Your future self will thank you. Retirement accounts are not bank accounts. Nor should they be treated as such. When retirement funds are drawn down, they impede the progress of retirement planning, even if the money is later restored. In a financial crush, a retirement account may seem like a great source of funds. It is often much larger than a savings account; it is technically not a liquid asset, but it can easily be mistaken for one. The central problem is this: when you take a loan or an early distribution from an IRA or a workplace retirement plan, you are borrowing from your future self. In fact, you may effectively be borrowing more money from your future than you think. Even if you
WEEKLY QUOTE "There are two ways of spreading light: to be the candle or the mirror that reflects it.” - Edith Wharton CONSUMER SENTIMENT DECLINES FOR NOVEMBER The University of Michigan’s monthly gauge of how households perceive current and future economic conditions ended the month at a mark of 98.5. Compared to the 100.7 final October reading, this was a disappointment. Still, the index was up 5.0 points year-over-year. Richard Curtin, the economist in charge of the consumer survey, noted that the index has hovered near “the highest levels since 2004” since January.1 HOME BUYING GETS A FALL BOOST Existing home sales rose 2.0% in October, surpassing the consensus 0.7% gain forecast by anal
WEEKLY QUOTE "Humor is just another defense against the universe.” - Mel Brooks YEARLY INFLATION BACK AT 2.0% Consumer costs ticked up just 0.1% in October, according to the Department of Labor. The marginal monthly gain left the annualized increase in the headline Consumer Price Index at 2.0%, down from 2.2% a month earlier. The core CPI has risen 1.8% in 12 months. Gasoline prices influenced the October headline number: they fell 2.4% in October after a 13.1% September leap.1 RETAIL SALES BEAT EXPECTATIONS Analysts surveyed by MarketWatch thought retail sales would be flat for October after their huge surge in September. That was not so. They surprised to the upside with a gain of 0.2%. Mi
Here are some things you might want to do before saying goodbye to 2017. What has changed for you in 2017? Did you start a new job or leave a job behind? Did you retire? Did you start a family? If notable changes occurred in your personal or professional life, then you will want to review your finances before this year ends and 2018 begins. Even if your 2017 has been relatively uneventful, the end of the year is still a good time to get cracking and see where you can plan to save some taxes and/or build a little more wealth. Do you practice tax-loss harvesting? That is the art of taking capital losses (selling securities worth less than what you first paid for them) to offset your short-term
WEEKLY QUOTE “I have found the best way to give advice to your children is to find out what they want and then advise them to do it.” - Harry S. Truman CONSUMER SENTIMENT INDEX DECLINES The University of Michigan’s monthly gauge of U.S. household sentiment fell to 97.8 in its initial November edition; analysts polled by Bloomberg estimated it would tick up to 100.8. While the 2.9-point dip from its final October level was the largest drop in a year, the index remained near a 13-year peak. Sixty percent of the consumers surveyed felt that stocks would rise in 2018.1 Q3 Earnings: A LOOK AT THE SCORECARD As of Friday, 87% of S&P 500 companies had reported third-quarter earnings. An analysis fro
The little things independent contractors should do before April. Do you freelance or run a business on the side? You have a complicated tax situation, all stemming from one fact – when you earn a paycheck, taxes are not immediately taken out of it. Many freelancers are caught off-guard when tax season arrives. They are stunned to realize how much tax they owe. If you would rather not be one of them, pay attention to these details. You should have all your 1099-MISC forms in hand by early February. If you earned more than $600 working for an employer during 2017, that employer will send you a Form 1099-MISC.1,2 Frustratingly, some employers miss the January 31 deadline for issuing 1099s and
What is in it? What could its changes mean for you, if they become law? Major changes may be ahead for federal tax law. At the start of November, House Republicans rolled out their plan for sweeping tax reforms. Negotiations may greatly alter the content of the bill, but here are the proposed adjustments, and who may and may not benefit from them if they become law. The corporate tax rate would fall from 35% to 20%. Wall Street would cheer this development, perhaps with a significant rally. Sole proprietorships, partnerships, and S corporations would also see their top tax rate drop to 25% (although W-2 wages for business owners who invest in these pass-through entities would still be taxed
WEEKLY QUOTE “All generalizations are dangerous, even this one.” - Alexandre Dumas HIRING REBOUNDS, INDUSTRIES EXPAND According to the Department of Labor, October brought a net gain of 261,000 jobs. (Last month’s net loss of 33,000 was revised to a net gain of 18,000.) The headline unemployment rate ticked down to 4.1%, while the broader U-6 rate fell to 7.9% (down 1.3% in 12 months). Wages were up 2.4% year-over-year. The Institute for Supply Management’s purchasing manager indices alternately rose and fell in October. The readings were strong: 58.7 for the factory PMI (down 2.1 points), 60.1 for the service sector PMI (up 0.3 points).1,2 CONSUMER SPENDING, CONFIDENCE IMPRESS Personal spen
