In no particular order, here’s a few interesting things I heard and read recently that I wanted to share:
Use Your Tax Return to Map Out a Better Financial Future (Liz Weston, NerdWallet)
This past week, I reviewed my 2017 tax return and played around with an online tax calculator to see what the 2018 tax law changes would mean to my family’s finances. I was pleasantly surprised to learn that, all else being equal, we will have a considerable decrease in the amount of tax we will owe in 2018. So I made some adjustments to my scheduled quarterly tax payments, and anticipated what I’d be able to save to my retirement accounts this year. Overall, it was a great exercise and I am glad I went through it. The referenced article by NerdWallet discusses some other things to consider, so I hope you give it a read. At least be aware of what your tax situation will look like (it will be different!) in 2018, and make any necessary changes this summer. Had I not done this exercise myself, I would have overpaid my taxes and not been as quick to make adjustment to annual savings plan. Let me know if you need help finding a tax calculator.
4 Important Financial Planning Considerations If You Have A Child With Special Needs (Christopher Young, Forbes contributor)
As a parent of two fairly healthy kids (so far…I am knocking on wood), it’s hard to imagine the struggles that some couples have if they have a special needs child. Whether it’s downs syndrome, autism, or a heart defect, it’s no secret that these are real risks and very prevalent in our society. Parents in this situation need to be diligent in their planning, in particular with an attorney who specializes in special needs situations and preferably who practices law in the state the family lives in. One thing that is definitely recommended is to create a “special needs trust” which involves the collaboration of several parties (advisors, attorneys, family members) to determine what type of care will need to be provided for a disabled person after the parents pass away. The parents typically provide the guidance while alive, but once they are not around they will need to have planned for someone else to take ownership of the situation. Another major tip: do NOT make the disabled person beneficiary of any 401k or insurance policy – this could exclude them from getting any federal benefits. If you are reading this and have a disabled loved one that you care about, do yourself a favor and get a plan together ASAP – the longer you wait, the worse the end result could be.
Retirees Reshape Where Americans Live (Janet Adamy and Paul Overberg, Wall Street Journal)
Interesting data came out recently which shows the power of the baby boom generation. The census bureau says that population growth was more-than 3 times the national average in those counties designated as “retiree spots”. I never knew a county can actually have a designation of “retiree spot”, but in fact close to 15% of all counties in the U.S. do because of their attractiveness to the 55+ crowds and heavy concentration of retirement activities. Much of this can probably be attributed to the rebound in housing prices and stock market values, which most likely kept baby boomers in their same houses 10 years ago. Times are better and the boomers are moving, but what’s also noteworthy is they are not only moving to the warmer climates (ala Florida, Arizona, Texas) but to places like Idaho, Wyoming, and Colorado. I think retirees are finding lower taxes and lower maintenance places available which also have access to outdoor activities and national parks. Although we are still seeing strong movement to my Florida area, we may see the trend continuing towards lower cost and less crowded areas in the country.
Enjoy the light reading!