Insights

The ABLE Account Program: Financial Planning for Family Members With a Disability

Financial planning for family members with a disability can be a challenging responsibility.  Governmental assistance programs such as Supplemental Security Income (SSI) and Medicaid have strict eligibility requirements that make caring for loved ones difficult.  For example, SSI has a limit of $2,000 in countable assets that a recipient can own which includes cash, bank accounts, investment and retirement accounts. An estimated 8 million people in the United States receives SSI disability benefits, but these benefits often do not cover all necessary expenses.  Families and friends can fund special investment vehicles to assist in paying all necessary expenses.

Planning Techniques for Bear Markets

Has your portfolio dropped significantly? What can you do? Watching your portfolio’s value tumble in the midst of a bear market can be mentally and emotionally draining.  You might even wish to ignore your portfolio completely during a market downturn.  While bear markets are generally unfavorable, they can provide an advantageous opportunity for various financial and estate planning strategies.  Strategies such as tax loss harvesting, Roth conversions, 529 plan contributions, gifting assets, and setting up Grantor Retained Annuity Trusts (GRATs) can help you save money on taxes and efficiently remove assets from your estate. 

Quarterly Commentary Q2 2022: Interest Rates Increase

Rising wages and other inflationary factors spurred the U.S. Federal Reserve to raise short-term fed funds interest rates by 1.5% so far this year, with another 1.5% rate increase expected by year-end.

Don’t Get Caught Without Enough Homeowners Insurance Coverage!

Given the recent wildfires in California, flooding in Florida, and other natural disasters throughout the United States, homeowners should be prepared for future disasters.  Climate change, rising property costs, inflation and the risk of insurers refusing to provide or renew coverage are leaving many homeowners in jeopardy of being underinsured.  Homeowners should insure the total replacement value of their property.  Those carrying less than the recommended amount of coverage are at risk of cash shortfalls and in some cases only partial reimbursement for damages.    

Stock Market Update May 2022: Contrarian Indicators Suggest Strong Stock Market Returns 12 Months Hence

U.S. Consumer sentiment is so poor now (April 2022) that future stock market returns are expected to be higher than average.  As can be seen in the chart below, when the University of Michigan Consumer Sentiment (confidence) Index has reached eight troughs in the last 51 years, the subsequent 12-month return of the S&P 500 stock index has averaged 24.9%.

In April 2022, the Consumer Sentiment Index reached a low only exceeded four other times.  Such pessimism occurs during periods of extreme financial and economic distress.  Within 12 months, conditions are expected to improve enough that pessimism wanes and stocks rally as a result.