Everyone has an estate plan; however, it comes down to whether you want it personalized to your wishes or not. You see, if you have not done the work ahead of time to organize and plan, your resident State has a plan for how they handle the distribution of your assets once you pass. That means that regardless of how you feel about it, your estate will go through probate (which could take months), making your estate public, and ultimately be decided by people who don’t know you or your family’s needs.

Effective estate planning involves creating a will(s) and/or trust, designating executors, trustees (in the case of a trust) and beneficiaries. Typically, it includes planning your possible incapacitation, which includes documents for your healthcare and financial decisions. This not only provides peace of mind for you and your loved ones, but also ensures that your financial and personal affairs are handled in a manner that reflects your values and intentions. Proper estate planning can prevent legal disputes, protect your heirs, and facilitate a smoother transition of your assets, ultimately preserving your legacy and providing for the future of your loved ones. 

Currently, if your estate is less than $13.61 million in assets, you may not need to worry about federal estate tax. This amount is good through the end of 2025 when the 2017 Tax Cuts and Jobs Act (TCJA) expires. However, beneficiaries may have to pay Income tax and capital gains tax depending on the  assets they inherit. This could become a substantial financial burden to your loved ones. Remember spouses inherit estates completely estate tax free. Children and other people or entities do not. Often times it is the second death that causes the problems concerning taxation. Proper estate planning should include proactively organizing your estate in a way that reduces the tax burden placed on your heirs. Luckily there are strategies to help you remove some of that tax burden.

One strategy is to create an irrevocable trust, which may help alleviate some tax burden because it transfers the ownership from the original owner to the trust. Because those assets no longer belong to the person who set up the trust, they may not be subject to inclusion in an estate when that person passes away. Another benefit to using a trust is it removes the probate process from the dispersal of your assets and keeps your estate private.

Another option is to make small, non-taxable gifts to your heirs during your lifetime. The IRS allows you to gift up to $18,000 per person without filing a gift tax return. By giving your loved ones the maximum gift each year, you reduce the size of your estate, thereby lowering its taxability.

When the TCJA expires at the end of 2025 if it is not renewed by congress and the president, the estate tax exemption could revert to about half its current level. It’s also important to know your state laws pertaining to estate taxation, because several states have lower estate tax thresholds than the federal government’s. When in doubt it is always wise to seek the advice and counsel of an estate planning attorney to help you settle your estate in a way that is best for you and your family.

Photo by Dan Meyers

We’ve been hearing about unemployment on the news a lot lately, especially leading up to the Fed’s meeting back in August. The Fed expressed concern about the unemployment rate, stating that was part of the data they took into consideration when deciding to lower interest rates.

The official unemployment rate we hear about on the news is called U-3 measure. While this is the data broadcast most often, it unfortunately does not give a complete picture of the unemployment situation because it only accounts for unemployed people actively searching for jobs within a 4-week window.

The unemployment rate in the US fell from 4.3% to 4.2%, representing 7.1 million people looking for work, which means, in theory, fewer people were unemployed. However, this does not include Discouraged Workers. These are adults who have looked for jobs at some point in the last 12 months but are not within the four-week period. Often, they have given up looking for a job (possibly temporarily). Ignoring these people makes it seem like there are fewer unemployed people.

Another issue with the U-3 unemployment measure is it does not take into consideration the quality of jobs that workers are accepting, nor does it distinguish if they are working part-time or temporary jobs.

The Real Unemployment Rate (U-6 measure) uses the data from the U-3 measure as well as four other measures of unemployment accounting for people outside the four-week window. Using this data will give a much better understanding of the actual unemployment situation in our country.

In spite of an unstable economy and uncertainty going forward, the last few years have shown that Americans are resilient spenders. Last year, according to the National Retail Federation (NRF), consumers spent over 12 billion dollars on Halloween purchases. It seems even fear of a recession isn’t enough to spook Halloween enthusiasts.

For many adults, Halloween is a highly anticipated holiday marked by parties, trick-or-treaters, and the opportunity to escape the real world and immerse themselves in a socially acceptable world of make-believe. There’s a whole slew of people ticking off the days until Fall, eagerly awaiting the release of seasonal and holiday decorations and goodies.

However, lately those autumn enthusiasts haven’t had to wait until September and October.

Retailers have been bringing out the Halloween merchandise earlier each year. For some retailers, like Michaels, 2024 marks the earliest release of Halloween yet stocking their shelves in late June with their spooky collections. This is quite a jump from a few years ago when the earliest they would bring out cauldrons and skeletons was August.

Similarly, Halloween online sales pretty much started during the last week of September, but according to trend forecasting service Granularity, peak online sales have been inching back a week each year Since 2019.

Most retailers state their reason for bringing out the creepy commodities earlier is to boost sales during what is normally a slow sales period. On most polls, Halloween ranks in the top three favorite holidays in America. Retailers are jumping at the chance that most buyers won’t be able to pass up purchasing for their favorite holiday, regardless of the time of year. 2024 is the second year in which Home Depot hosted their “Halfway to Halloween” event on April 25 at which they sold limited quantities of Halloween items. Home Depot isn’t the only one, Lowe’s and Target also released Halloween items online earlier than previous years, jumping on the “Summerween” bandwagon in which spooks and summer BBQs share shelf space.

The marketing ploy seems to be working. The $12.2 billion spent last Halloween was a record high, surpassing the $10.6 billion spent in 2022. When we break the numbers down it comes out to an average of $108.24 spent per person. The majority of that was spent on costumes, followed by Halloween décor, proving there’s way more to Halloween than just trick-or-treating.

Halloween isn’t the only holiday bringing in the big bucks. Halloween may be one of the favorite holidays to celebrate, but when it comes to spending it only ranks in the upper top ten. Last year Americans spent an estimated $886 billion on Christmas purchases, $24 billion on Easter, and $23 billion on Valentine’s Day. All this goes to show that even during times of uncertainty people still want to celebrate and enjoy the holidays.

It might not seem like it, what with all the sunshine and hot summer temps, but 4th quarter is nearly upon us. Now is the perfect time to start thinking about…your taxes. There, I said it. I know no one likes to think about taxes, and while it may seem a bit early to worry about taxes, the end of the year will be here before you know it, and it’s never really too early to review, organize, and plan for filing your taxes.

End-of-year tax planning is a practice that involves making financial decisions aimed at optimizing tax efficiency, reducing liabilities, and taking advantage of available deductions and credits. Effective tax planning not only ensures compliance with tax laws but also allows individuals and businesses to retain more of their hard-earned income, reinvest in growth, or save for future endeavors.

While preparing for the current tax year, it is a good idea to review your previous year’s tax return and make note of any changes that have occurred since the last time that you filed. i.e. did you move, retire, change jobs, get married/divorced, or did your tax bracket change? Highlight any of those changes and find any paperwork associated with them.

Each time you file you are eligible for standard deductions and certain tax credits. If your tax bracket has changed, so may have some of your credits and deductions.

Remember that tax deductions help to reduce your taxable income, which means you will have a lower tax bill. You do not want to miss out on any that are available to you. Check your for eligibility for retirement contributions, educational expenses, medical bills, property taxes, mortgage interest, charitable donations, etc. Make sure you have the needed paperwork to prove you qualify for each one; this will protect you in the event of getting audited.

You might need to consider maximizing contributions to retirement accounts such as IRAs or 401(k)s, which can lower taxable income and provide long-term savings benefits. Similarly, businesses may accelerate deductible expenses or defer income to reduce taxable income for the current year.

Timing is also crucial in end-of-year tax planning. By strategically timing income and expenses, you or your business can smooth out their tax liabilities over multiple years, thereby optimizing their overall tax burden. This may involve deferring income into the following year or accelerating deductible expenses into the current year to maximize tax savings.

Don’t wait until the end of the year, or worse April 15th, to figure out what you can or could have qualified for. It’s like the old saying, “if you snooze, you lose.” Once we cross December 31, there’s no going back to claim things you might have been able to claim. When you plan ahead and keep your paperwork organized throughout the year, it will help you better manage your tax burden. If you stay on top of it, you will be able and ready to take advantage of all the available tax credits and deductions.

If you have felt frustrated with the exorbitant cost of groceries, you’re not alone. People all over the country are getting fed up and frustrated with the ongoing rise in food prices. Inflation may have slowed its pace, but that doesn’t mean consumers aren’t still feeling the sting of sky-high food prices. According to the Bureau of Labor Statistics, The Consumer Price Index for All Urban Consumers (CPI-U) increased 3.0% over the last 12 months to an index level of 314.175 (1982-84=100).

Overall, food prices have risen 26% since the beginning of 2020. Since 2019, according to Bloomberg, the average cost of a fast-food meal has surged 47%. The Labor Department reported back in May that dining out will cost you almost 30% more than back in 2019. As of May, the cost of eggs had been on the rise with triple-digit year-over-year increases throughout 2022 and 2023. Lately, U.S. consumers spend more than 11% of their disposable income on food. This is higher than it’s been in thirty years.

Back in May it looked as if food prices might be on the decline, but after finally dipping, grocery prices rose by 0.2% from May to June, igniting frustration in consumers. The latest CPI report shows food prices are up 0.24% from June 2024 and 2.23% higher than they were 12 months ago. When compared to overall prices in 2023 there was a 5.7% increase.

Historically, food price spikes have been linked to social unrest and political instability, especially in the more economically vulnerable regions. While we’re not seeing people taking to the streets (at least not yet) people are taking to their social media platforms. Social media has been splattered with shocked consumers comparing their grocery bill from 4 years ago to today’s outrageous prices. Since February of 2020 consumer prices have increased over 20%. That’s quite a bit above the historic average for a four-year period. According to Yahoo finance, a basket of groceries that cost $100 in November 2020 would not cost $125.80, an increase of nearly $26 dollars for the exact same food items.

The rising cost isn’t the only sting. Adding salt to the wound is what’s now called “shrink-flation.” This is where companies charge the same price (or more) for a smaller amount of product. So that basket of food that increased $26 dollars may have the same products, but many of them are smaller than they were back in 2020, increasing the gouge consumers are feeling.

While we have seen some individual food items like some fruits and vegetables come down, the overall cost of groceries hasn’t really decreased, at least not enough to make a difference in people’s budgets. We are seeing a glimmer of light, however, as wages are slowly catching up and inflation begins to ebb. (As reported by the BLS, From June 2023 to June 2024, wages have increased 5.1%).

So, what can you do? One of the best ways to combat food inflation is the old fashion practice of growing your own garden. You could also find reliable local sources. Visiting your community farmer’s market is a great way to invest in farm fresh produce, preserves, salsa, soaps, lotions, and other products. Not only do local farms provide higher quality and better tasting foods they usually offer products that are less likely to contain harmful chemicals. Supporting your local farmers and makers is also another great way to support your local economy.

Photo 1 by: Stevepb

Photo 2 by: Bruno Kelzer

Owner’s Equivalent Rent (OER) is an economic indicator used to measure the cost of renting a home compared to owning it. It represents the amount a homeowner would pay to rent their home. This tool is used by economists and policymakers to calculate the cost of housing in inflation indices like the Consumer Price Index (CPI). OER is determined by comparing the costs of owning a home (including mortgage payments, property taxes, maintenance costs, etc.) to the rental value of similar properties in the housing market.

OWR is used because it reflects changes in housing costs that affect homeowners and renters alike, providing a comprehensive measure of housing cost inflation. Changes in OER can affect the CPI, and through a domino effect, monetary policy decisions, which impact overall inflation and cost of living calculations.

In order to create a secure retirement plan, a little flexibility is needed. Often people think a retirement plan needs to be strict and rigid, which they can be, however, developing a flexible plan allows you to live comfortably and securely without the unnecessary     restrictions.

Using annuities can be a great way to create a flexible retirement plan. Using careful consideration of your financial goals, risk tolerance, and your personal retirement timeline, you can develop a retirement plan that meets your needs and gives you the freedom to enjoy your post-working years.

An annuity is a financial product offered by insurance companies that provides regular payments over a specific period of time.

The first step is to assess your retirement needs and goals. This means estimating your retirement expenses and   determining your expected retirement age and the length of time you’ll need income. You’ll also need to evaluate how much risk you’re willing to take. (This can help determine which type of annuity will work best for you).

Annuities offer flexibility through their different options. There are Immediate or Deferred annuities, Fixed or   Variable annuities, and Indexed annuities. Each provides unique options allowing you to choose something that aligns with your retirement goals and risk tolerance.

Annuities also offer additional features and riders that allow you to support the flexible and secure retirement you’re planning for. They offer options like Guaranteed Minimum Income Benefit which provides a minimum income amount regardless of market performance, Long-Term Care  Riders which allow you to use annuit funds to cover long-term care expenses if needed, and Death Benefit Riders which guarantees that your beneficiary receives a certain minimum amount if you pass away before receiving all annuity payments.

An annuity can be part of a diversified retirement strategy that includes other investments like stocks, bonds, and savings accounts. This diversity helps you manage your risk and optimize returns over time giving you better flexibility and security.

Remember, flexibility does not mean unstable. Instead, it can provide more stability, giving you options. Using  multiple annuities in succession can give you this desired workability along with a reliable income.

A new epidemic is spreading across our country, fueled by inflation, credit cards, and “buy now pay later” options for almost all online purchases. This seemingly  invisible epidemic is spreading at an alarming rate. Have you guessed it? Consumer debt.

Our country is racked with debt. So far, in 2024, the average personal debt increased from $21,800 to $22,713. About 13% of that comes from auto loans, but over 28% comes from credit card debt. Only about 23% of American’s are debt free, and about 65% of American’s say they are living paycheck to paycheck, an increase from last year which was about 58% of Americans. It’s becoming more important than ever to pay off debt and stay out of debt.

When tackling your debt you need to have a plan. There are many strategies for paying down debt; one of the more popular methods is the avalanche method. With this strategy, you focus on paying off the debt with the highest interest rate first, while making minimum payments on all other debts. Unlike the snowball method, which focuses on paying off the smallest debt first and working your way up through your debt with increased payments, the avalanche method aims to minimize the overall interest you pay overtime, resulting in significant savings over the long term while simultaneously paying down your debts. Like the snowball method, once you pay off a debt, that payment is then applied to the next debt in line.

For an example: if you have three debts- a credit card balance with a 15% interest rate, an auto loan with a 6% interest rate, and a personal loan with a 4% interest rate, you would prioritize the credit card debt first and aggressively pay it down first. Once paid off, you would move on to the auto loan, then the personal loan, following the order of the interest rates.

A downside with the avalanche method is it can take more time to see results, especially if your highest interest rate debt is substantial. This can be  discouraging. If you are the type of person that needs to see immediate results to stay motivated, it may be more advantageous to use the snowball method or some other method of paying down debt.

The avalanche method provides a way to organize and prioritize debts while saving you money in the long run. It can empower individuals to take control of their finances. However you choose to manage and eliminate your debt, the critical thing is to start and do. Take the time to go over your budget, list all your debts, and decide what method will work best for you and your situation. Overcoming debt will help your own personal economy flourish, which will then help   bolster your own community, helping bit by bit to overcome the debt epidemic.