Long-Term Cost Planning

Did you know that spending often decreases at retirement? One reason is simply that our habits and desires may change. According to Genworth’s annual Cost of Care Survey, people spend less on transportation, vacations and food as they age. They often spend more on donations and gifts. Health care costs also consume a larger percent of spending as we age. That’s why long-term cost planning is critical. Understanding and planning for long-term needs can help you make the most of your finances today, while providing for your comfort and security down the road.

Unexpected events can also lead to a significant drop in spending. For example, a layoff or health event that causes early retirement can lower lifetime resources and force spending cutbacks.

Planning for expected and unexpected changes in your income and expenses down the road will help you maintain your desired lifestyle. There are many elements that inform such planning, such as:

  • Pensions, retirement accounts, other potential future income
  • Disability and long-term-care insurance
  • Medicare, Medicaid, private insurance
  • Projected inflation, rising costs of care

Most people will require some level of support services later in life. About 60 percent of seniors will need a cane, walker or wheelchair to remain mobile, according to the U.S. Health and Retirement Study (an ongoing project of the University of Michigan’s Institute for Social Research). And 20 percent will need help with bathing, eating and dressing. Cognitive decline will require more intensive care.

Knowing the full range of potential costs have been considered as part of your long-term financial plan creates peace-of-mind for you and your loved ones.

Long-term cost planning is part of our Core Client Services. That’s the value of Perspective.

Giving Back in 2020

Lupe CamargoEvery day is a good day to give back to the community. In the economic wake of COVID-19, today is an especially good day to give if you’re able. Giving back in 2020 will help non-profits that have been hit hard by the pandemic. Fundraising events have been cancelled or shifted online, creating a loss of expected income. Communities of faith that were forced to halt in-person services experienced a significant drop in giving. Such challenges impact the individuals, communities and causes these organizations serve, many of whom also have been hard hit by this challenging year. It’s a circular problem, and one I’ve seen firsthand as Board Chair of Girl Scouts.

At the same time, those who’ve been able to give have been generous. Charitable giving in many areas has reached historic levels in 2020. During this season of gratitude, we certainly can give thanks for that.

Tax-Wise Charitable Giving

As 2020 draws to a close and you consider your charitable giving options, here are a few things you should know:

  • The Corona-virus Aid, Relief and Economic Security (CARES) Act created additional incentives to give this year. It allows 100 percent of itemized donations to go toward adjusted gross income versus the typical 60 percent. CARES also allows an above-the-line deduction for donations up to $300 (in addition to the standard deduction for non-itemizers).
  • You can “bunch” donations into one year. That means itemizing 2020 taxes and taking the standard deduction in 2021. Your income, tax-filing status and donation amount are variables to consider with this approach. A Donor Advised Fund (DAF) can be useful for bunching donations; DAF contributions can be made in one year and distributed to charities over several years.
  • Those age 70 ½ years and older can deduct up to $100,000 per year tax-free from their IRAs through a Qualified Charitable Distribution, which presents an opportunity to reduce future taxable income and limit beneficiary tax liability.
  • If you decide to do a Roth Conversion, the additional tax liability could be offset with a charitable contribution.

If you’d like to further explore and plan tax-smart giving to increase the impact of your gifts, call or email your advisor.

By |2020-11-16T15:55:30-07:00November 18th, 2020|Charitable Giving, Current Affairs, Taxes|

Empowering Young Adults with Autism

SEEDs for Autism provides a path “from learning to earning” by empowering young adults with autism. The program has been a blessing for my family, and I am so proud that our firm is able to sponsor its inaugural Discovery Day event. (Scroll down to see event details!)

Empowering young adults with autism

Jake McCann works for the Arizona Diamondbacks.

The program teaches vocational job-development skills, while practicing life and social skills. My son, Jake, has participated in SEEDs for about three years. During that time, he has grown in confidence and abilities. With encouragement and coaching, Jake got a job as a 50/50 raffle sales person for the Arizona Diamondbacks. During the 2019 baseball season, he was one of the top sellers and was named Employee of the Month in August. Jake’s is only one of many success stories.

About 40 of SEEDs’ approximately 250 participants have found outside employment as a result of what they learned there. Skills are taught in welding, sewing, weaving, wood-turning, ceramics, jewelry, writing, computers, video production, screen printing and more. Participants learn from professionals who are experts in their fields and know how to create products that are beautiful and functional. SEEDs is also creating a business model intended to eventually create on-site jobs for a percentage of those who are in the program.

SEEDs contracts with a Board Certified Behavior Analyst (BCBA) who helps write language and social-skill goals. Classes and departments have a 1:1 to 1:4 teacher-student ratio, which allows for concentrated attention. This hands-on approach empowers participants to contribute and gain a better understanding of what is required to communicate, manage anxiety and work with others.

Community involvement is vital to SEEDs’ long-term success. Volunteers, donations and purchases are always appreciated. Take a moment to watch the video below and explore their website at www.seedsforautism.org.

Discovery Day will be a fun event and a great opportunity to do some early holiday shopping. We hope to see you there!

Empowering Young Adults with Autism

 

Discovery Day

November 16, 2019

10:00 a.m. to 2:00 p.m.

3420 S. 7th Street, Phoenix

Experience a variety of autism-friendly activities and explore new interests at this FREE community event.

Activities include carnival games, prizes, face painting, obstacle course, puppets, archery, martial arts, remote control cars, therapy dogs and more.

Meet-and-greets with Phoenix Police K-9 unit, Phoenix Herpetological Sanctuary, chess club and other groups. Buy delicious food and drinks, and visit Creation Stations to make origami, leather ornaments, wire bracelets, bath salts and more.

Get more details here!

By |2019-10-21T09:14:50-07:00October 21st, 2019|Charitable Giving, Company News|

Year-End Tax Saving Strategies

Lupe Camargo, financial plannerNow is a perfect time to check for any remaining opportunities to help minimize your tax bill before 2017 comes to a close. There are many year-end tax saving strategies for you to consider.

At Perspective Financial Services, we take a proactive approach to minimize our clients’ tax bills through a variety of investment strategies. Selling a security in a taxable account at a loss and replacing it with another security of the same asset class can help offset some of your capital gains tax; this is referred to as tax loss harvesting. We also research mutual funds that may generate a capital gains distribution before making end of year purchases; this helps avoid unnecessary capital gains taxes on new investments.

There are additional things you can do, with the help of your financial planner. Here is a checklist of things to think about.

When possible be proactive about the timing of your income. This can make a significant impact on your tax bill.

  • Defer a bonus or a sale of appreciated property to the following year when it becomes advantageous to avoid the income this year.
  • Pay expenses this year, such as fourth quarter state income taxes or medical expenses. This helps especially when next year’s income will be less than this year.
  • Increase your federal income tax withholding to soften the blow of a significant tax bill.

Take advantage of the vehicles that not only help you plan for the future, but give the added bonus of reducing your income taxes.

  • Max out your IRA contributions, and take advantage of the catch-up if you are over 50 years old.
  • If you are over 70 1/2 years old, or you have an inherited IRA, do not forget to take your required minimum distribution. The penalties are very steep if you do not.

If you are planning to gift money to family or charities, do so before the end of the year.

  • Give $14,000 per individual annually in federal tax-free gifts.
  • Make planned charitable contributions and take advantage of the charitable rollover provision if you are over 70 1/2 years of age.
By |2019-08-14T13:59:51-07:00December 4th, 2017|Advisors, Charitable Giving, Taxes|

Arizona Tax Credits Help the Community

Arizona tax credits help the community through programs like PetSmart Charities emergencyNovember 29 is Giving Tuesday this year, Arizonans who pay state income tax have a unique and easy opportunity to give by directing where some of those dollars are spent. Arizona tax credits help the community. The state offers a number of dollar-for-dollar credits you can specify on your income-tax return to benefit schools, registered charitable organizations and military families.

  • Public schools: You can donate up to $400 married ($200 for singles) to any public or charter school in Arizona for after-school activities. Effective in 2016, donations can be made up to April 15 of the next year (Use Form 322).
  • Private school tuition organizations: You can give up to $1,090 married ($545 single) to a tuition organization that awards scholarships for children in Arizona private schools (Form 323). If you wish to donate more than the Form 323 maximum, you can give up to another $1,083 married ($542 single), but this must be claimed on Form 348. Donations can be made up to April 15 of the next year. Click here for more information.
  • Qualified Charitable Organization (formerly Working Poor): You can donate up to $800 married ($400 single) to any Arizona-registered charity that helps the poor (Form 321, organization must be approved by the Department of Revenue). You must also itemize your deductions on your Arizona form to claim this credit. Effective in 2016, donations can be made up to April 15 of the next year. Click here for more information.
  • Military family relief: You can contribute $400 married ($200 single) to benefit Arizona service members and their families. The assistance goes to those who are deployed or to the families of those injured or killed. The credit is capped at $1 million annually so it’s important to get this money in as early as possible. Any money received after $1 million is reached (usually sometime in December) is returned (Use Form 340). Click here for more information. 
By |2019-08-14T13:59:56-07:00November 29th, 2016|Charitable Giving, Taxes|