the advice of a good estate attorney and your financial planner to help think through how best to plan for the short and long term.   Ground rules and communication Think about changing living arrangements -- for whatever reason -- as a new phase that requires ongoing conversations around the new relationships that will be created. Best to have those conversations first between parents and children. Your children can discuss with their spouses or partners. Every situation is different so it's important to be clear about who owns the house, who pays for what, and what the guidelines are for everyone's time and household/childcare responsibilities. Some clients write letters to each other setting expectations. Others set regular meetings -- similar to a condo board -- to discuss what's happening, what's next, health issues, and planning for the long-term.   Possibilities Several of our clients have changed their living arrangements in ways that help members of their family. The support and interaction of the family members strengthened everyone's relationships. One client sold her house and rented close to her children. Her grandchildren were in their early teens and would be off on their own in a few years. Because the housing situation would be shorter-term, renting made sense. Other clients are doing a large renovation on their house to turn it into a two-family for themselves and their children and grandchildren. Another client changed the estate plan to leave the house to one sibling and money to the other who was a minister and would not need his own housing. Another couple built an accessory dwelling unit on their property, moved into it while their children and grandchildren moved into the big house.   At some point you will probably need the advice of an elder law attorney. This specialist can help you gather and complete the needed documents and create a plan to help you manage your assets and affairs while still protecting your interests. The elder law attorney understands the ever-changing laws around asset transfers, the Medicaid application process, nursing home issues, and estate planning.   Get more tips in Jennifer's book Buy Now   Jennifer and Sarah were both named 2022 Boston Five Star Wealth Managers.   Helpful Websites     National Academy of Elder Law Attorneys                   Jennifer In The Media   Below are links to Jennifer's frequent contributions to financial planning articles.   NBC Boston turned to Jennifer for advice and tips on what to do if you win big in the lottery. Click here to watch or read the segment. Jennifer contributed to a WBUR Radio Boston segment, How to Look Before You Leap into the "Great Resignation." Click here to listen. NBC10 consumer investigative reporter Leslie Gaydos interviewed Jennifer for savings tips. For a great video, How to Save $1,000 in 5 Months, click here. For the written article, click here. Jennifer contributed to a timely article, How to seek forbearance on your mortgage, for The Boston Globe. Read article. If you’re interested in dividend funds, Jennifer contributed to The New York Times article, Dividend Funds Can Add Income, and Risk, to Your Portfolio. Read article. Jennifer contributed to a BankRate article, Should I combine my mortgage and student loans? Read article. Need help with your 401(k) during the pandemic? Jennifer contributed to a Boston Globe article, Five tips for managing a 401(k) during the pandemic's turbulence. Read article. Jennifer contributed to the Bottom Line Inc article Prepare your Finances for a Possible Recession. Read article. Jennifer contributed to The Wall Street Journal article If Saving During a Pandemic Is Hard, Here's How to Stay Motivated. Read article. The New York Times featured Jennifer in an article titled, Balanced Funds Don't Inspire Fear or Greed. That's Why They Are So Useful. Read article. With a contrarian view, Jennifer contributed to an article, People are enraged by the idea that you should have twice your salary saved by the time you're 35! published recently by Business Insider. Read article. Moving in together? Check this article from Business Insider, Five questions you and your partner should answer before taking the biggest step in your relationship. Read article. Insider asked Jennifer to contribute to an article on old fashioned ways to manage your money, Six money-saving tips your grandma used that are way more effective than any budgeting app. Read article. Jennifer contributed to an article on Business Insider, This is the best way to do your taxes online - according to experts. Read article. CNN Money's Money Moves featured Jennifer in an article on how to strike the right balance between retiring early and saving enough. Read article. Jennifer contributed to a CNN Money article When is the Right Time to See a Financial Advisor? Read article.   Compass Planning News   Compass Planning is a sponsor of YW Boston's 2022 two-part Elevating Lives Series. Compass Planning continues to meet with clients as well as those interested in learning more about the firm via phone and web-based video conferencing. Email [email protected] to learn more. Compass Planning has become a supporter of The Center for Financial Planning at the sustainer level. The CFP Board created the center to achieve a more diverse and sustainable financial planning profession so that every American has access to competent and ethical financial planning advice. AdvisoryHQ named Compass Planning as one of the ten best Boston financial advisors. (Disclosures)   Compass Planning Associates helps families, individuals, and small-business clients achieve financial security, knowledge, and control over their money. Our fee-only, client-centered approach provides education and guidance for achieving financial goals and dreams.   This newsletter and any linked references are for informational purposes only and are not to be construed as tax, legal, or investment advice. Compass Planning has gathered the information from sources it believes are reliable, but your individual situation can vary, and you should consult with your investment, accounting, and/or tax professional before taking any action. ©2022   Compass Planning Associates, Inc

On Course - The Importance of Asset Allocation During Inflation

On Course | June/July, 2022 | Volume 22, #6     Welcome. We at Compass Planning continue to appreciate your support. Thank you.   While many people successfully weathered the tech bubble, the recession that followed, 9/11, and the housing bubble, many others find the current economic situation combined with the market correction stressful. Our clients often hear "trust the pie chart." One central objective of our financial planning is to develop an asset allocation (aka the pie chart) that will help clients achieve their financial goals through the inevitable ups and downs of the economy and market. This month, we're taking a closer look at how that works.   If you missed our series on retirement, you can still access the issues. For Retirement, Part 1 - Retirement Savings, click here. For Retirement, Part 2 - Social Security, click here. For Retirement, Part 3 - The Retirement Paycheck, click here.   If you would like assistance setting up a financial plan and asset allocation, we are here to help you stay On Course!   Jennifer Lane, CFP Asset Allocation -- Trust the Pie Chart!   We have never used historical performance expectations when doing a financial plan. Instead, our projected returns have always been pessimistic to stay on the safe side -- and to acknowledge that the world feels way more crazy than it has in the past.     Please accept our apologies. We made a mistake in the section below, under Rebalancing Your Portfolio. The correct sentence should be: This helps you to sell high and buy low without trying to time the markets. We have corrected it in the text.   Background The financial plan takes into account not only retirement goals but also intermediate goals to determine what money you need to save and spend for savings, college, housing, and other expenses. Next, we figure out the mix of risk and return to best meet those objectives. Finally, we develop a portfolio based on the asset allocation needed that includes stocks, bonds, and cash, resulting in the pie chart, which is a great snapshot of where your monies are.   Rebalancing you portfolio Every year when you review and update your financial plan, you also take a close look at the asset allocation pie chart, comparing it to the prior year's. If one asset class has done better than another, its slice of the pie will be bigger. To rebalance back to your original pie chart target, you'll need to sell what's done well and buy what's done less well or gone down. This helps you to sell high and buy low without trying to time the markets. Rebalancing helps balance the risk in your portfolio by taking profits when they appear so you don't lose them due to market volatility. In addition, this is also the time to reevaluate how much money you may need to withdraw or save to meet your goals. If you like to do your own planning and investing, some investment firms, e.g., Vanguard or TD Ameritrade will create portfolio allocation charts based on your investments. Morningstar Investor (formerly Morningstar Premium) offers an array of options for investors for a fee. You can also do it yourself with spreadsheet software.   Bond options Prior to the current market, bond funds were good choices -- easy to rebalance and sell and buy. With current interest rate uncertainty, shorter maturity dates will be less volatile. Some clients are buying individual treasury bonds as an alternative to some of their bond funds. If you hold a treasury until it matures, you'll know exactly what yield to expect. Buying a treasury bond to match a specific income need, like next year's income withdrawals, is a way to be sure you'll have the cash available when you need it without having to sell a fund when it's down in value. We've spoken about Series I Savings Bonds. Created as an inflation bond, they have now come back into favor. From the website: Bonds can be purchased through October 2022 at the current rate. That rate is applied to the 6 months after the purchase is made. For example, if you buy an I bond on July 1, 2022, the 9.62% would be applied through December 31, 2022. Interest is compounded semi-annually. You have a limit of $10,000 per person, but you can also buy bonds for trusts and estates, corporations, partnerships, LLCs, and sole proprietorships. Some clients have been able to purchase $60,000 of I bonds.   Last words Hang on tight. The market will be rough while the Fed tries to get out ahead of inflation. No financial plan? Begin now. Gain a perspective of where you are, what expenses you have, and what taxes you pay. It's very likely you have too much of your assets in stock. Read and learn how to do asset allocation, which is now, more than ever, vital to your financial security.   Investing for college is different from investing for retirement because college covers such a short period of time. Your retirement assets can stand to fluctuate quite a bit, even after you retire, because even at age 60 or 70, you're still investing for a long period of time. College money gets spent quickly, leaving very little room for large value changes.   Get more tips in Jennifer's book Buy Now   Jennifer and Sarah were both named 2022 Boston Five Star Wealth Managers.   Helpful Websites     Morningstar Investor     TreasuryDirect             Jennifer In The Media   Below are links to Jennifer's frequent contributions to financial planning articles.   Jennifer contributed to a WBUR Radio Boston segment, How to Look Before Your Leap into the "Great Resignation." Click here to listen. NBC10 consumer investigative reporter Leslie Gaydos interviewed Jennifer for savings tips. For a great video, How to Save $1,000 in 5 Months, click here. For the written article, click here. Jennifer contributed to a timely article, How to seek forbearance on your mortgage, for The Boston Globe. Read article. If you’re interested in dividend funds, Jennifer contributed to The New York Times article, Dividend Funds Can Add Income, and Risk, to Your Portfolio. Read article. Jennifer contributed to a BankRate article, Should I combine my mortgage and student loans? Read article. Need help with your 401(k) during the pandemic? Jennifer contributed to a Boston Globe article, Five tips for managing a 401(k) during the pandemic's turbulence. Read article. Jennifer contributed to the Bottom Line Inc article Prepare your Finances for a Possible Recession. Read article. Jennifer contributed to The Wall Street Journal article If Saving During a Pandemic Is Hard, Here's How to Stay Motivated. Read article. The New York Times featured Jennifer in an article titled, Balanced Funds Don't Inspire Fear or Greed. That's Why They Are So Useful. Read article. With a contrarian view, Jennifer contributed to an article, People are enraged by the idea that you should have twice your salary saved by the time you're 35! published recently by Business Insider. Read article. Moving in together? Check this article from Business Insider, Five questions you and your partner should answer before taking the biggest step in your relationship. Read article. Insider asked Jennifer to contribute to an article on old fashioned ways to manage your money, Six money-saving tips your grandma used that are way more effective than any budgeting app. Read article. Jennifer contributed to an article on Business Insider, This is the best way to do your taxes online - according to experts. Read article. CNN Money's Money Moves featured Jennifer in an article on how to strike the right balance between retiring early and saving enough. Read article. Jennifer contributed to a CNN Money article When is the Right Time to See a Financial Advisor? Read article.   Compass Planning News   Compass Planning is a sponsor of YW Boston's 2021 two-part Elevating Lives Series. Compass Planning continues to meet with clients as well as those interested in learning more about the firm via phone and web-based video conferencing. Email [email protected] to learn more. Compass Planning has become a supporter of The Center for Financial Planning at the sustainer level. The CFP Board created the center to achieve a more diverse and sustainable financial planning profession so that every American has access to competent and ethical financial planning advice. AdvisoryHQ named Compass Planning as one of the ten best Boston financial advisors. (Disclosures)   Compass Planning Associates helps families, individuals, and small-business clients achieve financial security, knowledge, and control over their money. Our fee-only, client-centered approach provides education and guidance for achieving financial goals and dreams.   This newsletter and any linked references are for informational purposes only and are not to be construed as tax, legal, or investment advice. Compass Planning has gathered the information from sources it believes are reliable, but your individual situation can vary, and you should consult with your investment, accounting, and/or tax professional before taking any action. ©2022   Compass Planning Associates, Inc

On Course - Financial Strategies During Inflation and Recession

On Course | May 31, 2022 | Volume 22, #5     Welcome. We at Compass Planning continue to appreciate your support. Thank you.   What is happening with inflation and what can you do about it? The headlines are startling, with inflation higher than we've seen since the early 1980s. As with many things financial, while it's important to be aware of the macro view, even more important is considering how you and your financial plan are affected.   If you missed our series on retirement, you can still access the issues. For Retirement, Part 1 - Retirement Savings, click here. For Retirement, Part 2 - Social Security, click here. For Retirement, Part 3 - The Retirement Paycheck, click here.   If you would like assistance managing your finances through inflation, we are here to help you stay On Course!   Jennifer Lane, CFP   Financial Strategies During Inflation   What you're seeing or reading about these days should give you the heads up to review your own finances. Always, pay attention to your individual situation to make changes that make sense for you rather than reacting -- or overreacting -- to the headlines.   Background The US Bureau of Labor Statistics tracks many categories of goods and services. Some of the more notable categories in their recent report tracking 12-month inflation as of March 2022 include: All items: 8.5 percent Groceries: 10 percent Food away from home: 6.9 percent Gasoline: 48 percent Fuel Oil: 70 percent Electricity: 11 percent Medical care services (surprisingly): 2.9 percent   A look at my expenses Wow! Those are some eye-popping increases. Yes, good to know. Before hitting the panic button or before taking any action with your money, take a look at how inflation is affecting you directly. I gave it a try with my expenses for January through March this year versus last year. Here's what I found. Groceries: +55 percent Dining Out/Take Out: -8 percent Gasoline: -11 percent Electricity: +12 percent Medical: -4 percent No surprise that groceries and electricity are up. Fortunately, I don't have fuel oil to deal with, but just this small sample proves I should keep an eye on my grocery bill if I want to stay on track and avoid added costs eating into my savings.   Track your expenses Knowing what you spend is helpful in many ways -- particularly as an inflation fighting tool. A few careful decisions at the grocery store could put a dent in my grocery inflation. Whether I change what I buy or change where I shop, it's a choice I can make because I know where my money goes and, then, spend intentionally. In fact, I may choose to let the groceries stay on the pricey side because I want to shop at my favorite small grocery stores in Vermont as a dollar-vote from me to keep a wonderful part of rural living in my life. I'll find other places to cut instead.   Cash savings and inflation Say this out loud: Inflation decreases the value of your cash. If your cash returns 0.5 percent, then at 8.5 percent inflation, you actually lost -8 percent. Against an S&P 500 large cap stock fund returning ~15 percent and a total bond fund at -4 percent, cash isn't a long-term safe haven right now. Cash is important for liquidity -- and not much else. If you're still working, keep 3 to 6 months of basic living expenses in cash for emergencies and possible job search. Use online banks and some credit unions for this cash. If you're retired, review your withdrawal rate -- how much you're taking from your investments for daily expenses -- because it is a big factor in your cash planning. If you live on pension and Social Security with little cash needed from investments, keep enough in cash for emergencies and leave the rest invested. If you draw more than 4 percent of your portfolio, take a closer look at expenses. A withdrawal rate of 3-3.5 percent is safe for most of the clients we work with. Keep your portfolio balanced to your target asset allocation.   Time in the market is better than timing the market Your diversification pie chart matters. Your long-term portfolio -- money you won't be drawing from for ten or more years -- can stay invested following targets in your financial plan. Rebalance every year. This will force you to sell what's done well and buy what hasn't. That is, selling high and buying low without trying to guess where the market is going. Stock share values are down, but stocks (and the funds that own them) are still paying dividends, which can be a good income source that's often overlooked. If you're retired, consider the income potential and change dividends to pay income directly to you rather than having to sell shares for cash. Shorter bond maturities do better against inflation.   Beware of tax bracket creep and IRMAA If you are living on IRA or 401(k) withdrawals, increased expenses may mean increased withdrawals. With increased taxable income you may be subject to IRMAA (income-related monthly adjustment amount) that could result in extra Medicare premiums. IRMAA begins at adjusted-gross income of $92,001 for individuals and $182,001 for couples. If you think you may reach the IRMAA limit, review where your income is coming from. Reducing IRA withdrawals in favor of spending dividends from your taxable accounts can help. If you're over age 70 1/2 and are making charitable donations but not itemizing your taxes to get the charitable deduction, consider writing checks to charity from your IRA (called a Qualified Charitable Distribution - QCD). QCD checks don't count towards your adjusted gross income....reducing taxes and minimizing the chance you'll hit IRMAA.   Contribute to a Roth IRA in the years you're eligible. They are a great tax planning tool. Withdrawals are tax free and can be delayed past age 70 and a half. You don't get to deduct your deposit on your tax return, but the tax free withdrawals in retirement can be a great source of liquidity.   Get more tips in Jennifer's book Buy Now   Jennifer and Sarah were both named 2022 Boston Five Star Wealth Managers.   Helpful Websites     IRMAA   QCD-Qualified Charitable Distributions   Required Minimum Distributions   Roth IRA   US Bureau of Labor Statistics               Jennifer In The Media   Below are links to Jennifer's frequent contributions to financial planning articles.   Jennifer contributed to a WBUR Radio Boston segment, How to Look Before Your Leap into the "Great Resignation." Click here to listen. NBC10 consumer investigative reporter Leslie Gaydos interviewed Jennifer for savings tips. For a great video, How to Save $1,000 in 5 Months, click here. For the written article, click here. Jennifer contributed to a timely article, How to seek forbearance on your mortgage, for The Boston Globe. Read article. If you’re interested in dividend funds, Jennifer contributed to The New York Times article, Dividend Funds Can Add Income, and Risk, to Your Portfolio. Read article. Jennifer contributed to a BankRate article, Should I combine my mortgage and student loans? Read article. Need help with your 401(k) during the pandemic? Jennifer contributed to a Boston Globe article, Five tips for managing a 401(k) during the pandemic's turbulence. Read article. Jennifer contributed to the Bottom Line Inc article Prepare your Finances for a Possible Recession. Read article. Jennifer contributed to The Wall Street Journal article If Saving During a Pandemic Is Hard, Here's How to Stay Motivated. Read article. The New York Times featured Jennifer in an article titled, Balanced Funds Don't Inspire Fear or Greed. That's Why They Are So Useful. Read article. With a contrarian view, Jennifer contributed to an article, People are enraged by the idea that you should have twice your salary saved by the time you're 35! published recently by Business Insider. Read article. Moving in together? Check this article from Business Insider, Five questions you and your partner should answer before taking the biggest step in your relationship. Read article. Insider asked Jennifer to contribute to an article on old fashioned ways to manage your money, Six money-saving tips your grandma used that are way more effective than any budgeting app. Read article. Jennifer contributed to an article on Business Insider, This is the best way to do your taxes online - according to experts. Read article. CNN Money's Money Moves featured Jennifer in an article on how to strike the right balance between retiring early and saving enough. Read article. Jennifer contributed to a CNN Money article When is the Right Time to See a Financial Advisor? Read article.   Compass Planning News   Compass Planning is a sponsor of YW Boston's 2021 two-part Elevating Lives Series. Compass Planning continues to meet with clients as well as those interested in learning more about the firm via phone and web-based video conferencing. Email [email protected] to learn more. Compass Planning has become a supporter of The Center for Financial Planning at the sustainer level. The CFP Board created the center to achieve a more diverse and sustainable financial planning profession so that every American has access to competent and ethical financial planning advice. AdvisoryHQ named Compass Planning as one of the ten best Boston financial advisors. (Disclosures)   Compass Planning Associates helps families, individuals, and small-business clients achieve financial security, knowledge, and control over their money. Our fee-only, client-centered approach provides education and guidance for achieving financial goals and dreams.   This newsletter and any linked references are for informational purposes only and are not to be construed as tax, legal, or investment advice. Compass Planning has gathered the information from sources it believes are reliable, but your individual situation can vary, and you should consult with your investment, accounting, and/or tax professional before taking any action. ©2022

On Course - Your Personal Cyber Security

On Course | April 27, 2022 | Volume 22, #4     Welcome. We at Compass Planning continue to appreciate your support. Thank you.   We are seeing an ever increasing trend of clever phishing, scamming, and fraud communications -- whether phone, email, text, or mail. Having dealt with many instances over the years, I now believe that the best way to protect against it is to stay current with technology. Those whose work or live in community settings are better able to do this through provided training and as well as IT support. Others have the greater challenge to find ways to stay up-to-date. This month, we’re discussing what could happen and how best to identify and prevent potential schemes.   If you missed our series on retirement, you can still access the issues. For Retirement, Part 1 - Retirement Savings, click here. For Retirement, Part 2 - Social Security, click here. For Retirement, Part 3 - The Retirement Paycheck, click here.   If you would like assistance with phishing, scams, or fraud, we are here to help you stay On Course!   Jennifer Lane, CFP   Your Personal Cyber Security   Always be alert to potential scams -- phone, email, texts, and mail. The scammers are clever and sophisticated. Knowing what to look for can help you avoid getting caught in a scheme that gives the wrong people access to your personal information.     Key practices So much information is now online, e.g., Social Security payments, bank statements, investment statements and individual transactions. Probably your most important action is to stay current on how technology benefits your cyber security. Use two-factor authentication on all your accounts. It's the best way to keep your personal information secure. You can usually find the sign up under your profile or security. Learn to use your financial providers' apps as well as their websites. As much as possible pay bills online or with credit cards. Keep paper to a minimum. PayPal, Venmo, and Zelle are other options. Set up alerts on your bank, credit card, and investment accounts. The company will then send you notification for any transaction over that amount -- we suggest $500. Always verify separately whenever you aren't sure about the source. Call company directly. Do a search using the return email. Review your statements carefully. Credit card scammers often try small charges to see if the owner notices. Look for courses on current technology and scamming at your local community center, council on aging, or community college. Read articles to keep up-to-date on what's new. Buy a new laptop every few years to get the latest safety and cyber security functions. And also be sure whatever Wi-Fi you are using is secure.   Phone Calls First, DO NOT answer the phone. If it's important, the caller will leave a message. Scammers use fake IDs from known companies or local numbers. We have seen scamming calls from The Geek Squad, Apple, or email providers. Should you answer the phone and the caller wants personal information, say that you weren't expecting the call and need to call back. Ask for an case, ticket, or trouble number to use when you call back. That will quickly get rid of a fake caller.   Emails and Texts Take time when reading your emails and texts -- we get so many, we tend to skip through them as quickly as possible. Do not click on links or open attachments without verifying the authenticity of the email or text, including the "free" gift cards. Even when it closely resembles emails you get from people or organizations you know, do not automatically click. First, look at the return email address -- that often is the first clue that the email is not legitimate. Wording can also be a sign although not always. If you are at all suspicious, then call the company or person directly to double check. Once you confirm a bogus email, forward it to the real company (e.g., [email protected]). Mute and delete texts.   Mail Mail is more of an outbound issue. Thieves can steal the envelope, alter the check, and cash it. Use the US Post Office blue mail boxes or the slot inside the post office itself. If you have to mail a check, make sure you use a security envelope.   Almost all brokerages now offer online statements and transaction confirmations, a much safer option than working with paper. That said, If you do receive paper investment statements, be sure to shred them because they contain lots of personal information -- such as your name, address, account number, and invested balances -- making it easier for identity thieves.   Get more tips in Jennifer's book Buy Now   Jennifer and Sarah were both named 2022 Boston Five Star Wealth Managers.   Helpful Websites     CISA Tips   Identity Guard   Identity Theft Resource Center   IdentityTheft.gov   Lifelock           Jennifer In The Media   Below are links to Jennifer's frequent contributions to financial planning articles.   NEW Jennifer contributed to a WBUR Radio Boston segment, How to Look Before Your Leap into the "Great Resignation." Click here to listen. NBC10 consumer investigative reporter Leslie Gaydos interviewed Jennifer for savings tips. For a great video, How to Save $1,000 in 5 Months, click here. For the written article, click here. Jennifer contributed to a timely article, How to seek forbearance on your mortgage, for The Boston Globe. Read article. If you’re interested in dividend funds, Jennifer contributed to The New York Times article, Dividend Funds Can Add Income, and Risk, to Your Portfolio. Read article. Jennifer contributed to a BankRate article, Should I combine my mortgage and student loans? Read article. Need help with your 401(k) during the pandemic? Jennifer contributed to a Boston Globe article, Five tips for managing a 401(k) during the pandemic's turbulence. Read article. Jennifer contributed to the Bottom Line Inc article Prepare your Finances for a Possible Recession. Read article. Jennifer contributed to The Wall Street Journal article If Saving During a Pandemic Is Hard, Here's How to Stay Motivated. Read article. The New York Times featured Jennifer in an article titled, Balanced Funds Don't Inspire Fear or Greed. That's Why They Are So Useful. Read article. With a contrarian view, Jennifer contributed to an article, People are enraged by the idea that you should have twice your salary saved by the time you're 35! published recently by Business Insider. Read article. Moving in together? Check this article from Business Insider, Five questions you and your partner should answer before taking the biggest step in your relationship. Read article. Insider asked Jennifer to contribute to an article on old fashioned ways to manage your money, Six money-saving tips your grandma used that are way more effective than any budgeting app. Read article. Jennifer contributed to an article on Business Insider, This is the best way to do your taxes online - according to experts. Read article. CNN Money's Money Moves featured Jennifer in an article on how to strike the right balance between retiring early and saving enough. Read article. Jennifer contributed to a CNN Money article When is the Right Time to See a Financial Advisor? Read article.   Compass Planning News   Compass Planning is a sponsor of YW Boston's 2021 two-part Elevating Lives Series. Compass Planning continues to meet with clients as well as those interested in learning more about the firm via phone and web-based video conferencing. Email [email protected] to learn more. Compass Planning has become a supporter of The Center for Financial Planning at the sustainer level. The CFP Board created the center to achieve a more diverse and sustainable financial planning profession so that every American has access to competent and ethical financial planning advice. AdvisoryHQ named Compass Planning as one of the ten best Boston financial advisors. (Disclosures)   Compass Planning Associates helps families, individuals, and small-business clients achieve financial security, knowledge, and control over their money. Our fee-only, client-centered approach provides education and guidance for achieving financial goals and dreams.   This newsletter and any linked references are for informational purposes only and are not to be construed as tax, legal, or investment advice. Compass Planning has gathered the information from sources it believes are reliable, but your individual situation can vary, and you should consult with your investment, accounting, and/or tax professional before taking any action. ©2022

On Course - Your Kids and Money

On Course | March 22, 2022 | Volume 22, #3

Welcome. We at Compass Planning continue to appreciate your support. Thank you.   As a parent, you want to raise your children to be self-sufficient adults. Among the many ways you help them is to start discussing money as early as they can understand simple concepts. As they grow, you can expand the how and why, with the ultimate goal of having them financially skilled enough to be able to manage both a credit card and budget by their sophomore year in college.   If you missed our series on retirement, you can still access the issues. For Retirement, Part 1 - Retirement Savings, click here. For Retirement, Part 2 - Social Security, click here. For Retirement, Part 3 - The Retirement Paycheck, click here.   If you would like assistance helping your children learn about managing their money, we are here to help you stay On Course!   Jennifer Lane, CFP   Your Kids and Money   Spending. Saving. Giving. Investing. The four pillars of teaching your children about money. The sooner you start taking about money, the more comfortable both you and your children will be. Many, many parents shy away from money talks because their parents never spoke about it. Begin wherever you are to instill a healthy, open attitude toward discussing money.   Allowances Your ultimate goal is teach your child how to handle money. In order to do that, they need a cash flow. Each family member has chores and responsibilities for the household. These should be separate from the allowance. Be consistent about paying the allowance -- think of it as your child's payday. When they're older, you can set up direct deposit. Your role is to work with your child to decide how to spend, save, donate, and invest the money -- the four pillars. It's ok to give extra allowance for extra chores.   Managing the money/allowance Some parents set up a separate savings account with a debit card at their bank, which makes it easy to transfer money. Another possibility is an app with a debit card. Greenlight and GoHenry are options. Greenlight costs $5 per month per family. The apps let you set up chores, automatically transfer allowances, recharge the balance, and give you notifications when the card is used. You child cannot overdraw the account -- excellent idea when you're trying to build credit.   In the early years Begin as early as your child can understand what to do with money, perhaps a few quarters a week. Let them use the money in different ways and discuss why and what other options they have.   As they grow up Your goal is to send your kids to college knowing how to manage their money. Ideally, by sophomore year, they should have their own credit card and handle their own budget. One great result of this is that by the time they graduate, they will have a fairly decent credit rating because much of the rating is based on how old the credit history is. In middle school and especially high school, work with them on how they're spending their allowance. Jobs are important for earning extra money as well as learning how to manage a different enviornment from school and home. Great practice for later on. As mentioned below, time to set up a Roth IRA! Ideas For spending, have her figure out what she likes to do socially and use part of the budget for that. If you get a call from the pizza place asking you to put more money on the debit card, it's time for a talk about budgeting! For saving, you might say that he needs to budget for the cost of car insurance. Give him the money for it and then have him pay you back quarterly. Same for events or travel that happens only once or twice a year. Another option is a clothes budget, with required items and discretionary items. The purpose here is to learn how to budget for all types of expenses. For giving, together find a worthy cause that your child wants to support. Add it to the budget. For investing, as soon as she gets a job -- babysitting, camp counselor, lawn mowing, cashier -- it's time to open a Roth IRA! Instill in your child the importance of investing now for the long-term.

Cosigners on a loan are both responsible for the repayment of that loan. Avoid cosigning a loan for your child unless it's absolutely necessary. If you do cosign, ask to receive duplicate statements from the loan company so you can be sure the payments aren't missed.   Get more tips in Jennifer's book Buy Now   Jennifer and Sarah were both named 2022 Boston Five Star Wealth Managers.   Helpful Websites           Greenlight card   GoHenry card   MyBankTracker.com   NerdWallet

Jennifer In The Media

Below are links to Jennifer's frequent contributions to financial planning articles.   NEW Jennifer contributed to a WBUR Radio Boston segment, How to Look Before Your Leap into the "Great Resignation." Click here to listen. NBC10 consumer investigative reporter Leslie Gaydos interviewed Jennifer for savings tips. For a great video, How to Save $1,000 in 5 Months, click here. For the written article, click here. Jennifer contributed to a timely article, How to seek forbearance on your mortgage, for The Boston Globe. Read article. If you’re interested in dividend funds, Jennifer contributed to The New York Times article, Dividend Funds Can Add Income, and Risk, to Your Portfolio. Read article. Jennifer contributed to a BankRate article, Should I combine my mortgage and student loans? Read article. Need help with your 401(k) during the pandemic? Jennifer contributed to a Boston Globe article, Five tips for managing a 401(k) during the pandemic's turbulence. Read article. Jennifer contributed to the Bottom Line Inc article Prepare your Finances for a Possible Recession. Read article. Jennifer contributed to The Wall Street Journal article If Saving During a Pandemic Is Hard, Here's How to Stay Motivated. Read article. The New York Times featured Jennifer in an article titled, Balanced Funds Don't Inspire Fear or Greed. That's Why They Are So Useful. Read article. With a contrarian view, Jennifer contributed to an article, People are enraged by the idea that you should have twice your salary saved by the time you're 35! published recently by Business Insider. Read article. Moving in together? Check this article from Business Insider, Five questions you and your partner should answer before taking the biggest step in your relationship. Read article. Insider asked Jennifer to contribute to an article on old fashioned ways to manage your money, Six money-saving tips your grandma used that are way more effective than any budgeting app. Read article. Jennifer contributed to an article on Business Insider, This is the best way to do your taxes online - according to experts. Read article. CNN Money's Money Moves featured Jennifer in an article on how to strike the right balance between retiring early and saving enough. Read article. Jennifer contributed to a CNN Money article When is the Right Time to See a Financial Advisor? Read article.

Compass Planning News

Compass Planning is a sponsor of YW Boston's 2021 two-part Elevating Lives Series. Compass Planning continues to meet with clients as well as those interested in learning more about the firm via phone and web-based video conferencing. Email [email protected] to learn more. Compass Planning has become a supporter of The Center for Financial Planning at the sustainer level. The CFP Board created the center to achieve a more diverse and sustainable financial planning profession so that every American has access to competent and ethical financial planning advice. AdvisoryHQ named Compass Planning as one of the ten best Boston financial advisors. (Disclosures)

On Course - Filing Your Taxes for 2021

On Course | February 22, 2022 | Volume 22, #2

Welcome. We at Compass Planning continue to appreciate your support. Thank you.   Tax filing deadline is right around the corner. Tax payers in Massachusetts will have until Tuesday, April 19, 2022 to file their 2021 taxes; the deadline for everyone else is Monday April 18. By now, you should have your tax documents -- either online or paper. Here are some tips as you gear up to file your taxes!   If you missed our series on retirement, you can still access the issues. For Retirement, Part 1 - Retirement Savings, click here. For Retirement, Part 2 - Social Security, click here. For Retirement, Part 3 - The Retirement Paycheck, click here.   If you would like assistance in tax planning, we are here to help you stay On Course!   Jennifer Lane, CFP   Filing Your Taxes for 2021   Tax Prep: Make sure you have everything you need to file your taxes!   Gather all of the tax reporting forms you have received. If you have your 2020 taxes handy, double check against the forms you have to make sure you are not missing anything. Many organizations now post them online to your account instead of mailing them to you. Click here and here and here for different checklists that are pretty comprehensive.   Tax Preparation - Give it a try on your own!   Consider preparing your own tax return. TurboTax, TaxAct, TaxSlayer, and H&R Block are great options to prepare your own return. If you feel more comfortable having a professional prepare your return, turn to a CPA or enrolled agent. If you don't have a tax pro, ask for a referral from a trusted source. Even if you have a tax pro prepare your return, try running your information through online tax software as a double check. The software options may ask you more questions than the tax pro!   Tax Filing - Know your deadline For Massachusetts residents, the deadline is April 19, 2022. For all others, it's April 18, 2022. You can e-file your return through tax software or your tax pro. If you aren't going to be ready to file by your filing date, then make sure you file an extension. Remember that you need to pay the tax liability of money you expect to owe by your filing date but have until October 15 to file the return.   Roth IRA or IRA contributions You have until April 15, 2022 to make a 2021 contribution! IRA contribution limits for 2021 are $6,000 for those 49 and younger, and $7,000 for those 50 and over. If you plan to make a Roth IRA contribution, check to make sure you are under the income limit. Click here for the IRS explanation of Roth IRA contributions.   And -- once you've filed your taxes, take a little time to get set up for 2022 so you're prepared and organized when it comes time to do your taxes next year! Create a place to save tax-related paperwork, including donations, expenses, and medical bills.

Don't forget to file IRS form 8606 when you make nondeductible contributions to your IRA. When you retire, you or your heirs will be able to prove how much of your IRA balance is the money that you contributed after tax and is available to withdraw without additional tax and how much is investment growth and is taxable income on withdrawal.   Get more tips in Jennifer's book Buy Now   Jennifer and Sarah were both named 2022 Boston Five Star Wealth Managers.   Helpful Websites     IRS tips for filing     Tax Checklist (1)     Tax Checklist (2)

Jennifer In The Media

Below are links to Jennifer's frequent contributions to financial planning articles.   NEW Jennifer contributed to a WBUR Radio Boston segment, How to Look Before Your Leap into the "Great Resignation." Click here to listen. NBC10 consumer investigative reporter Leslie Gaydos interviewed Jennifer for savings tips. For a great video, How to Save $1,000 in 5 Months, click here. For the written article, click here. Jennifer contributed to a timely article, How to seek forbearance on your mortgage, for The Boston Globe. Read article. If you’re interested in dividend funds, Jennifer contributed to The New York Times article, Dividend Funds Can Add Income, and Risk, to Your Portfolio. Read article. Jennifer contributed to a BankRate article, Should I combine my mortgage and student loans? Read article. Need help with your 401(k) during the pandemic? Jennifer contributed to a Boston Globe article, Five tips for managing a 401(k) during the pandemic's turbulence. Read article. Jennifer contributed to the Bottom Line Inc article Prepare your Finances for a Possible Recession. Read article. Jennifer contributed to The Wall Street Journal article If Saving During a Pandemic Is Hard, Here's How to Stay Motivated. Read article. The New York Times featured Jennifer in an article titled, Balanced Funds Don't Inspire Fear or Greed. That's Why They Are So Useful. Read article. With a contrarian view, Jennifer contributed to an article, People are enraged by the idea that you should have twice your salary saved by the time you're 35! published recently by Business Insider. Read article. Moving in together? Check this article from Business Insider, Five questions you and your partner should answer before taking the biggest step in your relationship. Read article. Insider asked Jennifer to contribute to an article on old fashioned ways to manage your money, Six money-saving tips your grandma used that are way more effective than any budgeting app. Read article. Jennifer contributed to an article on Business Insider, This is the best way to do your taxes online - according to experts. Read article. CNN Money's Money Moves featured Jennifer in an article on how to strike the right balance between retiring early and saving enough. Read article. Jennifer contributed to a CNN Money article When is the Right Time to See a Financial Advisor? Read article.

Compass Planning News

Compass Planning is a sponsor of YW Boston's 2021 two-part Elevating Lives Series. Compass Planning continues to meet with clients as well as those interested in learning more about the firm via phone and web-based video conferencing. Email [email protected] to learn more. Compass Planning has become a supporter of The Center for Financial Planning at the sustainer level. The CFP Board created the center to achieve a more diverse and sustainable financial planning profession so that every American has access to competent and ethical financial planning advice. AdvisoryHQ named Compass Planning as one of the ten best Boston financial advisors. (Disclosures)