The Federal Reserve Raises Benchmark Interest Rate

Monetary policy is normalizing due to economic improvement.
Provided by Calvert Wealth Management, Inc

 On March 15, the Federal Reserve raised the benchmark interest rate by a quarter-point to a range of 0.75-1.00%. The increase was widely expected, and it represented a vote of confidence in the economy.1

This was the central bank’s second rate hike in three months, and Wall Street took it in stride, with the S&P 500 rising nearly 15 points on the day. One reason for that may have been the Fed’s latest dot-plot forecast, which remained as it was when the last interest rate adjustment was made in December. The Fed still projects a total of three hikes for 2017.1,2  … Read more →

What Could You Do With Your Tax Refund

Instead of just spending the money, you could plan to pay yourself!

About 70% of taxpayers receive sizable refunds from the Internal Revenue Service. Just how sizable? The average refund totals about $2,800.1

What do households do with that money? It varies. Last year, consumer financial services company Bankrate asked Americans about their plans for their federal tax refunds. Thirty-one percent of the respondents to Bankrate’s survey said that they would save or invest those dollars, and 28% indicated they would attack their debts with the money. Another 27% said they would buy food with that cash or use it to pay utility bills. Just 6% said they would earmark their refunds for shopping sprees or vacations.2

So, according to those survey results, about six in ten people who get a refund will use it to try and improve their personal finances. You could follow their example.

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Making & Keeping Financial New Year’s Resolutions

What could you do (or do differently) in the months ahead?

How will your money habits change in 2017? What decisions or behaviors might help your personal finances, your retirement prospects, or your net worth?

Each year presents a “clean slate,” so as one year ebbs into another, it is natural to think about what you might do (or do differently) in the 12 months ahead.

Financially speaking, what New Year’s resolutions might you want to make for 2017 – and what can you do to stick by such resolutions as 2017 unfolds?

Strive to maximize your 2017 retirement plan contributions. Contribution limits are set at $18,000 for 401(k)s, 403(b)s, most 457 plans, and the federal government’s Thrift Savings Plan; if you will be 50 or older in 2017, you can make an additional catch-up contribution of up to $6,000 to those accounts. The 2017 limit on IRA contributions is $5,500, and $6,500 if you will be 50 or older at some point in the year. (If your household income is in the six-figure range, you may not be able to make a full 2017 contribution to a Roth IRA.)1
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Your Annual Financial To-Do List

Things you can do before & for 2017.

What financial, business, or life priorities do you need to address for 2017? Now is a good time to think about the investing, saving, or budgeting methods you could employ toward specific objectives. Some year-end financial moves may help you pursue those goals as well.

What can you do to lower your 2017 taxes? Before the year fades away, you have plenty of options. Here are a few that may prove convenient:

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Your Year End Financial Checklist

Seven aspects of your financial life to review as the year draws to a close.

The end of a year makes us think about last-minute things we need to address and good habits we want to start keeping. To that end, here are seven aspects of your financial life to think about as this year leads into the next…

Your investments. Review your approach to investing and make sure it suits your objectives. Look over your portfolio positions and revisit your asset allocation.

Your retirement planning strategy. Does it seem as practical as it did a few years ago? Are you able to max out contributions to IRAs and workplace retirement plans like 401(k)s? Is it time to make catch-up contributions? Finally, consider Roth IRA conversion scenarios, and whether the potential tax-free retirement distributions tomorrow seem worth the taxes you may incur today. If you are at the age when a Required Minimum Distribution (RMD) is required from your traditional IRA(s), be sure to take your RMD by December 31. If you don’t, the IRS will assess a penalty of 50% of the RMD amount on top of the taxes you will already pay on that income. (While you can postpone your very first IRA RMD until April 1, 2017, that forces you into taking two RMDs next year, both taxable events.)1Read more →

Global Markets React to the Trump Win

Some major indices retreat after the news, but others advance.

News of Donald Trump’s election victory did not upend the equities markets. As word of his largely unexpected Electoral College win traveled around the world, most major indices did not suffer alarming losses. While the Nikkei 225 sank 5.36% overnight, the Shanghai Composite slipped 0.62%, the Sensex 1.23%, and the Hang Seng 2.16%. In Europe, there were notable gains: the FTSE 100 rose 1.00%, the Stoxx Europe 600 1.46%, the CAC-40 1.49%, and the DAX 1.56%. In North America* the Mexican IPC All-Share dropped 1.80% while the Canadian S&P/TSX Composite advanced 0.70%.1 … Read more →

When is Social Security Income Taxable?

Your Social Security income could be taxed. That may seem unfair, or unfathomable. Regardless of how you feel about it, it is a possibility.

Seniors have had to contend with this possibility since 1984. Social Security benefits became taxable above certain yearly income thresholds in that year. Frustratingly for retirees, these income thresholds have been left at the same levels for 32 years.1
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Tell Your Beneficiaries About Your Account and Policies

Will your heirs receive a fair share of your wealth? Will your invested assets go where you want them to when you die?

If you have a proper will or estate plan in place, you will likely answer “yes” to both of those questions. The beneficiary forms you filled out years ago for your IRA, your workplace retirement plan, and your life insurance policy may give you even more confidence about the eventual transfer of your wealth.
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2016 Retirement Plan Contribution Limits

Over the past 12 months, consumer prices have increased very little. The latest Consumer Price Index (September) shows 0.0% yearly inflation and only 1.9% core yearly inflation. That means no cost-of-living adjustment for Social Security, and very few IRS adjustments to retirement plan contribution limits.1

Roth IRA & traditional IRA contribution limits stay the same for 2016. Those 49 and younger in 2016 can contribute up to $5,500 to their IRAs, while those 50 and older will be able to contribute $6,500.2
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