Source: https://www.nwta-union.org/financial-information.html
Timestamp: 2019-04-25 05:54:43+00:00

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With Black Friday around the corner, for many the stress and pressure of holiday shopping can start to creep up. Between buying gifts, traveling to visit family and decking the halls, spending during the holidays can get out of control. But going into the season with a plan can help you keep spending within your budget and limit financial stress.
Here are four fiscally smart ways to navigate through the holidays while still enjoying the wonder of the season.
Decide how much to spend – Don’t head out the door until you have a holiday budget in mind and have identified what your spending limit will be. First, review your spending history from the previous holiday season and identify where you spent more than you planned. Then, review all of your major spending categories this year—like presents, meals, travel and entertainment. One rule of thumb is to not spend more than 1.5 percent of your income on holiday expenses.1 Consider going even deeper to set a budget for each person on your list. Knowing your spending limits beforehand will help keep you on track.
Write it down – Whether you are a list maker or prefer a spreadsheet put your plan down on paper. Studies show if you write a plan down you are more likely to stick to it. Include in your list who you intend to spend money on and how much you plan to spend on them. And keep your plan with you at all times, whether it is on paper or your phone for easy reference while shopping. While you’re at it, take a hard look at your list and trim it down where you can. Consider forgoing store-bought gifts for something homemade—and affordable—that has a more personal touch.
Consult your significant other – It is important to talk with your significant other and close family about your holiday spending plans. For example, if you and your spouse are on the same page when it comes to your holiday budget, the more likely you are to comply with it. Also, make sure that your spending plans are in line with your other financial goals for the year. You don't want to overspend on gifts and then have to forgo a family vacation. And when it comes to gift giving with each other, you might consider something outside of the usual gift like an experience you would both enjoy, or a joint gift versus individual gifts.
Consider your options: credit, debit or cash – To hold yourself more accountable to your holiday budget, decide beforehand if you are going to use credit, debit or cash to pay for your purchases. If you decide to use credit, make sure you look at which card will provide you the lowest interest rates and/or spending perks and make a plan to pay the card off in a timely manner. And be sure to avoid costly store credit cards that often have hidden fees and higher interest rates. If you decide to use debit, you might want to open a new checking account for the sole use of holiday spending to track purchases more closely. Another way to monitor spending is to pull out a specific amount of cash for shopping and once it’s gone, your shopping is done.
These are a few ways to enjoy the holiday season without breaking the bank. After all, love, laughter and caring are what people remember most about the holidays, and none of that takes money.
While many enjoy being spooked at Halloween, what’s not so welcome are haunting feelings about a dark financial future. If your fear of finances is holding you back and you’re too frightened to brave the unknown, take a look at this list of financial statistics. They suggest ways to avoid encountering a “scary” situation.
67% of American workers have less than $50,000 saved for retirement. A worrisome number from a recent retirement survey that also revealed an even scarier statistic: 29% of Americans have less then $1,000 saved.1 The best way to get out of the dark here is to act now. Invest wisely and realize that saving money in a bank, for example, typically yields low returns. Instead, consider putting your money in a tax-deferred IRA account or 401(k) retirement account, especially if your employer matches contributions.
25% of Americans making at least $100,000 live paycheck to paycheck.2 An alarming number of Americans, with what could be perceived as having lucrative jobs, still make poor financial decisions. For many, having more money equals more spending. Time to face your financial situation head-on. Practice making cuts in your monthly expenses to avoid living paycheck to paycheck while adding more to savings or investments that pay back. The more often you practice good spending habits the less scary and more fruitful your financial situation becomes.
Over 53% of Americans could not pay for an emergency that costs more than $400.3 This is a concerning statistic to think that the average American could not cover an unexpected expense, like a car breaking down or replacing a broken household appliance. General financial wisdom advocates establishing an emergency fund stocked with enough reserve cash to cover three to six months of living expenses. The best way to deal with this is to plan for the unexpected. If saving is an issue, consider setting up an automatic withdrawal from your paycheck to push more cash into savings.
Over 60% of parents feel more comfortable speaking to an advisor about finances than their adult children.4 Many families still struggle with financial conversations and today, more than ever, children are increasingly anxious about their finances. Don’t let your children make poor financial decisions that could seriously impact them —and possibly you—in the future. The best way to avoid this statistic is to involve them in appropriate financial conversations either at home or with a financial professional.
You don’t have to face the fear alone. Give me a call at (716) 837-3335 if you’d like to schedule an appointment.
allows them to invest money on a tax-deferred basis.
§529 College Savings Plans are a tax-efficient means that can help meet the expenses associated with higher education. Withdrawals from college savings plans can generally be used at any college or university. They are sponsored by states or state agencies, so there are many different plans available. Your Financial Professional can help you select one that is a good fit for you.
As long as the withdrawals are for eligible college expenses, you will not be subject to federal tax, and in most cases, state tax on the earnings.
If the beneficiary chooses to forego college, the account owner may change beneficiaries or withdraw the assets.
Anyone at any income level can establish or contribute to a §529 account.
The maximum amount allowed over the life of the account can be quite sizeable—more than $150,000 per student under most plans.
Account owners can deposit up to five years of contributions in a single year for each beneficiary without gift tax consequences.
1 Federal income tax on the earnings and a 10% penalty on the earnings may apply if withdrawals from §529 plan are not used for qualified educational expenses.
3 Legend Equities Corporation does not render tax or legal advice. Consult your tax adviser or attorney for tax and legal advice specific to your situation.
Section 529 plans offered: Are Not FDIC Insured; May Lose Value; Are Not Bank Guaranteed. Favorable state tax treatment may be limited to investments made in a §529 college savings plan offered by the customer’s home state. Customers should consult their tax adviser before investing.
Legend Equities Corporation and its affiliates do not provide tax, estate planning or legal information or advice.
Before investing in a §529 plan, consider its investment objectives, risks, charges and expenses carefully. The official statement, which contains this and other information about the §529 plan, can be obtained by contacting Legend Equities Corporation. Please read the official statement carefully before you invest or send money.
Our President & CIO Shashi Mehrotra answers your questions.
Q: How do I determine what is the right mix of stocks and bonds in my retirement account?
A: Most people think that the right mix of stocks and bonds is dependent upon age and age alone, but I don’t subscribe to that belief. I like to take a multi-dimensional approach when I deal with how much stocks and bonds a person should invest in. I think a person's risk profile is determined by their age, financial profile and emotional profile.
For example, let's say you are 35 years of age and you plan to work 30 more years. Some financial professionals would take only that information into account when planning your portfolio. An oversimplified, and inaccurate, industry standard is to subtract your age from 100 and that's the equity exposure you’re given. However, sometimes the older the person is, the more stocks they may need. This person may need to take the additional equity exposure so they do not run out of money in retirement because they didn’t save enough early on. If a person is young enough, we can address those goals differently by suggesting that they need to start saving more aggressively so that they don’t run out of money or have to work until they're 80 years old.
I believe a more appropriate method includes determining your emotional profile and what kind of intestinal fortitude to risk you have. It is critical to consider your emotional profile because how you react to market volatility can often derail you from your current plan. Let's again say you're a 35-year-old investor and your financial professional suggests you invest 80% of your portfolio into stocks and 20% into bonds because they feel your financial profile, age, and assets justify it. And five years later the market goes down 40%. If you’re an extremely emotional person when it comes to your money and start selling everything and go to cash, you are going to miss out on the opportunity to make gains when the market goes back up. That is an example of the danger of ignoring just one dimension of the three-dimensional process of determining your risk profile.
In 2008, many people steered away from their investment plan because they got scared when the market plummeted. I think those people who reacted emotionally did a major disservice to themselves by jumping out of the market. Emotionally reactive investors should consider whether they are comfortable with their exposure to stocks as they tend to be a more volatile asset class by nature, and that can affect your state of being and take you away from your long-term investment plan.
Q: What factors do you look at when deciding which investments to purchase for the portfolios managed by Legend Advisory Corporation?
A: Our Investment Committee reviews asset allocation recommendations provided by our Asset Allocation Neural Network technology (AANN) as the starting point when deciding which investments to include in our managed portfolios. AANN analyzes historical data selected by our Investment Management team to identify and interpret patterns and causal relationships as they relate to the major domestic and foreign equity and debt markets. The Investment Committee then evaluates AANN’s recommendations, along with current economic, political and capital market situations, to develop portfolio allocation recommendations. This includes recommendations for how much to invest in each asset classes, such as domestic large cap, small cap, foreign equities, foreign debt, domestic debt and cash.
When determining which specific funds to use, we use a combination of mathematical indicators and subjective methodologies. Selecting asset class allocations and funds is a complex process that we do not take lightly.
Shashi Mehrotra, Chartered Financial Analyst, is the President and Chief Investment Officer of Legend Advisory Corporation. The opinions expressed herein are those of Shashi Mehrotra solely and not necessarily the opinions of Legend Advisory Corporation or any of its affiliates. Such opinions are as of September 14, 2014 and are subject to change at any time based on market and other conditions and may not be suitable for all investors. No predictions or forecasts can be guaranteed. Past performance is not indicative of future results. This material does not constitute a recommendation to buy or sell any specific security. Investing involves risk, including possible loss of principal.
There is no guarantee that the recommendations made by AANN will be accurate. AANN does not, in and of itself, make any investment decisions. Legend Advisory Corporation’s Investment Committee utilizes AANN as a tool in its investment management process.
Advisory services offered through Legend Advisory Corporation, a registered investment adviser.
What do all these financial terms really mean? Here is a quick guide to some common financial terms.
Bond: A debt security, similar to an IOU. When you buy a bond, you are lending money to the issuer. In return for the loan, the issuer promises to pay you a specified rate of interest during the life of the bond and to repay the principal when it "matures," or comes due.
General Obligation Bond: A municipal bond not secured by any a ssets; instead it is backed by the issuer's power to tax residents to pay bondholders.
Bond Swap: The investor sells one bond and uses the proceeds to buy another bond, often at the same price.
Common Stock: An instrument that signifies an ownership position (called equity) in a corporation, and a claim on its proportional share in the corporation's assets and profits. Most stocks also provide voting rights, which give shareholders a proportional vote in certain corporate decisions, such as the election of corporate directors.
Tax time can be confusing, especially when you may not be clear why you have received a specific tax form based on your investments and retirement accounts. The following are brief explanations of the tax-related forms commonly received by investors.
Form 1099-B is a form issued by any broker/dealer to any client who sells shares of a security. This Form summarizes the proceeds of all capital transactions, which will be accompanied by a gain or loss, and must be reported to the IRS when you file taxes. Form 1099-B is issued by a fund underwriter in connection with the sale of mutual fund shares. Full-service broker/dealers also issue Forms 1099-B for any capital transaction in common stock, preferred stock, bonds, options, futures, etc. This notifies the IRS of all transactions that should appear on a taxpayer’s IRS Form 1040, Schedule D, either as a capital gain or capital loss.
Form 1099-DIV is a form issued by corporations to report all taxable dividends paid in the relevant year. This Form is also used by mutual fund companies to report all taxable capital gains and dividends paid to an investor – even if the shareholder reinvests these amounts in additional shares. The Form includes ordinary dividends, total capital gains, qualified dividends, non-taxable distributions, federal income tax withheld, foreign tax paid and foreign source income from each investment account held by a fund company. Dividends are reported on Schedule B and capital gains distributions are reported on Schedule D of Form 1040.
Form 1099-INT is issued by a payor of taxable interest such as a bank and tax-exempt interest such as a municipality or municipal bond mutual fund. Exempt-interest dividends should be shown in box 8 of Form 1099-INT. A taxpayer must report them on his/her tax return if required to file. This income is generally a “tax preference item” and may be subject to the alternative minimum tax. Box 9 of Form 1099-INT should show the tax-exempt interest subject to the alternative minimum tax.
Form 1099-R is the Form used by custodians and trustees to report distributions from all types of retirement plans, including §457 plans. Form 1099-R is also issued by insurance companies for distributions from non-qualified annuities. Form 1099-R must be mailed to each participant who has taken any distribution in a tax year by the end of January in the following year. It is transmitted electronically to the IRS by the end of February in the year following the distribution.
Form 2439 is a form issued by a mutual fund showing the shareholder’s share of undistributed long-term capital gains that the fund retained and paid taxes on. The taxpayer must report his/her share of these amounts as long-term capital gains on Schedule D, even though s/he did not actually receive a distribution. The taxpayer can take a credit for his/her share of any tax paid because s/he is considered to have paid it. This increases the shareholder’s basis in the account and s/he should keep Copy C of Form 2439 as documentation of this increase in basis.
2) reports all contributions and rollovers, including recharacterizations and conversions, made during the tax year and those regular contributions to traditional and Roth IRAs made in the following tax year prior to April 15th that were designated as contributions for the preceding year.
These are electronically transmitted to the IRS by the custodian. This form is informational only – it is not filed with the taxpayer’s Form 1040.
5) distributions from Roth IRAs.
All of an IRA owner’s traditional IRAs are considered one IRA for this form – once someone has made a non-deductible contribution to any traditional IRA, this form will have to be completed and attached to his return every year a distribution is made from any of his traditional IRAs, including distributions made to his beneficiary or beneficiaries. In the same vein, all of a Roth IRA owner’s Roth IRAs are treated as one Roth for distribution purposes.
6) has not taken a required minimum distribution and is subject to the 50% penalty.
Please note that the penalty must be paid when this form is filed, with or without the Form 1040. If the taxpayer has taken a premature distribution from a retirement account and the situation fits one of the §72(t) exceptions to the 10% penalty, s/he must declare which exception applies to the distribution on Form 5329. This does not apply for death or disability distributions.
Form 709: The Gift Tax Return is due by April 15th of the year following the bestowal of the gift. The Form is used to report any gift(s) to any donee excluding a spouse that exceeds the $13,000 annual exemption amount. However, if your client makes a gift to his/her spouse with strings attached (i.e., such as through a QTIP trust) or if the spouse is not a U.S. citizen and the client’s gifts total $133,000 or more, s/he will have to file this Form.
Hedge Against Future Tax Increases — Considering current personal income tax rates and with the nation facing unprecedented financial challenges in the years ahead, a Roth IRA may provide valuable tax-hedging advantages. Given the some of the current economic issues the nation is facing and potential fiscal challenges related to Medicare and Social Security, it’s not difficult to envision the possibility of being in a higher tax bracket during retirement, even for individuals who are currently in the upper income tax bracket (35% for 2010).
Tax Diversification in Retirement1 — Another advantage of Roth accounts relates to the potential benefits of creating a diversified pool of both tax-deferred and tax-free sources of savings from which to generate retirement income. When most or all of your retirement assets are held in traditional tax-deferred accounts, you do not have the flexibility to control your taxable income without foregoing retirement income and spending flexibility.
1 Distributions from a Roth account are tax-free provided the account has been open for at leastfive years and the individual is over age 59 1/2. Otherwise, withdrawals ofearnings may incur a 10% penalty in addition to ordinary income taxes.
Carefully consider the taxes, fees and expenses associated with a Roth conversion. The full amount of the conversion will be taxed as ordinary income.
Legend EquitiesCorporation and its affiliates do not provide tax or legal information or advice.
Carefully consider taxes, fees and other expenses before initiating an IRA conversion.
August 20112011 Payroll Tax Cut designed to provide a Bigger Paycheck!
What will you do with your extra income?
Put your extra cash to work for your future!
The table below illustrates how much more you may receive in 2011 based on your current annual salary, how much you could invest in a tax-deferred retirement savings account without seeing a decrease in your take home pay,2 and how much that investment may grow over the years.
about increasing the amount you contribute to your employer’s retirement savings plan, or your IRA/Roth IRA.
Legend Equities Corporation and its affiliates do not provide tax information or advice.
1 All other factors being equal.
2 Compared to your 2010 take home pay.
3 The hypothetical illustration assumes a 25% federal tax rate, a 7% annual rate of return and 26 pay periods per year. Lower capital gains rates may reduce the difference in accumulated values between the taxable and tax-deferred examples. This is a hypothetical illustration only and is not indicative of the performance of any particular investment. The principal value of an investment may fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. The illustration shows constant rates of return, whereas actual rates may fluctuate. This is not a guarantee of future results.
Taxes, fees and expenses have not been taken into consideration for the purpose of this illustration.4 2011 FICA maximum.
June 2011Did you know Sunday, May 29th was National §529 College Savings Plan Day? National §529 College Savings Plan Day is a great reminder to think about your children’s future education.
Named after the section of federal tax code that governs them, §529 College Savings Plans are tax-advantaged plans that can help meet the expenses associated with higher education. Funds accumulated within a §529 plan can be used for tuition, fees, room and board, books, supplies and equipment necessary for enrollment and other qualified expenses at nearly every accredited U.S. institution of higher learning.
A §529 College Savings account can be opened and funded at any time. The account can be started with an initial lump-sum contribution, (modest or significant) and contributors can make regular or occasional contributions as they please. Anyone (parents, grandparents, friends, even the intended beneficiary) can establish a §529 account and anyone can contribute to the account once it is opened.
§529 plans allow for earnings to be treated as tax-deferred until withdrawal. This way, taxes will not erode your account, allowing more of your funds to work for you over time. What’s more, withdrawals made for qualified higher education expenses are federal income tax-free!
Although the rules vary from state to state, contribution minimums are generally low, while the maximum amount allowed over the life of the account can be quite sizeable—more than $150,000 per student under most plans.
Account owners can deposit up to five years of contributions4 in a single year for each beneficiary without gift tax consequences. Also, contributions are generally excluded from your taxable estate for federal estate tax purposes, provided you are not the beneficiary on the account.
It’s never too early to start a college savings program. Contact your Financial Advisor today to begin taking advantage of this outstanding savings vehicle.
1Federal income tax on the earnings and a 10% penalty may apply if monies within §529 plan are not used for qualified educational expenses.
2The new beneficiary must be a member of the original beneficiary’s family. There may be federal gift or generation skipping transfer tax consequences if the new beneficiary is a member of a younger generation than the original beneficiary.
3Account owners may opt to contribute five times the current gift tax exemption amount in one year; the gift is treated as a series of five equal annual gifts on the federal gift tax return after the gift is made. If additional gifts are made, they may be subject to federal gift taxes.
4Subject to an “add-back” rule in the event of the contributor’s death.
Section 529 plans offered: Are Not FDIC Insured; May Lose Value; Are Not Bank Guaranteed.
Favorable state tax treatment may be limited to investments made in a §529 college savings plan offered by the customer’s home state. Customers should consult their tax advisor before investing. Legend Equities Corp and its affiliates do not provide tax, estate planning or legal information or advice.
Corey Malstrom, Registered Representative of and securities offered through Legend Equities Corporation, member FINRA/SIPC.

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