Asset Planning, Inc Blog

2019 annual contribution limits for eligible tax filers:

401(k), 403(b), most 457 plans, and Thrift Savings Plan is increased from $18,500 to $19,000.

IRA contributions increased from $5,500 to $6,000 per year. The age 50+ catch-up contribution limit remains at $1,000.

Tax deduction and Income limitations for 2019:

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor their spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase-out ranges for 2019:

If single or joint married taxpayers are not covered by a work retirement plan, they may fully deduct traditional IRA contributions. Other tax filers may partially or fully deduct contributions if they meet the below exceptions:

• Single taxpayers covered by a work retirement plan, can fully deduct if modified Adjusted Gross Income (AGI) is below $64,000. A partial deduction is allowed if modified AGI is between $64,000 to $74,000
•  Married Joint taxpayers, where the spouse making the IRA contribution is covered by a workplace retirement plan, can fully deduct if modified AGI is below $103,000. A partial deduction is allowed if modified AGI is between $103,000 to $123,000

• Married Joint taxpayers, where the spouse making the IRA contribution is not covered by a workplace retirement plan, but the other spouse is, can fully deduct if modified AGI is below $193,000. A partial deduction is allowed if modified AGI is between $193,000 to $203,000

The Modified AGI phase-out range for Roth IRA contributions is $122,000 to $137,000 for singles and heads of household, $193,000-203,000 for married couples filing jointly.

President Trump issued an executive order directing the Treasury Department to extend the age for required minimum distributions from retirement accounts. Currently the age is 70 1/2. His reasoning is that people are working and living longer. This can be good news for some of our clients who don't necessarily need to take the withdrawals at 70 1/2. Here is an articles from Forbes with some pros and cons to the proposed change.

Read Here

We thought we would give you a heads up on a new act that will be beginning on October 1, 2020. It is called the Federal REAL ID Act. This act will require anyone boarding domestic flights, entering military bases or federal facilities to have a REAL ID. It can either be a driver license or an ID card and they are issued by the California DMV.

Here is an example of what the Federal REAL ID will look like as well as a link to the REAL ID fact sheet with detailed instructions on how to obtain one.

REAL ID Fact Sheet

We suggest getting this done as soon as possible. Don't wait until close to the deadline, especially if you know you have travel plans that will require it. We know people have a tendency to procrastinate and we have a feeling there will be a backup due to a lot of people needing them at once.

Here is a great article with lots of information on the dangers of using public wi-fi. There are some interesting facts that I never even thought of. For example, hackers are not only looking for your personal identifying information but they also are looking at your browsing history to be able to target you in phishing scams based on your interests. These phishing scams come in the form of robocalls, free apps and targeted ads. As always we want you to take every precaution to safeguard yourself from identity theft. This article is definitely worth the read.

https://lifelockunlocked.com/tips/lowdown-public-wi-fi/?cid=em_eNews_vol5_onboardingdbm_readmore_-_

Happy Mother's Day weekend to you all!

Samantha

Amy Florian from Corgenius released some information regarding new tests to alert you to the early signs of dementia and Alzheimer's disease. The first study was about sense of smell and the second one was about personality changes.

Here are some highlights taken directly from her research on the studies that we thought were important.

Regarding smell, scientists studied several factors in reasonably healthy people and then followed them for five years to see who developed dementia. They found that when combined with baseline cognitive function at the start, the most important factor was sense of smell. They specifically studied five scents – orange, leather, peppermint, rose, and fish. The greater number of scents that created difficulty and the more poorly a person could discern these smells, the more likely they were to exhibit dementia five years later. Researchers noted that this can’t be relied on as a singular test, but rather as a realization that sensory function is closely related to brain function, and may be among the first areas to exhibit deficiencies.

Another study focused on the long-recognized fact that personality changes are an early sign of Alzheimer’s disease, especially becoming uncharacteristically angry, aggressive, paranoid, or inappropriate. Now researchers have developed a 34-question quiz that can help determine the breadth and depth of behavioral changes, and they are proposing an intermediate diagnosis of mild behavioral impairment. You can take the quiz here. Note that these changes should persist for 6 months and be fundamental changes in behavior in order to indicate problems.

We are always looking for ways to keep you informed on the latest news with issues we come accross and cognitive decline is an important one.

There's been a lot of recent reports on how much information Facebook really has on you and it is scary. When is the last time you looked to see how many of your apps are connected to your Facebook profile? Even if youre not using the app anymore, once you grant them permission to your Facebook profile they will continue to collect your data, including your friends list, pictures, browsing history etc, until you revoke their access.

We found a really good article on CNBC that gives you a step-by-step guide on how to check your privacy settings, see who has access to your information and how to remove them. Follow the link below to check it out.

https://www.cnbc.com/2018/03/20/how-to-see-which-facebook-apps-have-access-to-your-data.html

The Dow Jones and S&P 500 posted a loss of 7.92% and 7.17%, respectively, in the last 5 days, however this is not a reason to panic.  The market has been steadily increasing without a significant market move or correction and we have enjoyed 15 consecutive months with positive returns.  The headlines can be misleading, but this is just volatility returning to markets.  Some of the loss today was likely due to computerized algorithms that were triggered to start selling as the market reached certain levels.  This increased selling intensifies the loss, but will normalize when those same algorithms buy back in to the market.

We have been anticipating this correction and will take advantage of this opportunity.

After the hustle and bustle of the holidays and the start of a new year, most people start to look ahead and like the idea of a fresh start. Take advantage of this motivation by applying it to your finances as well and giving yourself a financial checkup.  Yes, I know that taking a good hard look at your finances is not always something that you look forward to. But being realistic about your current financial situation, making some goals and putting an action plan together will put you on the right track to having a successful retirement with less to worry about and more time to enjoy yourself.

I found an article in the December 2017/January 2018 edition of AARP magazine written by Michelle V. Rafter, that outlines some steps to get you started on your financial check up journey. Check it out by clicking the link below.

https://www.aarp.org/money/credit-loans-debt/info-2017/financial-checkup.html

May 2018 be your most financially fit year ever!

Samantha

There is no denying it, Bitcoin is all anyone is talking about right now. We know that a lot of you have questions as to what it is, how it works, the risks etc. I came across an article this morning on Seeking Alpha written by Victor Dergunov that I feel has been the most comprehensive in explaining exactly what Bitcoin is and the risks involved when investing in it. I thought I'd share it with you to give you some insights on the mysterious cryptocurrency that is taking over the headlines. Follow the link below to read the article.

https://seekingalpha.com/article/4132006-bitcoin-big-short-coming?lift_email_rec=false&utoken=896c83f5aaeb6c09476c6308df1c6ef8

Have a great weekend!

Samantha

Most of us live on our smartphones. Our whole lives are connected to them, from social media to online banking and more, so keeping them secure is more important than ever. I found a great article I wanted to share with you that has some tips on keeping your smartphone safe.

https://socialnomics.net/2017/05/10/7-best-practices-for-ensuring-smartphone-security/

I hope you find these tips useful!