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Buckingham Strategic Partnershttps://buckinghamstrategicpartners.comTue, 10 Jan 2023 22:59:34 +0000en-US hourly 1https://wordpress.org/?v=6.1.1https://buckinghamstrategicpartners.com/wp-content/uploads/2022/04/BSP_Logo_Color_Icon-Only.pngBuckingham Strategic Partnershttps://buckinghamstrategicpartners.com3232Buckingham Weekly Perspectives | Three Key Changes in the SECURE Act 2.0https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-three-key-changes-in-the-secure-act-2-0/

Wed, 11 Jan 2023 00:00:36 +0000

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=22265

In late 2022, Congress passed the much-anticipated SECURE Act 2.0. In this edition of Buckingham Weekly Perspectives, Chief Planning Officer Jeffrey Levine shares three of the most important components of this bill and how it may impact you for years to come.

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In late 2022, Congress passed the much-anticipated SECURE Act 2.0. In this edition of Buckingham Weekly Perspectives, Chief Planning Officer Jeffrey Levine shares three of the most important components of this bill and how it may impact you for years to come.

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Buckingham Weekly Perspectives | Three Ways to Lower Your 2022 Tax Liabilityhttps://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-three-ways-to-lower-your-2022-tax-liability/

Wed, 04 Jan 2023 16:49:43 +0000

https://buckinghamstrategicpartners.com/?p=22033

Advisor and client working on taxes

Even though 2022 is in the rear view mirror, you can still act now to lower last year’s tax liability. During this edition of Buckingham Weekly Perspectives, Chief Planning Officer Jeffrey Levine shares three strategies you can implement now to save money on last year’s returns.

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Advisor and client working on taxes

Even though 2022 is in the rear view mirror, you can still act now to lower last year’s tax liability. During this edition of Buckingham Weekly Perspectives, Chief Planning Officer Jeffrey Levine shares three strategies you can implement now to save money on last year’s returns.

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Ring in the New Year with a Fresh Look at Your Financial Planhttps://buckinghamstrategicpartners.com/perspectives/ring-in-the-new-year-with-a-fresh-look-at-your-financial-plan/

Mon, 02 Jan 2023 19:46:42 +0000

 

 

 

https://buckinghamstrategicpartners.com/?p=22021

Woman working at deskJanuary is not only a perfect time to implement your personal and professional resolutions – it’s also a great reminder to review your financial goals, plans and strategies. Decades of data have proven that successful financial outcomes are more likely to happen because of purposeful and thoughtful planning. As we start 2023, I recommend my […]]]>

 

Woman working at desk

January is not only a perfect time to implement your personal and professional resolutions – it’s also a great reminder to review your financial goals, plans and strategies. Decades of data have proven that successful financial outcomes are more likely to happen because of purposeful and thoughtful planning. As we start 2023, I recommend my clients reflect on their personal situation over the past year and consider how changes may impact their current plans.

I’ve compiled a checklist to get your year off to a fiscally fit start:

1. Get Organized

At the start of the year, it is helpful to have a full picture of what your anticipated overall income streams and cash requirements are going to be for the year. Plan for larger expenditures, especially if you will be withdrawing from your pool of investments to pay for them. You don’t want any needed funds at risk in the stock market; with advanced notice, you may reduce any associated tax liabilities as well. Make sure you have a good account of all current assets and liabilities; it’s essential to know what dollars you have available to you.

2. Identify Changes in Your Goals

Each year can be filled with surprises in your personal situation that may change your long-term goals and current objectives. Without a clear end goal in mind, you won’t know whether you’re saving too much or too little to meet short- and longer-term objectives such as funding education, buying a home or retiring. It’s important to reevaluate your goals annually as with life events such as marriage, the birth of a child, divorce, a new business venture or death of a loved one.

3. Adjust Your Plan Accordingly

When I work with my clients, my foremost concern is ensuring they aren’t at risk of running out of money during their lifetime. To do this, we build a plan based on the context of their current needs, wants and wishes. By starting with your goals in mind, you can revise a savings plan, update a portfolio allocation strategy, calculate a realistic retirement date and more.

While planning is vital for a healthy financial life, it’s equally important to make sure you aren’t suppressing your lifestyle too much along the way to retirement. Life is meant to be enjoyed! While we focus a lot on non-working years, you want to have fun during your working years as well. With proper preparation, you can strike that balance between planning for the future and living in the now. Or as I like to call it, giving yourself “permission to spend.”

4. Develop and Maintain a Budget

Regardless of your economic position, it’s essential to know where your dollars are going. This is often the single most difficult form of homework for clients. Your budget and your plan are only as good as the assumptions being used. If you are looking for a starting point, there are some great online options such as Mint and You Need a Budget. If technology isn’t your thing, you can also utilize a basic budget template like the one provided here.

Once you know what your goals, spending needs and available monthly dollars are, it’s time to determine if you are falling short or have an overage. To account for all of your money, I suggest assigning every dollar to a spend, save or give bucket.

5. Maximize Your Savings

To ensure you are maximizing your money, work with your advisor to review popular savings opportunities, such as:

6. Protect Your Wealth

Have any changes over the last year impacted how your dollars are protected? With proper planning you can safeguard your wealth from creditors, fraudsters or an unforeseen life event. Keep these items in mind as you consider the plan you have in place.

Rarely does one’s plan withstand the test of time. Life inevitably changes, almost as quickly as tax and estate laws. Plans should be created, implemented and monitored for changes; a good financial advisor can help hold you accountable, provide proactive advice and be your best advocate.

About the author: Erica Bouchard, CFP®
As a respected, resourceful problem solver and an enthusiastic collaborator, Erica delivers comprehensive long-term plans to her clients, all while accounting for complex dynamics and their ever-changing needs. She invests her time and energy in rigorous continuing education and is committed to bringing skill, insight and confidence to Buckingham client relationships.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party information which may become outdated or otherwise superseded without notice. Third-party information is deemed reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed adequacy of this article. By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements, or representations whatsoever by us regarding third-party websites. We are not responsible for the content, availability, or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products, or services available on or through them. R-22-4846

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Buckingham Weekly Perspectives | Three Tax Tips for 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-three-tax-tips-for-2022/

Wed, 28 Dec 2022 14:53:06 +0000

https://buckinghamstrategicpartners.com/?p=22017

men working on a tablet

While the year may almost be over, what you do NOW may still impact your finances in 2023. In this episode of Buckingham Weekly Perspectives, Chief Planning Officer Jeffrey Levine shares three tips you can utilize immediately to lower your 2022 tax liability.

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men working on a tablet

While the year may almost be over, what you do NOW may still impact your finances in 2023. In this episode of Buckingham Weekly Perspectives, Chief Planning Officer Jeffrey Levine shares three tips you can utilize immediately to lower your 2022 tax liability.

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Buckingham Weekly Perspectives | 2022 Stock Market Year-in-Review and 2023 Outlookhttps://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-2022-stock-market-year-in-review-and-2023-outlook/

Wed, 21 Dec 2022 14:45:55 +0000

https://buckinghamstrategicpartners.com/?p=22011

Man working on a tablet

From a return perspective, 2022 has been a challenging year for the stock market. In this edition of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan shares the highs and lows over the last year and his outlook for 2023.

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Man working on a tablet

From a return perspective, 2022 has been a challenging year for the stock market. In this edition of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan shares the highs and lows over the last year and his outlook for 2023.

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Buckingham Connects Webcast: December 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-connects-webcast-december-2022/

Tue, 20 Dec 2022 14:42:31 +0000

https://buckinghamstrategicpartners.com/?p=22008

Buckingham connects webcast banner

In our final webcast of the year, Managing Director of Investment Strategy Kevin Grogan shared his perspective on the recent market optimism. He attributed the change to markets becoming more hopeful that the Federal Reserve will be able to bring inflation under control without causing a recession. He also answered clients’ most pressing questions about investing, including the differences between mutual funds and exchange-traded funds (ETFs) and an explainer on why diversification is still a winning strategy.

On the planning side, Chief Planning Officer Jeffrey Levine gave a rundown of his year-end checklist as we look toward tax season. Some notable to-dos include reviewing Roth conversions, tax-loss harvesting opportunities and estimated tax payments and withholdings. He also fielded questions from clients about tapping into home equity, the impact of midterm elections on financial plans and the upsides and downsides of annuities.

President Wendy Hartman ended with a positive note for 2023. She reminded clients that Buckingham’s team of advisors strive to bring clarity and education for any event – be it a personal development or pending legislation – that may change their financial plan. And Kevin reminded clients that whether a recession happens or not in the year ahead, it’s important to keep in mind that the markets have already priced in this risk. Find out more on what he expects for the bond market next year in his year-in-review video.

R-22-4891

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Buckingham connects webcast banner

In our final webcast of the year, Managing Director of Investment Strategy Kevin Grogan shared his perspective on the recent market optimism. He attributed the change to markets becoming more hopeful that the Federal Reserve will be able to bring inflation under control without causing a recession. He also answered clients’ most pressing questions about investing, including the differences between mutual funds and exchange-traded funds (ETFs) and an explainer on why diversification is still a winning strategy.

On the planning side, Chief Planning Officer Jeffrey Levine gave a rundown of his year-end checklist as we look toward tax season. Some notable to-dos include reviewing Roth conversions, tax-loss harvesting opportunities and estimated tax payments and withholdings. He also fielded questions from clients about tapping into home equity, the impact of midterm elections on financial plans and the upsides and downsides of annuities.

President Wendy Hartman ended with a positive note for 2023. She reminded clients that Buckingham’s team of advisors strive to bring clarity and education for any event – be it a personal development or pending legislation – that may change their financial plan. And Kevin reminded clients that whether a recession happens or not in the year ahead, it’s important to keep in mind that the markets have already priced in this risk. Find out more on what he expects for the bond market next year in his year-in-review video.

R-22-4891

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How to Share Your Values with Legacy Lettershttps://buckinghamstrategicpartners.com/perspectives/how-to-share-your-values-with-legacy-letters/

Mon, 19 Dec 2022 14:37:18 +0000

https://buckinghamstrategicpartners.com/?p=22005

Grandparents playing with kids outsideIn wealth planning, it’s important to consider not just tangible assets but also the impact you hope to make on your community and family. This is often called one’s legacy, and a big component of that is intangible assets: your values and life lessons that can be passed down to future generations. As families and […]]]>

 

Grandparents playing with kids outside

In wealth planning, it’s important to consider not just tangible assets but also the impact you hope to make on your community and family. This is often called one’s legacy, and a big component of that is intangible assets: your values and life lessons that can be passed down to future generations.

As families and friends gather for the holidays, it’s a good time to reflect on your values and the principles that guide your life and financial decisions. One way to articulate these is to put pen to paper and create a legacy letter. This exercise is a chance to express your gratitude, share wisdom or make amends. It can also be a meaningful gift to your loved ones and yourself.

Why are legacy letters important?

Legacy letters communicate our love, values, beliefs, life lessons and wishes for future generations. These types of letters have been around for over 3,500 years. They originated with the Jewish faith and became popular in the Renaissance period but faded from use in the 1800s. Recently, they’ve re-emerged as a popular way for people of all faiths to share their life story. Several technology services have been developed to help people draft their stories on their own or with professional help.

A legacy letter offers a level of authenticity and truth that enables our loved ones to embrace our story and live and grow from it. It becomes a living document. A survey by Oxford University found that 81% of U.S. respondents want their heirs to have this intangible wealth.

When do I write a legacy letter?

You may be inspired to write, or update, a letter at milestones such as births, graduations, marriages, religious events or holidays. At three of my grandchildren’s baptisms, their parents and godparents wrote letters to the baby. Recently, at the oldest grandchild’s confirmation celebration, the letters were opened and read. For his eighth-grade graduation, his mother gave him a book that included written notes from all his teachers since pre-school. All of these would be considered legacy letters since they discuss wishes and values.

How do I write a legacy letter?

A legacy letter can take many forms — written, video, audio. Written is typically the best option since it will not rely on future technology to replay a recorded version. Nevertheless, I highly recommend you make the decision based on which format you are most comfortable in expressing your thoughts.

How long should my legacy letter be?

Making sure you know what you want to say and how you want to say it is more important than the length. Rather than focusing on word count, make sure the letter reflects your voice and answers questions your family would like to know. Often, that can be achieved in only a few pages, or you may feel compelled to write more. However, it does not need to be the length of an autobiography or memoir.

What should I include in my legacy letter?

Some questions you might want to consider when you sit down to write:

Is there anything I should not include in a legacy letter?

It’s important to understand that a legacy letter is not a legal document. Therefore, it is likely not appropriate to explain all the legal details of your wealth transfer plans. That’s what your estate documents and living trust are created for. However, you may choose to add greater context to your wealth plan so that your family understands what factors motivated your choices. Try to keep the tone positive and to share your story constructively.

What resources exist on writing a legacy letter?

Here are a few good book recommendations I share with my clients:

Your advisor’s role in legacy planning

Wishing you the best of luck on your writing journey; I hope that it helps you plan with a purpose. If you are looking for additional resources, your advisor can help to discuss how to define your goals and values and, of course, translate those into your wealth planning decisions.

R-22-4833

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Buckingham Weekly Perspectives | Direct Indexinghttps://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-direct-indexing/

Wed, 14 Dec 2022 19:51:04 +0000

 

 

 

 

https://buckinghamstrategicpartners.com/?p=21687

Woman on a laptop

While most of us are familiar with mutual funds or ETFs, direct indexing may be another option when investing in the world’s stock markets. Chief Investment Officer Jared Kizer shares specific situations where this lesser known broad diversification strategy may be beneficial.

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Woman on a laptop

While most of us are familiar with mutual funds or ETFs, direct indexing may be another option when investing in the world’s stock markets. Chief Investment Officer Jared Kizer shares specific situations where this lesser known broad diversification strategy may be beneficial.

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Buckingham’s Leadership Team’s Book Recommendationhttps://buckinghamstrategicpartners.com/perspectives/buckinghams-leadership-teams-book-recommendation/

Wed, 14 Dec 2022 19:46:33 +0000

 

 

 

 

 

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=21684

Holiday Book IdeasThis holiday season, if you are looking for a book recommendation for your favorite bibliophile, yourself, a family member, friend or colleague, Buckingham’s Leadership Team is spreading the cheer by sharing a few of their recommended reads. “My father shared a copy of one of Larry Swedroe’s books at the beginning of my career, and […]]]>

 

Holiday Book Ideas

This holiday season, if you are looking for a book recommendation for your favorite bibliophile, yourself, a family member, friend or colleague, Buckingham’s Leadership Team is spreading the cheer by sharing a few of their recommended reads.


Successful and Secure Retirement
“My father shared a copy of one of Larry Swedroe’s books at the beginning of my career, and it forever changed my path in life. My hope is that his book on retirement will inspire you as well.” – Adam Birenbaum, CEO Buckingham Wealth Partners

Preparing for retirement is more than putting money into a 401(k). Written by Buckingham’s own Larry E. Swedroe and Kevin Grogan, “Your Complete Guide to a Successful and Secure Retirement,” breaks down every important aspect you need to think about as you approach retirement. They dive into often overlooked issues that may affect your golden years such as Medicare, Social Security, elder financial abuse, challenges faced by women in retirement, heir preparation and more.


One Decade to Make Millions
“Whether it’s fitness or finance, instilling healthy habits at a young age is a gift of a lifetime! As a parent, I want to install values in my children around money and finance. This book is a great gift, a way to leave behind a legacy and to teach empowerment of impactful decision making.” – Wendy Hartman, President, Buckingham Strategic Wealth

When you decide to start investing is just as important as the amount you invest. In “One Decade to Make Millions: A Strategy to Maximize the Power of Your Twenties,” author, speaker and Buckingham Strategic Wealth advisor Jeff C. Johnson shares why it’s so important to start investing in your future earlier rather than later. Even if an investor doesn’t have a high-paying job or an advanced degree, with proper saving and spending habits they can set themselves up to retire with a comfortable nest egg.


Decisive: Make Better Life Choices
“This book has not only provided me with practical steps to become a more effective leader, but it has also helped me positively resolve personal decisions logically and effectively.” – Jeffrey Levine, Chief Planning Officer, Buckingham Wealth Partners

Whether it’s due to emotions, preconceptions or ill logic, as humans we have all struggled with making a decision at some point in our lives. In “Decisive: How to Make Better Choices in Life and Work,” authors Chip and Dan Heath introduce readers to an evidence-based four-step process to make better decisions in both their personal and professional lives. Their powerful, practical and effective strategies and tools can help readers get on the path to leading a happier, more productive life, no magic eight ball required.


Retirement the Right Way
“I love Clint Haynes’ positive viewpoint and advice on making the most out of retirement.” – Alex Potts, President, Buckingham Strategic Partners

There are two types of people in the world – those that dream of saying farewell to their 9-to-5 lives and those who dread not having the daily routine that comes with being in the workforce. No matter which side of the fence someone is on, retirement can be scary. In “Retirement the Right Way: How to Retire with Pleasure, Purpose and Peace of Mind,” independent Buckingham Strategic Partners advisor Clint Haynes explores the bigger picture of retirement, including finding a balanced perspective, reimagining life, learning to mind your money and more.


The Founders
“I love how ‘The Founders’ brings the reader into the ground floor of the two Silicon Valley startups that would eventually merge to form PayPal. The book is filled with lessons on entrepreneurship and provides insights into the personalities that are still making headlines today.” – Kevin Grogan, Managing Director of Investment Strategy, Buckingham Strategic Wealth

For many, PayPal is a convenient, cashless option to pay for online purchases. But did you know many of the creators and original employees of this controversial startup went on to become an integral part of some of the world’s most famous companies? They landed at Facebook, Tesla, YouTube and SpaceX, to name a few. In “The Founders: The Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley,” author Jimmy Soni shares the triumphs, trials and innovations of this groundbreaking company and how it has forever changed the way we live.


Entitlement Now
“‘Enlightenment Now’ offers a refreshing viewpoint to our modern world. In our work at Buckingham, we often counsel our clients away from the daily fads, new hot trends and shiny pennies. Instead, we use science and data to educate and inform solid financial plans that are designed to stand the test of time. This book is filled with long-term perspectives (and many examples) that result in wisdom that will serve you well throughout life. I hope you enjoy this book as much as I did.” – Justin Ferri, President, Buckingham Wealth Partners

Despite constant news of gloom and doom, research shows people around the world are living longer, happier and healthier lives. In Steven Pinker’s “Enlightenment Now: The Case for Reason, Science, Humanism, and Progress,” he dispels the recency bias we are all susceptible to and replaces it with a refreshing perspective based on reason and science. The author illustrates through dozens of data rich graphs how our lives are being enriched through the gift of enlightenment despite the obstacles we face daily.


Little Brother
“Ben Westhoff’s joy and heartache as a mentor in the Big Brothers Big Sisters program, along with his exploration of the two vastly different world’s he and Jorell inhabited, made this the hardest book for me to put down this year.” – Jeff Remming, Buckingham Strategic Wealth Chief Transformation Officer

St. Louis transplant Ben Westhoff was a 20-something college graduate from an affluent family. When he was paired up with eight-year-old Jorell Cleveland through the Big Brothers Big Sisters program, they quickly became inseparable. They weren’t just mentor and mentee – they were brothers. Tragedy struck in 2016 when Jorell was murdered in the middle of the street at close range. In “Little Brother: Love, Tragedy, and My Search for the Truth,” Westhoff shares his personal story of heartache, the realities of impoverished communities and the truth about the man he considered family.

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Buckingham Weekly Perspectives | The Collapse of the FTX Cryptocurrency Exchangehttps://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-the-collapse-of-the-ftx-cryptocurrency-exchange/

Wed, 14 Dec 2022 19:41:16 +0000

 

 

 

 

https://buckinghamstrategicpartners.com/?p=21682

Man working on a tablet

Billions of dollars of wealth were lost during the recent collapse of the FTX Cryptocurrency Exchange. Why did this happen? In this episode of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer shares three lessons learned from the failure of this speculative investment strategy.

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Man working on a tablet

Billions of dollars of wealth were lost during the recent collapse of the FTX Cryptocurrency Exchange. Why did this happen? In this episode of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer shares three lessons learned from the failure of this speculative investment strategy.

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Buckingham Weekly Perspectives | U.S. Stock Markethttps://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-u-s-stock-market/

Wed, 23 Nov 2022 08:01:09 +0000

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17669

With U.S. stocks down around 20% year-to-date, 2022 has been a challenging year for the markets. What can we expect as we ring in 2023? In this episode of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan shares valuable insights on the performance of U.S. stocks, FANMAG stocks and the importance of diversification.

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With U.S. stocks down around 20% year-to-date, 2022 has been a challenging year for the markets. What can we expect as we ring in 2023? In this episode of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan shares valuable insights on the performance of U.S. stocks, FANMAG stocks and the importance of diversification.

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Inherited an IRA? Here’s Why Planning Distributions Early Mattershttps://buckinghamstrategicpartners.com/perspectives/inherited-an-ira-heres-why-planning-distributions-early-matters/

Mon, 21 Nov 2022 14:58:10 +0000

 

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17687

Tax-Planning-NotebookIf you’ve inherited an IRA recently, here’s what you need to know about planning distributions and keeping up with changing tax rules.]]>

 

Tax-Planning-Notebook

Those who have inherited an IRA since 2020 may be finding it a challenge to keep up with evolving account distribution requirements and IRS messaging. Distribution rules the IRS proposed earlier this year only added to the confusion. Below are some common questions that should be considered when planning for required minimum distributions (RMDs) and other withdrawals from an inherited IRA in 2023 and beyond.

Is it possible to spread IRA account distributions out over your lifetime?

Before 2020, when someone other than a spouse inherited an IRA, the beneficiary could spread the distributions and accompanying taxes out over their lifetime, which was often several decades or more. This was commonly referred to as a Stretch IRA. For most non-spouse beneficiaries, excluding eligible designated beneficiaries, the ability to stretch out distributions over time was eliminated with the passing of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which went into effect in 2020.

Because of the SECURE Act, most non-spouse beneficiaries who inherited a retirement account in 2020 or after became subject to the 10-year rule. This rule requires all funds to be distributed by the end of the 10th year following the death of the IRA owner.

Does the 10-year rule require annual IRA distributions or only by the end of the 10th year?

When the SECURE Act passed, it did not specify whether annual distributions would be needed within the 10-year period. So, most tax professionals assumed that a beneficiary could wait to withdraw all funds in the 10th year.

However, in February 2022, the IRS issued proposed regulations that said beneficiaries subject to the 10-year rule would also need to take annual RMDs if the deceased IRA owner had died on or after their required beginning date, which is April 1 of the year after the deceased IRA owner turned 72. That meant affected beneficiaries should have taken RMDs in 2021 and would need to again in 2022. Those beneficiaries who did not risked being subject to a 50% penalty on the funds that should have been distributed.

The proposed regulations caused confusion and concern for taxpayers, so the IRS issued Notice 2022-53 in October, which stated that all beneficiaries subject to the 10-year rule are exempt from taking RMDs for 2021 and 2022.

Will the IRS ultimately require annual IRA distributions for those subject to the 10-year rule?

The IRS notice in October did not address whether RMDs would be required in 2023 and beyond. The silence could be an indication that the IRS intends to follow the interpretation it laid out in its proposed regulations and require annual minimum distributions on inherited IRAs after 2022. Or the IRS could be planning to reverse course and eliminate annual RMDs altogether for beneficiaries of the 10-year rule. Ultimately, we’ll just have to wait and see.

Does it make sense to take voluntary distributions from an inherited IRA?

Even if you are not required to take an annual distribution from your account, if you are a beneficiary subject to the 10-year rule, you may want to consider taking a voluntary distribution. Spreading distributions out as much as possible during the 10-year window can help reduce the chance that larger distributions in future years create a bigger tax bill. This can happen if a large distribution in one year pushes the beneficiary into a higher tax bracket. It might also lead to the beneficiary being phased out of critical deductions or credits.

How might voluntary IRA distributions save on taxes in the long run?

Let’s consider a married couple filing jointly who has taxable income of $300,000. For 2022, this places them in the 24% tax bracket, based on tax-year 2023 IRS inflation adjustments. They can earn an additional $40,100 of taxable income, for a total taxable income of $340,100, before worrying about being bumped into the 32% tax bracket. It would take an additional $131,900 of taxable income, for a total taxable income of $431,900, before they would find themselves in the 35% tax bracket.

Now, let’s assume one of them inherited an IRA with assets worth $200,000, and each year the account, their income and the tax bracket inflation adjustments remain constant. It would take roughly five years for the couple to deplete the account without being pushed into the next tax bracket. If they begin withdrawals immediately, they could take out $20,000 annually over the 10-year period. After that, they could be forced to take larger sums that would increase their bracket. The below chart illustrates how this would look.

In Scenario 1, the couple takes $20,000 from the IRA each year, while in Scenario 2, the couple takes all funds in the account in the 10th year. The result is that the couple in Scenario 2 pays roughly $15,000 more in total taxes because their income moved them into the 35% tax bracket in year 10.

The long-term advantages of planning IRA distributions

Although the above comparison is only hypothetical, as many uncontrollable factors will influence income, investments and tax brackets over time, it serves to demonstrate how proper planning helps prepare for the associated tax implications. If someone waits too long to take any distributions, they may be forced to take large sums just before the 10-year window closes, resulting in adverse tax consequences.

To minimize the impact of income taxes on your inheritance, the timing of your distributions should be coordinated with other anticipated income, deductions and credits as well as other tax attributes. The good news is that this is something your advisor can help with.

 

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party information and may become outdated or otherwise superseded without notice. Third-party information is deemed reliable, but its accuracy and completeness cannot be guaranteed. Individuals should speak with a qualified tax and financial professional based on their own circumstances to determine if the above scenarios are applicable. R-22-4732

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Buckingham Weekly Perspectives | Recent Market Newshttps://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-recent-market-news/

Wed, 16 Nov 2022 09:00:01 +0000

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17679

From the Federal Reserve’s rate hike to the mid-term elections, early November has been very busy! In this episode of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan shares the latest financial news, how it affects the markets and how it may impact your portfolio.

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From the Federal Reserve’s rate hike to the mid-term elections, early November has been very busy! In this episode of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan shares the latest financial news, how it affects the markets and how it may impact your portfolio.

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The Great Retirement Debatehttps://buckinghamstrategicpartners.com/perspectives/the-great-retirement-debate/

Thu, 10 Nov 2022 08:01:24 +0000

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17661

In his latest venture, Jeff Levine has teamed up with financial heavyweight Ed Slott of Ed Slott and Company to launch a brand new, consumer-friendly podcast, The Great Retirement Debate. In each episode, Jeff and Ed will go head-to-head knocking out critical topics in the retirement landscape. Through a coin flip, they take opposing sides […]]]>

 

In his latest venture, Jeff Levine has teamed up with financial heavyweight Ed Slott of Ed Slott and Company to launch a brand new, consumer-friendly podcast, The Great Retirement Debate. In each episode, Jeff and Ed will go head-to-head knocking out critical topics in the retirement landscape. Through a coin flip, they take opposing sides to provide you with the good, bad and necessary information to make informed decisions about your retirement. Everyone’s a winner with this podcast!

Learn more at www.greatretirementdebate.com.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party data which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party websites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article. The opinions expressed by featured authors are their own and may not accurately reflect those of Buckingham Strategic Partners®. R-22-4488

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Buckingham Weekly Perspectives | Maintaining International Diversificationhttps://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-maintaining-international-diversification/

Wed, 09 Nov 2022 15:06:21 +0000

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17647

The U.S. has been the best performing stock market in the world over the recent decade. With that in mind, is it wise to maintain international diversification in your portfolio? In this edition of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer shares three reasons why it’s important to diversify your stock allocation outside of domestic companies.

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The U.S. has been the best performing stock market in the world over the recent decade. With that in mind, is it wise to maintain international diversification in your portfolio? In this edition of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer shares three reasons why it’s important to diversify your stock allocation outside of domestic companies.

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Top 10 Things to Do Before 2022 is Overhttps://buckinghamstrategicpartners.com/perspectives/top-10-things-to-do-before-2022-is-over/

Mon, 07 Nov 2022 15:03:45 +0000

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17640

The holidays usher in a joyful time of family gatherings, holiday parties, fun with friends and the promise of a bright new year. But before you put a bow on 2022, there are a few financial housekeeping tasks that you should review. From my experience with clients, I have compiled a top ten list of […]]]>

 

The holidays usher in a joyful time of family gatherings, holiday parties, fun with friends and the promise of a bright new year. But before you put a bow on 2022, there are a few financial housekeeping tasks that you should review. From my experience with clients, I have compiled a top ten list of considerations to make your festivities a little greener. But hurry, you need to take advantage of these money-saving opportunities before the ball drops on Dec. 31.

Now let the countdown begin!

10. Maximize your 529 contributions
The gift of learning is always in style! When you contribute funds to a 529 educational account, you not only provide your favorite student with lifelong knowledge, but many states will also award your generosity with tax deductions or credits. Couples can give up to the gift tax exclusion of $32,000 per beneficiary without needing to file a gift tax return, but states vary in how much of a contribution will result in a tax benefit.

9. Consider a year-end charitable gift
The season of giving is a great time to make monetary donations to a favorite medical organization, deserving animal shelter or struggling soup kitchen. Besides feeling good, when you make a qualified charitable distribution (QCD) from your IRA, your required minimum distribution (RMD) is fulfilled up to $100,000 for that year. Please note that while the RMD age is 72, you can make a QCD at age 70½. QCDs can be even more valuable than gifting directly to a charity and then taking a deduction, since the income never hits your tax return at all.

8. Explore tax-loss harvesting
Even a down market has a silver lining when it allows you to take advantage of potential tax savings. Tax-loss harvesting is when you sell a fund that is at a loss and then immediately purchase a similar fund. This way, you aren’t out of the market if it turns around. When you implement tax-loss harvesting strategies, losses may fully offset any capital gains income or up to $3,000 per year of ordinary income for any amount not used by capital gains. Losses must be generated before Dec. 31 to be part of your 2022 filing.

7. Review your allocations
While you can’t control volatility in the market, you can help safeguard your portfolio by reviewing your asset allocation to make sure your investments are still allocated the right way to meet your goals. By doing this – especially after big swings in the market – you can ring in the new year knowing that your goals are on track.

6. Use your FSA funds
Because contributions made to a flexible spending account (FSA) are tax-free, they are a great option to pay for certain out-of-pocket health care costs, such as deductibles, over-the-counter medication and even everyday necessities such as contact solution and hand sanitizer. While some employers allow individuals to roll over $570 annually, for the most part these funds must be used before the clock strikes midnight on Dec. 31, or you will lose that hard-earned money. Confused about which expenses are covered through an FSA account? Check out this handy guide.

5. Contribute to non-deductible IRA/convert to Roth IRA
Converting funds to Roth mean you will never pay taxes on those retirement dollars again. Also known as a “back-door” Roth, this approach may be useful for a non-working spouse, or a spouse who has all of their retirement savings within a 401(k), particularly for individuals or couples who make too much to contribute to a Roth IRA directly. You can fund an IRA without getting a tax deduction, and then convert the whole amount to a Roth IRA. One thing to note is that if you have other pre-tax IRA balances, this strategy often does not make sense since some or most of the conversion would then be taxable. Late last year, the tax law changes proposed eliminating this strategy. While that particular bill didn’t pass, it could very well happen immediately upon approval in a future bill.

4. Review any other Roth conversions
This consideration is particularly important in early retirement (pre-RMDs/Social Security) or if income is lower than normal for a year (e.g., one spouse took time off from work). Roth conversions allow you to pay taxes at lower rates while your guaranteed income is lower. Roth funds are funds you will never pay taxes on again. Tax rates are set to go up in 2026, if Congress does not act, since the Tax Cuts and Jobs Act will be sunsetting.

3. Prepare to resume student loan payments
The federal student loan payment pause that was first initiated in 2020 will end at the end of the year. With payments rapidly approaching, it’s important to contact your student loan servicer and make sure your payments will be made. It also makes sense to look into income-based options to repaying this debt. If you are considering refinancing your student loans in forbearance, ensure that you are taking the best course of action by watching Chief Planning Officer Jeffrey Levine’s deep dive into President Biden’s Federal student debt forgiveness program.

2. Maximize 401(k) contributions
Maxing out your 401(k) contribution is a win-win situation. Not only are you proactively building a comfortable nest egg for retirement, but this strategy will also save you money during tax season. Each individual can contribute $20,500 for the year. If you are 50 or older, or if you are turning 50 by Dec. 31, you can invest an additional $6,500 for a total of $27,000 annually.

Cue the drum roll please! The most important money saving action you should implement before the end of the year is…

1. Take your RMD
When it comes to tax savings, I cannot emphasize enough how important it is to take your RMD from your IRA, 401(k), inherited IRAs or other retirement account before Dec. 31. By not doing so, you would incur a 50% penalty tax on the undistributed amount in addition to the regular taxes owed on the distribution.

By implementing some or all of these considerations by the end of 2022, you may save thousands of dollars in taxes. To fully take advantage of these tax-saving strategies, consult with your financial advisor.

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Buckingham Weekly Perspectives | Capital Market Assumptions for Planninghttps://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-capital-market-assumptions-for-planning/

Wed, 02 Nov 2022 08:00:26 +0000

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17625

capital market assumptions

As Buckingham advisors help clients plan for retirement, they have to make assumptions about expected returns on stocks and bonds. In this edition of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan shares how we use capital market assumptions in our overall planning process, the means in which we come up with these expectations and the difference between bond and stock valuations.

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capital market assumptions

As Buckingham advisors help clients plan for retirement, they have to make assumptions about expected returns on stocks and bonds. In this edition of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan shares how we use capital market assumptions in our overall planning process, the means in which we come up with these expectations and the difference between bond and stock valuations.

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Buckingham Weekly Perspectives | Private Credit Marketshttps://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-private-credit-markets/

Wed, 26 Oct 2022 08:00:23 +0000

 

 

 

https://buckinghamstrategicpartners.com/?p=17615

Private credit has been used for decades in traditional banking channels, but since the financial crisis it has been gaining momentum in capital markets. In this episode of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer explains what private credit is and how it may benefit you.

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Private credit has been used for decades in traditional banking channels, but since the financial crisis it has been gaining momentum in capital markets. In this episode of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer explains what private credit is and how it may benefit you.

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Buckingham Weekly Perspectives | Inflation: How Did We Get Here?https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-inflation-how-did-we-get-here/

Wed, 19 Oct 2022 15:33:27 +0000

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17607

Last week, the U.S. Bureau of Labor Statistics released September’s inflation data. The results were less than encouraging. How did we wind up with inflation running over 8% for an extended stretch? On this episode of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan shares the causes of high inflation and how world events have shaped our current economy.

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Last week, the U.S. Bureau of Labor Statistics released September’s inflation data. The results were less than encouraging. How did we wind up with inflation running over 8% for an extended stretch? On this episode of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan shares the causes of high inflation and how world events have shaped our current economy.

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How To Navigate Your Student Debt Relief Optionshttps://buckinghamstrategicpartners.com/perspectives/how-to-navigate-your-student-debt-relief-options/

Tue, 18 Oct 2022 16:25:57 +0000

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17605

There are three major parts to Biden’s plan to help those dealing with student loan debt. Over the past 12 months, the Department of Education under the Biden-Harris administration has championed a metric ton of program revisions and policy changes to the federal student loan system. The most recent Student Loan Debt Relief Plan, announced […]]]>

 

There are three major parts to Biden’s plan to help those dealing with student loan debt.

Over the past 12 months, the Department of Education under the Biden-Harris administration has championed a metric ton of program revisions and policy changes to the federal student loan system. The most recent Student Loan Debt Relief Plan, announced on Aug. 24, expands the October 2021 announcement of the Public Service Loan Forgiveness (PSLF) waiver and Income-Driven Repayment (IDR) Plan Reform publicized in April of this year.

The recent policy changes finally acknowledge that student loan debt is a systemic, structural problem. And despite the seemingly endless supply of opinions and rhetoric, the buzz about student loans has served as a catalyst for conversations around destigmatizing debt. These developments could be the first steps toward addressing the problems deeply embedded in today’s postsecondary education system (read: painfully high tuition costs. We’ll leave that can of worms for another article).

That said, fiduciary financial planners can (and should) only provide best-interest recommendations based on facts and current law, rather than speculate about unknowns. In the spirit of practicing that principle, here are the facts of the Student Loan Debt Relief Plan, a timeline of important dates and action items, as well as answers to the most common questions sent to our Education Planning Resource team at Buckingham Strategic Wealth.

Part 1: Final Extension of the Payment Pause

The Biden-Harris administration extended the federal student loan payment, interest and default pause for a final time, through Dec. 31, 2022. The extension will occur automatically. The additional months will continue to count nonpayment toward PSLF and maximum repayment terms under IDR plans. Regular payments will resume in January 2023.

Part 2: One-Time Student Loan Debt Relief

Borrowers are eligible for one-time student loan debt relief if their 2021 or 2020 adjusted gross income (AGI) was below $125,000 (individual or married, filing separately) or $250,000 (married, filing jointly or head of household). During a recent White House briefing, senior administration officials confirmed that borrowers would qualify for relief if their income met the criteria in either 2021 or 2020.

According to the Department of Education’s website, borrowers will receive the following amounts of relief if their AGI is below the income threshold:

Direct Loan (including Parent PLUS), Perkins, Defaulted, and Federal Family Education Loan (FFEL) Program loans held by the Department of Education or in default at a guaranty agency with an outstanding balance as of June 30, 2022, are eligible for relief. If the outstanding loan balance is less than the maximum amount of debt relief a borrower is eligible for, the borrower will receive relief only up to the loan balance.

Relief will be awarded federal income tax-free potential for state income tax liability, depending on the state. Eligibility for debt relief is based on each borrower’s situation.

Part 3: The Creation of a New IDR Plan

The Biden-Harris administration also proposed creating a new IDR plan that substantially reduces future monthly payments for low- and middle-income borrowers.

The plan would:

The Department of Education had initially proposed a new IDR plan that excluded graduate student loan borrowers. Since then, it appears that officials have softened on a total exclusion of graduate student loan borrowers. Instead, borrowers with both undergraduate and graduate loans will pay a weighted average rate.

While the details of the proposed new IDR plan look promising for many borrowers, the Department of Education has not yet released formal regulations governing the program, and many questions remain unanswered.

How will the new Student Loan Debt Relief plan benefit me?

The final extension of the federal student loan payment, interest and default pause benefits all borrowers with Direct Student Loans. The additional four months of nonpayment mean extra cash in borrowers’ budgets and a bit more time to create a plan once required payments start again in January.

Borrowers with federal student loans have two options to dispose of their loans. Borrowers can pursue loan forgiveness through the PSLF (or a similar program), or they can pursue forgiveness after paying the maximum IDR plan terms or by paying the loan off in full. (There are also some exceptions, such as borrower death or permanent disability.)

Borrowers often struggle choosing between taxable forgiveness through an IDR plan or paying down their entire loan balance. If applicable, PSLF should be considered the top choice. If not, borrowers whose total federal loan balance is less than their current annual income should consider paying their loans in full with a standard 10-year repayment plan. Borrowers whose total federal loan balance is higher than their annual income should consider taxable forgiveness through an IDR plan.

For borrowers who plan to pay down their loans in full or have made payments to pay off their loans since March 2020, one-time forgiveness will be beneficial, because it will decrease the overall balance of their total federal student loan debt. The Biden-Harris administration encourages borrowers to apply by Nov. 15 if they want relief by Dec. 31, 2022.

Borrowers with undergraduate loans aiming for IDR plan forgiveness should benefit from the initial information regarding the new IDR plan. If eligible, IDR plan borrowers should still apply for one-time forgiveness because it may slightly lower their tax bill in the year of forgiveness since their overall loan balance will likely be smaller.

How do I know what type of loan and repayment plan I have? How can I check if I received a Pell Grant?

Qualification for nearly all changes to student loan debt repayment plans, cancellation, forgiveness and relief depends on the loan program type.

To confirm your loan program type and/or repayment plan, use your FSA ID to sign into your account at Studentaid.gov. Click on the “My Aid” tab and download your .txt document report. To verify if you were a Pell Grant recipient, click on the “Grants” tab. If you received a Pell Grant, take a screenshot, or print out the document confirming that fact for your records.

I have multiple loans and/or multiple loan program types. How will the government apply my relief if I qualify?

For borrowers with multiple loans, the Department of Education announced it will apply relief in the following order:

If you have multiple loans in a program type (e.g., multiple Direct Loans), the Department of Education will apply the relief in the following order:

I have made payments toward my loans since March 2020 or even paid off my loans during the pandemic. How can I request a refund for my payments?

According to the Federal Student Aid Data Center, approximately 9.1 million borrowers made at least one payment between April 2020 and March 2022. This includes about 1.9 million borrowers who paid off their accounts entirely.

All borrowers can request a refund for any payment (including auto-debit payments) made during the payment pause (beginning March 13, 2020) on qualifying loans. This gives borrowers the ability to claim back money they spent paying student loans during the pandemic. Borrowers must request a refund before applying for debt relief.

Borrowers pursuing PSLF with confirmed employment certification and payment count should strongly consider requesting a refund to allocate funds toward other financial goals or future payments. Requesting a refund will not affect their payment count.

Individuals who made voluntary payments and paid off their loans entirely or paid their balances down to an amount lower than what they believe will be forgiven should consider asking for a refund. Any amount refunded above their relief amount will still need to be paid off in the future.

For borrowers who still have a loan balance, it is not clear whether refunds will be automatically included in the relief amount or if they must request a refund. A refund must be requested for borrowers who paid off their balance. All eligible borrowers are encouraged to call and request the appropriate amount to be refunded to ensure it is received.

Important Upcoming Deadlines and Updates

Early October 2022 – Student loan debt relief application to be released

Actions to take:

Oct. 31, 2022 – Deadline to submit the PSLF waiver and consolidate FFEL loans for qualification

Actions to take:

Dec. 31, 2022 – End of student loan moratorium

Actions to take:

Jan. 1, 2023 – One-time payment count revision for eligible IDR borrowers

Actions to take:

What exactly does the future of student loans look like in an ever-changing policy environment? Although it’s difficult to predict, there are steps both current and future borrowers can take to remain financially engaged and informed based on what we know today.

In a recent New York Times article, Travis Hornsby, founder of the Student Loan Planner, credited access to sound advice and having a plan with a clear path forward as two major factors to student loan repayment success. By becoming more aware of their own financial goals and student loan repayment strategy, borrowers can position themselves to navigate whatever lies ahead.

About the author: Becca Craig

Buckingham Strategic Wealth Associate Wealth Advisor Becca Craig, CFP®, CSLP®, ABA, has a passion for financial education. Championing the role of both financial advocate and advisor, she enjoys making money work for her clients—not against them—so they can focus on the people, endeavors, and causes they care about most. Becca’s specialty in student loan repayment planning provides her clients with a holistic financial framework in which they can build their net worth while simultaneously deploying strategies geared toward full repayment or forgiveness.

This commentary originally appeared October 7 on thestreet.com.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal or tax advice. Certain information is based upon third party data which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Individuals should speak with their qualified financial professional about their unique circumstances to determine if the above is applicable. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article. The opinions expressed by featured authors are their own and may not accurately reflect those of Buckingham Strategic Partners® R-22-4425.

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Should You File for Social Security Early to Capture the Inflation Adjustment?https://buckinghamstrategicpartners.com/perspectives/should-you-file-for-social-security-early-to-capture-the-inflation-adjustment/

Mon, 17 Oct 2022 14:30:53 +0000

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17601

Social Security benefits will go up 8.7% in 2023, the largest adjustment in four decades. Here’s why you don’t need to rush to file to benefit from the increase. With all the talk about inflation these days, you may have heard the news that the 2023 cost-of-living adjustment (COLA) for Social Security benefits is 8.7%, […]]]>

 

Social Security benefits will go up 8.7% in 2023, the largest adjustment in four decades. Here’s why you don’t need to rush to file to benefit from the increase.

With all the talk about inflation these days, you may have heard the news that the 2023 cost-of-living adjustment (COLA) for Social Security benefits is 8.7%, the largest in four decades. If you are approaching or over age 62 and haven’t filed for your retirement benefits, you may be wondering if you should file earlier than planned so you do not miss out on the increase.

The reality is that you do not need to file now to benefit from the COLA increase. Starting in the year you turn 62 any COLA will be calculated into your benefit amount, whether you choose to file that year or wait longer (you can file any year from age 62 up to 70).

What is the COLA?

In 1975, the Social Security Administration began adding annual increases to retirement benefits to keep up with rising costs based on the rate of inflation. If there is no inflation, there is no COLA. Although the COLA has been 0% three times, it has never been negative, even in periods of deflation. The COLA, however, does not only affect current benefits. It also applies to all future benefits and even the maximum taxable earnings on which wage earners pay into the system.

How is the COLA calculated?

The timing and methods for calculating COLA have changed over time. Since 1984, the Social Security Administration has based COLA on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (or CPI-W), comparing the average CPI-W from the third quarter of the current year to that of the prior year.

What is the 2023 COLA?

The Social Security Administration announced on Oct. 13 that the 2023 COLA increase will be 8.7%, the highest increase since 1981. That means payments will go up by more than $140 per month, on average, starting in January.

If you currently receive benefits, you should receive your COLA notice via your online Social Security account before the end of December, and you will receive your increased benefit amount in January.

If you have not filed for benefits but are curious how the change will affect your payment, you can go to your online account and view your full retirement age benefit amount before the end of the year. Then you can check again in January to see the increase reflected.

Should I file now so I do not miss out on the COLA?

While everyone’s situation is different, generally there are good reasons to delay filing for your Social Security benefits, especially if you have other income sources you can rely on. For example, filing too early might permanently reduce your benefits, it may lead to adverse tax implications, or you may be subject to an earnings test that reduces your current benefits.

Many do not realize that Social Security is protected against inflation, one of the reasons Buckingham advisors view Social Security as a form of longevity insurance. And in fact, even for individuals who plan to file in the future, annual COLAs are still factored into their future benefits from the year they turn 62. So, you do not lose out on this benefit by waiting to file.

If you chose to file earlier than you would have under the assumption you might miss out on the increase, there may be options to consider. For example, you can get a one-time “do-over” by filing a request to withdrawal your application up to 12 months after filing. This will cancel your benefits so you can reapply later, but you will need to repay any benefits that you’ve received. Alternatively, if you are older than full retirement age (66 or 67, depending on your birth year), you can suspend your benefits so that they continue to grow at a rate of 8% per year up to age 70. If you suspend, however, any benefits that family members receive based on your benefit, such as a spousal benefit, will also be suspended. We would recommend consulting with your financial advisor as soon as possible to help determine the right course of action for you.

I’m already receiving benefits. Will the COLA be enough for me?

The short answer is it depends. Perhaps you have other financial resources and don’t have to rely as heavily on Social Security for all your income needs. Also, depending on your spending habits, you may not be as affected by the rate of inflation as others. Interestingly, the CPI-W used to determine the adjustment reflects inflation for a particular subset of workers (urban wage earners and clerical workers) who are paying into Social Security, not those who are retired and actually receiving benefits.

Each person’s situation and spending habits are different, so if you have concerns it may be helpful to review your plan with your advisor.

About the authors:

Steve Weiss, CFP® joined Buckingham Strategic Wealth in 2012 as a portfolio advisor. Today, as a wealth advisor, he assists clients with making important financial decisions. Prior to that, he was at the firm from Enterprise Bank & Trust where he held such titles as trust operations specialist, paraplanner, and investment and planning specialist. He earned a bachelor’s degree in communication from the University of Michigan and is a CERTIFIED FINANCIAL PLANNERTM professional.

Jim Cornfeld, CFP® joined Buckingham Strategic Wealth in 2006. Prior to that, he was vice president and portfolio manager for First Bank Wealth Management Group. He spent 18 years with Mobil Oil Corporation in its marketing division, representing Mobil globally from its offices in Africa, Australia and New York. Jim is a CERTIFIED FINANCIAL PLANNERTM and chairs the firm’s Advanced Planning Committee.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party information which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Individuals should speak with a qualified financial professional based on their own circumstances. The opinions expressed here are their own and may not accurately reflect those of Buckingham Strategic Partners®. R-22-4562

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Buckingham Weekly Perspectives | The Strengthening Dollarhttps://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-the-strengthening-dollar/

Wed, 12 Oct 2022 14:18:32 +0000

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17591

Over the last few months, the U.S. dollar has been gaining strength in foreign markets. In this edition of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan, CFA, CFP® shares what a strong dollar means for the U.S. and world economy, why it’s happening and how it may impact your financial plans.

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Over the last few months, the U.S. dollar has been gaining strength in foreign markets. In this edition of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan, CFA, CFP® shares what a strong dollar means for the U.S. and world economy, why it’s happening and how it may impact your financial plans.

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The A, B, Cs of Medicarehttps://buckinghamstrategicpartners.com/perspectives/the-a-b-cs-of-medicare/

Mon, 10 Oct 2022 14:33:52 +0000

 

 

 

https://buckinghamstrategicpartners.com/?p=17585

From Oct. 15 to Dec. 7, 2022, qualified participants can sign up to take part in the federal government’s insurance plan. If you are overwhelmed by the process, definitions and complexities of Medicare, you are not alone. According to the Centers for Medicare &amp Medicaid Services (CMS), almost 64 million Americans were fully enrolled in […]]]>

 

From Oct. 15 to Dec. 7, 2022, qualified participants can sign up to take part in the federal government’s insurance plan. If you are overwhelmed by the process, definitions and complexities of Medicare, you are not alone. According to the Centers for Medicare &amp Medicaid Services (CMS), almost 64 million Americans were fully enrolled in the Medicare program in October 2021. That’s a lot of medication and doctor visits. For those navigating enrollment this year, these are the key questions clients often ask.

When should I enroll in Medicare?

Most Americans enroll in Medicare when they turn 65. The Initial Enrollment Period (IEP) runs for seven months total – three months prior to your birth month, your birth month and three months after your birth month. For instance, if you were born in April, you are eligible to enroll January through July of the year you turn 65. During this time, you will have guaranteed acceptance for all Medicare plans, meaning you cannot be denied coverage for any reason for any part of Medicare. Once you sign up, your Medicare coverage will begin either on the first day of your birth month or the first of the month after you enroll after your 65th birthday.

Do I have to enroll in Medicare?

If you are still employed or receive health insurance through your employer’s plan, a spouse’s plan or a union group health plan and your employer has 20 or more employees, then you do not need to enroll in Medicare when you turn 65. You can wait until you officially terminate from your group health plan, either through retirement or loss of employment.

Medicare regulations require that anyone covered by a small employer plan with less than 20 employees must enroll in Medicare at age 65 instead of the group plan.

Which elements of Medicare do I need to sign up for?

There are essentially five main components of Medicare, and each serves a specific purpose. Here is a brief explanation of each component and some of the benefits they provide:

Medicare Part A – Hospital Insurance

Medicare Part B – Physicians and Medical Tests

Medicare Part C – Medicare Advantage

Medicare Part D – Prescription Drug Coverage

Medicare Supplement/Medigap Plan

While everyone who enrolls in Medicare will sign up for Parts A and B, you will need to make a choice on what other plans you will choose. For full enrollment of Medicare, you will choose one of two paths:

How much does Medicare cost?

Your monthly cost for Medicare will vary depending on the type of Medicare coverage you choose, the specific plans you enroll in and your annual income.

The good news is that for most people, Part A costs you nothing. These premiums are covered by the federal payroll taxes we pay. For Part B, the base monthly premium is $170.10 for 2022, and this applies to everyone on Medicare. Around November, new premium amounts will be announced by Social Security.

However, depending on your income, your Part B premium may be higher due to an Income Related Monthly Adjustment Amount (IRMAA). This is determined based on your income reported in your tax returns for the two prior years. If you earned over $91,000 those years and are enrolled in?Medicare Part B?and/or?Part D, there will be a surcharge added to these elements. Social Security reviews your Modified Adjusted Gross Income (MAGI) each year, which is based on your income from the prior year, and reassess how much your Part B premiums will be for the upcoming year.

Medicare FAQ Table

For couples who are married and file separately, the 2021 income tiers and adjustments are:

Medicare FAQ Table

Once you have met the qualifications to enroll in Medicare, how do you sign up? The quickest and easiest way is online with the Social Security Administration at www.ssa.gov. You’ll need to create a “my Social Security” account prior to enrollment. You can also enroll by calling Social Security at 800-772-1213 or visiting your local Social Security office.

Your retirement shouldn’t be spent sifting through hours of red tape to receive the medical care you need and deserve. If you have questions about the facets of Medicare, please reach out to your advisor. Cheers to a healthy year!

About the author:

As an Onboarding & Integration Advisor, Scot Colgrove, CFP® enjoys breaking down complex issues to simpler, more easily understood concepts. He and his team lead training on the latest systems, processes and the firm to help new teams acclimate to Buckingham. He serves as an advocate for the joining firms whenever needed. His goal is to make the transition as anxiety free as he can for them.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party information and is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Third party information may become outdated other otherwise superseded without notice. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this information. 22-4422

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Buckingham Weekly Perspectives | Inflation Expectationshttps://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-why-is-inflation-expected-to-be-low/

Wed, 05 Oct 2022 15:15:38 +0000

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17576

Good news is on the horizon! Inflation is expected to significantly decrease in the near term. During this episode of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer, CFA shares why this may be happening and what you can expect for the future.

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Good news is on the horizon! Inflation is expected to significantly decrease in the near term. During this episode of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer, CFA shares why this may be happening and what you can expect for the future.

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Economic Brief: Labor Market Remains Tight As Global Risks Risehttps://buckinghamstrategicpartners.com/perspectives/economic-brief-labor-market-remains-tight-as-global-risks-rise/

Mon, 03 Oct 2022 18:44:28 +0000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17554

Labor Market Remains Tight As Global Risks RiseWhile inflation has moderated since June, it remains stubbornly high. Shocks happening abroad are the main contributor.]]>

 

Labor Market Remains Tight As Global Risks Rise

Main Takeaway:

While inflation has moderated since June, it remains stubbornly high, and the Federal Reserve took further action by raising its benchmark rate again in September. Shocks happening abroad are the main contributor, and speculation about the world entering recession early next year has risen.

Top Risks:

The war in Ukraine has led to a dramatic increase in gas prices, with Europe facing limited supply to heat homes and power factories this winter. This will impact nearly every good produced in the region, from wine glasses to fertilizer. In the U.S., housing costs are likely to keep inflation higher.

Sources of Stability:

Employment remains strong, with the U.S. adding an average of 440,000 jobs a month this year. Consumers are seeing some relief at the gas pump as the price of oil has dropped. Home prices are also cooling, and lumber prices have fallen more than 70% from their March peak.

In the Spotlight:

The big paradox to the outlook for slower growth is the strong labor market, prompting the key question of whether the Fed’s actions to tame inflation will push up the unemployment rate. At the end of July, there were 11.2 million job openings compared with six million people unemployed in August, according to Bureau of Labor Statistics data. This has led to severe shortages in many occupations. Even so, the unemployment rate ticked up slightly in August, and the Fed raised its unemployment rate prediction for 2023 from 3.9% in June to 4.4% as of its September FOMC meeting.

unemployment rates chart

Key Areas to Watch

interest rates

Interest Rates

September was a tough month for markets as the Fed bumped up its main policy rate another 75 basis points. The target range for the benchmark federal funds rate is now 3% to 3.25%, the highest since before the 2008 financial crisis and up from near zero at the start of this year. The question for markets is how high interest rates will need to go to cool the economy and bring down core inflation.

feds balance sheet

Fed’s Balance Sheet

The Fed also announced it would continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, which it began buying when the pandemic began to help push bond yields lower. Reducing these holdings causes the reverse—yields go up. When yields go up, it becomes less appealing to buy lower-yielding bonds already in the market, and it becomes more expensive for borrowers to raise money by issuing new bonds.

europes energy crisis

Europe’s Energy Crisis

Russia continues to restrict its natural gas supplies to Europe in response to Western sanctions on Russia for invading Ukraine. As a result, the continent has been grappling with soaring energy prices for most of the year. There are concerns that the European Union won’t have enough supply to meet demand this winter, which has led to pledges to cut consumption. These developments are slowing global growth and creating a cost-of-living crisis for Europeans.

chinas slowing economy

China’s Slowing Economy

China’s economy is expected to slow to about 3.3% in 2022, the lowest in 40 years, excluding 2020, according to the International Monetary Fund. It also faces a housing crisis like the one the U.S. experienced in 2008, with home sales down 40% in July. Housing makes up much more of an individual’s net worth in China than in the U.S., creating greater risks to its economy. Because China’s economy is the second largest, this adds to the likelihood of a global recession.

strength of us dollar

Strength of U.S. Dollar

From September 2021 through end of September 2022, the U.S. dollar index, a measure of the performance of the U.S. dollar against a basket of developed market currencies, rose from about 92 to about 112, a two-decade high. In September, the British pound dropped to the lowest level against the dollar since 1985, and the euro remains close to parity against the dollar. The yen has also struggled against the dollar, and in September Japan’s authorities intervened to prop up the currency in the foreign exchange market for this first time since 1998.

housing market

Housing Market

The extremely tight housing market could lead to inflation being more persistent than economists are forecasting. While rising interest rates will slow demand for housing, the U.S. faces a housing shortage of about four million homes, helping to explain why through July the year-over-year increase in home prices was about 16%, though slower than 18% in June. That shortage is why rents have been rising so dramatically. Rising interest rates will slow building and exacerbate the shortage problem.

consumer spending

Consumer Spending

Consumer spending slowed in July, rising only 0.1% compared with 1% in June, possibly due to inflation concerns. However, consumers are starting to see relief in some spending areas. After peaking at over $5 a gallon in June, the average national price of gasoline fell to $3.70 in late September. And because of the slowdown in housing, lumber prices have fallen more than 70% from their peak in March.

Key Economic Indicators

Key Economic Indicators

Where do markets go from here?

What are the investment planning implications?

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party data which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Individuals should speak with their financial professional before implementing any investment planning strategies mentioned above. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article. R-22-4443

© 2022 Buckingham Wealth Partners. Buckingham Strategic Wealth, LLC, & Buckingham Strategic Partners, LLC (Collectively, Buckingham Wealth Partners).

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What Caused Market Volatility To Risehttps://buckinghamstrategicpartners.com/perspectives/what-caused-market-volatility-to-rise/

Fri, 30 Sep 2022 16:01:06 +0000

 

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17549

Blog_BSP_Market-Volatility-Rise_2022_1920x1080.jpgSeptember turned out to be a tough month for markets after performance started to look a little brighter late this summer.]]>

 

Blog_BSP_Market-Volatility-Rise_2022_1920x1080.jpg

Although the recent volatility can be unnerving, it’s important to remember that it is impossible to accurately predict changes in the economy and how they might affect markets.


September turned out to be a tough month for markets after performance started to look a little brighter late this summer. Earlier in the year, the key worry for markets was that the Federal Reserve was not acting fast enough to tighten monetary policy and that rising inflation was the predominant risk. Now, markets have reacted to growing concerns that the Fed and other central banks are tightening relatively severely, which could lead to a sharp decline in global economic growth.

What has led to the higher volatility after a brief summer rally?

Since mid-August, the U.S. stock market is down around 15%, and high-quality fixed income is in the –4% to –8% range depending on the fund or index. It’s likely that the weaker market performance reflects heightened expectations that the Fed, in its efforts to reduce inflationary risks, will continue to tighten monetary policy even if the economy starts slowing. How can we see this?

The first thing to observe is that real rates of interest — you can think of this as the amount of interest markets are paying relative to what inflation is expected to be — are now meaningfully positive and have increased significantly over the course of this quarter. Second, inflation expectations — meaning what the fixed income market expects inflation to be in the future — have declined significantly. Both these facts indicate that the fixed income markets believe the Fed is prioritizing inflation reduction. However, the risk that inflation stays higher for longer has not gone away; instead, the risk of a “hard landing” – or sharp economic slowdown – has become more pressing.

How are the major asset classes performing to date this year?

What’s the outlook for the rest of the year?

Given how sharply yields have risen this year — combined with the massive spike in energy prices, in Europe in particular — we should all expect increasingly gloomy economic data and predictions that it will continue to worsen from major news outlets. It is important to keep in mind that market performance is a leading indicator: you can expect economic data to worsen when global stock markets are down 20% or more (especially for many growth-oriented asset classes).

What are the upsides for investors in this environment?

Although the recent volatility can be unnerving, remember that no one can precisely predict changes in the economy and, more specifically, how they might affect markets. Here are some points investors can keep in mind in the meantime:

For informational and educational purposes only and should not be construed as specific investment, accounting, legal or tax advice. Certain information is based on third party data which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. U.S. Market above is measured by Vanguard Total Stock Market Index Fund (VTSMX), High Quality Fixed Income is measured by DFA Diversified Fixed Income (DFXIX), DFA Inflation-Protected Securities (DIPSX), DFA Municipal Bond (DFMPX), and DFA Intermediate Gov’t Fixed Income (DFIGX). Past performance does not guarantee future results. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio nor do indices represent results of actual trading. Mentions of specific securities should not be construed as a recommendation. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this document. R-22-4451

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Buckingham Weekly Perspectives | What’s been happening in the markets?https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-whats-been-happening-in-the-markets/

Wed, 28 Sep 2022 12:29:23 +0000

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17543

In this episode of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan shares a broad perspective of what has happened, why it happened and the implications for investors.

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In this episode of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan shares a broad perspective of what has happened, why it happened and the implications for investors.

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Five Reasons Your Financial Advisor Should Review Your Willhttps://buckinghamstrategicpartners.com/perspectives/five-reasons-your-financial-advisor-should-review-your-will/

Mon, 26 Sep 2022 13:40:45 +0000

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17537

Financial advisors can offer a different perspective about the legal terms in estate documents and what they will mean financially for you and those who inherit your assets.]]>

 

Financial advisors can offer a different perspective about the legal terms in estate documents and what they will mean financially for you and those who inherit your assets.

All the events that happen over our lifetime—going to college, getting married, having children, choosing to divorce and deciding when to retire—have consequences for our finances. However, a little less than half of Americans have tied their financial planning into their estate planning: only 46% of individuals have a will that describes how they would like their money and estate handled after death, according to a Gallup News poll.

Baby boomers are expected to transfer an estimated $30 trillion to $68 trillion to their children, grandchildren and other beneficiaries over the next two to three decades. For those who don’t know where to begin in the estate planning process, typically the first step is to seek an estate attorney to work with you on drafting a will or living trust. While the attorney’s job is to ensure the legal aspects of your inheritance wishes are solidified, it’s a good idea to share your estate documents with a financial advisor.

Here are five reasons why:

  1. Your will should align with your financial goals. Your wealth advisor should already have a full-picture view of your personal, family and financial circumstances. Your advisor works with you to ensure that all your assets and liabilities are accounted for and included in your plan. Upon retirement, this plan forms how your assets will be used to support you for the remainder of life. Providing a legacy to heirs or charities is also an important part of financial planning. Advisors make sure your will aligns with your financial goals by discussing your beneficiary designations for retirement accounts and titling of nonretirement accounts. They also review specific dollar bequests versus the allocation of a percent remaining to ensure it meets your wishes. Finally, they are able to help you consider income tax differences for heirs or charities that inherit retirement funds as opposed to residual estate funds.
  2. You don’t want to forget to include any assets in your will. Because your advisor is your go-to person for taking stock of your assets, they will be able to recognize what assets are accounted for through your estate documents. Even if you do have estate documents, the title of an asset may dictate what occurs upon your death. Understanding which document or title supersedes the other upon death may help avoid undesirable results. Advisors work with their clients to create checklists to keep track of all their important documents and accounts. And most importantly, making sure funds flowing to your estate beneficiaries match up with your desires will help prevent family or legal disputes.
  3. Your advisor can help you navigate situations when your family circumstances change. Generally, it’s recommended to revisit your will every three to five years or if there is a major life event such as a marriage, divorce, birth or death in the family. Your advisor acts as a sentinel for your accounts by reminding you what will occur upon your death, ensuring that any life event can be handled either through a change in your will or a change of beneficiary or title. When financial advisors review a prospective client’s estate documents, one of the biggest surprises is often that an ex-spouse is still named in the will or in a retirement account beneficiary designation. Regular reviews of both estate documents and beneficiary designations will help to uncover issues and inconsistencies.
  4. The tax implications of what’s written in your will aren’t always the most efficient. While your CPA serves as a tax resource, financial advisors can identify opportunities for tax efficiency in the process of passing your assets to heirs. For example, including charitable bequests in your will while making family members the designated beneficiaries of a retirement account will almost always result in a greater income tax burden on your heirs. Some very simple changes may save your heirs significant income taxes on funds they inherit.
  5. Speaking with an advisor is a chance to think about your overall legacy. Your legacy is about much more than the assets you leave behind. Working with an advisor is an opportunity to decide which charities you would like to contribute to and whether to make some or all donations during your lifetime or wait until death. Furthermore, advisors can support in creating a legacy letter as a way to share values, beliefs and life lessons to heirs. Legacy letters are notes that better explain the rationale behind your choices in your estate documents and how you wish to be remembered. They are an opportunity to provide more personal context on how you would like your family to carry out your wishes and insights into the values that guide your life. Although these legacy letters may not be legal documents, they provide a more personal way for you to communicate with your heirs.

If you have questions about the benefits of sharing your will, please reach out to your advisor.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. The above is legal information is provided for educational purposes only, individuals should reach out to a qualified legal professional based on their own circumstances. Certain information is based upon third party data and may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy or confirmed the adequacy of this article. The opinions expressed by featured authors are their own and may not accurately reflect those of Buckingham Strategic Partners®. R-22-4431

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Buckingham Connects Webcast: September 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-connects-webcast-september-2022/

Mon, 19 Sep 2022 22:00:42 +0000

 

 

 

 

 

 

 

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17519

Buckingham connects webcast banner

As our advisors and clients look toward year-end planning, Buckingham’s president, chief planning officer, and managing director of investment strategy shared their thoughts on the economy, planning strategies and legislation aimed to reduce cost burdens. Key topics included portfolio strategies to manage unexpectedly high inflation, updates about the Inflation Reduction Act and how Medicare recipients will benefit, and more clarity around the Biden administration’s student loan forgiveness announcement, which borrowers can begin applying for in October. Overall, our industry thought leaders acknowledged that the economy is still working its way through the shock of the pandemic, which explains the volatility in markets seen this year.

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Buckingham connects webcast banner

As our advisors and clients look toward year-end planning, Buckingham’s president, chief planning officer, and managing director of investment strategy shared their thoughts on the economy, planning strategies and legislation aimed to reduce cost burdens. Key topics included portfolio strategies to manage unexpectedly high inflation, updates about the Inflation Reduction Act and how Medicare recipients will benefit, and more clarity around the Biden administration’s student loan forgiveness announcement, which borrowers can begin applying for in October. Overall, our industry thought leaders acknowledged that the economy is still working its way through the shock of the pandemic, which explains the volatility in markets seen this year.

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Buckingham Weekly Perspectives | Interval Fundshttps://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-interval-funds/

Mon, 19 Sep 2022 15:43:13 +0000

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17512

BuckWeeklyPerspectives_BSPBlogImage

While interval funds aren’t as widely known as their popular counterparts mutual funds or ETFs, they may be a valuable vehicle for portfolios looking to hold less liquid investments. In this episode of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer explains what interval funds are, their pros and cons and how they may be a beneficial addition to a well-balanced financial plan.

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BuckWeeklyPerspectives_BSPBlogImage

While interval funds aren’t as widely known as their popular counterparts mutual funds or ETFs, they may be a valuable vehicle for portfolios looking to hold less liquid investments. In this episode of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer explains what interval funds are, their pros and cons and how they may be a beneficial addition to a well-balanced financial plan.

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Buckingham Weekly Perspectives | September, 14 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-september-14-2022/

Wed, 14 Sep 2022 14:04:05 +0000

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17499

Whether it’s happiness, anger or indifference, the student debt forgiveness program has been met with a vast range of emotions. But it has also created concern that these changes may produce a moral hazard when it comes to student loans in the future. In this episode of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan explains this phenomenon, explores the possibility of an additional forgiveness plan in the future and shares his thoughts on investing funds into a 529 college plan verses taking out student loans.

Want a deeper dive into the student debt forgiveness program? Check out Chief Planning Officer Jeffrey Levine’s recent Buckingham Weekly Perspectives video.

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Whether it’s happiness, anger or indifference, the student debt forgiveness program has been met with a vast range of emotions. But it has also created concern that these changes may produce a moral hazard when it comes to student loans in the future. In this episode of Buckingham Weekly Perspectives, Managing Director of Investment Strategy Kevin Grogan explains this phenomenon, explores the possibility of an additional forgiveness plan in the future and shares his thoughts on investing funds into a 529 college plan verses taking out student loans.

Want a deeper dive into the student debt forgiveness program? Check out Chief Planning Officer Jeffrey Levine’s recent Buckingham Weekly Perspectives video.

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How To Start Strategizing for Charitable Giving Seasonhttps://buckinghamstrategicpartners.com/perspectives/how-to-start-strategizing-for-charitable-giving-season/

Mon, 12 Sep 2022 14:56:47 +0000

 

 

 

 

 

 

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17480

Blog_BSP_Charitable-Planning_2022_1920x1080.jpgStarting to plan your charitable giving strategies now will prevent you from feeling rushed to meet year-end deadlines. It will also give you the time to think carefully about which causes fit best in your long-term legacy plan.]]>

 

Blog_BSP_Charitable-Planning_2022_1920x1080.jpg

As we approach the busy holiday season, now is a great time to start thinking about which charities match your values for end-of-the-year donations. According to Giving USA’s annual report on philanthropy, individuals, bequests, foundations and corporations gave an estimated $484.85 billion to U.S. charities in 2021. This year, charities will likely face more need for financial assistance given the pace of inflation and rising costs.

In addition to choosing charities that match your values, your donations have implications for your tax returns and future investment strategies. Financial advisors have the knowledge to help clients meet their gift-giving goals while also being smart about taxes. Explore four ways you can maximize the financial impact of your monetary donation while honoring your wealth plan with our easy-to-understand infographic.

FSC Charitable Giving Toolkit

People often approach legacy planning in a chronological life order, focusing on the accumulation of wealth until retirement. When it comes to charitable giving, it’s best to reassess your values and strategies each year. According to Wealth Advisor Elliot Dole, planning for the long term requires a shift in perspective, but it will build the foundation for setting up the ideal legacy and wealth transfer plan. This is becoming especially important for the baby boomer generation, which is expected to donate an estimated 30% of its wealth to charities over the next 20 years.

As every family has a unique set of circumstances, there is not always a one-size-fits-all solution. It’s important for your advisor to understand your hopes, dreams and goals in order to create a plan that passes on more than money; it should also pass on the values you hold most dear.

Schedule a conversation with your advisor to discuss the right plan for your family.

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Buckingham Weekly Perspectives | September, 7 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-september-7-2022/

Tue, 06 Sep 2022 21:11:20 +0000

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17469

Larry Swedroe economic brief all eyes on inflation

Treasury bonds, certificate of deposits and other fixed income securities are great ways to diversify your portfolio. But in this current economic climate, is it smarter to put your money in short- or long-term maturity assets? In this episode of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer explores the risks and benefits of these options.

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Larry Swedroe economic brief all eyes on inflation

Treasury bonds, certificate of deposits and other fixed income securities are great ways to diversify your portfolio. But in this current economic climate, is it smarter to put your money in short- or long-term maturity assets? In this episode of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer explores the risks and benefits of these options.

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Buckingham Weekly Perspectives | August, 31 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-august-31-2022/

Wed, 31 Aug 2022 13:27:07 +0000

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17457

federal student loans

Everyone is talking about President Biden’s student debt forgiveness program. You may be wondering how the recently announced changes may impact you and your loved ones. In this episode of Buckingham Weekly Perspectives, Chief Planning Officer Jeffrey Levine takes a deep dive into the details of this important plan. He covers:

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federal student loans

Everyone is talking about President Biden’s student debt forgiveness program. You may be wondering how the recently announced changes may impact you and your loved ones. In this episode of Buckingham Weekly Perspectives, Chief Planning Officer Jeffrey Levine takes a deep dive into the details of this important plan. He covers:

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How to Find an Advisor You Can Trusthttps://buckinghamstrategicpartners.com/perspectives/how-to-find-an-advisor-you-can-trust/

Mon, 29 Aug 2022 13:45:11 +0000

 

 

 

https://buckinghamstrategicpartners.com/?p=17454

Several years ago, I met with a wealthy widow who had been quite a bit wealthier before meeting Mr. Bernie Madoff. After that devastating experience, she was very concerned about finding an advisor she could trust to act in her best interest. I know she is not the only person who has questions and concerns […]]]>

 

Several years ago, I met with a wealthy widow who had been quite a bit wealthier before meeting Mr. Bernie Madoff. After that devastating experience, she was very concerned about finding an advisor she could trust to act in her best interest. I know she is not the only person who has questions and concerns about finding a reputable, honest and skilled wealth advisor. If you are in this boat, I’ve created a list of five criteria that should be an absolute requirement when vetting a new advisor.

The choice of a financial advisor is one of the most important decisions you will ever make. To ensure you end up with a qualified, trustworthy wealth manager, it’s imperative that you perform a thorough due diligence. I hope these five considerations have armed you with the knowledge to vet potential firms. If you are looking for a fiduciary or if your current advisor only provides a suitability standard of care, we would love to connect you with a qualified advisor.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have?approved, determined the accuracy, or confirmed the adequacy of this article. R-22-3993

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Buckingham Weekly Perspectives | August 24, 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-august-24-2022/

Wed, 24 Aug 2022 12:47:18 +0000

 

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17446

BuckinghamWeeklyPerspectives_8.24.22_Stagflation.jpg

A stagnant economy + high inflation = stagflation. While this concept isn’t new, it’s certainly a concern in today’s economy. Buckingham’s Chief Investment Officer Jared Kizer shares what stagflation is, his thoughts on the likelihood of it occurring and how to protect your investments.

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BuckinghamWeeklyPerspectives_8.24.22_Stagflation.jpg

A stagnant economy + high inflation = stagflation. While this concept isn’t new, it’s certainly a concern in today’s economy. Buckingham’s Chief Investment Officer Jared Kizer shares what stagflation is, his thoughts on the likelihood of it occurring and how to protect your investments.

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The Game Changing Power of Convictionhttps://buckinghamstrategicpartners.com/perspectives/the-game-changing-power-of-conviction/

Wed, 24 Aug 2022 12:12:52 +0000

 

https://buckinghamstrategicpartners.com/?p=17449

To serve clients in an impactful manner, we can’t just think we are doing the right thing for them, we have to know it in our core.]]>

 

Maya Angelo famously stated, “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.” While relevant in all areas of our connections with others, I believe this is most true with client-advisor relationships. And I believe that one of the most impactful ways we can achieve a genuine connection with our clients is by having a strong unwavering conviction in the research, solutions and implementation of our wealth strategies. To serve clients in an impactful manner, we can’t just think we are doing the right thing for them, we have to know it in our core.

I have seen the power of conviction transform lives; it’s a true game changer.

In 2002, I was a 22-year-old kid getting my feet wet in the investment business. As an avid outdoorsman, I was thrilled when I was invited on a high-altitude mountain climbing expedition. This incredible trip quickly turned into a life changing nightmare. I tumbled over 4,000 feet down the face of a glacier. My beaten, limp body came to rest just shy of the cliffs hovering almost three miles off the ground. Since the altitude was too high for a standard rescue, I was forced to stay the night until a military helicopter could come to my aid. Suffering from a pulmonary edema and serious head injuries, in a state of disarray I unknowingly removed my gloves throughout the cold darkness. Though I miraculously survived the night, the cost was significant. I lost the majority of my fingers and toes to frostbite. Amazingly, this tragedy was the beginning of my “why” to begin doing what I do.

When I agreed to go on the trip, not only was I looking for adventure, I was searching for answers to my already questioning career. The wealth management firm that I joined right out of college was using predominantly actively managed mutual funds within their clients’ portfolios. We’d buy the funds with the best ten-year numbers … and then watch them underperform for the next decade. I had no conviction in this firm’s methodology and beliefs, it was tough for me to talk to my clients with a clear conscious about our portfolio offerings. But all of that was about to change.

After I was rescued, my journey was a difficult road of recovery plagued with surgeries, amputations and infections. While my wounds healed, I began to read the white papers and research around passive investing. I was enamored with the facts and data. It made sense and I was fascinated with the purpose behind it.

Once I was back on my feet and in the office, I was invited to a Dimensional Fund Advisors (DFA) intro conference in Santa Monica. Those two days would change my life … almost as much as that cold painful night on the mountain.

Over those 48 hours, I was bombarded with regression analysis, betas, coefficients and slopes. While I didn’t fully understand what the heck these DFA guys were talking about, I knew the presenters believed in what they were saying! More than the message they were giving, I loved how they made me feel. Like them, I wanted to live a life of passion fueled by deep conviction.

Following the conference, I introduced myself to Dan Wheeler, the head of Financial Advisor Services at DFA. I told him that I couldn’t go home to the investment world of Wall Street, promised Alpha and big expense ratios that I didn’t believe in. I had three options: work for DFA, find a different advisory firm who implemented with DFA or leave the industry.

Fortunately, Dan and DFA took a chance and offered me a position. Fast forward four months later – I was a terrified, fingerless 25-year-old living in Santa Monica with my dream job. Fueled by my quest for knowledge, I quickly realized that to be able to explain complex investment strategies to my clients, I had to fully understand the “why” behind the “how”. I became dedicated in this lifelong quest.

On an equally important note, before my fateful climb I had the honor of befriending DFA’s Regional Director, Bo Cornell. He saw that I was looking for investment answers, devouring data, searching for truth and questioning the active management concept. The bed of research he shared with me blew me away. The DFA representatives I was introduced to were sensible, smart and most of all passionate. They had a contagious excitement about the research and implementation of their wealth strategies within their portfolios.

As a young man looking for purpose in my career, their conviction was palpable.

Besides being my mentor, Bo was someone whom many of the early Buckingham Founders call a close personal friend, as he initially approved the then start up firm known as BAM. I knew Bo truly cared for me, believed in me and had deep convictions behind the things he was telling me. He wanted the light bulb to go off for me … and boy did it ever. Not only did it cause a shift in the way I looked at the markets, it shifted the way I looked at life.

Thanks to these combined experiences, encounters and fate, my conviction was birthed. I would go on to have a successful career at DFA, eventually becoming a vice president while also managing our internal Client Service team. A key part of this management role was educating new members of our DFA Regional Director team. I was excited to show others the power of truly believing in the firm’s methodology.

As a new member of the Buckingham Strategic Partners team, my conviction is stronger than ever. The evidence-driven philosophy, wealth of resources and deep passion for always doing the right thing runs deep within me and I am thrilled to be home.

I encourage you to find your conviction both personally and professionally. Go beyond being just competent, attack new learning opportunities with deep passion and constantly evaluate your beliefs and processes. It will improve your life in ways you cannot even imagine. Lastly, trust is currency in our business. Clients want to know they are in good hands and that someone truly cares about them through thick and thin.

All of us have a story, reason and a why behind what we do each day. While my story may be a little more unique than yours, its power is no different. I hope that by hearing my conviction journey, it helps you think through yours.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal or tax advice. Certain information is based upon third party data which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party websites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. The opinions expressed by featured authors are their own and may not accurately reflect those of Buckingham Strategic Partners®. R-22-4260

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Why Stocks Have Rebounded So Quicklyhttps://buckinghamstrategicpartners.com/perspectives/why-stocks-have-rebounded-so-quickly/

Wed, 17 Aug 2022 14:26:24 +0000

 

 

 

https://buckinghamstrategicpartners.com/?p=17417

With stocks down 20% and inflation quickly rising, the first half of 2022 was rough. But there is good news on the horizon! Stocks are up 14% since the beginning of July and have been delivering positive results over the last four weeks. The year-over-year inflation rate has dropped from 9.1% in June to 8.5% in July. Buckingham’s Managing Director of Investment Strategy Kevin Grogan shares the “why” behind the market’s optimistic outlook.

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With stocks down 20% and inflation quickly rising, the first half of 2022 was rough. But there is good news on the horizon! Stocks are up 14% since the beginning of July and have been delivering positive results over the last four weeks. The year-over-year inflation rate has dropped from 9.1% in June to 8.5% in July. Buckingham’s Managing Director of Investment Strategy Kevin Grogan shares the “why” behind the market’s optimistic outlook.

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Why The Location Of Your Investments Mattershttps://buckinghamstrategicpartners.com/perspectives/why-the-location-of-your-investments-matters/

Mon, 15 Aug 2022 13:52:06 +0000

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17406

Most investors have a process for deciding which investments to buy in their portfolio—with different objectives for building wealth over time. But once you’ve selected your investment mix, have you considered how the account that holds your investments affects what you ultimately earn? A potential game changer for your expected returns is the amount of […]]]>

 

Most investors have a process for deciding which investments to buy in their portfolio—with different objectives for building wealth over time. But once you’ve selected your investment mix, have you considered how the account that holds your investments affects what you ultimately earn?

A potential game changer for your expected returns is the amount of tax you’ll need to pay, which may be annually or when you make withdrawals depending on the account type. The type of account also makes a big difference in the amount of tax owed. Thinking about asset location—or being strategic about which account holds each of your investments—can help investors keep more of their income.

Leveling the Playing Field Among Accounts

If you have ever received a Form 1099 from the IRS for investment gains or losses, or if you’ve paid income taxes after taking money from your retirement account, you know that Uncle Sam is your investment partner. Just like you, the government wants these accounts to grow because bigger returns generally mean more tax dollars to collect.

From a tax perspective, taxable brokerage accounts, traditional individual retirement accounts (IRAs) and Roth IRAs are not created equal. To level the playing field, it’s important to consider the after-tax expected return of any investment—the amount we keep. Knowing how an investment is taxed within different types of accounts is critical in determining where to own each of your investments.

Non-Qualified Accounts (Taxable)

Traditional IRAs (Tax-Deferred)

Roth IRAs (Tax-Deferred)

Deciding Which Accounts Should Own What Is a Game of Prioritization

When making investment decisions, the first step is to decide what type of investments will meet your personal goals—the accounts you already have should not dictate those decisions. Only after deciding on your overall allocation target can you review your existing accounts to determine the optimal location for each of your investments.

When considering location, it’s helpful to view all of your accounts as one household portfolio, rather than separately. Although exchanging investments between accounts may lead to differing returns in one account compared with another, the goal is to create more after-tax wealth overall through tax efficiency.

To make the most of tax treatments, it’s generally favorable for most investors to prioritize tax-inefficient investments in IRAs, either traditional or Roth. As you move these investments to tax-deferred IRAs, you’ll have room in your taxable accounts to take advantage of the preferential rates for tax-efficient investments. Some examples below illustrate how to think about these decisions.

When deciding whether to place your investments in a taxable account or IRA, it’s also important to give the greatest consideration to those investments with higher expected returns—and therefore generally higher risk. For example, it may seem like simple logic to hold investments with the highest expected returns in a Roth IRA because your income won’t be taxed. However, you aren’t always better off taking all the investment risk.

Additionally, there are some instances when the placement of your investments requires more consideration, such as if you anticipate using any of your traditional IRA funds for future qualified charitable distributions because there could be greater tax advantages in doing so. Ultimately, deciding which account should own which investment will depend on each investor’s circumstances. Working with a financial advisor can help you navigate your specific case and help you set up a plan to maximize your after-tax returns.

If you are not currently working with a financial advisor, Buckingham would love to help you reach your wealth goals. Please visit our website for more information or connect with us for a short introductory conversation.

About the author:

As a wealth advisor, Patrick Kuster believes a financial plan is only as good as its implementation, and seeing the plan through is one of the most rewarding parts of his job. He loves helping clients solve their financial puzzle, pulling apart plans and discovering concepts that question industry norms. He also likes educating clients and providing them insight that keeps them on track toward achieving their financial goals.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal or tax advice. Certain information is based upon third party data which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party websites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. The opinions expressed by featured authors are their own and may not accurately reflect those of Buckingham Strategic Wealth®. R-22-4212

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Buckingham Weekly Perspectives | August 10, 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-august-10-2022/

Wed, 10 Aug 2022 08:00:01 +0000

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17391

Larry Swedroe economic brief all eyes on inflation

At Buckingham, we are often asked about the benefits of integrating corporate credit risk as part of a diversified portfolio. This is expected since this investment strategy is a substantial portion of the world’s capital markets. In this edition of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer shares the pros and cons of owning or investing heavily in corporate bonds.

R-22-4140

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Larry Swedroe economic brief all eyes on inflation

At Buckingham, we are often asked about the benefits of integrating corporate credit risk as part of a diversified portfolio. This is expected since this investment strategy is a substantial portion of the world’s capital markets. In this edition of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer shares the pros and cons of owning or investing heavily in corporate bonds.

R-22-4140

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Buckingham Weekly Perspectives | August 2, 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-august-2-2022/

Wed, 03 Aug 2022 01:33:56 +0000

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17375

In a surprise move, Manchin and Schumer agreed on the Inflation Reduction Act (IRA) to help contain skyrocketing costs and decrease the deficit. How will this bill personally impact you? In this edition of Buckingham Weekly Perspectives, Chief Planning Officer Jeffrey Levine provides an overview of how this legislation will affect back door Roth IRAs, tax increases, healthcare, energy-related provisions and the inner workings of the IRS.

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In a surprise move, Manchin and Schumer agreed on the Inflation Reduction Act (IRA) to help contain skyrocketing costs and decrease the deficit. How will this bill personally impact you? In this edition of Buckingham Weekly Perspectives, Chief Planning Officer Jeffrey Levine provides an overview of how this legislation will affect back door Roth IRAs, tax increases, healthcare, energy-related provisions and the inner workings of the IRS.

R-22-4180

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Invest Like A Girlhttps://buckinghamstrategicpartners.com/perspectives/invest-like-a-girl/

Mon, 01 Aug 2022 08:00:57 +0000

 

 

https://buckinghamstrategicpartners.com/?p=17373

Investing can be an overwhelming process. Due to circumstances beyond their control, women face additional challenges and hurdles when it comes to growing their money. As a wealth planner, I have identified several areas of concern that may impact a woman’s financial health. Don’t worry, I’ve also included solutions and tips to help even the […]]]>

 

Investing can be an overwhelming process. Due to circumstances beyond their control, women face additional challenges and hurdles when it comes to growing their money. As a wealth planner, I have identified several areas of concern that may impact a woman’s financial health. Don’t worry, I’ve also included solutions and tips to help even the playing field and mitigate risks.

1. Caregiving

From time spent raising children, helping elderly parents or tending to sick family members, women assume the role of caregiver in the home 70% of the time. In fact, women on average spend 12 years out of the workforce caring for their families. The pandemic forced a disproportionate number of women to resign from their positions due to virtual schooling and lack of day care. Besides taking a physical and emotional toll, caregiving hits women financially as well. Years out of the work force can leave an otherwise robust bank or retirement account lagging. Fortunately, there are things women can do to counteract this lost time in the workforce:

2. Women Still Earn Less

Despite strives in equality, the gender wage gap is still alive. In 2020, women on average earned only 82 cents on the dollar for performing the exact same job as their male counterparts. This is due to no attributable reason other than gender. The pay gap is even wider for women of color. In addition, women also tend to dominate certain careers that are often lower in salary, such as childcare workers and home health aides.

Every year, Vanguard releases a study on “How America Saves”. In 2020, they reported the average male has twice the retirement savings than the average female. It makes sense – the less women are earning, the less likely we are to save or to have wiggle room in the budget to save. Due to these pay gaps, women on average lose?some $900,000?over a 40-year career, according to a recent estimate.

To compound this disparity, Women ask for raises as often as men but don’t get them. In one study, women who asked for a raise received one?15% of the time, while men were awarded raises 20% of the time.

To counteract this disproportionate gap:

3. Women Live longer

Having a longer life expectancy seems like a good problem to have … but it can put pressure on retirement savings. Women on average live five years longer than men, which mean they must plan for five additional years of retirement spending. I was astounded to learn 80% of women are single or widowed at the time of their death. How do you prepare for the increased costs, support and care as you age?

4. Control the controllables

While we can’t control the rising costs of products or record-breaking inflation, we can spend and save mindfully. To do so, I suggest you break your budget down using the 50/30/20 method as a guideline:

Due to these headwinds, women have less margin of error when it comes to investing in their future. While all of this may seem overwhelming, don’t worry, it’s not all doom and gloom. With thoughtful planning and calculated changes – such as saving more to make up for any earnings shortfall, negotiating your salary and making sure you have the proper allocation in your portfolio – you can plan for the impact of these trends.

About the author:
As a wealth advisor for Buckingham Strategic Wealth, Katie takes pride in helping individuals navigate the challenges of balancing daily expenses with their savings goals. Seeing the impact that it has on their lives is what keeps her coming back for more. She finds joy in collaborating with her team to truly understand how she can help clients in any unique situation; the problems that keep them up at night and the goals that they have set for themselves. Thinking critically to help clients find the solutions to these complex issues is the part of the job that is most rewarding to her.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party sources which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. By clicking on any of the third-party links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article. R-22-4015

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Buckingham Weekly Perspectives | July 27, 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-july-27-2022/

Wed, 27 Jul 2022 08:00:38 +0000

 

 

https://buckinghamstrategicpartners.com/?p=17371

If you are handling your own investments, target date funds may be a great allocation to your portfolio. These funds are set to change asset allocations over time as your designated retirement year approaches. Buckingham’s Managing Director of Investment Strategy Kevin Grogan shares the mechanics of these investment strategies, their advantages and limitations and why they may be beneficial to you.

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If you are handling your own investments, target date funds may be a great allocation to your portfolio. These funds are set to change asset allocations over time as your designated retirement year approaches. Buckingham’s Managing Director of Investment Strategy Kevin Grogan shares the mechanics of these investment strategies, their advantages and limitations and why they may be beneficial to you.

R-22-3995

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Economic Brief: All Eyes On Inflation For The Remainder Of 2022https://buckinghamstrategicpartners.com/perspectives/economic-brief-all-eyes-on-inflation-for-the-remainder-of-2022/

Tue, 26 Jul 2022 18:50:52 +0000

 

 

 

 

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17352

Larry Swedroe economic brief all eyes on inflationWhile there’s always uncertainty in the outlook for the economy and financial markets, a confluence of events has pushed the level of uncertainty to high levels.]]>

 

Larry Swedroe economic brief all eyes on inflation

While there’s always uncertainty in the outlook for the economy and financial markets, a confluence of events has pushed the level of uncertainty to high levels, namely the Federal Reserve’s battle against inflation, Russia’s invasion of Ukraine and ongoing supply chain struggles. The markets have already priced in these risks, explaining why stocks and bonds have performed poorly this year.

Top Risks

We believe the two biggest risks to the economy are the war in Ukraine dragging on and inflation running hotter than markets expect. In addition, the effects of reduced fiscal stimulus, significantly tighter monetary policy and the stronger U.S. dollar are likely to result in slower economic growth, in our opinion, the chance of recession in the next 12 months increasing to 30%-50%.

Sources of Stability

Although GDP growth is expected to slow, the unemployment rate should stay low through 2023 at around 3.6%. Monetary policy is still loose, with negative real rates of interest; there is still some fiscal stimulus; and both corporate and consumer balance sheets remain strong.

In The Spotlight

As the year began, many pinned their hopes on the economy shaking off the worst impacts from the COVID-19 pandemic—with expectations that reopening economies would ease supply chains and inflation. However, by midyear, it became clear that the ramifications aren’t abating as quickly as anticipated. In June, the consumer price index rose 9.1%, the fastest pace since 1981. Gasoline, housing prices and food were the largest contributors to this increase. The core index, which excludes food and energy, only fell slightly in June to 5.9% from 6.0% in May and well above where it was last June at 4.5%.

The Fed has responded to the sharp rise in inflation by hiking interest rates, though the June numbers may mean that the bank will speed up the pace of increases. Both stocks and bonds tend to perform poorly during high inflation regimes, like the one we are experiencing now. As such, financial plans should consider that there might be a negative impact on future economic growth, leading to lower equity returns.

consumer price index chart

Monetary Policy

The Fed has a difficult task in fighting inflation. The risk that the Fed is behind in tightening policy enough to slow inflation is growing, which could lead to the bank raising rates higher than the market expects. The Fed will also begin reducing its balance sheet by almost $100 billion a month in September, an unprecedented amount that could push rates higher than currently priced into the market—a negative for both stocks and bonds.

War in Ukraine

Economic sanctions on Russia have created further supply and inflation problems. Global supply chains rely on Russia for its oil and gas, wheat, and semiconductor exports. Russia is the main supplier of gas to several European countries, with Germany and Italy at greatest risk if Russia cuts off gas shipments to them. This would have a significantly negative impact on their economies, almost certainly producing a recession with global implications.

Supply Chains

The pandemic disrupted supply chains, leading to inflationary pressures. This has implications for markets because the globalization of supply chains had a deflationary impact on prices. Innovations like just-in-time inventory management—which provides the minimum amount of inventory to meet demand—led to improved productivity, profits and economic growth. Supply chains have yet to recover, which could lead to more onshoring, resulting in higher prices for consumers and lower corporate profits.

Labor Market

The tight labor market is contributing to inflation and could pressure corporate profits. The U.S.’s strong economic recovery since the pandemic downturn contributed to a tight labor market: almost two jobs are posted for every unemployed person, and the unemployment rate is down to 3.6%. Many workers also retired early during the pandemic, raising pressures on wages. The move to onshore jobs will add further tightness to the labor market, and higher wages could squeeze corporate profit margins.

Strength of U.S. Dollar

The stronger dollar has negative implications for global economic growth. As the Fed has raised interest rates faster than other central banks, the dollar has strengthened against other currencies. A stronger dollar makes U.S. exports more expensive for foreign buyers. Corporate profits may also take a hit because the stronger dollar weakens the earnings of U.S. multinationals. That could lead to lower earnings forecasts and lower price-to-earnings (P/E) ratios.

Consumer Confidence

There has been a sharp drop in consumer confidence. The Conference Board’s expectations index—based on consumers’ short-term outlook for income, business and labor market conditions—fell to 66.4 in June, the lowest level since March 2013, from 73.7 in May, signaling increased risk of a recession. The University of Michigan consumer sentiment index also reached a record low of 50.0 in June. Lower consumer confidence could slow spending and economic growth.

Housing Costs

Housing costs, especially rents, keep rising. Housing represents about one-third of the CPI, and because of the way it is calculated, it works with a significant lag. Rents have been rising sharply and will likely continue to do so as housing supply is limited, and labor markets are strong. That will create upward pressure on rents and the CPI. Higher rents also could create a substantial burden on budgets and reduce consumer spending.

key economic indicators

Investment Planning Implications

Investors dislike uncertainty—when the risk of a negative outcome increases, they demand larger risk premiums, driving P/Es down. Although this means companies are expected to have lower earnings, lower stock valuations may provide opportunities for patient investors.

Empirical evidence demonstrates that buying stocks when investor sentiment is negative has led to much higher returns than when investor sentiment is positive. The logic is simple: negative sentiment leads to low prices, large risk premiums and high expected returns. Returns are likely to be poor only if predictions turn out to be worse than expected.

Unfortunately, since not even good forecasters can tell us what is going to happen, the best you can do is make sure your plan anticipates negative shocks appearing regularly and addresses risks you are most concerned about, reducing them to an acceptable level.

Investors should always build the risk of an unexpected “black swan” event into their plans.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party data which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article.

© 2022 Buckingham Wealth Partners. Buckingham Strategic Wealth, LLC, & Buckingham Strategic Partners, LLC (Collectively, Buckingham Wealth Partners). R-22-4113

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Buckingham Connects Webcast: Perspectives on the Economy & Markets: Planning for 2022 and Beyondhttps://buckinghamstrategicpartners.com/perspectives/perspectives-on-the-economy-markets-planning-for-2022-and-beyond/

Tue, 26 Jul 2022 17:36:47 +0000

 

 

 

 

 

 

 

 

 

 

 

 

 

https://buckinghamstrategicpartners.com/?p=17349

While you can’t escape the rapidly rising prices in the produce aisle, gas station or your local home improvement store, you can take steps to safeguard your portfolio. During our Buckingham Connects live webcast Perspectives on the Economy & Markets: Planning for 2022 and Beyond, three of our thought leaders answered viewer’s questions about inflation’s impact on housing, consumer confidence, the job market, supply chain issues, the strength of the dollar in a global economy, planning implications and more. They also shared actions you can take to protect your financial future, explained why a recession is unfortunate but not unexpected and explored the Federal Reserve’s response to market volatility.

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While you can’t escape the rapidly rising prices in the produce aisle, gas station or your local home improvement store, you can take steps to safeguard your portfolio. During our Buckingham Connects live webcast Perspectives on the Economy & Markets: Planning for 2022 and Beyond, three of our thought leaders answered viewer’s questions about inflation’s impact on housing, consumer confidence, the job market, supply chain issues, the strength of the dollar in a global economy, planning implications and more. They also shared actions you can take to protect your financial future, explained why a recession is unfortunate but not unexpected and explored the Federal Reserve’s response to market volatility.

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Buckingham Weekly Perspectives | July 20, 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-july-20-2022/

Wed, 20 Jul 2022 11:38:23 +0000

 

 

https://buckinghamstrategicpartners.com/?p=17341

Along with the recent heatwave, this summer has brought us even higher inflation rates. In this edition of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer discusses the latest market updates and shares the five-year economic forecast.

R-22-4131

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Along with the recent heatwave, this summer has brought us even higher inflation rates. In this edition of Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer discusses the latest market updates and shares the five-year economic forecast.

R-22-4131

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The “4 Rs” of Behavioral Financehttps://buckinghamstrategicpartners.com/perspectives/the-4-rs-of-behavior-finance/

Mon, 18 Jul 2022 14:39:10 +0000

 

 

https://buckinghamstrategicpartners.com/?p=17338

In his book, “Thinking, Fast and Slow” , psychologist Daniel Kahneman examines the two brain systems that drive the way we think while also shining light on the common biases that impact decision making. As it turns out, our brains are hard-wired to make fast, intuitive and emotional decisions shaped by our own biases and generalizations. […]]]>

 

In his book, “Thinking, Fast and Slow” , psychologist Daniel Kahneman examines the two brain systems that drive the way we think while also shining light on the common biases that impact decision making. As it turns out, our brains are hard-wired to make fast, intuitive and emotional decisions shaped by our own biases and generalizations. These mental glitches, Kahneman proposed, make us feel like we are using good judgement even though the results of these impulsive decisions often get us into trouble. Without pausing to engage the rational area of the brain when faced with a big decision, especially financial ones, you risk causing more harm than good.

High levels of uncertainty about the economy, rising inflation, global supply chain disruption, soaring gas prices and expectations of increased market volatility can stoke fear in the minds of investors planning their financial futures. This may even cause some to consider sidestepping the risk of loss by making an impulsive change to their investment strategy. Building off Kahneman’s work and behavioral economics, strategies have been developed to help investors make better decisions during periods of instability.

A methodical framework for decision making can assist in slowing down responses, hopefully reducing the likelihood that emotions and irrational thinking will get in the way. The Kaplan Behavioral Financial Advisor (BFA) course has broken this process down into “The 4 Rs”:

R #1: Recognize?the Situation

When you become overwhelmed, pause and take a moment to verbalize what you are feeling. Describe the reasons for these emotions and identify the actions you are considering. Think about any previous experiences that may be shaping your perception, such as the 2008 market crash. Try to assess whether you are in a clear state of mind and if your decision could derail a well-designed financial plan.

R #2: Reflect on Your Values

Do your best to zoom out your perspective and verbalize the big picture as well as your desired?long-term?financial outcomes. Consider if any biases are shaping your worldview and if those biases are potentially clouding your decision-making ability.

R#3: Reframe Your Viewpoint

Describe how this potential decision relates to your values, goals and moral principles. Bring the focus back to the long-term view and concentrate on what truly impacts the likelihood of success for your financial plan. Identify any instances where a market pullback creates opportunity such as investing cash reserves to “buy low”.

Think about how similar instances in market history played out:

R#4: Respond Purposefully

Make an educated decision based on the overall picture, not the immediacy of a market drop or a perception that you know something about the market others do not. Seek counsel from your trusted financial advisor on the best decision for your situation.

The “4 Rs” approach is designed to help you make decisions that are emotionally reflective rather than emotionally reflexive. Remember, think SLOWLY! If you have questions about your portfolio, speak with your advisor about your concerns.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party websites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this information. ©2022, Buckingham Strategic Partners. R-22-4070

About the author: As a divisional manager, Sean Brooks enjoys working with advisors in every area of their practice, from helping solve investment problems to sharing ways to run more efficient practices and build stronger client relationships. Prior to joining Buckingham, Sean was with AssetMark in a business development role, and he also worked as a banker and financial representative with JPMorgan Chase in Arizona and Illinois. Sean also spent time working as an estate planning consultant helping families avoid probate. He attended Loyola University of Chicago and earned a business degree in economics.

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Buckingham Advisors Named in Investopedia’s 100https://buckinghamstrategicpartners.com/perspectives/buckingham-advisors-named-in-investopedias-100/

Thu, 14 Jul 2022 13:56:20 +0000

 

 

 

https://buckinghamstrategicpartners.com/?p=17334

At Buckingham Wealth Partners, we pride ourselves on cultivating talented and passionate professionals from the industry and industry peers across the nation agree on our hiring selections! Cheers to Buckingham Wealth Partners’ Head of Planning Strategy Michael Kitces for once again being awarded Investopedia’s Most Influential Advisor. Michael’s respected thought leadership, ability to shape strategic […]]]>

 

At Buckingham Wealth Partners, we pride ourselves on cultivating talented and passionate professionals from the industry and industry peers across the nation agree on our hiring selections!

Cheers to Buckingham Wealth Partners’ Head of Planning Strategy Michael Kitces for once again being awarded Investopedia’s Most Influential Advisor. Michael’s respected thought leadership, ability to shape strategic priorities, passion for research, dedication and love of the business makes him number one in our book.

A big congratulations goes out to Buckingham Wealth Partners’ Chief Planning Officer Jeffrey Levine on being named one of the top 100 advisors in the country. Jeffrey prides himself on creating a seamless client experience, serving as Buckingham’s technical resource and providing training and education to hundreds of advisors.

Besides being authoritarians in the field, these award winners are always dedicated to doing the right thing. Kudos Michael and Jeffrey!

The Investopedia 100 recognizes advisors making significant contributions to critical conversations around the financial industry.

Third-party rankings and recognition from ratings services are no guarantee of future investment success. Working with a highly rated advisor does not ensure that a client or prospective client will experience a higher level of performance or results. Ratings should not be considered an endorsement of the advisor by any client nor are they representative of any one client’s evaluation.

The Investopedia 100 Top Financial Advisors of 2022 award is an independent listing of financial advisors in the U.S. produced annually by Investopedia. Investopedia’s proprietary methodology focuses on awarding financial advisors who have demonstrated top-of-the-industry skills to reach the largest and most diverse financial and investing audience. That reach is measured by the digital presences across the nominees’ own websites, social media, and other media platforms; community support through peer nominations outside nominees’ own firms and lastly their commitment to financial literacy measured by participation in workshops, programs, nonprofits, or collaborations with others in the community to spread financial education. For additional information on the methodology please click here.

By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party websites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. For general informational purposes only. R-22-4090

© 2022, Buckingham Strategic Wealth® and Buckingham Strategic Partners®, collectively known as Buckingham Wealth Partners.

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Buckingham Weekly Perspectives | July 13, 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-july-13-2022/

Wed, 13 Jul 2022 13:15:50 +0000

 

 

 

https://buckinghamstrategicpartners.com/?p=17327

What is the difference between value and growth stocks? In this edition of #Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer explains the differences between these equity investment strategies and shares the rewards and risks.

R-22-4012

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What is the difference between value and growth stocks? In this edition of #Buckingham Weekly Perspectives, Chief Investment Officer Jared Kizer explains the differences between these equity investment strategies and shares the rewards and risks.

R-22-4012

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Buckingham Weekly Perspectives | July 6, 2022https://buckinghamstrategicpartners.com/perspectives/buckingham-weekly-perspectives-july-6-2022/

Wed, 06 Jul 2022 08:00:10 +0000

 

 

https://buckinghamstrategicpartners.com/?p=17308

BuckWeeklyPerspectives_BSPBlogImage

Is it better to invest all your funds at once or should you utilize a dollar cost averaging approach and spread out your investments over time? Buckingham’s Managing Director of Investment Strategy Kevin Grogan explains the evidence-driven “why” behind the answer, delves into the psychology of emotions and finances and shares how he personally handles this subject in his own portfolio.

R-22-3995

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BuckWeeklyPerspectives_BSPBlogImage

Is it better to invest all your funds at once or should you utilize a dollar cost averaging approach and spread out your investments over time? Buckingham’s Managing Director of Investment Strategy Kevin Grogan explains the evidence-driven “why” behind the answer, delves into the psychology of emotions and finances and shares how he personally handles this subject in his own portfolio.

R-22-3995

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