As age 73 nears, it is critical that you begin considering how you want to handle the required minimum distributions (RMDs) you are obligated to withdraw from your tax-advantaged retirement accounts, including 401(k)s, 403(b)s, 457s, and individual retirement accounts (IRAs). According to US New Money, 62% of Americans aren’t even aware that they have to take an RMD, and a fair share of those that do make mistakes they could have avoided. Here are a five common RMD mistakes that could prove costly.
 
1. Forgetting to take your RMDWe lead busy lives, even as retirees, and it is more common than you might think for people to forget to take their RMD before the applicable deadline. Doing so may result in a 50% penalty imposed by the IRS. One recourse that might be beneficial is to contact your financial institution and find out if they have automatic RMD withdrawal options to help you stay on time. These choices vary from monthly distributions to semiannual, quarterly, or annual. Staying on top of your financial responsibilities can help save money and alleviate some of your financial stress.
 
2. Delaying your first RMDFor individuals who need extra time to prepare for the withdrawal, the IRS allows you to defer your first RMD to April 1st of the following year. This strategy may not be the most beneficial approach, as delaying that first payment will require you to make two RMDs within a year. If you have large accounts, you could find yourself looking at two sizeable taxable withdrawals in the same year, bumping you into a higher tax bracket and potentially subjecting you to the Medicare surcharge.
 
3. Using the wrong balance to calculate your RMDsMany people will try to calculate how much they owe for their RMDs; however, they won’t use the proper balance. This will generate an RMD less than the required amount, and you may be subject to a penalty. If you withdraw more than the threshold, it is fine. There is a floor but no ceiling regarding the withdrawal amount. According to the IRS, an RMD is calculated for each account by dividing the prior December 31st balance of that IRA or retirement plan account by the age-based distribution period found in the IRS table.
 
Three tables provide those distribution periods:
 

• If you are married, your spouse is the sole beneficiary of your account, and if they are younger than you by ten years or more than you, you use the IRS’s Joint and Last Survivor Table.
• All other original IRA owners use the IRS’s Uniform Lifetime Table.
• If you inherited your IRAs, you will use the Single Life Expectancy Table.

 
 
5. Mixing plan typesYou are not allowed to use the withdrawals from different retirement accounts to meet the RMD threshold for one of those accounts.
 

• If you have multiple 401(k) or 457(b) accounts, you must withdraw an RMD from each account separately.
• If you have multiple IRA or 403(b) plans, you can take your total IRA RMD from just one of those accounts.
• Regarding employer-sponsored retirement plans, if you have more than one former retirement plan with different employers, you must take the RMD from each account separately.

 
5. Paying distributions for both spouses from one spouse’s accountThere are several financial assets that married couples can hold jointly; however, retirement accounts don’t fall into that category. Retirement accounts must be owned individually, and the responsibility to take RMDs applies to that owner, even if you file taxes jointly.
 
Other key takeawaysIf you own a Roth IRA, you are not required to take an RMD while the account holder is alive. If you inherited the account, you may be required to take distributions. Failing to take this action could subject you to hefty penalties.
 

• RMDs are considered income, and a spouse who withdraws too much might also owe more in Social Security and Medicare premiums because of the higher income.

 
Get help from a financial professional before making financial decisionsWith so many moving parts and the complex nuances involved with taking RMDs, getting help from a financial professional could save you a headache and potentially a significant amount of money the government would otherwise get. Take five minutes and schedule that meeting with your financial professional today because tomorrow will come quickly, and you want to stay ahead of the curve.
 







Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine if your investment(s) require Required Minimum Distributions (RMD), consult your financial professional.
 
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
 
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
 
Prepared by LPL Marketing Solutions
 
Sources;
Common required minimum distributions mistakes to avoid | Fortune Recommends
Taking Required Minimum Distributions? These Mistakes Could Cost You (investopedia.com)
Required Minimum Distribution Mistakes to Avoid (usnews.com)
 
LPL Tracking # 491033

Click here to The holidays are nearly upon us – a time of giving, goodwill to others, and embracing traditions. For many people, giving to a charity or organization that aligns with your values provides a sense of fulfillment. If you itemize deductions on your income tax return, you can deduct gifts made to charities. Here are six year-end giving strategies to spread holiday cheer with the additional gift of potential tax benefits.

1. Making cash giftsIf you give cash, you may deduct up to 60% of your adjusted gross income (AGI). Giving cash also provides the charity better flexibility when it comes to spending the money to help the people, animals, or the environment. Two disadvantages of giving a cash gift are liquidating a stock, bond, or other appreciated asset and being responsible for the generated capital gains tax, and you also don’t always know how the money is necessarily being used.


2. Donating Stocks, Bonds, or other appreciated securitiesIf you are considering donating the earnings from appreciated stocks, bonds, real estate, or other appreciated non-cash assets directly to your charity of choice you may want to think about giving the appreciated asset directly to the charity over giving cash after selling them. This may be a beneficial strategy as it allows you to avoid the capital gains tax so long as you adhere to the rules. In addition, you would be eligible for a charitable income tax deduction up to the fair market value of the security you donate, up to 30% of your AGI. A financial professional can help you with the nuances of this type of giving strategy.


3. Donor-advised fund (DAF)A DAF is a fund managed by a third party that handles charitable donations given to a specified charity. Donors become eligible for an immediate tax deduction in that calendar year. They can give anonymously, knowing that the money can grow tax-free, and may be able to bypass capital gains taxes. There are various ways to give, including cash, stocks, bonds, and other appreciated assets. There are a couple of things to consider when deciding on a DAF. Initially, there may be a high start-up cost. Funds are not eligible for donor benefits, for example, scholarships and tickets, and there is limited control regarding grant-making. Being a DAF donor also gives you the authority to recommend grants from the fund to charitable organizations you support over time.


4. Bunch your charitable giftsBunching your donations is a tax strategy where you make a multi-year contribution in a single year to maximize your itemized deduction for the year in which you make your donations. The strategy is to make your itemized deductions (including charitable donations) large enough to exceed the standard deduction amount. Bunching charitable gifts involves timing and the amount you plan to give. This has become a popular strategy after the Tax Cuts and Jobs Act of 2017 that nearly doubled the standard deduction through 2025. You have to remember that your donations must be to qualifying charitable organizations, generally non-profits with tax-exempt status under section 501(c)(3) of the IRS code.


5. Contribute restricted stockIf you contribute directly to a public charity, including sponsors of donor-advised funds, the donor can qualify for an income tax deduction for the full fair market value (FMV) of the securities in an amount up to 30% of the donor’s adjusted gross income, with a five-year carryforward for any excess not deductible in the year of the contribution. When giving stock as opposed to the after-tax proceeds from selling the stock, the charity receives the full value of the appreciated stock and the donor is not subject to capital gains tax on the appreciation in the stock.


6. Combine tax-loss harvesting with a cash giftTax-loss harvesting involves using capital losses to offset capital gains up to $3,000 of ordinary taxable income. Donors who itemize their deductions can then claim a charitable deduction for donating cash from the sale proceeds. But, to use this method, you have to understand when to apply it. Tax-loss harvesting only works on taxable investments.
Several retirement accounts, for example, IRAs and 401(k)s are tax-deferred and therefore are not eligible to be used to offset taxable gains. Also, if you are somebody that just invests in mutual funds or exchange-traded funds (ETFs), tax-loss harvesting may be more difficult because to use tax-loss harvesting, the whole fund has to be down, therefore limiting its tax-saving capability.


Year-End Giving, Your Financial Professional, and YouCharitable giving and the potential tax benefits are often complex and decisions not carefully weighed could impact you and your financial goals. Consider consulting a financial professional before making any financial decisions that could put a damper on your holiday cheer this year.







Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

The tax-loss harvesting and other tax strategies discussed should not be interpreted as tax advice and there is no representation that such strategies will result in any particular tax consequence. Clients should consult with their personal tax advisors regarding the tax consequences of investing and charitable giving.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by LPL Marketing Solutions


Sources:
Using Restricted Stock and Other Equity Awards for Tax-Smart Giving (fidelitycharitable.org)
Donor-Advised Fund Definition, Sponsors, Pros & Cons, Example (investopedia.com)
What is a Donor-Advised Fund? | NPTrust
5 Situations to Consider Tax-Loss Harvesting - TurboTax Tax Tips & Videos (intuit.com)
LPL Tracking # 490957edit.

A 401(k) plan is one of the most popular and effective techniques for saving for your retirement. A company will automatically withdraw and contribute money from each paycheck to your 401(k) plan. Some employers will even match a percentage of the contribution. Are you maximizing these contributions? There are also limits on how much you are allowed to contribute annually. Here is a 401(k) end-of-the-year checklist you may find beneficial in keeping up with your retirement strategy.
 
☐ Review your goals
There is a good chance that you have created short- and long-term goals. You may have met with a financial professional who helped you create a strategy based on the lifestyle you hope to have in retirement. To reach your long-term goals, you will often pursue short-term goals. As life changes, so might these goals, and reviewing your goals at the end of the year can be beneficial.
 
☐ Consider increasing your contribution amount
For 2023, the maximum contribution for employees is $22,500, or $30,000 if you are 50 or older. Catch-up contributions for those 50 or older are $7,500.
It is possible to make non-tax deductible contributions to traditional 401(k)s above the employee contribution limit. The total 401(k) plan contributions an employer and employee can make cannot be more than $66,000 for 2023. For those 50 or older, the maximum is $73,500.
 
☐ Get a 401(k) match from your employer if it is offered
Review your plan to determine if your employer offers a 401(k) matching contribution. Typically, employers match employee contributions up to a percentage of annual income. Your employer can elect to match a percentage of contributions up to the limit or 100% of your contribution up to a percentage of your total compensation.
If you are a highly compensated employee, your employer may only match up to a specified dollar amount regardless of your income. As an example of how matching works, say your employer offers to match 100% of all your contributions every year up to 4% of your annual income. If you are earning $50,000, the total amount your employer would contribute is $2,000. You can contribute more than 4%, although your employer won’t match it.
 
Even if you have multiple 401(k) plans with different employers, the total employee contribution plan stays the same if you have multiple 401(k) plans with different employers. Multiple plans don’t mean a higher contribution limit.
The IRS adjusts 401(k) plan contribution limits annually for inflation.
 
☐ Review your beneficiaries
Life is a journey and is constantly changing. One moment you could be getting married or divorced, and the next, there could be a birth, death or a significant financial shift in the family. Years ago, you may have named a charity as one of your beneficiaries, and now it no longer exists. Because the 401(k) is in the background, you can easily forget about it. However, it is critical to review these details periodically, for example, at the end of the year to ensure the beneficiaries are current.
Retirement account beneficiary designations hold precedence over will and trust directives. Suppose somebody is listed as a beneficiary on your retirement account, but someone else is on your will and trust directive. In that case, the retirement account will generally determine who gets the money.
 
☐ Maximize your tax benefits with a 401(k)
Contributing to a 401(k) is done on a pre-tax basis. This allows you to deduct your contributions in the year you make them, lowering your taxable income. However, this benefit only applies to traditional 401(k) plans, not Roth 401(k) plans. If invested, the money in a traditional 401(k) can accrue interest on a tax-deferred basis, meaning dividends and capital gains that grow within your 401(k) are not subject to tax until you start withdrawing. The RMD (required minimum distribution) age for 401(k)s is 73, expected to increase in the next few years. A 401(k) is particularly attractive if you believe you'll be in a lower tax bracket in retirement.
 
☐ Sign up for direct deposit
There are a few benefits to using direct deposit, the electronic funds transfer process where employers can transfer wages directly into an employee’s bank account. Direct deposit allows for convenience, efficiency, and potentially heightened security. However, there is always the risk of a data security breach, so monitoring your direct deposit payments is essential. There is also an element of enhanced privacy and control when you use direct deposit. Time sensitivity for receiving and cashing the check is no longer an obstacle. Money can automatically be withdrawn from the check and contributed to a savings account. Direct deposit has more pros than cons, but you should make a careful, informed decision- before deciding to use this money transfer method. A financial professional can help you determine if it aligns with your financial situation.
 
☐ Consult a financial professional
The money put into a 401(k) plan can be invested in stocks or bonds. Otherwise, it will remain in the account as cash. With any investment, risk is involved, and getting help from a financial professional can help you with managing risks that might arise and confidently grow your wealth over time. Some people may be hesitant to seek out the help of a financial professional because they think it is only for the wealthy. However, financial services can be affordable and help you save money over time.
 



Important Disclosures:
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by LPL Marketing Solutions

Sources:
401(k) Contribution Limits for 2023 – Forbes Advisor
10 Tips for Managing Your 401(k) Account | Nasdaq
How 401(k) Matching Works (investopedia.com)
LPL Tracking # 1-05377976

The Christmas season is an excellent time of the year to review your financial planning strategy. Our finances are top of mind as most of us are monitoring our spending as the holiday and new year approaches. We can look back over the year, draw from our wins and losses, and get an idea of where we need to make changes. Here is a 12 days of Christmas financial planning checklist to keep you off Santa’s naughty list:


1. On the 1st day of Christmas, my financial professional said to me… Where do you stand with your debt?
Debt is something nearly all of us can relate to. The average American household debt in 2023 is $101,915. What makes up your debt, and are you working to pay it down? The compilation of debts held by the average consumer includes:

• Home mortgages
• Credit card debt
• Personal loans
• Student loans
• Home equity lines of credit (HELOC)
• Auto loans
• Medical debt

 
2. On the 2nd day of Christmas, my financial professional said to me… Is your credit where you want it to be?  
There are three primary credit bureaus: Experian, Equifax, and TransUnion. It is important to review your credit report and ensure nothing is on it that shouldn’t be. For example, if you pull up your credit score on Experian (which is free) and see something questionable, like an old phone bill sent to collections that you already closed, you may file a dispute. If it is a legitimate argument the credit bureau will investigate.

3. On the 3rd day of Christmas, my financial professional said to me… Have you created an estate plan? If so, have you reviewed it yet this year?  
According to LegalZoom, 56% of Americans believe that estate planning is important, but only 33% of adults in the U.S. have documented their end-of-life plans, 75.12% of those being wills. Ensure you understand what it is you want with your estate planning goals, from disbursement to beneficiaries, tax benefits, philanthropic pursuits, and avoiding probate if possible. Having a well-ironed-out estate plan may alleviate some of the stress your heirs may experience when managing your affairs after you are gone and seeing to it that your wishes are considered.
 
4. On the 4th day of Christmas, my financial professional said to me… Have you started that emergency fund you have been talking about?  
In life, unexpected events occur. Are you ready for such a moment? Did you know that 49% of Americans have less or no savings built up from a year ago? If you don’t yet have one, starting an emergency fund can be beneficial; money accumulates over time faster than you might think. Review your emergency fund if you have one, or consider putting money away for that rainy day, even if it is minimal initially.

5. On the 5th day of Christmas, my financial professional said to me… Have you reviewed your beneficiaries?  
As the years pass, your family structure may have changed. The beneficiaries you have on your accounts may not be the ones you still want and if you should die, regardless of what you have in your will, the listed beneficiaries on those retirement accounts will take precedence. It is essential that you regularly review your beneficiaries.
 
6. On the 6th day of Christmas, my financial professional said to me… Have you considered a Roth IRA conversion?  
Converting assets into a Roth IRA may be a beneficial retirement strategy for you if you think you may be in a higher tax bracket after you retire. There is no tax benefit upfront; however, earnings grow tax-free, and you won’t be taxed when it is time to withdraw the assets. By doing so, you are better equipped to personalize your tax planning when you retire, regardless of how the world has changed. You also will not have to take required minimum distributions (RMDs) like you do other retirement accounts.

7. On the 7th day of Christmas, my financial professional said to me… Have you maximized all available tax breaks?  
Maximizing your tax breaks can be complex, including itemizing your deductions, claiming tax credits, making a required minimum distribution (if you are of age), contributing to your health savings account, and reviewing your filing status. Consult your financial professional to learn more about how your decisions could impact your financial goals.

8. On the 8th day of Christmas, my financial professional said to me… Have you reviewed your budget?  
Living below your means is one of the keys to preserving financial wealth and growing it. It is easy to spend money frivolously; however, creating an up-to-date budget can help you manage your spending to ensure it is less than the amount of money you bring in. Consider that 76% of U.S. adults making under $50,000 live paycheck to paycheck. If you are one of them, it may be time to reevaluate your spending habits.

9. On the 9th day of Christmas, my financial professional said to me… Have you reviewed your portfolio and rebalanced it if necessary?  
Rebalancing your portfolio involves modifying your portfolio’s composition to align with your risk tolerance and financial goals. Remember not to overlook the taxes you may incur from profitable investment sales. A financial professional can help you understand the impact of capital gains on your finances.

10. On the 10th day of Christmas, my financial professional said to me… Have you harvested any tax losses?  
If you have a realized loss, you can offset capital gains up to $3,000 in ordinary income to lower current federal taxes. Tax-loss harvesting defers tax payments, but it doesn’t excuse them. If there are no capital gains to offset in the year capital loss was harvested, you can carry over the amount to offset future gains or income. The calculations and complexities of this potential tax benefit can be confusing so consider seeking a financial professional for assistance.

11. On the 11th day of Christmas, my financial professional said to me… Review and modify your goals  
Reviewing and modifying your financial goals is critical because it gives you both a foundation to work with and a direction to take. Since life happens and the market constantly evolves, staying current on your goals can help you maintain alignment with your financial strategy and potentially avoid pitfalls.

12. On the 12th day of Christmas, my financial professional said to me… Have you scheduled your end-of-year meeting yet with me?  
Working through your Financial Planning Checklist alone can be complicated, therefore getting help from a financial professional can benefit you in potentially preserving and growing your wealth and hopefully dodging any obstacles that may arise.
 





Sources:
Average American Household Debt in 2023: Facts and Figures (fool.com)
Companies List | Consumer Financial Protection Bureau (consumerfinance.gov)
Roth IRA conversion rules for 2023 (usatoday.com)
Tax-Loss Harvesting Rules and Strategies for Investors | Investing | U.S. News (usnews.com)
Most Americans Don’t Have Enough Emergency Savings, Despite The Strong Job Market | Bankrate
Rebalance Your Portfolio To Stay on Track (investopedia.com)
 
Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation.
Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.
The tax-loss harvesting and other tax strategies discussed should not be interpreted as tax advice and there is no representation that such strategies will result in any particular tax consequence. Clients should consult with their personal tax advisors regarding the tax consequences of investing.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by LPL Marketing Solutions
LPL Tracking #498167-01

Kitty O’Neill Collings, an American politician and pioneer in the area of international diplomacy, civil liberties, and social justice, once quipped, “Aging seems to be the only available way to live a long life.” Along with aging comes the certainty that most of us will gradually begin to deteriorate over the years, both physically and mentally, and many of us potentially might require long-term care. Because of this reality, long-term care insurance (LTC) becomes an attractive option. The government won’t help pay for your long-term care bill. Knowing about long-term care insurance and how you can make those premiums work for you may make it easier to create a strategy in preparation for those retirement years. Here are five tax benefits of owning long-term care insurance.
 
1.      Potentially Tax-FreeThe Internal Revenue Service (IRS) may treat your long-term care insurance benefits as tax-free based on your policy limits and how it is structured. If benefits are considered reimbursement, they are 100% tax-free. If they are indemnity or cash, they are tax-free up to a specified amount per diem (see below in the Tax Deductibility portion).
 
2.      Tax DeductibilityUnder section 7702(b), long-term care insurance has attractive tax benefits. However, only qualified long-term care insurance policies are eligible. The maximum amount eligible for the deduction per person is based on an age-indexed schedule.
 
Age at the end of the tax year                                                        2023

• 40 or younger                                                                                 $480
• 41-50                                                                                               $890
• 51-60                                                                                               $1,790
• 61-70                                                                                               $4,770
• 71 and older                                                                                  $5,960

 
Benefits paid are generally excluded from taxable income. However, some cash products that pay daily or monthly benefits not associated with actual bills are subject to a per diem limitation of $420 a day. Anything over that amount is subject to taxation unless there are bills to support the higher number.
 
3.      Health Savings AccountsHealth Savings Accounts (HSA) are personal savings accounts where you can add pre-tax dollars to pay certain health care costs. If you have an HSA, you can pay your long-term care insurance premiums.
Due to the increasing inflation in 2022, the IRS increased contribution levels for 2023 to $3,850 for individual coverage or $7,750 for family coverage, up from $3,650 and $7,300 in 2022. For those age 55 and older, you are allowed an additional $1,000 contribution for ‘catch up.’
The IRS also includes a 2023 limit for Excepted Benefit Health Reimbursement Arrangements (EBHRAs) at a limit of $1,950, up from $1,800 in 2022.
However, you have to be aware that not all policies have tax incentives. Linked benefit or hybrid life insurance policies do not generally qualify for a possible tax benefit.
 
4.      Tax Advantages for Certain Hybrid PoliciesIf your hybrid long-term care policy meets federal tax guidelines (IRC Section 7702(b)), a percentage of your long-term care premium may be deductible. Also, hybrid policy benefits, for example, long-term care, are tax-free. Not all insurance companies offer this type of product, so it is critical that you review your policy and strategy with a financial professional.
 
5.      Self-employed IndividualsIf you are self-employed, you can deduct 100% of your health insurance premiums, including long-term care insurance premiums, without meeting the 7.5% adjusted gross income (AGI) threshold. However, the deduction amount can’t exceed the net profit from your business. Below is a breakdown of how the different tax benefits can be accomplished.
S-corporation – The business should pay shareholder-employee premiums and add the total premium paid to W-2 compensation. This can ensure the individual’s plan is considered an employer plan for tax purposes. It gets more complicated when premiums are paid personally. To be deductible as an employer plan on the owner’s tax return, they must be reimbursed with a written agreement for the plan.
 
Partnerships – Premium payments through partnerships do not have to be paid by the partner. If you pay the premiums yourself, the partnership must reimburse you and report the premiums as guaranteed payments. Then, you take the self-employment health insurance age-based eligible premium deduction. Premiums paid by the partnership must be added to the partner’s K-1 as a guaranteed payment.
C-corporations – Premium payments are 100% deductible from the corporate tax return and considered a reasonable and necessary business expense. The deduction is not limited to the age-based eligible premiums. Like traditional health and accident insurance premiums, this applies to shareholder W-2 employees, their spouses, and dependents, and the business pays all employee coverage. Employer-paid LTC is excludable from an employee's gross income, including the shareholder employees’ income, and the benefits are received tax-free. C-corporation paid premiums must be a 100% corporate expense to be deductible. They are excluded from shareholder employees' incomes, bonuses, expense accounts, or other compensation.
Non-owner Employee – Premiums paid to any non-owner employee and spouse by any business entity are 100% deductible without any limits. Like health care premiums, they are considered a reasonable and necessary business expense. Long-term care insurance paid by an employer is not included in the employee’s gross income, and benefits are tax-free.
Due to the complexity involved with the potential taxation of your long-term care insurance benefits and how this may impact you and your financial goals, it is essential that you consult a financial professional who can help provide guidance and create a strategy that aligns with your retirement plans.
 
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which product(s) may be appropriate for you, consult your financial professional prior to purchasing.
 
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
 
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
 
This article was prepared by LPL Marketing Solutions
 
Sources:
How Are Long-Term Care Insurance Benefits Taxed? (2023) (annuityexpertadvice.com)
Long-Term Care Insurance Tax Deduction Limits Increase for 2023 - IRS Reveals Schedule Based on Age | LTC News
Tax deductible long-term care insurance tax limits-LTC federal tax limits state deductions for long term care (aaltci.org)
 
LPL Tracking # 1-05378143

Thanksgiving is a holiday for spending time with loved ones, being grateful, and perhaps enjoying a bit of overindulgence. There are many financial lessons to be had in planning, preparing, and celebrating this annual feast.1 Here are four Thanksgiving lessons that might help your household's financial plan year-round.

Planning is the Key to Preparation
You cannot expect to whip together a flawless Thanksgiving meal if you do not begin planning and preparing at least a few days in advance. Similarly, you cannot put together a strong budget and financial plan if you do not know where your money is going or if you do not plan for expenses before they occur. Track your expenses for a few months using a budgeting app or even the old-fashioned method of using a pen and paper to see what you are working with.

Balance and Moderation are Crucial
Just as overindulging in turkey, ham, or heavy side dishes may leave you feeling groggy and lethargic for the rest of the day, overindulging in spending might leave your budget in a mess.

One way to cut your monthly outflow with little impact is to go through your budget with a fine-toothed comb and eliminate any expenses not currently adding significant value to your life. Could you put a monthly subscription on pause? Do you really need an extended warranty on a high-quality item? By rigorously evaluating what your regular expenses contribute to your life, you may make cuts of nonessential items and then be able to indulge where it matters.

Plan for More Than You Need
When planning a Thanksgiving meal, preparing more food than you think you might need is probably a good idea. Not only may this help ensure you have enough for any extra guests who might show up, but this method also allows you to send leftovers home with guests. In the budget context, building in some extra wiggle room when estimating expenses may help prevent falling short at the end of the month.

Money is Important, But Not the Most Important
As the saying goes, "Money isn't everything,"—and this is never truer than at Thanksgiving, when time spent with loved ones is paramount. Even if you have ample financial resources and a healthy budget, if you do not have those human connections, you may still struggle to identify a sense of purpose. While you are working on your financial plan, be sure to work on your relationships as well.

Enjoy your Thanksgiving holiday with friends and family by using these tips and then take a hard look at your financial plans. It may help to work with a financial professional when reviewing your assets, expenses, retirement plans, and other financial goals to have a balanced approach to budgeting and expenditures. Always be grateful for what you have and take good care of yourself.




Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
LPL Tracking #1-05377994
Footnotes1 Put Thanksgiving Lessons to Work in Your Financial Plans
https://tulsaworld.com/put-thanksgiving-lessons-to-work-in-your-financial-plans/article_9aa3dff1-6a5b-5dc5-ac2a-164a9c02a6e7.html

​Generational Wealth involves financial planning, where parents or grandparents pass wealth to loved ones after they die. Entrusting family members with receiving an inheritance is more than just getting a hold of assets or a check in the mail. It is about understanding how to steward the hard-earned wealth that you and your spouse spent your lives building.

​You are not alone if you are uncomfortable discussing your finances with your children or grandchildren. For many parents, talking to their children about their future inheritance is a challenging topic to explore. Did you know that only about one-third of adults have a prepared will, and about 40% with investable assets of $1 million or more never discuss their estate plans with their children? This communication breakdown is correlated to the fact that 90% of the time, inherited wealth is entirely squandered by the third generation, and 70% of the time, it is gone by the second. These troubling statistics lead financial professionals to believe that talking to children about their inheritance may help reverse this downward trend.
 
Why don’t parents want to talk to their children about estate planning and their inheritance?

Studies indicate that there are a few reasons a parent does not want their children to know how much money they have and how much they will get.

Entitlement

• The child knows they will one day inherit a significant amount of money, and due to this they may feel entitled to simply receive it without putting in any effort to maintain it.

Motivation

• Knowing that one day they will come into a significant amount of money could affect their motivation to work hard and succeed on their merit. Anderson Copper, a CNN journalist and son of multi-millionaire Gloria Vanderbilt, never received a trust fund from his mother. Instead, he generated his own wealth. He is quoted as saying, “From the time I was growing up, if I felt that there was some pot of gold waiting for me, I don’t know that I would have been so motivated.”

The value of a dollar

• Children that grow up with money available, or those that may be aware that they will get a large sum in the future, could focus on the material things they will buy or the fancy vacations they will one day take. Parents want children to understand the value of a dollar and that generating wealth is difficult. The money was hard-earned, and being financially responsible and controlling frivolous spending, for example, is an essential life skill that can be learned.

Wealth management

• Wealth management is a long-term responsibility that everyone should practice. Those who learn to manage wealth efficiently tend to live financially confident lives.

Lack of gratitude

• In Shakespeare's play King Lear," the king says about his daughter, "How sharper than a serpent's tooth it is to have a thankless child." Studies have indicated that children that are grateful for the abundance in their lives and good fortune that comes their way are not only happier but more intent on the preservation and stewarding of the wealth that is passed down to them, as well as sharing similar values to those of their parents or grandparents in terms of wealth management.

 
That is a compelling list of why parents may be concerned about discussing their finances and inheritance with their children; however, discussing your children’s future inheritance with them has benefits.

Why is it important to talk to your children about getting an inheritance?

First, as mentioned above, the fact that most parents don’t talk to their children about their finances, and the statistics around wealth being lost so quickly should be a significant red flag. You don’t necessarily have to tell them the exact amount of the inheritance they will get; however, letting them know that there is an inheritance in their future can allow you to open the door toward teaching financial responsibility, advanced money management skills, among other characteristics like values and the dangers of frivolous spending. Adult children of baby boomers are estimated to inherit around $12 trillion and pass down $30 trillion to their children.

At what age should you consider scheduling a meeting with your financial professional, yourself, and your children to discuss estate planning and inheritance?

Even in their late teens, twenties, and thirties, children can benefit from understanding the emotionally and financially complex world of financial planning regarding the structure, details, and management of an estate plan and the passing down of an inheritance. Being prepared can help to mitigate problems, challenges, and risks that could appear later on.

What are some ways that parents can work to communicate effectively with their children?

Asking questions
Asking pertinent questions will help you to create a strategy and design a big-picture blueprint for your children to learn about where the inheritance came from, how it has been managed, and the importance of continuing to steward the wealth, including:

Parent questions

• How much will be inherited by the children?
• Are the children financially responsible in their own lives currently?
• Will this money affect their lifestyle?

Children’s questions

• Are Mom and Dad’s financials ok?
• Will they be open about their financials with us?
• Can a financial professional help us get a better understanding of our situation?

Transparent communication
You want to be open and honest about your finances. Doing so can help to mitigate obstacles that could appear later on. Transparent communication helps to build trust when discussing:

• Which accounts and assets comprise the estate plan, and how to access them?
• The amount of the inheritance.
• Who are the emergency contacts, and how to reach them?
• Why is the estate plan currently structured the way it is?
• What responsibilities will be required for a smooth transition?
• Both parties express true feelings about the situation, including worries, which builds trust and can open doors for teachable moments that will inevitably arise.

Share your values with your children
What do inheritance and lifestyle mean to you? Finding areas where both parents and children have shared values will make it easier to work together to pursue the same financial aspirations.

Work together during decision-making
Sometimes difficulties with decision-making after receiving an inheritance are due to previous decisions made by earlier generations who needed to be taught how to manage wealth strategically.

Recognize where there might be a problem and troubleshoot it now, for example, a spendthrift child or grandchild
There are incidents where the parents or grandparents might feel that a beneficiary is not fiscally responsible based on how they currently live their lives, overspending on material things, maxing out credit cards, battling substance abuse issues, a lack of gratitude, and feelings of entitlement for money they didn’t earn. These are all worst-case scenarios that are real-life problems for some families. How do you deal with it?

Schedule an appointment with a financial professional
The first step is to set up a family call to discuss services, expectations, and goals. A financial professional can guide parents on how to talk with children and grandchildren about the inheritance they will receive one day and how to manage the money. They can also offer insight into the importance of maintaining generational accounts. The handful we've done so far have been a hit! This resource is a 20-minute call for you and your family – kids, grandkids, nieces, siblings, parents, in-laws, grandparents, or anyone you consider family.
The family call gives us the opportunity to meet your loved ones and introduce ourselves so they know how we can help them going forward, both in a group setting or one-on-one.
The format is flexible and customizable to your needs as well. All conversations or consultations will be kept strictly confidential. Never will we discuss anything pertaining to you without your permission.

​Create a plan
With the help of a financial professional, parents and children can begin designing a strategy for long-term wealth stewardship.
It cannot be overstated how critical preparation is when it comes to the pursuit of any long-term goal or strategy. Begin this new journey by scheduling a meeting with your financial professional for you, your spouse, and the loved ones who will one day receive an inheritance.

If you would like to set up a call, please reach out to us by way of the contact information below. Please have the following information ready:

• Dates and times everyone is available
• Everyone's email addresses and contact information so that I may introduce myself.

​Don't hesitate to contact me if you have any questions. Thank you for your continued business, and we look forward to building our relationship with you!
 
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by LPL Marketing Solutions.
LPL Tracking #1-05377431
 
Sources:
How to Talk to Your Kids About Their Inheritance - Bloomberg
What To Tell Your Children About Their Inheritance (estateplanning.com)
Tips for estate planning and talking about inheritance | UMN Extension
What to tell your adult kids when planning your estate (cnbc.com)
How To Talk To Your Kids About Your Will | HuffPost Life
 
 
Savannah Sharp

​Although achieving your financial goals is more challenging than following a step-by-step recipe, a few common ingredients and preparation methods may help improve your ability to manage financial resources. Here is one recipe for a tasty Financial Dish.
Ingredients

• One cup of clear financial goals
• Two cups of smart budgeting
• 3/4 cup of consistent saving
• One tablespoon of diligent debt management
• One teaspoon of regular investing
• One pinch of frugal living
• One dash of an emergency fund
• Two tablespoons of continuous learning
• One cup of patience

Instructions
     1. Preparation: Set Clear Financial Goals

• In a quiet space, define your short-term and long-term financial goals.
• Be specific, measurable, achievable, relevant, and time-bound (SMART) in your goal-setting.

     2. Mix in Smart Budgeting:

• In a large bowl, create a comprehensive budget that outlines your income and expenses.
• Allocate funds for essentials, savings, investments, and discretionary spending.
• Regularly track and adjust your budget as needed.

     3. Fold in Consistent Savings:

• Use a dedicated savings account to transfer a portion of your income automatically.
• Aim to save at least 10-20% of your income for various goals, such as retirement, emergencies, and major purchases.

     4. Whisk in Diligent Debt Management:

• Review your debts, including credit cards, loans, and mortgages.
• Develop a strategy to pay off high-interest debts first while making minimum payments on others.

     5. Stir in Regular Investing:

• Research and choose investment options that align with your risk tolerance and goals.
• Invest consistently in diversified assets such as stocks, bonds, and mutual funds.

     6. Sprinkle a Bit of Frugal Living:

• Reduce unnecessary expenses by evaluating your spending habits.
• Look for opportunities to save money without sacrificing quality of life.

     7. Add a Dash of Emergency Fund:

• Set aside 3-6 months' worth of living expenses in an easily accessible account.
• This fund acts as a safety net during unexpected financial setbacks.

     8. Blend in Continuous Learning:

• Educate yourself about personal finance, investing, and money management.
• Stay informed about economic trends and financial strategies.

     9. Bake with Patience:

• Understand that financial success takes time and discipline.
• Avoid impulsive decisions and stay focused on your long-term goals.

    10. Serve with Confidence:

• Regularly review your progress and celebrate your achievements.
• Adapt your financial plan as your life circumstances and goals evolve.

Note: This recipe is a guideline. Adjust ingredient quantities and methods according to your personal financial situation and preferences. A financial professional may work with you to create a personalized plan that considers your financial circumstances. Remember that financial success is a journey. Every individual's recipe may vary.



Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
Investing in mutual funds involves risk, including possible loss of principal.  The funds value will fluctuate with market conditions and may not achieve its investment objective. Upon redemption, the value of fund shares may be worth more or less than their original cost.
This article was prepared by WriterAccess.
LPL Tracking #1-05377994

On Saturday, Hamas, a Palestinian militant group designated as a terrorist organization by the U.S. government, launched an attack on Israel, killing hundreds of civilians and taking dozens more hostage. In response to the attack, Israel launched a counteroffensive on Hamas positions in the Gaza Strip (one of two Palestinian territories, the other being the West Bank), a territory home to 2.3 million Palestinians under Hamas rule.

​While volatility initially impacted markets to start the week, investors seemingly shrugged off the tragic geopolitical turmoil in the Middle East, with the S&P 500 closing up 0.3 percent Monday. This market reaction may reflect the view that the conflict will remain focused on just Gaza and Israel, rather than spreading into oil producing regions throughout the Middle East. The market response is also likely looking at any potential for a slowdown in the global economy as increasing the likelihood of a pause in the Federal Reserve’s (Fed) interest rate hiking cycle.

​Stock Market Performance Following Prior Geopolitical Events
So, how have markets historically reacted to geopolitical crisis events, including wars and terrorist attacks? We look back at two dozen or so such events going back to World War II in the table below:

View enlarged chart

​As you can see above, the average one-day return at the onset of a geopolitical event is -1.1%. The S&P’s 0.3% gain Monday was unusual compared to history, as a positive one-day return only occurred four out of the 23 events we studied.

While the total drawdown related to this tragic event and recovery timetable are unknown, based on prior geopolitical events, the average drawdown is -4.7%, while the average time to reach market bottom is 19 days, and the average time to fully recover losses is 42 days. In other words, equities have historically held up well during geopolitical shocks, including wars and other military conflicts going back decades, with the average recovery taking roughly two months. Even the market recovery from 9/11 took only 31 days.

​Looking at a slightly wider list of events that also includes major non-war related historical events and how stocks performed over the next year after the event it seems that the main determinant of returns is not the severity of the event but whether the event coincided with, or caused, a recession. Assuming no imminent recession, LPL Research’s base case scenario currently, history shows that markets are roughly flat over the next month following an event but on average recover in the following three, six, and 12-month periods. In the case of an event near a recession however stocks are down on average over all the time periods studied (one, three, six and 12-months).

View enlarged chart

​Impact on the Path of Interest Rates
The weekend attacks on Israel affected markets’ expectations for the path of interest rates. On Monday the market implied probability of an increase in the fed funds target rate next month fell below 14% (after being almost 50% at the start of September and 30% last week) as investors anticipate the conflict has the potential to put a brake on the global economy this quarter. Despite a strong headline payroll report on Friday, wage pressures eased, adding support to markets’ view that the Fed will keep the target rate unchanged when the FOMC meets on November 1. Recent comments from Fed officials have also pointed in that direction by acknowledging the markets have done some of the Fed’s work by pushing yields on the intermediate and long parts of the Treasury curve higher. Interest rate sensitive sectors such as technology, communication services and utilities were amongst the bigger outperformers on Monday as expectations for further hikes in 2023 diminished.

Impact on the Energy Sector
Crude oil prices are on hyper-alert for any indication the conflict is poised to spread into the oil producing regions in the Middle East, particularly with regard to Iran. Initial reports suggested Iran supported and helped with logistics of the attack on Israel, but Iran denies having any role. Iran is suspected to be wary of recent progress that had been made toward a historic peace deal between Israel and Saudi Arabia that would reshape political power dynamics in the Middle East. The U.S. is involved in a broad reaching diplomatic effort to keep the conflict contained. Oil prices, however, may move dramatically higher if it appears the diplomatic effort is failing, and Iran is brought into the conflict.

Crude oil prices had been oversold coming into this week, but with a headline driven market sometimes filled with rumors and inaccurate reporting, oil prices can be subject to significant swings. Any chatter that Israel, now seemingly focused on shutting down Hamas’s operations, is preparing to strike beyond the immediate conflict, will escalate upward pressure on prices.
The first place markets will see the impact of fighting in Israel will undoubtedly be the increased risk premium embedded in oil prices, which would be expected to support the energy sector as markets assess the likelihood that Iran is brought into the conflict. Unsurprisingly the energy sector had the largest outperformance on Monday with a daily return of over 3.5%. LPL Research maintains its overweight recommendation on the energy sector.

Impact on Equity Positioning
The potential impact on the broader equity markets is difficult to predict because the risk of a wider conflict involving Iran or other countries in the region is still difficult to assess. Still, that risk, especially if it did materialize, could push volatility higher (although the volatility index, or VIX for short, actually ended Monday only marginally higher than Fridays close), sending stocks lower, and perhaps shift market leadership more toward defensives (utilities, gold, Treasuries, etc.). To be clear, this is not our base case.

If conflict remains contained to Israel and Gaza, while the humanitarian impact will still be devastating, the market impact will likely be very limited as Israel contributes only about 0.5% of world gross domestic product (GDP) and not a major producer of crude oil.
Defense stocks should catch a bid as defense spending will likely increase if this news provides a catalyst for Congress to act to bolster supplies of munitions and air defense systems that are now being supplied to both Ukraine and Israel.

​The Strategic and Tactical Asset Allocation Committee (STAAC) maintains its neutral stance on equities but will continue to watch developments in the Middle East closely to determine potential impact on the energy sector, the broader equity markets, and the path of interest rates.
 
 
IMPORTANT DISCLOSURES
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. For more information on the risks associated with the strategies and product types discussed please visit https://lplresearch.com/Risks  
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
Securities and advisory services offered through LPL Financial, a registered investment advisor and broker-dealer. Member FINRA/SIPC.
Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value
 
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