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                    [post_content] => Sarah Duey  

I once had clients with only one daughter. They created a trust for only their grandchild without ever telling their daughter why.  

As the trustees, we worked with this daughter, because her child was still a minor. There were hard feelings — a lot of wondering why her parents had skipped her in their estate planning. 

Grieving our loved ones is hard enough without adding extra emotions. Not talking to your family about your estate plan has the potential to create chaos and make your family feel unprepared.  

You want to be sure your family is aware of your estate plan and what roles they’re going to play in the events of your incapacity or death.  

In this article, we’re going to discuss some of the basics of estate planning, what types of things you should communicate to your family, and how to go about updating your family on a regular basis.  

Your Estate Plan and Picking Powers of Attorney

An estate plan doesn’t speak to only your after-death wishes; it helps determine how you’ll be taken care of during your life if you’re incapacitated. Estate plans include powers of attorney who step in to take care of you in the event you’re incapacitated, a will and sometimes trusts.  If you haven’t chosen a healthcare power of attorney, these considerations might be helpful:  
  • Choose somebody who’s going to be the best person, geographically, to help you. While oftentimes that could be your spouse, if you’re single or childfree, you might choose a sibling or close friend.  
  • Before you make anything final, you need to talk to this person to ask if they’re comfortable with this responsibility. 
  • Identify your wishes for your care. Healthcare power of attorney gives power, but not instruction. You’ll want to establish a living will to specify what your end-of-life choices are – for example you don’t want to be on a ventilator or feeding tube.  
  • Share the power of attorney with your doctor. You want your medical professionals to be in the know as well.  
It’s always a good idea to revisit your choices every few years to ensure you still have the right people in place.   Approach financial powers of attorney in a similar way:  
  • Choose somebody who can be there to take care of your bills and finances and ensure they’re on board and ready for the responsibility.  
  • Pick a trustworthy person. Unfortunately, that isn’t always your children or family. Give hard thought to your kids’ situations and whether they might make good choices. Unfortunately, I’ve seen way too many abuses and oftentimes it’s close family members. The National Council on Aging reports that 60% of elder abuse cases1 are close family members or spouses.   
Putting those powers of attorney in place is critical. If you don’t plan proactively and become incapacitated, your loved ones will have to go through the courts to get conservatorship or guardianship to be able to help you.  

Crafting and Communicating Your Estate Plan in The Family Meeting

Estate planning and communicating it to your family happens on a spectrum. On one side is the logistics – here are where the documents are, here are the passwords. On the other side is legacy planning – here are my values and here’s how I want you to continue my legacy.   Wherever you fall on that spectrum, it’s your responsibility to communicate that to your family. And that’s where having a series of regular family meetings comes in.   You don’t have to run these meetings yourself – you can utilize a facilitator. You also don’t have to dive into specific numbers or amounts you’re leaving to specific people.   A facilitator is especially helpful if you anticipate there might be some conflict or concern over the way you're setting up your estate. A good facilitator would be your financial advisor, but if they’re not comfortable with the task, ask them to recommend somebody.   The goal of these meetings is to give your family enough information to minimize chaos if something happens to you.   The first thing to do is to set an agenda that outlines what you’re going to talk about. You don’t want your family to be confused. Be clear: “This meeting is to talk about my estate plan.”   At the minimum, share:  
  • Where your estate planning documents are located  
  • Passwords 
  • Information for your financial advisor, estate planning attorney and CPA 
  • Contact information for any other professionals to call 
  • Powers of attorney 
Some people are very open and want to share all the details, whereas others decide they want to share the bare minimum. But keep in mind that the more you share, the better off your family will be.   After that initial meeting, set a cadence of regular meetings. These don’t have to dive into estate planning specifically, but you can tackle other topics while also weaving in estate planning. These meetings have the potential to bring your family closer together. It also can reduce feelings of overwhelm – this is difficult information and takes time to sink in.  The meetings can move toward preparing your heirs for their inheritance. First, talk to your children about wealth – how you expect them to manage it, how you make your financial decisions so your heirs can learn from you.  One idea is to start having them work with you to manage some of their inheritance.    For example, in his book “A Spectrum of Legacies,” Mark Weber wrote about one family who gave each adult child three $5,000 gifts. The first $5,000 could be used for anything, the second $5,000 would be invested, and the final $5,000 would be contributed to a donor-advised fund with the child’s name on it. To keep the process engaging, they added an incentive: The child who managed the investment account the best won an additional $5,000 at the end of a three-year period.   The children had to share how they were investing and what they were learning on a regular basis.  In addition, each child had to share how they were spending the donor-advised funds – to what organizations and how their gift might make an impact. Each child “owned” one of the categories and led that part of the family meeting. The parents felt this was a great way to teach their children about managing wealth, and it also gave them a platform to talk about other topics, such as estate planning.    While that might not be a feasible competition for every family, it’s just an idea to spark some creativity of your own. You can make these meetings interesting.   Since life changes or new policy could impact your estate plan, communicating your plan is never one-and-done. 

What About Your Parents’ Estate Plan?

You’ve done everything you need to do, but realize you have no idea what’s in your parents' estate plan. The best way to approach this is to simply say: “Tell me about your estate plan.” If you find out they don’t have an estate plan, ask them if you can introduce them to an estate planning attorney who can help them identify their goals and start the process.   Explain the risks of not having an estate plan – emphasize that as their child, you don’t want to have to go to the courts to get guardianship or conservatorship to be able to take care of them. Explain to them that without an estate plan, the state is going to decide how their assets will transfer.  If you have siblings, include them in the conversation. You don’t want to be seen as trying to get information they’re not privy to and create a negative situation.  

The Last Word: Communication is Key to Estate Planning 

Communication is the key to estate planning. The more we communicate, the better the transition will be. It’s up to you to make that happen but know there are resources and great people to guide you throughout that process. Your financial professionals can help you do that. Reach out today to schedule a consultation.   “Get the Facts on Elder Abuse” National Council on Aging, 23 Feb 2021. https://www.ncoa.org/article/get-the-facts-on-elder-abuse [post_title] => How to Talk to Your Family About Your Estate Plan and Avoid Complicating Their Grief [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => how-to-talk-to-your-family-about-your-estate-plan-and-avoid-complicating-their-grief [to_ping] => [pinged] => [post_modified] => 2022-07-06 09:18:19 [post_modified_gmt] => 2022-07-06 14:18:19 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?p=65019 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [1] => WP_Post Object ( [ID] => 65293 [post_author] => 90034 [post_date] => 2022-06-23 14:23:02 [post_date_gmt] => 2022-06-23 19:23:02 [post_content] => What is a Living Will? This is a question that many people ask but don't know where to find the answer. A living will is a very important part of your wealth management. In this blog post, we will discuss what a living will is, how to make one, and what it does. We will also discuss the difference between living wills and living trusts and explain why having a living will is so important.

What's A Living Will?

A living will is a legal document that states your wishes for medical treatment if you cannot communicate them yourself. It can include things like whether or not you want to be on life support, what kind of pain management you want, and who you want to make decisions for you if you can't. You can appoint someone to be your healthcare proxy, which means they will make decisions about your medical care if you're unable to do so yourself. This can be because you're in a coma, have dementia, or are otherwise incapacitated.

When Does A Living Will Take Effect?

Your living will only goes into effect when you're unable to communicate your wishes yourself. That's why it's important to appoint a healthcare proxy, so there's someone who can make decisions for you if you're unable to.

What Does A Living Will Do?

A living will is there to make sure your wishes are carried out if you cannot communicate them yourself. It's an important document to have, as it can prevent a lot of heartache and confusion in a time that's already difficult. Many people choose to appoint their spouse or partner as their healthcare proxy, but you can choose anyone you trust to make decisions for you. Just be sure they know your wishes and are comfortable making tough decisions on your behalf.

What's A Living Trust?

A living trust is a legal document that establishes how your assets should be distributed after you die. You can name a trustee to manage the trust, and you can specify how you want your assets to be used. A living trust can be revocable or irrevocable.

Living Will Vs. Living Trust

A living will is a document that outlines your medical treatment preferences if you cannot communicate them yourself. A living trust is a legal document that establishes how your assets should be distributed after you die. The main difference between a living will and a living trust is that a living will only apply to your medical treatment, while a living trust can apply to your medical treatment and your assets.

Advantages Of Having A Living Will

There are many advantages of having a living will, but the most important one is that it ensures your wishes are carried out. If you're unable to communicate with them yourself, you can rest assured knowing that there's someone who knows what you want and will make sure it happens. Another advantage is that it can prevent arguments among family members about what you would have wanted. In a time of grief, the last thing anyone wants is to argue about whether or not you would have wanted to be on life support.

What's Included In A Living Will?

To make a living will, you must know what needs to be included. A living will should include:
  • Your name and address
  • The date the will is created
  • Your signature
  • An appointed Health Care Agent
  • Alternate Agents in case your first choice is unable or unwilling to serve
  • Specific medical treatments you do or don't want to receive
  • Any general instructions for your care.
Creating a living will is an important step in controlling your health care and ensuring that your wishes are followed if you become incapacitated. A living Will allows you to state what kind of medical treatment you would or would not want to receive if you were unable to communicate those wishes yourself. It can also include general instructions for your care. If you have specific religious beliefs that guide your decisions about medical treatment, you should include those in your Living Will. You may also want to state whether you would or would not want to be kept alive on life support. Get in touch with wealth management professionals to get started.

How To Make A Living Will

Now that you know what is included in a living will and the advantages and disadvantages of having one, you may wonder how to make one. Creating a living will vary from state to state, so it's important to check the laws in your state before getting started. In general, the steps for creating a living will are as follows:
  • Choose your health care agent. This person will make decisions on your behalf if you are ever unable to do so yourself.
  • Choose alternate agents if your first choice is unable or unwilling to serve.
  • Make sure your agent knows your wishes and has a copy of your living will.
  • Keep your living will up to date as your health or medical treatments change.
A living will is an important document that can help ensure that your wishes are followed if you become incapacitated. It's important to choose your health care agent carefully and to keep your living will up to date as your health changes. By taking these steps, you can rest assured knowing that your wishes will be carried out even if you cannot communicate them yourself.

What's A Health Care Proxy?

A Health Care Proxy is someone you appoint to make decisions about your health care if you can't make them yourself. The person you choose must be over 18 years old and willing to take on this responsibility. You should pick someone who knows you well and who you trust to follow your wishes. You can give your Health Care Proxy authority to make all of your health care decisions or only the specifically listed ones in your Health Care Proxy form. If you want, you can give different kinds of authority to different people. For example, you could appoint one person to make decisions about medical treatment and another person to decide about mental health treatment.

Why Get Both A Living Will And Health Care Proxy?

You might want to appoint a Health Care Proxy even if you have a Living Will because:
  • Your Living Will might not cover all the decisions that need to be made.
  • Your health care situation might change, and your Living Will might not apply anymore.
  • Someone else might need to make decisions right away, and your Living Will takes effect only if you can't make decisions for yourself.
A Health Care Proxy is someone you appoint to make decisions about your health care if you can't make them yourself. The person you choose must be over 18 and willing to take on this responsibility. You should pick someone who knows you well and who you trust to follow your wishes.

Do You Lose Control of A Living Will If You Appoint a Proxy?

One common misconception about living wills is that you lose control of your health care decisions if you appoint a proxy. This is not the case. You are still in charge of your health care and can revoke or change your living will at any time. The only difference is that you have appointed someone to make decisions on your behalf if you are unable to do so yourself. Another thing to remember is that a Living Will will only go into effect if you are terminally ill or permanently unconscious. So, if you can still make your own decisions, then your living will has no bearing.

Differences Between Living Will Vs. Last Will And Testament

When it comes to your final wishes, you may wonder the difference between a living will and a last will and testament. A living will is a document that outlines your medical care preferences in the event that you are unable to communicate them yourself. For example, this could be due to an accident or illness that leaves you in a vegetative state. A last will and testament, on the other hand, is a document that details how you would like your assets to be distributed after you die. You can also use it to appoint a guardian for any minor children you have. While a living will only takes effect if you become incapacitated, a last will and testament come into play after you die.

Set Up Your Living Will

At Nesso Wealth, we can help you set up your living will. Our professionals will work with you to ensure that your will is tailored to meet your specific needs and wishes. By setting up your living will, you'll have confidence knowing that your family and loved ones will not have to make difficult decisions on your behalf should something happen to you. Our Nesso Wealth team can help you understand all aspects of a living will and provide you with the guidance to set it up for yourself. We work hard to keep our clients informed about their options and ensure that they have the best possible plan for their future. Don't hesitate to reach out now to learn more.   FIND OUT MORE   For a comprehensive review of your personal situation, always consult with a tax or legal advisor.  Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice. [post_title] => All You Should Know About Living Wills [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => all-you-should-know-about-living-wills [to_ping] => [pinged] => [post_modified] => 2022-06-23 14:23:02 [post_modified_gmt] => 2022-06-23 19:23:02 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.nessowealth.com/?p=65293 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [2] => WP_Post Object ( [ID] => 65289 [post_author] => 90034 [post_date] => 2022-06-23 14:17:09 [post_date_gmt] => 2022-06-23 19:17:09 [post_content] => For any business to be successful, planning is key. Financial planning is a necessary part of this process, and you should understand the different aspects of it to make the right decisions for your business. One aspect of financial planning that individuals often overlook is succession planning. Succession planning allows business owners and entrepreneurs to ensure that their businesses can continue operations smoothly in the event of an unexpected departure by key personnel. This includes departures caused by illness, retirement, or death. While succession planning can be a complex process, businesses of all sizes can benefit from it. If you're not ready to start succession planning, don't worry - you're not alone. Many business owners don't have a plan in place. However, this article will help you learn what succession planning is, how it works, its benefits for your business, and more.

What Is Succession Planning?

Succession planning is a business approach that allows organizations to transmit leadership roles to another person or group of employees. Consider succession planning a contingency plan, meaning it's not a one-time occurrence. Instead, it should be reevaluated and updated every year or as the company changes. A larger company may train mid-level personnel to take over higher-level responsibilities in the future. In contrast, succession planning for small firms and family-owned businesses frequently entails preparing the next generation to take over the company. A well-executed succession plan will take into account the needs of the business, the capabilities of employees, and the company culture.

How Does Succession Planning Work?

Businesses utilize succession planning to ease the process of changing leadership or ownership. It entails identifying internal employees or external candidates who deserve to develop in their careers and training them to take on additional responsibilities inside the organization. Succession planning strategies will only succeed if businesses take the appropriate precautions. You can account for unexpected changes using a succession plan.

Requirements For Succession Planning

  • Proper Hiring: Part of succession planning is making sure that you're hiring the right people. You'll want to look for individuals who not only have the skill set required for the job but also fit in with your company culture.
  • Training and Development: Once you've hired the right employees, it's important to invest in their training and development. This way, you know they're prepared to take on additional responsibilities.
  • Regular Reviews: You should review your succession plan regularly to keep it relevant and up-to-date. This is especially important if there are any changes within your company, such as new hires or promotions.
  • Time Commitment: Succession planning requires a significant time commitment from business owners and leaders. Your succession plan will likely fail if you're unwilling to dedicate the necessary time and resources.

The Importance Of Succession Planning

There are many reasons why businesses need succession planning. One of the most important is that it ensures continuity within the organization. If a key employee leaves suddenly, succession planning provides a plan of action so the business can continue to operate smoothly. Another reason businesses need succession planning is that it allows them to develop talent from within. By investing in the training and development of employees, businesses can create a pipeline of future leaders. Finally, succession planning can help businesses avoid financial difficulties. This has a lot to do with the relationship between succession planning and financial planning. We'll dive deeper into how both are connected in the next section.

Succession Planning Is A Critical Part Of Financial Planning

Financial planning is the process of creating a plan to achieve financial security. It includes setting goals, estimating expenses, and identifying sources of income. Succession planning is a key part of financial planning because, without a succession plan, businesses may face financial difficulties if a key employee leaves suddenly. No one will be able to decide how to manage the business's finances, and it may quickly become insolvent.

4 Different Types Of Succession Plans

1.   Internal Promotion

By promoting employees who are already familiar with the company's culture and values, you can minimize the risk of disruptions. Additionally, promoting from within can help to boost morale and loyalty among your workforce. Employees who feel that they have opportunities for growth are more likely to be engaged and motivated in their work.

2.   External Recruitment

If you're unable to promote from within, you may need to look outside the organization for a successor. While there can be some challenges associated with recruiting externally, such as a greater risk of hiring a poor fit, the benefits often outweigh the drawbacks. External recruitment can bring fresh ideas and perspectives into the organization. It can also help build goodwill with stakeholders who may have been concerned about the potential for managerial instability.

3.   Mergers and Acquisitions (M&A)

When done correctly, M&A can help businesses to diversify their products and services, enter new markets, and gain access to new technology and talent. Additionally, M&A can help to consolidate duplicate functions and overhead costs, resulting in a more efficient operation. However, M&A can also be a risky proposition, as it can involve a great deal of debt and can result in significant job losses.

4.   Family Succession

Family businesses often have a built-in succession plan, as the business is passed down from one generation to the next. While this can be an effective way to transition ownership, some challenges exist. For example, family dynamics can sometimes interfere with business decisions, and employees may perceive that nepotism is at play.

How To Choose The Right Successor?

There are a few key considerations to keep in mind when choosing a successor, including:
  • Skills and Qualifications: The successor should have the skills and qualifications necessary to take on the role and its new responsibilities.
  • Fit With Company Culture: It's essential to find a good fit with your company culture. They should share the same values and beliefs as the organization.
  • Leadership Potential: Strong leadership potential is also a must for any successor. This includes qualities such as vision, motivation, and the ability to inspire others.
  • Loyalty: The successor should be loyal to the organization. They should be committed to the company's success and willing to work hard to achieve its goals.
  • Work Ethic: Last but not least, a good work ethic is also required. This means being reliable and willing to put in the necessary time and effort to do the job.

Steps For Implementing A Succession Plan

Identifying The Successor

The first step is to identify the successor. To do this, you'll need to consider the skills and qualifications necessary for the role, the fit with the company culture, and the other factors we previously discussed.

Creating A Development Plan

Once you've identified the successor, the next step is to create a development plan. A development plan should include both formal and informal training opportunities. Formal training may consist of courses, workshops, or conferences, while informal training could consist of mentorship programs, shadowing opportunities, etc.

Implementing The Plan

The next step is to implement the succession plan. This phase includes putting the development plan into action and guaranteeing that all employees know the changes.

Monitoring And Updating The Plan

Finally, you should monitor and update the succession plan on an ongoing basis. Things may change over time, so it's important to be flexible and adjust the plan accordingly.

Common Mistakes Businesses Make When Implementing A Succession Plan

Many businesses make common mistakes when implementing a succession plan. These mistakes include:
  • Failing To Involve Employees: It's essential to involve employees in the succession planning process. They need to be aware of the changes and have a chance to provide input.
  • Not Adopting A Formal Agreement Or Plan: A formal agreement or plan is essential for a successful succession. By putting everything in writing, you can avoid misunderstandings and define a clear path forward.
  • Failing To Communicate: Communication is key when implementing a succession plan. Employees, shareholders, and other stakeholders need to be kept up-to-date on the changes and what they can expect during the transition.
  • Assume Their Talent Has The Necessary Knowledge: Just because an employee is talented doesn't mean they have the knowledge needed to take on a new role. Providing the proper training and development opportunities can lead to thoroughly prepared employees for their new responsibilities.

Succession Planning And Diversity

Succession planning is a big part of diversity initiatives. Diversity succession planning helps to ensure that all employees have the opportunity to develop and progress in their careers. It also helps to create a more diverse and inclusive workforce. When implementing a diversity succession plan, keep the following in mind:
  • Inclusivity: Succession planning should be inclusive of all employees. It should consider employees from different backgrounds and experiences.
  • Fairness: The process should be fair. All employees should have an equal opportunity to develop and progress in their careers.
  • Transparency: Finally, succession planning should also be transparent. Make sure all employees understand the process and know what to expect.

Nesso Wealth: Helping You Plan For The Future

At Nesso Wealth, we have plenty of experience helping Connecticut residents with their business financial planning needs, including succession planning. Whether you're looking to retire soon or want to make sure your business can continue without you, we can help. We'll work with you to create a custom succession plan based on your unique needs and objectives. Our other wealth management services include tax planning, retirement planning, estate planning, and investment management. At Nesso Wealth, we take the time to know our clients, understand them, and educate them on the most convenient options for achieving their objectives. We're there to coach you through anything and everything.   CONTACT US   For a comprehensive review of your personal situation, always consult with a tax or legal advisor.  Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice. [post_title] => Financial Planning in Business: Understanding Succession Planning [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => financial-planning-in-business-understanding-succession-planning [to_ping] => [pinged] => [post_modified] => 2022-06-23 14:18:37 [post_modified_gmt] => 2022-06-23 19:18:37 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.nessowealth.com/?p=65289 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [3] => WP_Post Object ( [ID] => 65256 [post_author] => 182109 [post_date] => 2022-06-15 09:39:02 [post_date_gmt] => 2022-06-15 14:39:02 [post_content] => It's almost impossible not to feel anxious at the dips and dives the stock market has been taking recently, compounded by relentless inflation-focused headlines. That's why you might be surprised to learn there's a lot of positive news to be had, despite the market uncertainty.  Read on for three encouraging themes that illustrate the long-term benefits of the stock market and why now is the time to recommit to your financial plan. 

Let History Be Your Guide 

We'll start with the bad news, because it would be naïve to ignore certain realities. Yes, the market has just endured the worst start to the calendar year in decades. And yes, it's the first time in 60 years both stocks and bonds have declined simultaneously.  With that out of the way, let's turn to the favorable news. Although market pullbacks may continue for the foreseeable future, it's vital to keep in mind that these short spurts don't define the market over the long haul.  When viewed daily, markets advance approximately six out of every 10 days, and if you take a calendar-year perspective, the stock market has gone up far more often than it has gone down. It's reassuring to realize that fluctuations occur regularly, yet these slumps are usually overcome in short order.   In fact, while drawdowns are common, so are recoveries. 

Dig Deeper into What’s Causing Inflation 

 While inflation itself isn't positive, its story is far more than just higher gas prices and food costs.  Some of today's rising inflation is caused by an array of factors that may otherwise constitute a strong economy.    Again, we'll dispense with the bad news first. There are indeed some negatives propelling inflation, including the lingering effects of COVID-19, continued supply chain disruptions, the Russia/Ukraine conflict and the downstream impact of the stimulus payments during the depths of the pandemic that flooded the economy with money.   And while those are all hurdles to overcome, what many miss is that inflationary pressures also stem from beneficial market forces. Here are five less talked about positive contributors to today's inflation: 
  • Surging retail activity – As the pandemic wanes and the world reopens, consumers are eager to get back out there and spend, whether it's planning a well-earned vacation or enjoying an evening out with friends. Pent-up demand for goods and services – by all of us, at the same time – allows companies to raise prices. While that ultimately creates inflation, the root cause is a positive one: strong consumer spending. 
  • Increased home values – Skyrocketing housing prices are burdensome to those aiming to buy their first home or relocate to a highly desirable area. But they are music to the ears of the current lucky homeowners who have seen their equity swell. Along the way, many have refinanced at historically low interest rates, which means their net worth has also increased as home values rose.
  • Higher net worth – Those soaring home values are just one part of our prosperity.  2021 saw the biggest increase in Americans' net worth in history thanks to elevated asset prices and rising stock prices. Although we’ve given a bit back as the market dipped, it still represents bigger gains than any other year. 
  • Rising business spending – All that pent-up demand is fueling a commensurate ramp up for businesses as they aim to meet market interest. That leads to investments in new machinery, factories, inventory and, of course, talent.  This creates demand for goods and thus pressure on inflation.
  • Fastest-ever labor recovery – One sign of the health of the economy is how long it takes for the job market to recover – and the pace today is blistering. For comparison, it took at least six years after the most recent recession for jobs to become plentiful, and today the market has almost fully recovered in the two years since shutdowns were prevalent. Currently, there are approximately two available jobs for every unemployed American, which is the best ratio on record. By contrast, in 2010, there were four unemployed workers for every one available job.
All these factors are intertwined. Consumers are confident about their net worth and good jobs. Which means businesses need to ramp up production. Which leads to more great jobs that offer higher wages as businesses compete for staff. The result: We're spending our money quickly, which is leading to inflation.  And while accelerating rents and surging gas prices are a real burden for Americans, there are also some potentially positive aspects that are materializing alongside these higher prices. 

Remember, You're in It for the Long Haul 

Looking at the market day by day can incite elation, then despair. That's why it's important to note that it doesn't matter what happens on one day – it matters what happens on all the days. 

The longer your time horizon – that is, the time until you need to tap your accounts in retirement – the less likely you are to experience a negative return.   Consider this perspective: Since 1970, the average rolling annual period saw advancement from stocks around 80% of the time. However, over rolling 10-year holding periods, stocks are up over 92% of the time, and they're higher 100% of the time for all rolling 15-year periods. That means those with a greater than 10-year investing time horizon have an excellent chance of possibly achieving positive returns.  But here's a caveat: The cliché that it's not about timing the market, but time in the market is true. Since 1988, just missing a few of the best days in the market has resulted in significant lost opportunity in long-term returns. And over time, many of these best-performing days occur around and after a bout of market volatility, which underscores the importance of remaining committed to your investment plan.  Finally, remember that progress happens too slowly to notice, but setbacks happen too quickly to ignore. Here's what we mean: In 2008, the market quickly lost 38%. And it was a huge deal. Books were written about it, and Congressional hearings were held. The market then slowly tripled from 2009 to 2015, and hardly anyone noticed. The lesson is that sticking with your investment plan is the key to a solid financial future.  The market is built to recover, which is why investors should keep a long-term mindset. Stay focused and determined and always keep the big picture in mind. Slow and steady wins the race.   Your financial advisor is here for you.    Always remember: Your financial advisor is here for you in good times and bad. They can answer your questions and provide objective guidance to keep your mindset fixed on the longer term.   If you’re not working with an advisor, now is a great time to get support. Let us help you connect with a professional who will tailor your plan to your existing needs and long-term goals.     The views stated are not necessarily the opinion of Cetera and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein.  Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.  Past performance does not guarantee future results. All investing involves risk, including the possible loss of principal.  There is no assurance that any investment strategy will be successful. [post_title] => Tips to Help You Stay Strong During Market Volatility [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => tips-to-help-you-stay-strong-during-market-volatility [to_ping] => [pinged] => [post_modified] => 2022-06-21 12:01:40 [post_modified_gmt] => 2022-06-21 17:01:40 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?p=64991 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [4] => WP_Post Object ( [ID] => 65242 [post_author] => 182131 [post_date] => 2022-06-14 07:50:41 [post_date_gmt] => 2022-06-14 12:50:41 [post_content] =>
By
Craig Lemoine, Director of Consumer Investment Research   I often find college savings at the top of my pile of financial stressors. Unless I find a money tree in my backyard, my oldest child is going to turn 18 well before I retire. We all have different values surrounding the education of our children or grandchildren. Some of us want to pay as much of our children’s college costs as we can. Others may believe in the power of being self-made, while some families fall in between. I proudly fall in the middle. College costs continued to rise for the 2021/2022 academic year. The average annual tuition and fee cost for a public in-state university is $10,740, rising to $27,560 for an out-of-state school and cresting at $38,070 for private schools. These costs do not include living expenses, housing or optional fees. Fold in the extras of everyday living, and college costs grow to around $30,000 annually per in-state student. These numbers quickly scale, compound and backflip into being overwhelming. Using time value of money techniques helps provide a path to clarity. Assuming the costs mentioned above, the ability to earn slightly more than inflationary pressure (3.45%) while providing four years of college costs would require just over $110,300 set aside for a student beginning college next year. These costs increase for students going out of state, attending private schools or in higher-cost-of-living areas. Americans tend to pay for college through a combination of parents pitching in from their income (40%), college savings plan distributions (11%), scholarships and grants (25%), student loans (11%), children utilizing their income and assets (8%) and other resources (5%). Every student and their support network will find a unique path to paying for college. These percentages help provide a framework of developing your own college savings plan. Developing a college plan is the launching pad to determine how much to save and what types of accounts to use. My personal goal is to save enough to provide for each of my children’s first two years at a public, in-state university. Beginning their junior year, my kiddos will need to pay their own housing and living expenses. This goal reflects my values and income and strikes a balance with completing long-term goals. Everyone is going to have a different perspective and starting point for college planning. The most common tool used for reaching college savings goals is a 529 plan – 37% of American families reported using a 529 plan to pay college costs in the prior academic year, with average account distributions of just under $8,000. Usage of 529 plans was more common among parents using retirement accounts or other investment vehicles, and they have quickly become America’s preferred method of saving for college, with Morningstar reporting $363 billion dollars held across 61 state plans in 2020. Why do we love 529 plans? They provide investors with immediate diversification, age-weighted portfolios and low costs. These plans often come with a state-income tax deduction on contributions, provide tax-deferred growth and state oversight, and allow owners to change plan beneficiaries to family members tax-free. Plans can be opened by an adult (referred to as the account owner), who names a beneficiary. The owner of the account (generally a parent or grandparent) controls investment options and can name and change the plan beneficiary (generally a child). The plan beneficiary receives tax-favored distributions based on their educational expenses. There are two varieties of 529 plans: college savings plans and prepaid tuition plans. While every state offers the college savings plan option, not all states offer a prepaid tuition plan. Prepaid tuition plans provide the option of paying for future college credit hours at a fixed cost. The cost is often hefty, but the plan invests dollars with the goal of paying future college costs. Prepaid tuition plans are attractive to conservative investors with a nest egg to invest. College savings plans allow owners to choose investment options from a slate provided by the plan administrator. These plans feature age-weighted mutual fund portfolios that grow more conservative as a beneficiary approaches traditional college age. Owners can also choose traditional mutual fund options based on plan offerings. If the account is used to provide qualified education expenses for a beneficiary, distributions are income tax-free. Qualified expenses include:
  • College tuition
  • College fees
  • Required supplies and equipment
  • Computer and internet access
  • K-12 tuition and fees (up to $10,000)
College savings plans wilt when proceeds are used to provide non-qualified expenses. Non-qualified expense gains are taxed as ordinary income and, with little exception (exceptions include offsetting beneficiary scholarships, military service, disability or death), assessed a 10% penalty. Non-qualified 529 expenses include:
  • Travel expenses to and from college
  • Car payments and upkeep
  • Car insurance costs
  • Expenses associated with a cellphone
  • Fraternity, sorority or other club dues
  • An allowance, gifts or other support
Committing entirely to 529 accounts for your college savings plan guarantees you will be paying some costs out of your cash flow while children are in school, or will find yourself making tax-heavy distributions from the account. Taxable distributions raise owner income, which will possibly lower financial aid eligibility, creating a ripple of pain. A better approach may be a core and satellite strategy. The core of a college savings strategy remains a 529 plan, but the satellite can take many forms.
  • A rocky satellite is a Uniform Gift to Minors Act (UGMA) or Uniform Trust to Minors Act (UTMA) account. These accounts allow minors to begin investing along with a custodian. Custodians can purchase individual equities, bonds, cryptocurrency, mutual funds or real estate. The custodian rolls off the account at the child’s age of majority (18 or 21, based on state of residence), leaving the child as the sole owner of account assets. UTMA and UGMA accounts are great at passing wealth to children, but they do not make a strong satellite in a college savings plan. UTMA/UGMA accounts can reduce financial aid more than other options, though they may be subject to parent income tax rates, and a child will control account assets once they turn 18 or 21.
  • If your child works part-time, a Roth IRA in the child’s name is an outstanding college savings satellite. As long as children have earned income, they can make after-tax contributions to a Roth IRA up to $6,000 annually. The Roth IRA will grow tax-free and account basis (initial contributions) can be used at any time. Roth IRAs are not considered in a financial aid calculation. Roth accounts can be invested in a range of investment options, including individual equities, bonds, mutual funds and cryptocurrency. Roth IRAs pair as an extraordinary satellite to 529 accounts. Consider the following example:
Victoria, 14, spent her summer mowing yards, house sitting and dog walking. She recorded her income and expenses and earned $5,500 over the summer. Victoria’s parents then opened a Roth IRA for her and bought two shares of Stock A at $2,750 a share. Assuming Victoria continues working through high school and her parents continue contributing, then by the time she begins college, her Roth IRA would have eight shares of Stock A and her account would have a cost basis of $22,000 ($5,500 multiplied by 4 summers). Victoria can sell shares as needed to provide supplemental expenses, and can take up to $22,000 out of the account without incurring any penalty. Shares will (hopefully) continue to appreciate in value, and Victoria can make additional contributions to the account if she continues working.
  • If your child does not have any earned income, consider opening a parent-owned non-qualified brokerage account to help save for non-529 expenses. The account will be subject to tax on dividends, interest and gains, but there are no asset or usage restrictions. Consider growth equities to limit income tax exposure, and choose positions not offered by the larger 529 college savings plan. Non-qualified brokerage accounts make strong satellites when orbiting with a 529 account.
  • Exotic satellites include cash value life insurance policies, rental properties and other real estate. They may have higher costs and require a time commitment, but can pair nicely with a core 529 account balance.
Add the moon to your college savings plan. A financial adviser can help you personalize a core/satellite approach. Meeting with a financial planner can also help you set a course of action, decide on weekly savings targets and develop an asset allocation built around your college savings needs.   Craig is not affiliated or registered with Cetera Advisor Networks LLC. Any information provided by Craig is in no way related to Cetera Advisor Networks LLC or its registered representatives. These examples are hypothetical only, and do not represent the actual performance of any particular investments.  Investments in securities do not offer a fixed rate of return.  Principal, yield and/or share price will fluctuate with changes in market conditions and when sold or redeemed, you may receive more or less than originally invested. A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes. Before investing, the investor should consider whether the investor's or beneficiary's home state offers any state tax or other benefits available only from that state's 529 Plan. [post_title] => 529s, Roth IRAs and Other Strategies for Your College Savings Plan [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => 529s-roth-iras-and-other-strategies-for-your-college-savings-plan [to_ping] => [pinged] => [post_modified] => 2022-06-21 09:18:16 [post_modified_gmt] => 2022-06-21 14:18:16 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?p=64988 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 5 [current_post] => -1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 65307 [post_author] => 100869 [post_date] => 2022-06-29 09:47:15 [post_date_gmt] => 2022-06-29 14:47:15 [post_content] => Sarah Duey   I once had clients with only one daughter. They created a trust for only their grandchild without ever telling their daughter why.   As the trustees, we worked with this daughter, because her child was still a minor. There were hard feelings — a lot of wondering why her parents had skipped her in their estate planning.  Grieving our loved ones is hard enough without adding extra emotions. Not talking to your family about your estate plan has the potential to create chaos and make your family feel unprepared.   You want to be sure your family is aware of your estate plan and what roles they’re going to play in the events of your incapacity or death.   In this article, we’re going to discuss some of the basics of estate planning, what types of things you should communicate to your family, and how to go about updating your family on a regular basis.  

Your Estate Plan and Picking Powers of Attorney

An estate plan doesn’t speak to only your after-death wishes; it helps determine how you’ll be taken care of during your life if you’re incapacitated. Estate plans include powers of attorney who step in to take care of you in the event you’re incapacitated, a will and sometimes trusts.  If you haven’t chosen a healthcare power of attorney, these considerations might be helpful:  
  • Choose somebody who’s going to be the best person, geographically, to help you. While oftentimes that could be your spouse, if you’re single or childfree, you might choose a sibling or close friend.  
  • Before you make anything final, you need to talk to this person to ask if they’re comfortable with this responsibility. 
  • Identify your wishes for your care. Healthcare power of attorney gives power, but not instruction. You’ll want to establish a living will to specify what your end-of-life choices are – for example you don’t want to be on a ventilator or feeding tube.  
  • Share the power of attorney with your doctor. You want your medical professionals to be in the know as well.  
It’s always a good idea to revisit your choices every few years to ensure you still have the right people in place.   Approach financial powers of attorney in a similar way:  
  • Choose somebody who can be there to take care of your bills and finances and ensure they’re on board and ready for the responsibility.  
  • Pick a trustworthy person. Unfortunately, that isn’t always your children or family. Give hard thought to your kids’ situations and whether they might make good choices. Unfortunately, I’ve seen way too many abuses and oftentimes it’s close family members. The National Council on Aging reports that 60% of elder abuse cases1 are close family members or spouses.   
Putting those powers of attorney in place is critical. If you don’t plan proactively and become incapacitated, your loved ones will have to go through the courts to get conservatorship or guardianship to be able to help you.  

Crafting and Communicating Your Estate Plan in The Family Meeting

Estate planning and communicating it to your family happens on a spectrum. On one side is the logistics – here are where the documents are, here are the passwords. On the other side is legacy planning – here are my values and here’s how I want you to continue my legacy.   Wherever you fall on that spectrum, it’s your responsibility to communicate that to your family. And that’s where having a series of regular family meetings comes in.   You don’t have to run these meetings yourself – you can utilize a facilitator. You also don’t have to dive into specific numbers or amounts you’re leaving to specific people.   A facilitator is especially helpful if you anticipate there might be some conflict or concern over the way you're setting up your estate. A good facilitator would be your financial advisor, but if they’re not comfortable with the task, ask them to recommend somebody.   The goal of these meetings is to give your family enough information to minimize chaos if something happens to you.   The first thing to do is to set an agenda that outlines what you’re going to talk about. You don’t want your family to be confused. Be clear: “This meeting is to talk about my estate plan.”   At the minimum, share:  
  • Where your estate planning documents are located  
  • Passwords 
  • Information for your financial advisor, estate planning attorney and CPA 
  • Contact information for any other professionals to call 
  • Powers of attorney 
Some people are very open and want to share all the details, whereas others decide they want to share the bare minimum. But keep in mind that the more you share, the better off your family will be.   After that initial meeting, set a cadence of regular meetings. These don’t have to dive into estate planning specifically, but you can tackle other topics while also weaving in estate planning. These meetings have the potential to bring your family closer together. It also can reduce feelings of overwhelm – this is difficult information and takes time to sink in.  The meetings can move toward preparing your heirs for their inheritance. First, talk to your children about wealth – how you expect them to manage it, how you make your financial decisions so your heirs can learn from you.  One idea is to start having them work with you to manage some of their inheritance.    For example, in his book “A Spectrum of Legacies,” Mark Weber wrote about one family who gave each adult child three $5,000 gifts. The first $5,000 could be used for anything, the second $5,000 would be invested, and the final $5,000 would be contributed to a donor-advised fund with the child’s name on it. To keep the process engaging, they added an incentive: The child who managed the investment account the best won an additional $5,000 at the end of a three-year period.   The children had to share how they were investing and what they were learning on a regular basis.  In addition, each child had to share how they were spending the donor-advised funds – to what organizations and how their gift might make an impact. Each child “owned” one of the categories and led that part of the family meeting. The parents felt this was a great way to teach their children about managing wealth, and it also gave them a platform to talk about other topics, such as estate planning.    While that might not be a feasible competition for every family, it’s just an idea to spark some creativity of your own. You can make these meetings interesting.   Since life changes or new policy could impact your estate plan, communicating your plan is never one-and-done. 

What About Your Parents’ Estate Plan?

You’ve done everything you need to do, but realize you have no idea what’s in your parents' estate plan. The best way to approach this is to simply say: “Tell me about your estate plan.” If you find out they don’t have an estate plan, ask them if you can introduce them to an estate planning attorney who can help them identify their goals and start the process.   Explain the risks of not having an estate plan – emphasize that as their child, you don’t want to have to go to the courts to get guardianship or conservatorship to be able to take care of them. Explain to them that without an estate plan, the state is going to decide how their assets will transfer.  If you have siblings, include them in the conversation. You don’t want to be seen as trying to get information they’re not privy to and create a negative situation.  

The Last Word: Communication is Key to Estate Planning 

Communication is the key to estate planning. The more we communicate, the better the transition will be. It’s up to you to make that happen but know there are resources and great people to guide you throughout that process. Your financial professionals can help you do that. Reach out today to schedule a consultation.   “Get the Facts on Elder Abuse” National Council on Aging, 23 Feb 2021. https://www.ncoa.org/article/get-the-facts-on-elder-abuse [post_title] => How to Talk to Your Family About Your Estate Plan and Avoid Complicating Their Grief [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => how-to-talk-to-your-family-about-your-estate-plan-and-avoid-complicating-their-grief [to_ping] => [pinged] => [post_modified] => 2022-07-06 09:18:19 [post_modified_gmt] => 2022-07-06 14:18:19 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?p=65019 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [comment_count] => 0 [current_comment] => -1 [found_posts] => 390 [max_num_pages] => 78 [max_num_comment_pages] => 0 [is_single] => [is_preview] => [is_page] => [is_archive] => [is_date] => [is_year] => [is_month] => [is_day] => [is_time] => [is_author] => [is_category] => [is_tag] => [is_tax] => [is_search] => [is_feed] => [is_comment_feed] => [is_trackback] => [is_home] => 1 [is_privacy_policy] => [is_404] => [is_embed] => [is_paged] => [is_admin] => [is_attachment] => [is_singular] => [is_robots] => [is_favicon] => [is_posts_page] => [is_post_type_archive] => [query_vars_hash:WP_Query:private] => 6b5c18c1252b6c6a9f5f8613c74e0017 [query_vars_changed:WP_Query:private] => [thumbnails_cached] => [stopwords:WP_Query:private] => [compat_fields:WP_Query:private] => Array ( [0] => query_vars_hash [1] => query_vars_changed ) [compat_methods:WP_Query:private] => Array ( [0] => init_query_flags [1] => parse_tax_query ) [tribe_is_event] => [tribe_is_multi_posttype] => [tribe_is_event_category] => [tribe_is_event_venue] => [tribe_is_event_organizer] => [tribe_is_event_query] => [tribe_is_past] => )

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                    [post_content] => The financial world is full of industry jargon and unfamiliar language that the average consumer may struggle to understand. This can be especially distressing during times of volatility, when we're all grappling for answers.

In this guide, we've broken down some of the most common phrases you might be hearing and reading to help you understand what's really being said.

Download the checklist today to get started.

 
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                    [post_content] => Gifting to your loved ones now or posthumously each carries their own positives and negatives as they relate to your estate plan, taxes, your goals and your legacy.

As you explore your options, refer to this guide. It offers a checklist, questions to ask your advisor and a conversation outline to help you communicate your wishes to your loved ones.

Download the checklist today to get started.

 
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                    [post_content] => Life insurance plans are designed to offer your family an infusion of income in the event of your death, so your loved ones won't have to worry about finances while they are grieving. But how do you know what type of policy to choose and if it will adequately cover your needs?

This resource helps you identify your insurance goals, offers basic guidance on how to pick the optimal policy and outlines when to work with your professional to update your coverage.

Download the checklist today to get started.

 
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                    [post_content] => Your retirement is the culmination of years of careful planning, and you don't want to fumble the ball when the end zone is in sight.

Download our checklist of key tasks to complete in the year leading up to your retirement to make sure you're prepared for this major life milestone.

Download the checklist today to get started.

 
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                    [post_content] => Health care costs in retirement aren't going anywhere. Naturally, as our bodies get older, it costs more to keep them running. And with U.S. health care spending expected to rise at a rate 1.1% faster than the annual GDP, this cost will come home to our pockets. Statistics like this make Medicare part of life for many Americans.

Let's look at the parts of this vital program and how it plays a part in your financial plan.

Download the checklist today to get started.

 
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            [post_content] => The financial world is full of industry jargon and unfamiliar language that the average consumer may struggle to understand. This can be especially distressing during times of volatility, when we're all grappling for answers.

In this guide, we've broken down some of the most common phrases you might be hearing and reading to help you understand what's really being said.

Download the checklist today to get started.

 
            [post_title] => Market Volatility Terms to Know
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Resources

Resources

Market Volatility Terms to Know

The financial world is full of industry jargon and unfamiliar language that the average consumer may struggle to understand. This can be especially distressing during times of volatility, when we’re all grappling for answers. In this guide, we’ve broken down some of the most com …
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                    [post_content] => The Personal Consumption Expenditure (PCE) Price Index increased 0.6% in May, after rising only 0.2% in April. PCE inflation is an alternative inflation measure to the Consumer Price Index (CPI), which is released earlier. The two measures both show inflation to be very high, but the CPI indicates prices have risen 8.6% in the last year, while PCE inflation has increased only 6.3%. The biggest difference is the basket of goods that make up each measure. For example, PCE inflation includes a wider range of medical costs, which have not increased as much as energy prices. Energy comprises 7% of the CPI and just 4% of the PCE. The Fed has indicated it favors the PCE measure, modified to exclude food and energy. PCE ex food and energy increased just 0.3% as gasoline prices rose significantly in May.

Key Points for the Week 
  • Core PCE inflation, which excludes food and energy, rose 0.3%.
  • Personal consumption rose 0.2% as higher spending on services overcame a decline in spending on goods.
  • The S&P 500 fell 20% in the first half of the year — its worst first-half performance since 1970.
One trend likely to help the Fed reduce inflation is increased spending on services. Services spending rose 0.7% while goods spending dropped 0.7% last month. Services account for a larger share of the economy, so the net effect was a 0.2% increase in overall spending. Service inflation has been lower than goods inflation, and decreasing goods spending is likely to reduce price pressures on some items in short supply. The S&P 500 declined 2.2% last week as markets became more concerned about the risks of recession in the coming year. The index of large-cap U.S. stocks fell 20% in the first half of the year. Global stocks matched the S&P 500’s decline. The MSCI ACWI sagged 2.2%. Because the concern was more about recession than inflation, bond prices increased. The Bloomberg Aggregate Bond Index added 0.4% last week and posted its second week of gains. The Department of Labor’s update on the U.S. employment situation leads the list of economic releases this week. Figure 1 Figure 2 Five Reasons to Expect a Better Second Half This year’s Fourth of July celebrations weren’t for the first-half market performance. The S&P 500, including dividends, declined 20% in the first six months of the year. The fall represented the worst first-half market performance since 1970. Emotionally, this market has taken its toll through a decline that started the second day of the year and accelerated in the second quarter. High inflation has been the biggest challenge, and every time we get gas, buy groceries, or check the market we are reminded of it. The propensity in down markets is to expect current trends to continue. In difficult markets, it is also easier to focus on known negative factors that have proven to be challenging. Yet, as we enter the second half of the year, there are strong reasons to expect improvement. Here are five forces we believe will make the second half of the year more attractive than the first.
  • Much of the bad news is already reflected in market prices.
The first half of 2022 contained a lot of bad news for markets, and prices fell in response. Inflation continued to increase, COVID shutdowns slowed the repair of supply lines, and Russia invaded Ukraine. In response to high inflation, the Federal Reserve pivoted and raised interest rates three times, once by 0.5% and once 0.75%. Europe reacted to Russia’s invasion of Ukraine by drastically reducing its purchases of Russian oil, contributing to slower economic growth and higher inflation. While those events had negative consequences, remember the market has already reacted to the news. With the S&P 500 20% lower than at the start of the year, it’s hard to argue that markets have ignored what has occurred.
  • Inflation seems to be moderating.
The Fed’s favorite measure of inflation increased 0.3% for the fourth consecutive month. But the Personal Consumption Expenditures Price Deflator (PCE) ex Food and Energy has moderated in recent months. From October to January, core PCE increased approximately 0.5% per month. An increase of 0.3% is still too high. Multiplying it by 12 creates a simplified annual inflation rate of around 3.6%, which is well above the Fed’s target of 2%. But our view is the steps the Fed is taking are starting to work, and additional hikes will contribute to slower price increases in coming months.
  • Political uncertainty is ebbing lower.
In the presidential election cycle, the second year of the administration is statistically the most challenging. Domestic political uncertainty has made this year even more so. House and Senate majorities are very narrow, and both houses of Congress could switch parties in November. The Supreme Court has been full of surprises, and the Jan. 6 commission has added to the mix. By the fourth quarter, and possibly even the third, polling data will provide some clarification on how midterm elections will turn out. The high inflation has also undercut any desire for a major spending initiative. Because the last support package seemed to feed inflation, avoiding high government spending should help reduce inflationary pressure.
  • Much of the economy remains strong.
While the current bear market is the 11th since 1950, it is only the fourth to occur outside of a recession. Non-recessionary bear markets are usually shallower, averaging a 28% decline, compared to an average 39% decline for recessionary bear markets (Figure 2). This week, the government will release the Job Opening and Labor Turnover Survey (JOLTS) for May and the Employment Situation report for June. The ideal result is decent job creation while companies choose to pull back open positions to reduce the excess demand for labor.
  • The system works.
Hopefully, as investors lit off fireworks celebrating our country's founding 246 years ago, they appreciated the resiliency of the American system. Investors who focus only on the short-term swings in inflation, political winds, and Fed policy should take note of the longer-term success of this republic and how people and equity markets have prospered. Even with two bear markets, inflation and a global pandemic, the S&P 500 is up double digits over the last 10 years. The key is to find the right balance. This has been a tough year, and we will continue to monitor a wide range of near-term risks and how they affect markets. Because many of those risks are already reflected, at least partially, in current prices, the more impactful data points may be those showing how a system with a long record of success is recovering. - This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. S&P 500 INDEX The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Bloomberg U.S. Aggregate Bond Index The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds. Bureau of Economic Analysis. 6/30/22.https://www.bea.gov/news/2022/personal-income-and-outlays-may-2022 Bureau of Labor Statistics 06/10/22 https://www.bls.gov/news.release/cpi.t01.htm Federal Reserve https://www.federalreserve.gov/monetarypolicy/openmarket.htm Compliance Case # 01420404 [post_title] => Market Commentary: Moderating Inflation, Ebbing Political Uncertainty Among Reasons for Hope in the Face of a Tough Market [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => market-commentary-moderating-inflation-ebbing-political-uncertainty-among-reasons-for-hope-in-the-face-of-a-tough-market [to_ping] => [pinged] => [post_modified] => 2022-07-05 12:50:58 [post_modified_gmt] => 2022-07-05 17:50:58 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=market-commentary&p=65037 [menu_order] => 0 [post_type] => market-commentary [post_mime_type] => [comment_count] => 0 [filter] => raw ) [1] => WP_Post Object ( [ID] => 65299 [post_author] => 90034 [post_date] => 2022-06-27 09:32:22 [post_date_gmt] => 2022-06-27 14:32:22 [post_content] => The S&P 500 spent only a short time below the 20%-decline threshold, before jumping back above it last week. U.S. large-cap stocks rallied 6.5% based on optimism that inflationary pressures are starting to respond to higher interest rates. Key Points for the Week
  • The S&P 500 bounced off recent lows, rallying 6.5% last week.
  • Interest rates moved slightly lower as expectations for inflation declined.
  • Existing home sales fell 3.4% last month while new home sales jumped 10.7%.
The optimism was partly driven by reassuring consumer expectations for inflation. The University of Michigan consumer sentiment data reported inflation expectations fell from 5.4% to 5.3% for the next year and dropped from 3.3% to 3.1% for the next five years. That data indicates inflation expectations are not becoming as firmly established in the economy as many feared. Purchasing Manager Index data for goods and services both declined in the U.S., adding support to the idea interest rate increases are slowing activity. Both manufacturing and services data remain above 50, meaning they are expanding. The manufacturing index fell to 52.4 from 57 in May and reached a 23-month low. Services dipped from 53.4 to 51.6, which is the lowest reading in five months. High home prices and higher financing costs are slowing housing activity. Existing home sales fell 3.4% last month and have fallen 8.6% in the last year. New home sales jumped 10.7% last month but have still fallen 5.9% in the last year. As we note in the next section, home affordability has fallen with higher rates, but sales should benefit from ongoing demographic trends (Figure 1). Global stocks did not jump as much as U.S. stocks did last week. The MSCI ACWI added 4.8%. The Bloomberg U.S. Aggregate Bond Index surged 0.6% as lower inflation expectations supported bond prices.  The Core Personal Consumption Price Deflator will provide additional perspective on inflationary pressures when it is released on Thursday. Figure 1 Figure 2 Housing and Interest Rates People will complain the military is always well-prepared to fight the last war. Investors should be careful who they criticize because we can often act the same way. Some are comparing today’s housing market to the market leading up the Great Recession. The 2008 financial crisis was driven by exorbitant demand for housing and loose lending standards that imperiled many banks. 2022 is a much different market, and in today’s update, we’ll explore some of the important differences. A recent piece by the home loan buyer Freddie Mac (yes, the one that needed additional government support during the housing crisis) highlights some of the key trends that have caused housing prices to jump so rapidly in recent years (Figure 2) and why higher interest rates may not do as much damage to the housing market as some feared (Figure 1). The piece cites four factors:
  • “Record low mortgage rates in 2020 and 2021 and the race to beat future increases;
  • Limited supply from underbuilding and below average distressed sales;
  • An increase in first-time homebuyers due to favorable age demographics; and
  • Increased migration from high-cost cities to areas that already had a housing shortage.”
When the Federal Reserve cut interest rates in response to the pandemic, homeowners rushed to refinance and homebuyers took advantage of low rates to move. The surge of demand for new homes encountered a housing market with the fewest homes for sale since the statistics inception in 1993. The supply situation was further constrained because pandemic aid shrunk the number of distressed sales. Great for those families, but it also cut off another source of supply. The market would normally respond by building more homes, but rapidly increasing timber prices in the early stage of the pandemic limited supply and slowed the ability to start new projects. Another powerful force for home demand was the number of millennials at the prime age to purchase their first home. There are more than 46 million 25-34 year-olds in the U.S., about 6.5 million more than in 2006. Given the strong employment market prior to COVID, millennials were in a good position to buy homes. Many millennials still haven’t purchased a home. From 2012 to 2022, the number of renter households ages 25-44 doubled from 1.75 million to 3.5 million, and the trend is still moving higher. Potential demand for housing remains robust. Another part of this trend was a preference for mid-sized metro areas from the largest markets. Those markets had already experienced increased demand prior to the pandemic, especially in the South and Mountain West. Other pandemic-related factors fed into these same themes. Moving away from big cities became more attractive as large cities lost some advantages during COVID lockdowns. Working from home increased the demand for larger and remodeled houses, which were more affordable in smaller cities. The report emphasized the purchase of homes for rent is only a moderate factor in housing demand. Large corporate purchases of homes have increased, but the overall investor share of home sales was 27.6% in December 2021, only 0.9% higher from two years earlier. Given this environment, how will mortgage rates over 6% affect the market? Our expectation is home price appreciation will slow. Higher rates increase the total cost of a home, and buyer demand should slow down just as cities are starting to reopen. The trend away from the largest cities will likely continue. Demand should stay relatively strong given the demographic trends and as long as there isn’t a deep recession. For those still thinking about the housing crisis of 2008, there are some important differences. As long as unemployment remains fairly low, foreclosures and short sales should increase only gradually as consumers remain well-positioned to make payments. The average credit score on a new loan is approximately 775 in today’s environment. In the housing crisis the average was closer to 700. Some have noted an increase in the number of homes under construction and compared it to 2008. The difference is many of these homes are already sold and supply chain constraints have prevented their completion. The deep challenges of 2008 seem unlikely given the strength of the market and the financial security of the buyers. Last month’s 10.7% increase in new home sales, after a recent decline, is a good indication demand remains robust. The net effect should be a slowing market with demographic factors and geographic preferences supporting prices in many areas. Investors in homes or homeowners looking to sell should not expect the rapid price gains of the last couple years to continue. A more likely trend is for price gains to slow toward historical trends, with continued variability based on geographic region.   - This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. S&P 500 INDEX The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Bloomberg U.S. Aggregate Bond Index The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds. Khater, Sam and Ralph DeFranco. FreddieMac. 6/09/22. https://www.freddiemac.com/research/insight/20220609-what-drove-home-price-growth-and-can-it-continue Khater, Sam and  Kristine Yao. 06/22/22. https://www.freddiemac.com/research/insight/20220622-pursuit-affordable-housing-migration-homebuyers-within-us-and-after-pandemic University of Michigan Consumer Sentiment 06/22. http://www.sca.isr.umich.edu/ S&P Global 06/23/22. https://www.pmi.spglobal.com/Public/Home/PressRelease/8fd15c4803fd4399bea8d16e1dc06422#:~:text=S%26P%20Global%20Flash%20US%20Services,slowdown%20and%20only%20modest%20overall Census Bureau. 06/24/22.3 https://www.census.gov/construction/nrs/pdf/newressales.pdf New York Fed 05/22. https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/hhdc_2022q1.pdf Compliance Case #01413571 [post_title] => Market Commentary: S&P 500 Rallies 6.5%, Lifting Market Above Bear Level [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => market-commentary-sp-500-rallies-6-5-lifting-market-above-bear-level [to_ping] => [pinged] => [post_modified] => 2022-06-27 09:51:19 [post_modified_gmt] => 2022-06-27 14:51:19 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=market-commentary&p=65012 [menu_order] => 0 [post_type] => market-commentary [post_mime_type] => [comment_count] => 0 [filter] => raw ) [2] => WP_Post Object ( [ID] => 65270 [post_author] => 90034 [post_date] => 2022-06-21 10:03:38 [post_date_gmt] => 2022-06-21 15:03:38 [post_content] => The S&P 500 dropped 5.7% last week and is now 22.3% off its peak. This decline pushed the index of large-cap U.S. stocks into a bear market, which is defined as a 20% or greater drop from its peak. Volatility remained elevated, and the S&P 500 has now moved by 1% or more 60 times this year. Key Points for the Week
  • The S&P 500 entered a bear market by closing more than 20% below its all-time high.
  • The Federal Reserve raised rates 0.75% as the central bank plays catch up after leaving rates too low for too long.
  • U.S. retail sales slowed 0.3% last month in response to heightened inflation, while industrial production remained strong. Even with the decline, retail sales are up 8.1% from last year.
Much of the decline can be traced to the Federal Reserve raising rates 0.75%, signaling the central bank views more rapid action as necessary to tamp down inflationary pressures. With the hike, the Fed’s benchmark fund rate has a range of 1.5%-1.75%. It was the first time since 1994 that the Fed has raised 0.75% in one meeting. The Fed also raised its expectations for interest rates in each of the next three years, suggesting additional rate hikes should be expected (Figure 1). Some economic data indicate the pressure on prices might be edging lower. Producer prices rose 0.8% last month but only 0.5% when food and energy is excluded. While up 10.7% in the last year, that is 0.9% lower than it was two months ago. Retail sales fell 0.3% last month. Consumers are pulling back from purchases in the face of higher prices. Global stocks moved similarly to U.S. stocks last week. The MSCI ACWI also fell 5.7%. The Bloomberg U.S. Aggregate Bond Index shrank 0.9% as bond prices fell in response to the expectation of higher rates. A host of Purchasing Manager Index reports will be released this week and will help identify if economic activity remains strong. Figure 1 Figure 2 Bearing up to the Pressure We are back in a bear market. After a couple of close escapes, the S&P 500 broke through the down-20% threshold and entered a bear market early last week. Unlike the COVID bear market in early 2020, this decline has taken a while. The S&P 500 peaked on Jan. 3, 2022, and has slid 22.3%, including dividends, from that peak. The decline has accelerated in recent months with the S&P 500 falling 18.6% in the second quarter. Why did the markets drop? Inflation and the Fed’s interest rate hikes were the primary causes. Markets moved into last week still trying to digest the larger-than-expected inflation report from the previous Friday. The news didn’t go down easy and expectations for a 0.75% rate hike started to increase. Those expectations were fulfilled on Wednesday, when the Fed raised rates 0.75% for the first time since 1994. The Fed moved aggressively because it delayed tightening monetary conditions and is trying to catch up (Figure 1). In its official statement, the Fed recommitted itself to getting inflation back down to 2 percent. By increasing rates, the Fed will make borrowing more expensive, and less borrowing makes the economy expand more slowly, reducing demand and allowing prices to decline. The Fed faces a difficult challenge because rapid interest rate hikes can harm key segments of the economy and markets don’t have time to adapt to changing expectations. Markets dropped last week partly due to concerns the Fed will keep raising rates rapidly and push the economy into recession sometime next year. Fears of a recession next quarter seem overblown given the continued strength in labor markets. The Fed isn’t the only central bank battling rapidly rising prices. Inflation is a global phenomenon and many countries have been increasing rates. Last week Switzerland and England both raised rates. The 0.5% increase in Swiss rates was a surprise to many while the English raised rates by 0.25% for the fifth straight meeting. Previously, the European Central Bank announced it would raise rates at its July meeting. Given all this information, what should investors expect from the market? In the short term, markets are expected to stay volatile. There have already been 60 moves of 1% this year and those are likely to continue given the uncertainty. Inflation data, such as the Personal Consumption Expenditures Pride Deflator (PCE) and the Consumer Price Index, will likely have outsized impact. We will be paying close attention to communication from Fed governors about the future direction of rates. We’ll also be watching energy prices closely. Producer and consumer prices were pushed higher because of energy prices, and we expect prices in other areas indirectly affected by higher energy costs to rise. In the intermediate term, the odds favor the patient investor. Averaging all the bear markets since 1955, stocks have increased 6.1% in the three months after a decline of more than 20%. The S&P 500 has increased an average of 19.5% one year after entering a bear market (Figure 2). Markets often rally after entering bear markets because investors reach a point of high pessimism. During declines, it is easy to identify the challenges market face. The case for why things will improve is often more nuanced and less vivid. Yet, based on historical performance, the most realistic assumption is the market will recover eventually and patience is often the most important investor virtue. Anything you can do to stretch out your time horizon can help make investing less challenging and more rewarding. Please let us know if there is anything we can do to help you. - This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. S&P 500 INDEX The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Bloomberg U.S. Aggregate Bond Index The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds. The Federal Reserve 06/15/2022. Federal Reserve issues FOMC Statement.https://www.federalreserve.gov/newsevents/pressreleases/monetary20220615a.htm ING Snaps. 06/16/2022. Swiss National Bank raises rates by 50 bps.https://think.ing.com/snaps/swiss-national-bank-raises-rates-by-50bp/#:~:text=The%20SNB%20has%20revised%20its,the%20first%20quarter%20of%202024. Eliot Smith. 06/16/2022.https://www.cnbc.com/2022/06/16/bank-of-england-hikes-rates-for-the-fifth-time-in-row-as-inflation-soars.html Census Bureau. 06/15/2022. Advance Monthly Sales for Retail and Food Services May 2022.https://www.census.gov/retail/marts/www/marts_current.pdf BLS. 06/14/2022. Producer Price Index News Release Summary.https://www.bls.gov/news.release/ppi.nr0.htm Sylvan Lane. The Hill. Fed hikes by 75 basis points for first time since 1994.https://thehill.com/homenews/3524517-fed-hikes-rates-by-75-basis-points-for-first-time-since-1994/#:~:text=The%20Federal%20Reserve%20announced%20Wednesday,discouraging%20May%20surge%20in%20inflation. Compliance Case #01408268 [post_title] => Market Commentary: Fed Raises Rates by 0.75%, Market Moves Into Bear Territory [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => market-commentary-fed-raises-rates-by-0-75-market-moves-into-bear-territory [to_ping] => [pinged] => [post_modified] => 2022-06-22 07:44:12 [post_modified_gmt] => 2022-06-22 12:44:12 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=market-commentary&p=65005 [menu_order] => 0 [post_type] => market-commentary [post_mime_type] => [comment_count] => 0 [filter] => raw ) [3] => WP_Post Object ( [ID] => 65259 [post_author] => 90034 [post_date] => 2022-06-15 13:58:05 [post_date_gmt] => 2022-06-15 18:58:05 [post_content] => Fueled by inflation readings that have remained stubbornly elevated, the stock market, measured as the S&P 500 Index, entered bear market territory at market close on June 13, 2022.  A bear market represents a decline in equity values by more than 20%. And while crossing this arbitrary threshold of 20% has garnered a lot of media attention, the double-click into understanding the context of equity volatility can help to increase investors’ confidence to remain committed to their investment plan. The most important thing to remember is that the phrase “it’s different this time” is one of the most dangerous phrases in investing. Downturns and bear markets are caused by different things and called different names, but the single-most durable investment truth is the long-term resiliency of capital markets and economic growth. Sparking the current downdraft in stocks was the May reading of the Consumer Price Index (CPI) data – the most widely followed proxy for consumer inflation – coming in higher than expected. The CPI rebound undercut an expected trend towards the moderating of inflation. The headline inflation rate of 8.6% was the highest since 1981, driven predominately by accelerating food and energy costs. Food and energy prices have been adversely impacted by Russia’s invasion of Ukraine, two countries that play a vital role in the commodity supply chain. Despite the headline result, there was some positive news sitting inside the inflation report. Namely, Core CPI, which excludes the volatile food and energy components, increased a more tolerable 6.0% over the last year and the annual rate actually declined from the previous month. The post-pandemic reopening of the world is one of the major reasons that inflation is surging. The combination of businesses trying to get back up-to-speed after being shuttered through the pandemic (picture a car that hasn’t started in a year trying to get going again), mixed with the pent-up demand of Americans ready to upgrade the homes we’ve been confined to, go on a vacation, or get a proper haircut is creating an imbalance of supply and demand that is putting pressure on prices of everything from eggs to airfare to housing. The result? The highest inflation rates in four decades, sparking concern that’s driven markets into bear market territory. And while crossing into bear market territory is a headline-grabbing event, it’s important to note that it’s just an arbitrary line in the sand and we’ve been here before. Moreso, history shows that bear markets – particularly those not associated with a recession – mark a potentially close proximity to near-term market bottoms. There’s a lot we can garner from prior bear-market periods that helps to place volatile periods like this into context and provide some cautious optimism to what the future might bring. While this current market volatility is the eleventh bear market since 1950, it’s only the fourth to occur outside of a recession. This non-recessionary characteristic is a vital factor, as these versions of bear-market periods are usually shallower and lead to a swifter recovery than the majority of declines that occur during recessionary times. For example, bear markets that occur outside of recessions average a 28% decline versus the 39% average decline during recessions. With this current stock market volatility already pricing in the majority of the typical non-recessionary bear decline, cautious optimism remains that the market is approaching a likely bottoming level – especially given the continued strength of most elements of the U.S. economy, including strong consumer spending and the best labor market in decades. Additionally, the full attention of the Fed to aggressively use monetary policy to turn the tide of inflation is in effect. Another encouraging sign is once a bear market begins, recoveries are often closer than we anticipate. In only three of the last thirteen bear markets since 1950 (including three near bear markets), stocks moved further lower a year later. And each of these were associated with a major recession – something that is not where we are today. The other ten times, markets recovered significant following the bear market crossover. Importantly, amongst five previous non-recessionary bear markets, similar to the economic conditions we are currently experiencing, all posted one-year gains over 23% and averaged 30% advances in aggregate. While there are many things still to unfold for the market and the economy, we do not anticipate a recession on the near-term horizon, and thus view these historic trends to be the most likely paths for market conditions to follow. Declining markets are always troubling to go through. But combining a longer-term perspective, mixed with past market behavior, can help provide important rational and fact-based context – as opposed to the emotional responses that get too many investors turned around. What’s important to note is that despite all these market drawdowns, headline-grabbing bear market periods, and recessionary periods that occur on average every six years or so, markets have always weathered these challenges over the longer-term.  Evidence is that all-time highs for stocks were just over six months ago, and stocks have historically climbed every single wall-of-worry presented before. And with a long-term perspective, it is likely that stocks will be there again. The reality is that markets, like most things in life, are more fragile and susceptible to short-term fears than we ever imagined – but more resilient than we often give them credit for. The reason, as the wise investment parable states, is that progress happens too slowly to notice, but setbacks happen too quickly to ignore. As an example, during the Great Recession of 2008 the market quickly lost 56%. It was an enormous deal. Books were written about it, and Congressional hearings were held. But the recovery over the next few years was powerful; the market tripled in value and barely anyone ever noticed. Emotion is ignited by pain, fear, and suddenness, which makes market volatility hard to navigate. It’s easy to identify the challenges that sit right before us, but the case for how things will improve is often harder and more nuanced. History has proven that challenges faced by the market are managed, mitigated, or innovated away with a longer-term vantage. Today’s challenges are no different. The reality is that markets are built to recover, which is why remaining steadfast to a long-term mindset and following a thoughtful investment plan is the key to a solid financial future.     This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Burt White is not affiliated or registered with Cetera Advisor Networks LLC. Any information provided by Burt is in no way related to Cetera Advisor Networks LLC or its registered representatives. [post_title] => Special Market Commentary: S&P 500 Slips Into a Bear Market. Now What? [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => special-market-commentary-sp-500-slips-into-a-bear-market-now-what [to_ping] => [pinged] => [post_modified] => 2022-06-21 12:19:30 [post_modified_gmt] => 2022-06-21 17:19:30 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=market-commentary&p=64995 [menu_order] => 0 [post_type] => market-commentary [post_mime_type] => [comment_count] => 0 [filter] => raw ) [4] => WP_Post Object ( [ID] => 65238 [post_author] => 90034 [post_date] => 2022-06-13 09:48:44 [post_date_gmt] => 2022-06-13 14:48:44 [post_content] => The S&P 500 dropped 5.1% last week as investors digested new inflation data released on Friday. May’s Consumer Price Index (CPI) report showed a reacceleration of inflation after a brief reprieve in April. Headline CPI increased 8.6%, which is the fastest pace since December 1981. The primary drivers of inflation were energy and food prices. Gasoline prices increased 4.1% in May, a big reversal from the 6% decline in April. Food prices, primarily from grocery store spending, climbed 1.4%. Key Points for the Week
  • The Consumer Price Index, a measure of inflation, increased a higher-than-expected 8.6% in May, the fastest pace since December 1981. Core CPI, which excludes food and energy prices, rose 6%, down from 6.2% in April.
  • The U.S. trade deficit fell 19.1% in April as imports fell and exports increased.
  • Stocks and bonds declined as markets prepared for the Federal Reserve to hike interest rates further to control inflation.
Core CPI, which removes the effects of food and energy, decreased slightly from 6.1% to 6% but remained stubbornly high. The primary driver was vehicle prices with used car prices increasing 1.8% since April. Markets responded to the higher inflation read by pricing in more aggressive rate hikes, which hurt both stock and bond indices. The S&P 500 declined 5% for the week, once again testing bear-market territory, falling 17.6% so far this year. At the time of publishing early Monday morning, stocks had extended their losses and were poised to decline more than 20% from their highs. Bonds, as measured by the Bloomberg U.S. Aggregate Bond Index, declined 0.9% to bring their year-to-date total to -8.9%. The U.S. trade deficit fell 19.1% in April. U.S. imports declined sharply, following several months of businesses briskly increasing inventory in the wake of supply-chain disruptions. Meanwhile, exports continued to grow through April, thanks to more food shipments, which jumped sharply, the strong performance of industrial supplies, and capital goods. Still, the trade deficit in April remains large compared to pre-pandemic levels. This continues to reflect the strength of the U.S. economy compared to other major economies, which is a trend economists expect to continue for the foreseeable future. The big event this week will be the Federal Open Market Committee meeting, in which the Fed is expected to increase the federal funds rate by 0.5% for the second meeting in a row. The market will be paying attention to Chair Jerome Powell’s comments on expectations for the July and September meetings. Figure 1 Persistently High Last month, it looked like inflation pressures were starting to subside. Gas prices declined by 6%, food price increases were starting to slow, and vehicle prices had fallen for three straight months. The FOMC set the stage for 0.5% rate increases for June and July, but there was some indication the Fed would pause hikes in September if inflation moderated further. Unfortunately, consumer price increases reaccelerated in May. Headline inflation increased 1%, which brought the yearly number to +8.6%, the highest level since December 1981 (see Figure 1). Energy prices led the way as WTI crude oil increased from around $105 per barrel to $115. Gas and natural gas prices increased right along with it. Overall, energy prices only account for 7% of the weight in the basket but accounted for 25% of the gain. Food prices were another big contributor, increasing 1.2% in May. Grocery store prices generated the most pressure, increasing 1.4% versus a 0.7% increase for eating out. The stubbornness of core CPI, which removes the impact of energy and food, was most disappointing. Automobile prices were main drivers, especially as used cars climbed 1.8% since April. This was the first time used car prices increased since January and is a sign the sector continues to struggle with supply constraints, particularly in microchips. Vehicle inventories are only 17% of the levels they were prior to the COVID-19 pandemic. The main reason for the Fed’s “transitory” thesis last year was members expected supply-chain constraints would ease and consumer behavior would normalize after the pandemic ended. This has occurred to a degree, but not nearly as quickly as experts thought. The war in Ukraine and the COVID shutdown in China have extended the supply chain issues. At the same time, there is some evidence that demand for goods in the U.S. is falling, which caused some prices to fall. The report showed a decline in prices of some goods, such as major appliances (-2% month over month), bedroom furniture (-1.6% month over month), and sporting goods (-0.2% month over month). Also, several major retailers have indicated they have a lot of inventory built up, which will likely lead to price cuts over the summer. But this good news wasn’t nearly enough to offset the large price increases in other parts of the economy. One of the side-effects of elevated inflation is consumer debt is beginning to rise again. During the pandemic and its after-effects, borrowers had begun to pay off debt as they received government stimulus checks and had fewer ways to go out and spend money. At the same time, personal savings reached levels not seen since World War II. Now, with no further stimulus checks and consumers experiencing higher inflation, revolving credit crossed the record high last seen in February 2020, reaching $1.1 trillion. This spending could be a good sign for the economy as consumers seem comfortable adding to their debt but could also be a concerning trend for personal balance sheets, especially if the jobs market reverses course and becomes tighter. This week the market will be paying close attention to the Federal Open Market Committee meeting, in which it’s widely expected that Jerome Powell and the rest of the Federal Reserve governors will approve a 0.5% increase to the federal funds rate. While there shouldn’t be a surprise there, special attention will be paid to any hints at a change from the projected 0.5% increase in July and any comments on expectations for September. The market already responded last week to expectations that rates will increase, but additional clarity from the Fed will be helpful to establish a direction for the market moving forward. It's also important to acknowledge that talk of a recession has picked up recently. The Fed has a difficult job of trying to bring down inflation by raising interest rates just enough without turning economic growth negative. The good news is the economy still appears strong — consumer demand is high, unemployment is low, and the economy has added more than 1 million jobs in the past three months. Stubborn inflation has raised a concern that additional interest rate hikes will pressure markets now and the economy in the future. Last week’s performance reflects those concerns. It also reflects concerns the decline in some speculative investments may trigger short-term selling pressures across markets. Last week’s decline and subsequent weakness in pre-market indicators this week suggest the S&P 500 may decline more than 20% from its previous peak. While some short-term traders may be pushed into selling based on short-term concerns, now is a good time to take advantage of your longer horizon. If you are nervous, check with your advisor and see if this short-term volatility has had any effect on your long-term plan.   - This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. S&P 500 INDEX The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Bloomberg U.S. Aggregate Bond Index The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds. CME Group, CME Fed Watch Tool, June 13, 2022. https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html U.S. Bureau of Labor Statistics, Consumer Price Index Summary, June 10, 2022. https://www.bls.gov/news.release/cpi.nr0.htm BEA, “U.S. International Trade in Goods and Services, April 2022,” June 7, 2022. https://www.bea.gov/news/2022/us-international-trade-goods-and-services-april-2022 CNBC, “Credit card balances spike to $841 billion after stimulus checks helped reduce debt,” June 9, 2022. https://www.cnbc.com/2022/06/09/credit-card-balances-spike-after-stimulus-checks-helped-reduce-debt.html Compliance Case # 01400538 [post_title] => Market Commentary: Inflation Pressures Remain High, S&P Dips Again [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => market-commentary-inflation-pressures-remain-high-sp-dips-again [to_ping] => [pinged] => [post_modified] => 2022-06-21 11:43:38 [post_modified_gmt] => 2022-06-21 16:43:38 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=market-commentary&p=64971 [menu_order] => 0 [post_type] => market-commentary [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 5 [current_post] => -1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 65310 [post_author] => 90034 [post_date] => 2022-07-05 10:04:58 [post_date_gmt] => 2022-07-05 15:04:58 [post_content] => The Personal Consumption Expenditure (PCE) Price Index increased 0.6% in May, after rising only 0.2% in April. PCE inflation is an alternative inflation measure to the Consumer Price Index (CPI), which is released earlier. The two measures both show inflation to be very high, but the CPI indicates prices have risen 8.6% in the last year, while PCE inflation has increased only 6.3%. The biggest difference is the basket of goods that make up each measure. For example, PCE inflation includes a wider range of medical costs, which have not increased as much as energy prices. Energy comprises 7% of the CPI and just 4% of the PCE. The Fed has indicated it favors the PCE measure, modified to exclude food and energy. PCE ex food and energy increased just 0.3% as gasoline prices rose significantly in May. Key Points for the Week
  • Core PCE inflation, which excludes food and energy, rose 0.3%.
  • Personal consumption rose 0.2% as higher spending on services overcame a decline in spending on goods.
  • The S&P 500 fell 20% in the first half of the year — its worst first-half performance since 1970.
One trend likely to help the Fed reduce inflation is increased spending on services. Services spending rose 0.7% while goods spending dropped 0.7% last month. Services account for a larger share of the economy, so the net effect was a 0.2% increase in overall spending. Service inflation has been lower than goods inflation, and decreasing goods spending is likely to reduce price pressures on some items in short supply. The S&P 500 declined 2.2% last week as markets became more concerned about the risks of recession in the coming year. The index of large-cap U.S. stocks fell 20% in the first half of the year. Global stocks matched the S&P 500’s decline. The MSCI ACWI sagged 2.2%. Because the concern was more about recession than inflation, bond prices increased. The Bloomberg Aggregate Bond Index added 0.4% last week and posted its second week of gains. The Department of Labor’s update on the U.S. employment situation leads the list of economic releases this week. Figure 1 Figure 2 Five Reasons to Expect a Better Second Half This year’s Fourth of July celebrations weren’t for the first-half market performance. The S&P 500, including dividends, declined 20% in the first six months of the year. The fall represented the worst first-half market performance since 1970. Emotionally, this market has taken its toll through a decline that started the second day of the year and accelerated in the second quarter. High inflation has been the biggest challenge, and every time we get gas, buy groceries, or check the market we are reminded of it. The propensity in down markets is to expect current trends to continue. In difficult markets, it is also easier to focus on known negative factors that have proven to be challenging. Yet, as we enter the second half of the year, there are strong reasons to expect improvement. Here are five forces we believe will make the second half of the year more attractive than the first.
  • Much of the bad news is already reflected in market prices.
The first half of 2022 contained a lot of bad news for markets, and prices fell in response. Inflation continued to increase, COVID shutdowns slowed the repair of supply lines, and Russia invaded Ukraine. In response to high inflation, the Federal Reserve pivoted and raised interest rates three times, once by 0.5% and once 0.75%. Europe reacted to Russia’s invasion of Ukraine by drastically reducing its purchases of Russian oil, contributing to slower economic growth and higher inflation. While those events had negative consequences, remember the market has already reacted to the news. With the S&P 500 20% lower than at the start of the year, it’s hard to argue that markets have ignored what has occurred.
  • Inflation seems to be moderating.
The Fed’s favorite measure of inflation increased 0.3% for the fourth consecutive month. But the Personal Consumption Expenditures Price Deflator (PCE) ex Food and Energy has moderated in recent months. From October to January, core PCE increased approximately 0.5% per month. An increase of 0.3% is still too high. Multiplying it by 12 creates a simplified annual inflation rate of around 3.6%, which is well above the Fed’s target of 2%. But our view is the steps the Fed is taking are starting to work, and additional hikes will contribute to slower price increases in coming months.
  • Political uncertainty is ebbing lower.
In the presidential election cycle, the second year of the administration is statistically the most challenging. Domestic political uncertainty has made this year even more so. House and Senate majorities are very narrow, and both houses of Congress could switch parties in November. The Supreme Court has been full of surprises, and the Jan. 6 commission has added to the mix. By the fourth quarter, and possibly even the third, polling data will provide some clarification on how midterm elections will turn out. The high inflation has also undercut any desire for a major spending initiative. Because the last support package seemed to feed inflation, avoiding high government spending should help reduce inflationary pressure.
  • Much of the economy remains strong.
While the current bear market is the 11th since 1950, it is only the fourth to occur outside of a recession. Non-recessionary bear markets are usually shallower, averaging a 28% decline, compared to an average 39% decline for recessionary bear markets (Figure 2). This week, the government will release the Job Opening and Labor Turnover Survey (JOLTS) for May and the Employment Situation report for June. The ideal result is decent job creation while companies choose to pull back open positions to reduce the excess demand for labor.
  • The system works.
Hopefully, as investors lit off fireworks celebrating our country's founding 246 years ago, they appreciated the resiliency of the American system. Investors who focus only on the short-term swings in inflation, political winds, and Fed policy should take note of the longer-term success of this republic and how people and equity markets have prospered. Even with two bear markets, inflation and a global pandemic, the S&P 500 is up double digits over the last 10 years. The key is to find the right balance. This has been a tough year, and we will continue to monitor a wide range of near-term risks and how they affect markets. Because many of those risks are already reflected, at least partially, in current prices, the more impactful data points may be those showing how a system with a long record of success is recovering. - This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. S&P 500 INDEX The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Bloomberg U.S. Aggregate Bond Index The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds. Bureau of Economic Analysis. 6/30/22.https://www.bea.gov/news/2022/personal-income-and-outlays-may-2022 Bureau of Labor Statistics 06/10/22 https://www.bls.gov/news.release/cpi.t01.htm Federal Reserve https://www.federalreserve.gov/monetarypolicy/openmarket.htm Compliance Case # 01420404 [post_title] => Market Commentary: Moderating Inflation, Ebbing Political Uncertainty Among Reasons for Hope in the Face of a Tough Market [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => market-commentary-moderating-inflation-ebbing-political-uncertainty-among-reasons-for-hope-in-the-face-of-a-tough-market [to_ping] => [pinged] => [post_modified] => 2022-07-05 12:50:58 [post_modified_gmt] => 2022-07-05 17:50:58 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=market-commentary&p=65037 [menu_order] => 0 [post_type] => market-commentary [post_mime_type] => [comment_count] => 0 [filter] => raw ) [comment_count] => 0 [current_comment] => -1 [found_posts] => 114 [max_num_pages] => 23 [max_num_comment_pages] => 0 [is_single] => [is_preview] => [is_page] => [is_archive] => [is_date] => [is_year] => [is_month] => [is_day] => [is_time] => [is_author] => [is_category] => [is_tag] => [is_tax] => [is_search] => [is_feed] => [is_comment_feed] => [is_trackback] => [is_home] => 1 [is_privacy_policy] => [is_404] => [is_embed] => [is_paged] => [is_admin] => [is_attachment] => [is_singular] => [is_robots] => [is_favicon] => [is_posts_page] => [is_post_type_archive] => [query_vars_hash:WP_Query:private] => a903a142677fece24840fa13db0e14fd [query_vars_changed:WP_Query:private] => [thumbnails_cached] => [stopwords:WP_Query:private] => [compat_fields:WP_Query:private] => Array ( [0] => query_vars_hash [1] => query_vars_changed ) [compat_methods:WP_Query:private] => Array ( [0] => init_query_flags [1] => parse_tax_query ) [tribe_is_event] => [tribe_is_multi_posttype] => [tribe_is_event_category] => [tribe_is_event_venue] => [tribe_is_event_organizer] => [tribe_is_event_query] => [tribe_is_past] => )

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                    [post_content] => By Erin Wood, Senior Vice President, Financial Planning and Advanced Solutions

Just a few years ago, Rose retired with a decent-sized 401(k). With some careful budgeting and a part-time job, her retirement finances were on track. Rose was looking forward to traveling, reigniting her passion for photography and spending time with her son and her grandkids.

The pandemic changed everything. Her son contracted COVID-19 in the early days of the pandemic. His health deteriorated quickly and he died at only 35 years old. He didn’t have life insurance. A gig worker without a 401(k), he had very minimal retirement savings.

Rose’s grandchildren, ages 2 and 6, joined the more than 140,000 U.S. children under the age of 18 who lost their primary or secondary caregiver due to the pandemic from April 2020 through June 2021. That’s approximately one out of every 450 children under age 18 in the United States.

Rose’s ex-daughter-in-law battles drug addiction and had lost custody of the kids during the divorce, so Rose became the children’s primary caregiver. She quickly discovered that caring for young children as an older adult is more physically challenging than when she raised her son, so she made the difficult decision to leave her part-time job to have the energy to care for her active grandchildren. She wants to do everything for these kids who have lost so much — but it puts her financial security at risk.

Sadly, she is far from alone.

Read the full article
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                    [post_content] => By: Erin Wood, CFP®, CRPC®, FBS®, Senior Vice President, Financial Planning, Carson Group

 

Laura and Caroline are in their late 50s. Friends since meeting at a playgroup for their toddlers, both were in long-term, seemingly happy marriages. Laura married her high school sweetheart right after they graduated from college and worked as an RN while her husband attended medical school. When their first child was born, Laura decided to become a stay-at-home parent. She just celebrated sending her last child off to college and was looking forward to enjoying an empty nest with her husband.

Already established in her career as an accountant for a large insurance firm, Caroline married a bit later, at 33. Today, she’s a financial controller for the same firm. Her spouse owns his own landscaping business. Caroline is the high-wage earner in the family.

Unfortunately, both women are now surprised to be facing a “gray” divorce: a divorce involving couples in their 50s or older. Each will need to make some tough choices as they deal with the emotional devastation of unraveling a long-term marriage. Although my focus as a financial planner is to help my clients find their financial footing during and after divorce, I also encourage clients to build a strong network of family and friends as well as a therapist or clergy person to offer critical emotional support during this time.

Read full article on Kiplinger.com

[post_title] => Emerging Financially Healthy After a Gray Divorce [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => emerging-financially-healthy-after-a-gray-divorce [to_ping] => [pinged] => [post_modified] => 2022-03-25 14:07:37 [post_modified_gmt] => 2022-03-25 19:07:37 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=news&p=64886 [menu_order] => 0 [post_type] => news [post_mime_type] => [comment_count] => 0 [filter] => raw ) [2] => WP_Post Object ( [ID] => 53316 [post_author] => 55227 [post_date] => 2020-01-28 10:38:21 [post_date_gmt] => 2020-01-28 16:38:21 [post_content] => By Jamie Hopkins

Roth conversions can be a powerful tax and retirement planning technique. The idea behind most Roth conversions is to take money from an IRA and convert it to a Roth IRA. Essentially, you’re paying taxes today instead of paying taxes in the future.

The Tax Cut and Jobs Act lowered taxes for many Americans and with the SECURE Act Roth IRAs became even more powerful as an estate planning vehicle to minimize taxes, so it’s a convenient time to take advantage of Roth conversions. However, Roth conversions can come with some issues. Before you engage in one, be aware of these common problems as it can be hard to undo the transaction.

Conversions After 72

IRAs and Roth IRAs are both retirement accounts. It’s easy to assume Roth Conversions are best suited for retirement, too. However, waiting too long to do conversions can actually make the entire process more challenging. If you own an IRA, it’s subject to required minimum distribution rules once you turn 72, as long as you had not already reached age 70.5 by the end of 2019. The government wants you to start withdrawing money from your IRA each year and pay taxes on the tax-deferred money. However, Roth IRAs aren’t subject to RMDs at age 72. If you don’t need the money from your RMD to support your retirement spending, you might think, “I should convert this to a Roth IRA so it can stay in a tax-deferred account longer.” Unfortunately, that won’t work. You can’t roll over or convert RMDs for a given year. So, if you owe a RMD in 2020, you need to take it and you cannot convert it to a Roth IRA. Despite the fact you can’t convert an RMD, it doesn’t mean you can’t do Roth conversions after age 72. However, you need to make sure you get your RMD out before you do a conversion. Your first distributions from an IRA after 72 will be treated as RMD money first. This means, if you want to convert $10,000 from your IRA, but you also owe an $8,000 RMD for the year, you need to take the full $8,000 out before you do a conversion. Full article on Forbes   [post_title] => 3 Roth Conversion Traps To Avoid After The SECURE Act [post_excerpt] => Roth conversions can be a powerful tax and retirement planning technique. The idea behind most Roth conversions is to take money from an IRA and convert it to a Roth IRA. Essentially, you’re paying taxes today instead of paying taxes in the future. [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => 3-roth-conversion-traps-to-avoid [to_ping] => [pinged] => [post_modified] => 2020-02-28 16:01:10 [post_modified_gmt] => 2020-02-28 22:01:10 [post_content_filtered] => [post_parent] => 0 [guid] => https://divi-partner-template.carsonwealth.com/?post_type=news&p=53316 [menu_order] => 0 [post_type] => news [post_mime_type] => [comment_count] => 0 [filter] => raw ) [3] => WP_Post Object ( [ID] => 51325 [post_author] => 6008 [post_date] => 2019-12-06 10:26:33 [post_date_gmt] => 2019-12-06 16:26:33 [post_content] => By Jamie Hopkins People plan on having a good day, a good year, a good retirement and a good life. But why stop there? Why not plan for a good end of life, too? End of life or estate planning is about getting plans in place to manage risks at the end of your life and beyond. And while it might be uncomfortable to discuss or plan for the end, everyone knows that no one will live forever. Estate planning and end of life planning are about taking control of your situation. Death and long-term care later in life might be hard to fathom right now, but we can’t put off planning out of fear of the unknown or because it’s unpleasant. Sometimes it takes a significant event like a health scare to shake us from our procrastination. Don’t wait for life to happen to you, though. Full article on Kiplinger [post_title] => 10 Common Estate Planning Mistakes (and How to Avoid Them) [post_excerpt] => Estate planning and end of life planning are about taking control of your situation. Death and long-term care later in life might be hard to fathom right now, but we can’t put off planning out of fear of the unknown or because it’s unpleasant. Don’t wait for life to happen to you, though. [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => 10-common-estate-planning-mistakes-and-how-to-avoid-them [to_ping] => [pinged] => [post_modified] => 2020-02-28 16:02:24 [post_modified_gmt] => 2020-02-28 22:02:24 [post_content_filtered] => [post_parent] => 0 [guid] => https://divi-partner-template.carsonwealth.com/?post_type=news&p=51325 [menu_order] => 0 [post_type] => news [post_mime_type] => [comment_count] => 0 [filter] => raw ) [4] => WP_Post Object ( [ID] => 63648 [post_author] => 273 [post_date] => 2019-11-11 16:27:38 [post_date_gmt] => 2019-11-11 21:27:38 [post_content] => By Jamie Hopkins

Everyone’s heard the stories of celebrities who died without a proper estate plan in place. It’s been a hot topic in the last few years with Prince and Aretha Franklin serving as unfortunate faces of the phenomenon. But it’s not just freewheeling entertainers. Abraham Lincoln – a lawyer by trade – didn’t have one either, which leads me to say something you’ve probably never heard anyone say: don’t be like Abraham Lincoln.

Most people want to plan for a good life and a good retirement, so why not plan for a good end of life, too? Let’s look at four ways you can refine your estate plan, protect your assets and create a level of control and certainty for your loved ones.

1. Review Beneficiary Designations

Many accounts can pass to heirs and loved ones without having to go through the sometimes costly and time-consuming process of probate. For instance, life insurance contracts, 401(k)s and IRAs can be transferred through beneficiary designations – meaning you determine who you want to inherit your accounts after you die by filing out a beneficiary form. You can often name successors or backup beneficiaries, and even split up accounts by dollar amount or percentages between beneficiaries with these forms. Full article on Forbes [post_title] => 4 Ways To Improve Your Estate Plan [post_excerpt] => Most people want to plan for a good life and a good retirement, so why not plan for a good end of life, too? Let’s look at four ways you can refine your estate plan, protect your assets and create a level of control and certainty for your loved ones. [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => 4-ways-to-improve-your-estate-plan [to_ping] => [pinged] => [post_modified] => 2020-02-28 17:02:59 [post_modified_gmt] => 2020-02-28 22:02:59 [post_content_filtered] => [post_parent] => 0 [guid] => https://flpfinancial1.carsonwealth.com/insights/news/4-ways-to-improve-your-estate-plan/ [menu_order] => 0 [post_type] => news [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 5 [current_post] => -1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 65129 [post_author] => 90034 [post_date] => 2022-05-26 08:18:44 [post_date_gmt] => 2022-05-26 13:18:44 [post_content] => By Erin Wood, Senior Vice President, Financial Planning and Advanced Solutions Just a few years ago, Rose retired with a decent-sized 401(k). With some careful budgeting and a part-time job, her retirement finances were on track. Rose was looking forward to traveling, reigniting her passion for photography and spending time with her son and her grandkids. The pandemic changed everything. Her son contracted COVID-19 in the early days of the pandemic. His health deteriorated quickly and he died at only 35 years old. He didn’t have life insurance. A gig worker without a 401(k), he had very minimal retirement savings. Rose’s grandchildren, ages 2 and 6, joined the more than 140,000 U.S. children under the age of 18 who lost their primary or secondary caregiver due to the pandemic from April 2020 through June 2021. That’s approximately one out of every 450 children under age 18 in the United States. Rose’s ex-daughter-in-law battles drug addiction and had lost custody of the kids during the divorce, so Rose became the children’s primary caregiver. She quickly discovered that caring for young children as an older adult is more physically challenging than when she raised her son, so she made the difficult decision to leave her part-time job to have the energy to care for her active grandchildren. She wants to do everything for these kids who have lost so much — but it puts her financial security at risk. Sadly, she is far from alone. Read the full article [post_title] => COVID’s Financial Toll Isn’t What You Think [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => covids-financial-toll-isnt-what-you-think [to_ping] => [pinged] => [post_modified] => 2022-05-26 08:28:28 [post_modified_gmt] => 2022-05-26 13:28:28 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=news&p=64940 [menu_order] => 0 [post_type] => news [post_mime_type] => [comment_count] => 0 [filter] => raw ) [comment_count] => 0 [current_comment] => -1 [found_posts] => 6 [max_num_pages] => 2 [max_num_comment_pages] => 0 [is_single] => [is_preview] => [is_page] => [is_archive] => [is_date] => [is_year] => [is_month] => [is_day] => [is_time] => [is_author] => [is_category] => [is_tag] => [is_tax] => [is_search] => [is_feed] => [is_comment_feed] => [is_trackback] => [is_home] => 1 [is_privacy_policy] => [is_404] => [is_embed] => [is_paged] => [is_admin] => [is_attachment] => [is_singular] => [is_robots] => [is_favicon] => [is_posts_page] => [is_post_type_archive] => [query_vars_hash:WP_Query:private] => 8bbea74eca9b0e937ac286f0d22d32a8 [query_vars_changed:WP_Query:private] => [thumbnails_cached] => [stopwords:WP_Query:private] => [compat_fields:WP_Query:private] => Array ( [0] => query_vars_hash [1] => query_vars_changed ) [compat_methods:WP_Query:private] => Array ( [0] => init_query_flags [1] => parse_tax_query ) [tribe_is_event] => [tribe_is_multi_posttype] => [tribe_is_event_category] => [tribe_is_event_venue] => [tribe_is_event_organizer] => [tribe_is_event_query] => [tribe_is_past] => )

In the News

In the News

COVID’s Financial Toll Isn’t What You Think

By Erin Wood, Senior Vice President, Financial Planning and Advanced Solutions Just a few years ago, Rose retired with a decent-sized 401(k). With some careful budgeting and a part-time job, her retirement finances were on track. Rose was looking forward to traveling, reigniting her passion …
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