Money Matters

It’s election season again. We’ve heard many promises from candidates and speculation from the pundits on what those promises if enacted, could mean for the country. But how might these possible outcomes affect your financial future? When considering this question, keep these points in mind:

Campaign promises aren’t always kept. Presidential candidates often proclaim that they intend to institute major changes in tax or spending policies, or both. But the reality is that our political system is generally resistant to major changes, which may be good for investors because the financial markets dislike the uncertainties accompanying these types of changes.

Economic progress doesn’t always depend on Washington. Even when political leaders succeed in enacting laws and regulations, the results can be unpredictable. Major economic indicators, such as jobs, interest rates, and inflation, can move in unexpected directions, given prevailing policies. 

Financial markets can do well – no matter who’s in charge. Since 1970, the stock market, as measured by the S&P 500, has returned on average over 10 percent annually. And that’s under every political combination – Democratic president with Democratic Congress, Republican president with Republican Congress, or one party holding the presidency with the other holding Congress. 

The fact is that many factors outside political leaders’ control drive financial markets. To cite just one example, it’s the Federal Reserve, not the president or Congress, that sets interest rates. Other events, including natural disasters, global political or military conflict, and oil production, will also have an impact on our economy and financial markets. Therefore, instead of making investment decisions based on the political scene, “vote” for some tried-and-true strategies. For starters, try to build a diversified portfolio. While diversification can’t protect against all losses or guarantee profits, it can help shield you from market volatility that might primarily affect one asset class. In certain circumstances, if you only owned stocks and the market dropped, your portfolio could decline more than if you also owned bonds, which frequently move in a different direction than stocks. Another suggestion: Invest for the long term. At times, the financial markets experience short-term downturns, but you may not want to overreact by selling investments to “cut losses.” After all, if you’re not invested in the market, you could miss the early stages of a potential next rally, which is often when the biggest gains are made. Consider holding quality investments as part of a strategy that’s appropriate for your risk tolerance, time horizon, and personal goals. Elections can give political leaders a lot of influence – but when it comes to making the right investment choices, you’ve got the power.

– Laci P Graul, CRPS™

Financial Advisor

205-573-0228

www.edwardjones.com

Edward Jones, Member SIPC

Investors should understand the risks involved of owning investments, including interest rate risk, credit risk and market risk. The value of investments fluctuates and investors can lose some or all of their principal.

Past Performance does not guarantee future results.

The S&P 500 is an unmanaged, index not available for direct investment and is not meant to depict and actual investment.

Money Matters

We all have heard stories about identity theft, and especially how elderly individuals are so heavily targeted. There is a growing trend of identity theft, but the target is children and their Social Security numbers. When your child’s Social Security number has been compromised due to identity theft, this can cause significant difficulty when the parent’s file their tax returns and claim the many child-related tax benefits, such as the Child Tax Credit, the Child Care Credit, and even the Earned Income Tax Credit. If a fraudulent tax return has been filed using the stolen identity information of your child, it is not possible to electronically file the parent’s tax return without obtaining an Identity Protection PIN from the IRS website irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin.  

A much longer-term impact to your child is if their Social Security number is compromised at an early age, this can cause significant difficulty in the future, such as when they apply for their first credit card, or a car loan, or even on an application for an apartment. The Federal Trade Commission has an excellent website with helpful tips for checking for Child Identity Theft, ways to protect your child’s information, and additional guidance on what to do if you believe there has been identity theft of your child’s information: consumer.ftc.gov/articles/how-protect-your-child-identity-theft.

It is never too early to be conscious of this risk. Any person that has a Social Security number is at risk, regardless of their age.

-Benefield & Hamner, Certified Public Accountants

205-621-4033, www.cpabh.com

Money Matters

When considering the principles of stewardship, you might first think of budgeting or investing. These are certainly worthwhile considerations. However, it is also wise to consider components of stewardship that extend beyond a lifetime. When planning for your estate, here are a few elements to keep in mind.

Are your estate planning documents in force and relatively current? If you have not updated your estate documents within the past 10 years, have had a significant change in circumstance (such as a large inheritance or marriage), or have unsigned documents, you may want to ensure your written plans still accurately reflect your intentions. It is also wise to periodically review your named executor, trustee, or guardian (and successors) to ensure those individuals are still able to perform those roles.

Are your beneficiary designations set up appropriately? Did you establish your 401k plan or insurance policies long ago, or before changes in your marital status? Typically, retirement plans and life insurance beneficiary designations will take precedence over the disposition of assets dictated by your will. You may want to review designations to ensure they are in accordance with your goals. Consider designating TOD (transfer on death) beneficiaries for any individually owned accounts to minimize probate costs and allow prompt access to financial resources.

Have you considered those aspects of estate planning that are not addressed by a standard will/power of attorney? For example, if you own a business, have you developed a feasible succession plan that will allow the company to continue in a healthy manner if you were to pass away or be incapacitated? Have you developed a list of accounts/insurance policies that could be shared with a trusted family member or financial advisor to ease the administrative burden on a surviving spouse in case of a premature death? Have you effectively communicated your values and life lessons to family members in a lasting form that they can revisit when needed?

An estate planning attorney or experienced financial advisor can walk alongside you as you evaluate these questions and fine-tune organization and planning for your unique circumstances. While stewardship and careful planning are good practices to pursue, consider that our only lasting peace is found in the love and holiness of Christ; our heavenly Father knows our days and upholds us throughout this earthly life!

BMSS Wesson Wealth Solutions offers comprehensive financial planning and investment strategies aligned with your values. We specialize in serving business owners, corporate executives, and families stewarding earnings or inherited wealth. Please feel free to contact me to discuss your interests in our services. Qualifying portfolios may be eligible for a review at no cost.

-Abigail Waddell, CPA, CFP®

Senior Financial Planner

[email protected]

Money Matters

A new school year will soon begin. And if you have young children, that means it’s one year closer to the day when they head off to college or another post-secondary education or training. You might be preparing for that day with a 529 education savings plan — but should you be concerned if you need to start taking withdrawals to pay for education expenses when the financial markets are volatile? 

Long-term investment vehicles based on the financial markets, like a 529 plan, will always fluctuate in value. If you’ve had a 529 plan for many years, you’ve probably invested money when the market has been up, down, and flat. In fact, during down periods, it’s often a good time to invest, because your dollars buy more shares than they could when prices are up. Your hope is that, over the years, your 529 plan will gain enough to overcome the short-term declines in value. In any case, you’ll want to keep in mind the key benefit of 529 plans: Earnings and withdrawals are federally tax-free when the money is used for qualified education expenses for college and some trade school programs. Your state may give you an income tax deduction or a credit for your 529 plan contributions. In Alabama, a 529 plan can be used for K-12 schooling as well. 

You have another incentive to keep your 529 plan intact despite temporary drops in value. Specifically, if you withdraw money and don’t use it for eligible education expenses, your withdrawal may be subject to a 10% penalty, in addition to state and federal income taxes. That could be a high price to pay for a move that may not be in your best interest. Many 529 plans offer investment portfolios that gradually become more risk-averse as the beneficiary gets closer to college age. A financial advisor can discuss the investment options with you. While this investment feature doesn’t guarantee you’ll have complete immunity from financial market volatility, it can help reduce its impact when you need access to the money. 

Here’s one more point to keep in mind: Just because you’ve planned to access your 529 plan when your child reaches 18, or whatever age they begin their post-secondary education, you’re not required to take money out at that point. You can keep your 529 plan intact until you feel more comfortable making withdrawals, though you’ll need to consider how this decision will affect your ability to help pay for your child’s education.  The financial markets will always be in some type of flux, but don’t let these movements deter you from sticking with a 529 plan — it’s still one of the best investments you can make in your child’s future.

Watch the video below to learn more about 529 education savings plans and how they can help you plan for your child’s college education or another post-secondary education.

 

– Laci P Graul, CRPS™

Financial Advisor

205-573-0228

www.edwardjones.com

Edward Jones, Member SIPC

Money Matters

In all of Christian life, we have two competing stories in front of us that shape the way we view concepts like investing. First, we have God’s story, rooted in the Bible. God’s story helps us move beyond just financial returns—to the how, who, and why behind our investment strategies. Alternatively, the world’s story for investing is often simply the pursuit of maximum risk-adjusted returns. God’s story starts at Creation, in the Garden. In the beginning, God created the heavens and the earth (Gen. 1). God created man in his image to work and to keep God’s creation (Gen. 2). After the Fall, stewarding God’s creation brought difficulty (Gen. 3), but our charge has not changed. God still owns everything, and we are to continue as good stewards of his creation (Ps. 24:1). 

Does God Really Care How I Invest My Money? Thankfully, God did not abandon his creation when man fell, but God immediately began his work of redemption. As Christians, we are the first fruits of God’s new creation, and we are to reflect his work of redemption until he ushers in the new heavens and the new earth. God owns it all and cares deeply about how we invest our money (Matt. 25: 14-30; Luke 16: 1-13; 1 Tim. 6: 9-10).  There is no biblical prescription for investing, but there are principles upon which we can build. Investing is a wisdom call and a personal conviction, informed by Scripture. While there are no perfect companies that completely align with Christian values, Biblical discernment guides us to ways we can practice faith-based investing.

• Negative screening avoids companies with harmful products or practices, such as abortion and pornography. 
• Engagement strategies allow investors to act through such means as communication with corporate leaders, shareholder resolutions, and proxy voting. 
• Positive screening means investing in companies that actively promote the common good or redemptive practices—such as innovation in medical research or implementation of corporate chaplaincy, along with serving communities and employees well. 

What Should I Do Next? Pray and seek counsel from others. Then find investment partners that align with your priorities, create compelling value, and drive capital to make a positive impact in this world. Through purposeful strategies, we take steps toward investing our money in God-honoring ways that create meaningful change and lead to greater human flourishing (Matt. 22:36-40). 

Watch the video below to learn more about God’s story for investing.

BMSS Wesson Wealth Solutions offers comprehensive financial planning and investment strategies aligned with your values. We specialize in serving business owners, corporate executives, and families stewarding earnings or inherited wealth. Qualifying portfolios may be eligible for a review at no cost. 

–Bradley Moore

BMSS Wesson Wealth Solutions

205-982-5555

[email protected]

Money Matters

Here’s a sobering statistic: 72% of retirees say one of their biggest fears is becoming a burden on their families, according to a study by Edward Jones and the consulting firm Age Wave. If you are near retirement, how can you prepare yourself to become financially free, so you won’t have to depend on grown children or other family members? Here are a few suggestions to consider:

Keep adding to retirement savings. Today, with a greater awareness of healthy lifestyles, many people are spending two, or even three, decades in active retirement. To help pay for those years, then, you’ll likely need to build your retirement savings as much as possible. So, while you’re still working, try to contribute as much as you can afford to your 401(k) or other employer-sponsored retirement plan.

Choose an appropriate withdrawal rate. While it’s important to build your retirement savings, it’s just as essential to make the money last. Once you retire, you’ll want to establish an appropriate withdrawal rate — that is, the amount you can take out each year from your 401(k) and other investments without running the risk of outliving your money. The amount you can safely withdraw each year will depend on a variety of factors, including your age, your account balances, Social Security benefits, inflation, income tax rates, and spousal income.

Think about downsizing. One possible way to boost your savings and add liquidity is to downsize your living arrangements. This may be an attractive option if your children are grown, and your current home feels too large. Of course, downsizing is a highly personal decision — if you’ve lived in your home for many years, it can certainly be hard to leave. Consequently, you’ll need to weigh the emotional factors against the potential financial benefits of moving into a smaller, less expensive space.

Prepare for long-term care costs. If you were ever to need some type of long-term care, such as an extended stay in a nursing home, you could face some sizable expenses, most of which may not be covered by Medicare or a Medicare Advantage plan. Clearly, you would not want to put your grown children in a position where they might feel the need to step in financially. To help avoid this possibility, you may want to consult with a financial professional about addressing these costs through strategies that may be appropriate for your needs. 

These aren’t the only ideas to consider in helping maintain your financial independence and reducing your potential dependence on your family during your retirement years but taken together, they can give you a good start.

Watch the video below to learn more about how you can prepare for financial freedom now.

 

– Laci P Graul, CRPS™

Financial Advisor

205-573-0228

www.edwardjones.com

Edward Jones, Member SIPC

Money Matters

As the April tax deadline approaches, many households find themselves wondering if they are paying more taxes than necessary. Here are a few high-level concepts to keep in mind.

Retirement planning: When allocating 401(k) or IRA contributions between Roth or traditional accounts, it can be difficult to know which is better. Assuming that tax rates in the future mirror the current structure, a simple way to approach this decision is to compare your marginal tax rate today to your expected marginal tax rate at retirement. For example, if you file jointly and your taxable income is $200,000 today (32% marginal rate), and you expect your taxable income in retirement to be $100,000 (22% marginal rate), you generally are best served to maximize your pre-tax, or traditional, allocations. However, if your taxable income today is $50,000 (12% marginal rate), and you expect a higher taxable income in retirement, it is likely better to allocate funds to Roth accounts. Keep in mind that there may be income limitations to consider. Traditional IRA contributions may not be deductible if either spouse has access to a workplace retirement plan, and Roth IRA contributions are not allowable at higher incomes (although there are strategies to deal with this limitation).

Asset allocation: As yields on cash and fixed income have increased, many are feeling the bite of ordinary income taxes on interest income from taxable bonds or high-yield savings accounts. In many cases, it is wise to invest taxable accounts in assets that offer preferential tax rates on long-term capital gains and qualified dividends (such as equities or equity funds). Conversely, you may want to hold assets that produce ordinary income (such as taxable bonds) in retirement accounts to defer those taxes as long as possible. Your time horizon, risk tolerance, liquidity needs, and your values are other relevant factors to consider before finalizing your allocation.

Fund selection: Due to the fund structure, exchange-traded funds (ETFs) are typically more tax-efficient than mutual funds—even when tracking the same index. When similar mutual funds and ETFs are available to meet an investment goal, it may be better to choose ETFs if the account is taxable. Additionally, actively managed mutual funds often distribute more income (and result in higher taxes) than index mutual funds, since active funds typically have higher turnover of the underlying assets.

BMSS Wesson Wealth Solutions offers comprehensive financial planning and investment strategies aligned with your values. We specialize in serving business owners, corporate executives, and families stewarding earnings or inherited wealth. Please feel free to contact me to discuss your interests in our services. Qualifying portfolios may be eligible for a review at no cost.

-Abigail Waddell, CPA, CFP®

Senior Financial Planner

[email protected]

Money Matters

Spring is almost here, which means it’s time for spring cleaning. This year, in addition to tidying your home, you might want to consider sprucing up your financial environment. Here are some suggestions for doing just that.

Improve your vision. Once the days are warmer and longer, you may want to get outside and clean all the winter grime and smudges from your windows. You may want to bring more focus to your financial vision by asking some key questions: Is my investment strategy still appropriate for my needs, goals, and family situation? If not, what changes should I make? And am I prepared for changes in my life, such as health challenges or a need to retire earlier than planned? 

De-clutter. As you look around your home, you may find things such as expired health care products, ancient cleaning solutions, and so on, in addition to duplicate household items (how many blenders do you really need?). Most people find that eliminating this clutter gives them a good feeling – and a more livable space. As an investor, you can also find clutter in the form of redundant investments. For example, you might own several nearly identical mutual funds. You might be better off selling some of these funds and using the proceeds to find new investments that can help you further diversify your portfolio. As you may know, diversification is a key to investment success, but keep in mind that it can’t prevent all losses.

Plant seeds of opportunity. Whether they’re planting camellias and crocuses or carrots and cilantro, gardeners are busy in the spring, hoping their efforts result in lovely flowers and tasty foods. And when you invest, you, too, need to plant seeds of opportunity in the form of investments that you hope will grow enough to enable you to make progress toward your goals. So, you may want to review your portfolio to ensure it’s providing this growth potential, given your individual risk tolerance. 

Reduce dangers. You may not think about it that much, but your home and surroundings can contain potential hazards. You might have sharp cutting instruments protruding from shelves in your garage or heavy, cracked tree branches hovering close to your roof. Spending some time on a spring-cleaning sweep can get rid of these dangers — and devoting time to consider the possible threats to your financial security, and those of your family, can pay off, too. For starters, review your life insurance to determine if you’ve got enough. Your employer may offer some coverage as an employee benefit, but it might not be sufficient, so you may need private coverage. 

Spring is a great time for brightening your physical space — and your financial one, too.

Watch the video below to learn more about financial spring cleaning.

 

– Laci P Graul, CRPS™

Financial Advisor

205-573-0228

www.edwardjones.com

Edward Jones, Member SIPC

Money Matters

As most of us have experienced in one way or another—families can be hard. Add in money, and any issue your family is having will be amplified. There is no one-answer-fits-all because human emotions are fluid, and relationships can be complicated. Whether navigating financial matters with children, aging parents, or extended family, biblical principles give wisdom. Let’s explore three. 

1. Make Generosity a Priority. In Acts 20:35, Paul led through giving as he explained, “In everything I did, I showed you that by this kind of hard work we must help the weak, remembering the words the Lord Jesus himself said: ‘It is more blessed to give than to receive.’” The Bible mentions giving, possessions, and money more than 2,000 times,* and our wealth is a tool for blessing others and advancing God’s kingdom. Giving as a family—of time, energy, and money—creates an environment of generosity while teaching that everything you have belongs to God.  Passages for family discussions: Proverbs 11:25, 2 Corinthians 9:6–8, Hebrews 13:5

2. Let Your Family Fail with Dignity. It may be tempting to protect loved ones from making mistakes, but not letting them fail may prohibit growth. However, if you walk alongside, extending empathy and helping them pursue discernment and cultivate resiliency, this can create a greater constitution against larger failures in the future. Money adds another layer of complication to an already-complex path of helping. Allowing others to experience failure encourages a trust in God’s sovereign plan. Remember, you are charged with stewardship, and you can provide support which may or may not be financial. Passages for further study: James 1:2–4, Proverbs 24:16, Isaiah 41:10

3. Follow a Biblical Precedent. The Bible warns of the many pitfalls of wealth, but it does not romanticize poverty. It is good to work hard and to cultivate the gifts the Lord has bestowed on us. The overarching theme of biblical warnings about wealth is the need to avoid greed. When we understand that material wealth is not the ultimate measure of success or happiness, we can generate long-lasting financial and spiritual health in our families. Passages for further study: Proverbs 15:27, Ecclesiastes 5:10, Matthew 19:24, Luke 12:1

Practicing faithful stewardship in family dynamics glorifies God. You lead by example as you approach financial decisions with prayer and biblical understanding for wisdom and discernment.

*National Christian Foundation, “10 Principles of Biblical Generosity.”

Watch the video below to learn more about the biblical principles that provide wisdom for families navigating financial matters.

BMSS Wesson Wealth Solutions offers comprehensive financial planning and investment strategies aligned with your values. We specialize in serving business owners, corporate executives, and families stewarding earnings or inherited wealth. Qualifying portfolios may be eligible for a review at no cost. 

-Benaiah Gorman, CFP®

BMSS Wesson Wealth Solutions

205-982-5555

[email protected]

Money Matters

Managing your finances and investing for your future are important tasks — and they can be challenging, but you don’t have to go it alone. Many people benefit from working with a financial advisor, someone who knows their needs and goals and makes appropriate recommendations. If you’re considering getting some help, here are some questions to consider.

Have you worked with people like me? All of us are unique individuals. Yet, you do share certain characteristics with others — age, income, family situation, and so on. You might feel comfortable knowing that a financial advisor has worked with people like you and can readily understand and appreciate your needs and specific goals. The more information you can provide about yourself upfront, the better your chances of finding a good match.

Do you have a particular investment philosophy? Some financial advisors follow a particular investment style, while others might focus on specific investments or categories. There’s nothing inherently wrong with these types of approaches, but you might be better served by working with someone who takes a broader view — one that emphasizes helping clients meet their goals over any philosophy or strategy.

How will you communicate with me? Open and frequent communication are key to a successful relationship with a financial advisor. So, you’ll want to know what you can expect. Will you have annual or semi-annual reviews of your accounts? In between these reviews, can you contact your advisor at any time with questions you may have?

How do you define success for your clients? Some investors track their portfolios’ performance against that of a specific market index, such as the S&P 500. But, these types of benchmarks can be misleading. For one thing, investors should strive for a diversified portfolio of stocks, bonds, and other investments, whereas the S&P 500 only tracks the largest U.S. stocks. When you talk to potential financial advisors about how they define success for their clients, you may want to look for responses that go beyond numbers.

How are you compensated? Financial advisors are compensated in different ways — some work on commissions, some charge fees, and some combine fees and commissions. There isn’t necessarily any best method, from a client’s point of view, but you should clearly understand how a potential advisor is compensated before you begin a professional relationship. 

These aren’t the only questions you might ask a potential financial advisor, but they’ll give you a good start. When you’re trusting someone to help you with your financial goals, you want to be completely comfortable with that individual, so ask whatever is on your mind.  

Watch the video below to find more information on questions to ask financial advisors.

– Laci P Graul, CRPS™

Financial Advisor

205-573-0228

www.edwardjones.com

Edward Jones, Member SIPC