WE Plan

It Feels Like Autumn

October 11, 2018

For me, once Labor Day passes and school is in full swing I always feel that in a blink of an eye it’ll be Halloween. Sure enough, it is mid-October and I’m writing the last WE Plan installment of 2018. That means we recommend you take a moment to make sure there aren’t any loose item that need to be taken care of before year end. Here is a list for your convenience:

  1. Have you realized gains in any investments in 2018? Realized means that you have sold a property/stock/mutual fund and enjoyed a profit. If so, you may consider selling an asset at a loss to offset some portion of the gain(s). If you have investments that are managed by your WealthEngage team, you can be sure that we constantly consider the potential tax implications that you may face due to the investments we buy and sell for you. If you have investments elsewhere, be sure to let us know what has happened in those accounts and we will help you design a plan for year end.
  2. Remember that the standard deduction doubled for 2018 so many of you will no longer itemize deductions when you do your taxes next year. In the past, many clients have made end of year charitable contributions expecting to receive some help on their tax bill, while also helping a cause that is important to them. I am all for helping worthy causes, but you should know whether a donation will help you financially as well as help you feel that you are doing good by giving back. It may be time to consider a Donor Advised Fund (DAF). A DAF allows you to make contributions to an account without those funds going to a charity right away. Why would you do this you ask? Because by making a large contribution to a DAF you may perhaps exceed the standard deduction and be able to get a tax break! Then you can distribute the money in your DAF as you see fit - all to one charity or smaller amounts to various charities. Ask your WealthEngage team for more information.
  3. Do you own or did you start a business in 2018? With a growing economy we see more entrepreneurs starting businesses and following their dreams. One of the advantages of owning business is that there are retirement plan options that most employees don’t have available to them. I’d like to highlight two: Simplified Employer Pension (SEP) and a Defined Benefit Plan. The SEP tends to be inexpensive to establish and allows you to make before tax contributions in excess of $50,000 each year. Compare that to the max 401(k) contribution limit which is half that amount. Another unique feature of the SEP is that the deadline to make a contribution for a given year is the tax filing date with extensions which goes into the following year. So, you could make a contribution to a SEP in September of 2019 which will offset your taxable income for 2018! This gives you plenty of time to plan your cash flow to maximize your deduction. The Defined Benefit Plan takes more work to establish and usually deputies that you hire another professional to administer the plan for you, but it may be a very powerful way to maximize retirement savings and lower taxes.

I’d like to touch upon a topic I brought up in the last WE Plan article which was titled “What Happens When You’re Gone”. In it we introduced a new service called Everplans which we offer to our valued clients and their friends complimentary. Recently, there was a death in my family that came as a big surprise. The experience has reinforced in me the importance of leaving detailed information about your wishes, your finances, and other important information to those you leave behind. If you have not enrolled in Everplans, please ask your WealthEngage team about it and consider using it. If you are not comfortable with using a third party, I understand. At least write down the information and give it to those you trust. We can help you create a list of items to address.

As always, please let us know if we can help with any of the above topics, or if there is anything else in your financial plan that you feel needs work.

Any opinions are those of Eddy Augsten and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. The information contained herein does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Past performance may not be indicative of future results. Investing involves risk and investors may incur a profit or a loss. No strategy can guarantee success. Contributions to a Donor Advised Fund are irrevocable. Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. Raymond James financial advisors do not render advice on tax or legal matters.

You should discuss any tax or legal matters with the appropriate professional. Raymond James is not affiliated with Everplans.

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