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Second Quarter Reports Indicate Strong Earnings Overall

Second Quarter Reports Indicate Strong Earnings Overall

Q2 earnings strong indicating no signs of changing soon and what that means for the market for the rest of 2017.

Over the past several quarters, the upward trajectory in the price movement of the S&P might lead you to believe that corporate earnings have been improving as well. This wasn’t the case until 2017: earnings growth was stagnant during the calendar year 2016 and only began to rise in this year’s first quarter.

With nearly all companies now reporting their second-quarter earnings, this trend appears to be continuing. Q2 2017 was another strong quarter of earnings growth. As of August 11, over 90% of companies in the S&P 500 had reported their actual Q2 results. Among the companies reporting, 73% beat their mean earnings per share (EPS) estimate and 69% beat their mean sales estimate. Combined, the S&P 500 reported 10.2% growth over the Q2. 

The continued rise in the price of the S&P without the accompanying earnings growth has led to a market with a valuation that is above average over the last five and ten year periods. While not in “bubble” territory, this is certainly something we are keeping a close eye on. At this time, there are also two current trends that deserve specific attention. 

S&P 500 Companies with More Global Exposure Reported Higher Earnings Growth

FactSet recently compared the earnings of companies that generate more than 50% of sales inside the United States with companies that generate less than 50% of their sales inside the United States. Companies with less global exposure had an earnings growth rate of 8.5% for the most recent quarter while those with more global exposure had an earnings growth rate of 14.0%. Revenue growth was also stronger for companies with more global exposure. The strength of companies with global sales was the result of the tailwinds of a weaker U.S. dollar and stronger global GDP growth. 

S&P 500 Companies See Worst Price Reaction to Positive Earnings Surprises since Q2 2011

Generally speaking, one expects companies that report earnings above estimates, or earnings surprises, to be well received and for their stocks to trade higher. During the second quarter, this has not held true. 

FactSet tracked performance of the 331 S&P 500 companies reporting positive earnings surprises and found that nearly 50% recorded a price decline over their tracking period with an average price decline of 4.0%. If this negative reaction to positive news continues, it will serve as a sign of caution moving forward. 

Looking Ahead to the Q3 and the Rest of 2017 

In the second half of 2017, monitoring the two trends discussed above will be important. If the U.S. dollar re-gains strength, it could negatively impact future earnings. Similarly, there will be cause for concern if earnings reactions remain negative to positive news. In a market where valuations are above average at best, one needs to watch closely to ensure that everything is not priced for perfection. In the meantime, analysts continue to expect strong earnings growth, which may help to support higher prices.

If you have any questions regarding how Republic Wealth Advisors is working with our clients to address current market valuations and the current environment, reach out for more information. 

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

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How HSAs Appeal More To High-Income Earners

How HSAs Appeal More To High-Income Earners

What a Health Savings Account (HSA) is and how it may make sense for higher-income earners – and not-so-much for lower-income earners.

Do you have a Health Savings Account (HSA)? 

A Health Savings Account, or HSA, is a unique savings account with a triple tax benefit. First, contributions reduce taxable income. Second, growth within the account is tax-free if withdrawals are made for qualified expenses. And third, qualified withdrawals (withdrawals used for medical expenses) are also tax-free. And the HSA may be uniquely helpful to a higher-income earner.  

How An HSA Works

To be eligible to contribute to an HSA, the taxpayer must be enrolled a high-deductible health plan, defined as a plan with a deductible of at least $1,300 (individual) or $2,600 (family), by December 1st of 2017 (contribution amounts are prorated for partial year eligible taxpayers). A single individual can deposit up to $3,400 to an HSA in 2017. Taxpayers age 55 and older can make an additional catch-up contribution of $1,000 per year. For a family, the contribution limit is set at $6,750 for 2017

Here’s a helpful table that shows the relevant contributions, limits, deductibles, and more from the Society For Human Resource Management:

  

HSA & HDHP Table from shrm.org

Unlike Flexible Spending Accounts, HSAs do not have a “use-it-or-lose-it” feature. The account belongs to the taxpayer if he/she does not use the funds before the end of the calendar year. Funds carry over from year to year and can even be invested, making HSAs a great savings vehicle for increasingly high medical bills that may occur in future years.

A bonus benefit is that after the age of 65, the account owner may take distributions from the HSA for any purpose, health-related or not; he or she will pay regular income tax, but with no penalty.

Advantages of HSAs

HSAs often benefit older taxpayers. A typical couple turning 65 today will pay an average of $220,000 in out-of-pocket medical costs before they die, according to a 2013 study by Fidelity Benefits Consulting. That’s a big medical bill that will come due for many people.  

However, according to the Employee Benefits Research Institute (EBRI), a 55-year old taxpayer who contributes the maximum amount to an HSA every year until age 65 could see a balance of $60,000 from $42,000 in contributions, assuming a 5% rate of return. 

Higher-Income Earners Benefit Most

HSAs typically work best for those with high incomes. As with any tax-advantaged investment strategy, you need to be in a high tax brackets to save more money with a tax deduction.

Second, making maximum contributions requires deeper pockets. HSAs work with a high-deductible health insurance plan, remember. That means you need the ability to pay out-of-pocket at least $1,300 (and often a lot more, depending on the policy) in annual medical bills – before the insurance kicks in.

Lower-Income Earners Benefit Less

HSAs are not big money-savers for people in lower income brackets. Low-income families usually don’t have extra cash to tuck away in an HSA. 

Middle-income families will also not likely benefit by not going the high-deductible, HSA route. They just can’t save enough though an HSA to make a big savings difference in the long-run. Because HSAs are usually the last savings vehicles to get funded after 401(k)s and IRAs.

The Bottom Line: HSAs Are Helpful In The Right Place

A healthy person in any income bracket who needs little or no medical care during the year will always come out ahead by choosing the overall cheaper plan and banking the difference.

But you probably shouldn’t start with maxing out an HSA. Financial planners generally agree that individuals should first max out 401(k) plan and IRA contributions for the year before they start funding an HSA, but you will need to consult someone who can advise you on your specific situation.

To speak with an experienced advisor at Republic Wealth Advisors about whether contributing to an HSA is appropriate for your situation, please reach out today. We’re happy to walk through how an HSA may make sense for you.

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

 

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How A Roth 401(k) Could Keep You Wealthier In Retirement

How A Roth 401(k) Could Keep You Wealthier In Retirement

What is a Roth 401(k), how taxes differ from the traditional 401(k), and other considerations for your retirement savings. 

There are many retirement savings options for people today. One of the lesser-known options is the Roth 401(k). Since January 1, 2006, U.S. employers have been allowed to amend their 401(k) plan document to elect Roth IRA type tax treatment for a portion or all of their retirement plan contributions.

Let’s cover why a Roth 401(k) may be right for your situation. Special thanks to NerdWallet for some of the details on this article.

What Is A Roth 401(k)?

According to Investopedia

A Roth 401(k) is an employer-sponsored investment savings account that is funded with after-tax money up to the contribution limit of the plan. This type of investment account is well-suited to people who think they will be in a higher tax bracket in retirement than they are now. 

The Roth 401(k) can be a great investment vehicle for the right person. The key is whether you want to pay taxes on your contributions now or on your distributions during retirement. The contribution rules for a Roth 401(k) are exactly the same as for a traditional 401(k). Currently that limit is $18,000/year or $24,000/year for those 50 or older – indexed each year (n

Note: that this is the maximum contribution for either or a Traditional and Roth 401k; in other words, you cannot fund $18,000 into a Roth 401k and also $18,000 into a Traditional 401k).

More Money Now Or Later?

Contributions to a Roth 401(k) can hit your budget harder today because of the additional tax withholdings. That’s because after-tax contribution takes a bigger chunk of your current paycheck than a pretax contribution to a traditional 401(k). So it often costs you more to use a Roth 401(k) on the front end.

On the back end, the Roth account can be more valuable in retirement. That’s because when you pull a dollar out of that account, you get to keep that entire dollar. In addition, growth is compounded tax free in a Roth. However, when you pull a dollar out of a traditional 401(k), you only keep the after-tax value of the dollar. 

Pros & Cons of the Roth 401(k)

One reason to opt for a Roth 401(k) relates to tax rates before and during retirement. If your tax rate is low now and you expect it to be higher in retirement, you can make contributions with after-tax dollars — which you can do with a Roth 401(k). At that point, you won’t pay taxes at that higher rate when you take qualified distributions in retirement. 

Another reason to go with the Roth 401(k) is the potential for tax rate increases. Because government expenses tend to continue to grow, there’s a possibility of future legislative tax increases; current tax rates are low historically-speaking. That would be an incentive to pay taxes now in a Roth account compared to later with a traditional 401(k).

A final reason to go with a Roth 401(k) is you can roll your funds into a Roth IRA which is not subject to Required  Minimum Distributions (RMDs). With a traditional 401(k), you are required to take distributions at age 70 ½. Not so with the Roth 401(k) if it’s properly managed.   

However, if your tax rate is higher now than you expect it to be in retirement, then a traditional 401(k) may make more sense. You’ll then pay taxes at that expected lower rate when taking distributions in retirement. Many retirees often live frugally, resulting in a lower tax burden so the traditional 401(k) is often the best option.

Roth vs. Traditional 401(k)

Image from NerdWallet

Check With An Experienced Advisor To Discuss Your Options

If you anticipate higher income in your retirement years because of deferred compensation or other income you’re expecting, it might make sense to start contributing to a Roth 401(k). There are several options to consider besides current tax rates, and because future assumptions are unknown, there is not a simple or “right” answer. 

To chat with an experienced advisor at Republic Wealth Advisors about whether contributing to a Roth 401(k) may be appropriate for your situation, please reach out today. We’ll be happy to walk you through the pros and cons of different retirement savings options, including the Roth 401(k).

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

 

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Five Tips For Every High-Income Earner

Five Tips For Every High-Income Earner

5 things to review if you earn more than most: net worth, taxes, estate planning, insurance, and portfolio risk.

Some of the most successful professionals earning high annual incomes can make big financial blunders. Why? Because they’re busy doing what they’re good at -- being doctors, attorneys, business leaders, and performing other highly-skilled roles. These in-demand professionals often don’t have the time or expertise to take proper care of their own financial situation. 

This circumstance can leave their families vulnerable to costly financial mistakes. If you make a good income, review these five tips to discovery if you might have an important financial need. Special thanks to Forbes for the article idea.

Tip #1: Know Your Net Worth 

High earning individuals often accumulate assets ranging from investment accounts, retirement accounts, insurance policies, and real estate. One of the more common mistakes with top-earning professionals is a missing net worth statement -- a consolidated list of all assets and liabilities.

If your net worth statement is out-of-date (or you don’t even have one), you may unknowingly be creating tax issues for your estate. For instance, if insurance policies are not properly utilized within your estate, you could be pushed over the estate tax limit and wind up paying unnecessary estate taxes. Armed with a complete net worth statement, you can make better financial planning decisions.  

Tip #2: Pay Taxes Now On Retirement Accounts

Many current high earners may also remain in the top tax bracket after retirement. That means all deferred income, pensions, investment income, and even Social Security benefits could be taxed at a high rate in the future. Consider using all available after-tax savings strategies now to help minimize taxes later. As an example, Roth 401k contributions (if your company offers the option), have several advantages over traditional 401k contributions:

  • No income limit to making Roth 401k contributions.
  • Roth 401k growth is tax free.
  • Roth 401k funds can be rolled directly into a Roth IRA when retiring or leaving a company.
  • There are never any required minimum distributions (RMDs).   

Tip #3: Estate Planning For Your Family

Once someone has a taxable federal estate ($5,490,000 for an individual or $10,980,000 for a married couple in 2017), it may make sense to use more advanced estate planning strategies to remove assets or the growth of assets outside of the estate. If you see exceeding this threshold as a possibility, you should consider consulting with a qualified estate attorney.

Tip #4: Review Your Insurance

There are several areas of insurance that you should review as a high-income earner.

Although it comes in many different forms, life insurance often plays a key role in estate planning. Your unique family needs will dictate what life insurance strategy to have in place. Getting this right can be a key factor in your family’s financial success. 

Other types of insurance are also important. Disability insurance will protect you during an unexpected accident or illness. Long-term care insurance will help pay for care during a long-term illness like dementia. An umbrella policy will cover liability issues related to your personal property. All of these insurance areas are helpful to review with a good, independent insurance agent.

Tip #5: Understand Your Portfolio Risk

Risk is an unavoidable part of everything you do. You have to take some level of risk to generate reasonable investment returns. Taking additional investment risk can provide larger returns, but also increases the potential downside. 

The level of risk you take should always be matched to your financial goals and objectives.  Aggressive investing can cause declines of 30% or more during bear markets. If you can tolerate that kind of downturn (very few can), you may want to explore more aggressive investment strategies. Regardless of your tolerance for risk, you should understand the types of investments you own and what sort of risk is inherent with each one.

Use A Professional

Each of these tips can be vital to your financial success. However, some of these areas require specialized knowledge involving tax planning, estate planning, and insurance. We recommend using a professional whenever venturing into unfamiliar financial territory. This will help you steer clear of the financial landmines that trip-up many other high-earners.

We enjoy our role as a key financial resource to our clients. If you need a referral to a specific professional, please reach out to us -- we’re happy to make an introduction!

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

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The #1 Reason You Need An Estate Plan

The #1 Reason You Need An Estate Plan

Several reasons to create a good estate plan as well as the number one reason plan your estate: personal peace of mind.

Death. It happens to us all. 

Chances are death is not the first thing you think about every morning, but that doesn’t mean you should never think about it.

A good plan will help make the transition as easy as possible for your family and everyone who depends on you when you’re gone. The resulting peace of mind can help you enjoy the rest of your life, no matter how long you live.

Several Reasons To Create An Estate Plan

There are many reasons to create an estate plan. Minimizing taxes is just one of these reasons.   In fact, a good estate plan could net your family a potential $0 tax liability. That’s one goal, but a well-designed plan will include much more.

Another reason estate planning is helpful is that your wishes have the best chance of being followed if they’re in writing. Recording your intentions will help ensure they’re followed. A comprehensive plan includes instructions for your affairs in the event you are incapacitated or disabled – not just when you die. You can make sure your wishes for medical care, family matters, business continuity, and asset disposition are clear even if you are comatose. So estate planning is not just planning for death.

Moreover, estate planning addresses assets for your children, grandchildren, and your favorite charities. Blended families add another layer of complexity if that’s your situation.  There are numerous ways to do this and the right plan isn’t always obvious. But a good estate plan will make your wishes clear – and help your family avoid unnecessary strife when you pass.

But Isn’t A Will Enough?

The classic “Last Will & Testament” is also a part of an estate plan, but it’s not comprehensive. Retirement accounts require you to designate a beneficiary ahead of time and that designation may override your legal will. The same goes with insurance policies. Your estate plan should encompass all your assets and make sure they are distributed according to your wishes. That’s why having a will isn’t the only component in a good estate plan.

The #1 Reason To Plan Your Estate

There are many reasons for estate planning, but the number one reason to do it is for your own personal peace of mind. 

You’ve worked hard for your family, usually for many decades. You’ve provided for your family, sometimes have grown a business, saved assets, bought properties, and invested in worthwhile causes. Your estate plan is one of your final statements to the world about who you are and what you care about. By creating a good estate plan, you are not only giving your spouse and your family what you’ve worked hard for, you’re also giving yourself the peace of mind that you’ve finished the race well. 

Next Steps In Estate Planning

Estate planning is an important part of a broader financial plan. 

We can help direct you to the right resources and experts based on your own unique goals and circumstances. We are not attorneys at Republic Wealth Advisors, but we’ve been through this process with many clients. We’ve seen how smooth the process can be for well-prepared families, and how difficult it can be for those who didn’t plan.

We recommend consulting with a board certified estate planning attorney in your area. If you need a referral, please reach out and we’re happy to make an introduction!

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

 

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Estate Planning, Death & A Good Financial Strategy

Estate Planning, Death & A Good Financial Strategy

Estate planning basics, one family’s experience, and how to get your financial affairs in order.

Estate planning can be an uncomfortable process.

While no one likes talking about death, it is one of the few certainties in life.  It is a “when” not “if” proposition, and it is important to plan ahead so that you can control how your assets pass to your heirs (and also not leave a burden to someone else to sort through your affairs when they can’t consult you).  

Estate Planning Basics

There are several things you can do to prepare for your inevitable passing (or your disability). For instance, we recommend you…

  • Identify all individual (and spousal assets) and determine who should receive them.
     
  • Include instructions for your care if you become disabled before you die.
     
  • Name a guardian for minor children.
     
  • Locate and safeguard all life insurance policies.
     
  • Review and update beneficiaries on assets and policies.
     
  • Understand pensions and retirement plans.

Although this isn’t a comprehensive list, it should help you start thinking about the importance of estate planning today. Planning can save weeks and months of heartache in an already taxing time. But with proper planning, the death of a spouse doesn’t have to be as stressful on you personally or financially. 

One Couple’s Experience with Estate Planning: The Lupos 

In a recent story in the The New York Times, one couple’s estate planning helped tremendously.

One couple who went through this exercise, Erika and John Lupo of Sparta, N.J., did so sooner than most, and it paid off. When Mr. Lupo died of cancer last year at age 57, Ms. Lupo, 51, who runs an acting school, was extraordinarily well prepared — unlike many widows.

In his final days, Mr. Lupo, a former salesman, did everything he could to prepare his estate and make sure his wife knew where his assets were — and how they could be bequeathed to her and heirs. There was a bit of complex estate and financial planning involved, because Mr. Lupo had a daughter from a previous marriage, and the couple has a teenage son.

Working with Mark Germain, a certified financial planner with Beacon Wealth Management in Hackensack, N.J., Mr. Lupo had several documents in order just a few weeks before he died.

“We made out wills, durable powers of attorney and a trust” for Mr. Lupo’s daughter, Mr. Germain said. “We also made some arrangements for the son in the will. We had to do some sophisticated planning.”
 

In this instance, the Lupos’ estate planning was complex. There was a previous marriage, another child, and a teenage son in the mix. But with the help of a good financial planner, the Lupos were able to order their financial affairs to help sustain the family when the patriarch passed on. 

Getting Your Estate In Order

Each individual’s (and family’s)situation is unique. What may have been true for the Lupos may have nothing to do with your circumstances. That’s why it’s important to connect with the right professionals to complete your estate planning.  Even if you have previously completed estate planning, the plan should be reviewed periodically to determine if changes are needed.

We recommend consulting with a board certified estate planning attorney in your area. If you need a referral, please reach out and we’re happy to make an introduction!

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

 

 

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‘Death Tax’ Repeal Proposed In Trump’s New Budget

‘Death Tax’ Repeal Proposed In Trump’s New Budget

Trump’s proposed estate tax repeal, details of the ‘death tax’, and how you should prepare your estate for generational wealth transfer.

 

President Donald Trump will include the estate tax repeal in his tax reform proposal, the administration's top economic advisor has confirmed. This relates to the Federal, not any state-level estate taxes. 

Gary Cohn is Chief Economic Advisor to President Trump. He spoke in the White House Press Briefing Room on April 27, 2017. According to Think Advisor, 

"We're going to repeal the death tax," Cohn said. "The threat of being hurt by the death tax leads small-business owners and farmers in this country to waste countless hours and resources on complicated estate planning to make sure their children aren't hit with a huge tax when they die. No one wants to see their children have to sell the family business to pay an unfair tax."

Details of The ‘Death Tax’ Repeal And Why It’s In The Budget

According to IRS.gov, the estate tax, also known as the “death tax”, is “a tax on your right to transfer property at your death.”    

Estates are now taxed at 40 percent at the time of a person’s death. The tax applies to all assets after $5.49 million per individual and $10.98 million per couple. With proper planning, the average effective rate can be lower under the current tax system. The death tax repeal would not be aimed at lower and middle class families, instead it’s focused on higher net worth individuals and couples.

According to Cohn, the reason for the estate tax repeal is to spur on the American economy. Upper class families provide the capital to invest in business development. Capital infusion often spurs job growth and opportunity for all Americans, which is a major push in Trump’s administration. 

The budget was delivered to Congress in May and has yet to pass the House or Senate. The budget is not expected to pass as proposed and the death tax is still in force for now. Depending on the political climate and future Congressional votes, the death tax may remain. However, we are hopeful that some cut of the estate tax cut will eventually pass.

Estate Planning With or Without The Death Tax

Regardless of what happens with the death tax, it’s prudent to consult with an estate planning attorney about your situation. Whenever there are significant assets to transfer to the next generation, there are inevitable complications for every family. This includes issues with some state-level estate taxes.  

If you need a good recommendation for an estate planning attorney, please reach out. We love helping clients achieve all their financial goals including helping with legacy planning.
 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

 

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Headwinds, Tailwinds & Wild Cards In The Summer of 2017

Headwinds, Tailwinds & Wild Cards In The Summer of 2017

What's working and not working for equities in the financial markets as we enter the summer months.

Dear Clients, Strategic Alliances, Family and Friends,

We hope this finds you and yours doing well and looking forward to the calendar turning to summer.

I thought we would take a pause from our recent blogs being centered mostly on different wealth management topics and share some thoughts from the front lines about what is on our minds here at Republic regarding the capital markets.

For those of you that have been with us for some time you will no doubt remember the framework from our periodic missive Headwinds and Tailwinds regarding the investment opportunities and risk landscape.

Headwinds For Equities Going Forward

  1. High stock valuations (i.e., price to book, price to sales, dividend yield, price to earnings multiples, price to earnings adjusted for both inflation and rolling periods of time, enterprise value, etc.). No matter how you slice it most equities are priced for a happy world.
     
  2. Seasonal rotation usually described as "sell in May and go away". This means the markets historically tend to go stagnant after May and pick up again late in the year.

Potential Tailwinds For Equities From Here

  1. Momentum (i.e., technical analysis). In other words, technical indicators suggest a continued bull run.
     
  2. Supply vs. demand (i.e., there are roughly half the number of public companies today (4,000+/- vs. the 8,000+/- that were public when I entered the business almost four decades ago).
     
  3. Economies around the world are definitely starting to show some actual real growth for the first time in a decade (top line sales revenue growth along with double digit earnings growth).

Wild Cards

  1. Narrowing markets. Are the market advances getting to narrow...with fewer names doing well? You may have heard about the hand full of so called " FANG" stocks, Facebook, Amazon, Apple, Netflix, and Google hitting new highs.  Much has been written about this recently and it appears this fear is overblown, but definitely it is continuously monitored by our team.
     
  2. Currencies (i.e., the value of the dollar vs. the other world markets).
     
  3. The Fed (if and when will the Fed actually go from the accommodative position of forcing interest rates to near zero along with blowing out their balance sheet with QE1, QE2, QE3(QEInfinity?) going all the way back to 2009? In other words, when the biggest financial engineers of all time go from providing a gale force tailwind for financial assets and start to become a possible headwind, will other central bankers follow?).
     
  4. The ever present geo-political risks (North Korea, Syria, Russia, and other international issues can always throw a wrench in otherwise functioning markets).  

Cautious Optimism for the Rest of 2017

Yes, deep down, we are optimists. But we take our Fiduciary responsibilities to heart all the time (side note, we are not fazed by the financial front page debate over the new fiduciary rules for advisors...we have been fee based, fee- only fiduciaries from the start around here).

How all these market dynamics play out going forward and more importantly what it means for your custom investment portfolio strategy and you will continue to be top of mind for us. These will be high on our agenda when we visit with you at your next Regular Progress Meeting.

As always, we are both grateful and thankful to continue to serve you. 

Fred Hanish 
(and the rest of the Republic Wealth team)

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

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Three Quick Steps To Protect Seniors From Fraud

Three Quick Steps To Protect Seniors From Fraud

One in five elderly people will be financially exploited. Here are three quick steps to minimize the exposure to senior fraud. 

Seniors are a prime target for swindlers. 

According to the National Adult Protection Services Association, one in five elderly people will be financially exploited. However, only 1 in 44 cases are reported. That means 20% of all elderly people are victims of fraud, but only 2% of actual cases are reported. 

These are several reasons for this growing epidemic. 

  • For one, elderly people have resources. They’ve worked their entire lives and have often built a substantial nest egg.
  • However, society has become much more complicated than it was years ago, so seniors are less familiar with sophisticated scams.
  • In addition, seniors can suffer from diminished capacity issues, something they didn’t have to deal with in their early years.
  • Finally, technology has advanced so there are more ways to bilk seniors from their hard-earned savings.  

In short, seniors are often preyed upon by scam artists. 

Fidelity Investments put together a short document to help seniors in this situation. We have highlighted the top action items for seniors you may know to protect them from future scams. 

Step 1: Create Oversight

Ideally, it’s best for more than one person to have oversight in a senior’s financial affairs. That way the elderly person is not dealing with new and sophisticated frauds alone. There would be another person there to help with the added complexities of life in 2017. So encourage your loved one to have a family member or trusted advisor act on their interest. 

Step 2: Setup Alerts

Setup alerts whenever significant financial transactions occur. This will help catch problems as they are occurring. You can also monitor credit card and bank card statements to catch suspicious recurring charges. These steps help minimize the potential for scams for some of the elderly you know.

Step 3: Act Quickly

Finally, act quickly. If you are concerned about potential fraud, seek assistance early—problems will only get worse over time. Contact the financial institution involved as soon as soon as you notice something is wrong. That will help fix these problems quickly and prevent future issues.   

Share With A Senior

Do you know a senior? 

This would be a good article to share with them. Please forward along to a loved one and let’s protect one another from scam artists who prey upon elderly people.  

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

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Three Tips for Excellent Email Protection

Three Tips for Excellent Email Protection

Use different email accounts, enable two-factor authentication, change your email account 4X / year, plus some bonus tips.

Email security is important. 

Without secure email, your entire online presence is at risk. And most of the responsibility for email security lies with you.

Email providers can’t guarantee your cybersecurity. Hackers attack email providers to gain access to user accounts. But they also directly attack individual email accounts, using phishing, malware, social engineering and other scams.

Here are three tips to dramatically improve your email security from JP Morgan’s Cybersecurity Awareness document. 

Email Tip #1: Use Different Personal & Business Email Accounts

If you segment business and personal email accounts, you decrease cybersecurity risk by 50%. It takes extra effort and time to manage two accounts, but it’s much better than the alternative. Here’s what two email accounts look like…

Example Email For Business:
This email address is being protected from spambots. You need JavaScript enabled to view it.

Example Email For Personal:
This email address is being protected from spambots. You need JavaScript enabled to view it.

Once you setup your business and personal email accounts, start using them in that way. Send your contacts an appropriate announcement and interact with people on each account accordingly. This will help limit the downside risk if one of your accounts gets hacked. 

Email Tip #2: Enable Dual-Factor Authentication

Enable dual-factor authentication in your email service when available to help prevent unauthorized access. This is probably the best thing you can do to secure your email.

Dual Factor Authentication, also known as DFA (as an acronym), is an extra layer of security that is known as "multi factor authentication". It requires a username & password but also something that only that user has on them – like cell phone text verification. Using dual-factor authentication will help dramatically improve your email security. 

Email Tip #3: Change Your Password 4 Times Per Year

Email passwords are your first line of defense against a cyberattack. Hackers use dictionaries, names, linguistic patterns, and can break into over 60% of passwords used today – possibly including yours. And worse, email providers also get hacked thus compromising your passwords. 

Here are some ways to improve your email password security. 

  • Use long and complex passwords – at least 10 characters.
  • Use special characters and numbers.
  • Change your email password 3-4 times per year. 

Bonus:  Extra Tips to ‘Bulletproof’ Your Email Accounts

Following the above 3 tips will put you ahead of most other email users.  However, if you want to go the extra mile to ‘bulletproof’ your email accounts, here are more email security tips:

Image from: JP Morgan’s Guide to Cybersecurity Awareness

Other Cybersecurity Areas To Watch

Email security will be important for any person with an email account going forward. Make sure you’re aware of the dangers and follow these tips to stay safe online. 

  


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

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