Single Point of View

Single Point of View is our way to occasionally share planning ideas relating to personal finance. Our goal is to pass along concepts that you may not be exposed to on a daily basis.
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SPP Client Login

We have put together a presentation that will explain the various resources you can use to access account information. There are multiple options for viewing your accounts online, we want to make sure you find the one that works best for you. Click HERE to learn more about the Client Login page.
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Social Security: Cost of Living Adjustment 2015

Recently, the Social Security Administration announced its  COLA (Cost of Living Adjustment) for 2015. This adjustment of 1.7% will be applied to payments beginning in January 2015.Also connected to this adjustment is the increase of wages subject to the Security Security Tax, going from $117,000 to $118,500.If you would like to learn more about how this adjustment is calculated, please visit the Social Security Administrations official site.For more information on how your wages are taxed based on these adjustments, please visit this fact sheet from the Social Security Administation.
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IRS Retirement Plan Limits announced for 2015

On October 23, 2014, the IRS announced its annual cost of living adjustments. Below is a chart from www.401khelpcenter.com that does a nice job summarizing the changes in limits since 2012. Chart of Select Limits                   401k Plan Limits for Year 2015 2014 2013 2012 401k Elective Deferrals  $18,000 $17,500 $17,500 $17,000 Annual Defined Contribution Limit $53,000 $52,000 $51,000 $50,000 Annual Compensation Limit $265,000 $260,000 $255,000 $250,000 Catch-Up Contribution Limit $6,000 $5,500 $5,500 $5,500 Highly Compensated Employees $120,000 $115,000 $115,000 $115,000           Non-401k Related Limits         403(b)/457 Elective Deferrals $18,000 $17,500 $17,500 $17,000 SIMPLE Employee Deferrals $12,500 $12,000 $12,000 $11,500 SIMPLE Catch-Up Deferral $3,000 $2,500 $2,500 $2,500 SEP Minimum Compensation $600 $550 $550 $550 SEP Annual Compensation Limit $265,000 $260,000 $255,000 $250,000 Social Security Wage Base $118,500 $117,000 $113,700 $110,100
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Chase Security Breach - What to do?

If you are a customer of Chase Bank you are probably wondering what steps you can be taking to protect yourself.First, we would suggest not to panic and change banks based on this breach.  All banks and financial institutions are targets for these attacks.  Unfortunately, it is safe to say this won't be the last breach of a bank.Online Access to Accounts:  We have read that usernames and passwords have not been breached and not to rush to change them.  We disagree with this thought process and think it cannot hurt to change the passwords you use to login to your accounts.Communication from "The Bank":  Be very cautious with the information you share with those calling or writing you on behalf of the bank.  If someone reaches out to you, we feel it is better to call the bank back directly with the number on the back of the card to verify...
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IRS Guidance on after tax 401k contributions and Roth conversions

The last quarter (or so), we tend to be very focused on tax planning. (Not to be confused with tax accounting in the first quarter or so). With that, it is very timely that last week the IRS issued guidance (Notice 2014-54) on rolling out after tax contributions from a 401k plan. KEY POINT In its guidance, the IRS stated that a retirement plan participant has the ability to convert their "after tax" account into a Roth IRA tax free. Here is a link to the referenced notice:http://www.irs.gov/pub/irs-drop/n-14-54.pdf  Background: 401k-Employee Contribution Types To understand the significance of this, we must first understand the types of employee contributions that may go into a plan. For more information on contribution types, see the IRS link below.Pretaxhttp://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-ContributionsAs a plan participant, you have the option of contributing to your plan on a pretax basis. This will allow you to take a deduction on your personal taxes.AftertaxYou may...
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Year End Gifting

Family Loan-Forgiveness of principal vs forgiveness of debtCredit Card Miles529 ContributionsOutright gifts of up to $14,000 per person-$28,000 from a couple2x for december and january for particular goalLifetime exemptionWhat is not considered a gift
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NerdWallet: Maximizing Contributions

imageI am 32 and max out my retirement savings every year through 401k and IRA. I also save an equivalent amount that I put into savings/investment accounts. How should I think about trading off between maximizing my contributions to retirement accounts versus putting less in my retirement accounts so I have more liquid assets to put towards a downpayment? The bottom line is my net worth is now divided equally between liquid and illiquid (retirement) accounts. I would like to buy property, and I need more cash for a downpayment on my dream home.   2 people found this answer helpful Shaun Erickson CFP® Boston, MA It's all about priorities.  If the dream home is a priority for you, you will need to calculate out how long it will take you to get there under your current savings plan vs. how long it will take you if you diverted funds from retirement savings.  The...
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NerdWallet: Roth IRA Contribution

imageI made a non-deductible "Backdoor" Roth IRA Contribution (to get around income limits), and my taxes went up in TaxAct when filing taxes. I am using a 1099-R that I received with a Gross distribution (box 1) and Taxable amount (box 2) in agreement, plus 2b checked (taxable amount not determined). Distribution code is showing "02 - "Early distribution, exception applies (under age 59.5)". Is the key here that this distribution code was messed up by the provider of the 1099-R (Vanguard), in which case it should be a "G - Direct rollover of a distribution ... to a qualified plan" ?   Shaun Erickson CFP® Boston, MA Did you file Form 8606 when you made your non-deductible contribution?  It sounds like you have not reported your basis in the IRA, and therefore is counting all of the funds in it as previously deducted.
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NerdWallet: Life Insurance Policy

imageI'm 40 years old, in good health, and considering a life insurance policy for the benefit of my wife and one-year old. Would you rather get a whole life insurance policy, or a term life insurance policy and "invest the difference" in the market? I'm also contributing to a 401K, a 529 account, and have about $1M in loan liabilities.     Shaun Erickson CFP® Boston, MA My opinion is to first get enough term insurance to cover the income you are trying to protect, for the time period you are trying to protect it.  As mentioned before, a convertible term policy would be preferable as it gives you greater flexibility in the future should you need the insurance longer than you initially planned. The conversation of "invest the difference" should really be one of analyzing your overall budget, and ability to save (not just investing what you would have put into an insurance policy otherwise). ...
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NerdWallet: Spending Habits

imageI am 26 years old and have had some bad spending habits and am currently in debt. What is the best way to pay it down? I have been making $100,000 per year for the past couple of years. I have $30,000 in credit card debt. What is the best way of paying this down? What is a realistic goal for the amount of time it would take to pay this down?   1 person found this answer helpful Shaun Erickson CFP® Boston, MA I agree with Bryan.  If you've been accumulating debt it sounds like you need to start to work on a budget to reduce your spending to a point where you are cash flow positive each month.  There are some great tools out there for helping you analyze your current spending, check out mint.com.  Once you understand where your money is going you will need to make some choices on areas you can reduce spending.  ...
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NerdWallet: 401(k)

imageWhat happens to your 401k if you quit your job/move to another company?   Shaun Erickson CFP® Boston, MA When you leave, you will typically be given information on your options for your 401k plan.  Generally, you have a few options: 1) Leave it in the plan (not all companies allow this option) 2) Cash out (pay tax and potential penalty if under certain age) 3) Roll over to an IRA or your new company retirement plan (if it allows rollover contributions) You will need to check your specific plan rules to determine how things like company profit sharing contributions are handled (it is possible there is a vesting schedule on these which means you could forfeit that value if you leave prior to vesting).  You can get a lot of info on your plan's specific rules in the Summary Plan Description which your employer should provide to you.
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NerdWallet: Traditional IRA

imageIf I'm around the limit for a Roth IRA (110k single I believe), should I open a traditional IRA as well? I'm starting to max my 401k and want to open an IRA as well and start maxing it. 1 person found this answer helpful Shaun Erickson CFP® Boston, MA You should discuss the benefits of this with your tax advisor.  If you are contributing to a 401k plan, you are probably not eligible to deduct any contributions to an IRA account. Some people who are over the Roth contribution income limits will make a non-deductible IRA contribution, then immediately convert it to a Roth IRA (sometimes referred to as a "backdoor" Roth IRA Conversion.  You should research all of the pros and cons of this technique prior to implementing, especially if you have other traditional IRA accounts which could make a portion of this conversion taxable to you.
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NerdWallet: Credit Report Delinquency

imageWhat can I do if I have an erroneous delinquency on my Credit Report? I am using Credit Karma to monitor my credit. Today I received an update that a new account (under a financial institution I've never heard of; AMCA) has been placed in collections. The amount is nominal at $50. I don't know who to call to investigate, or where to call just to pay it off so I don't have this further impact my credit. Thanks in advance. 2 people found this answer helpful Shaun Erickson CFP® Boston, MA I am not familiar with CreditKarma, however, you are entitled to receive a free copy of your credit report each year from each of the 3 nationwide credit reporting companies, Experian, Equifax, and TransUnion (you simply need to request it).  Utilize www.annualcreditreport.com to request your report (this is different than the companies you see advertising on TV). You are given an option to challenge...
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NerdWallet: Mortgage Options

imageWhat mortgage options are available for people with underwater mortgages purchased after December 26, 2009? Shaun Erickson CFP® Boston, MA You can start by checking with the Attorney General's Office in your home state.  Your state may have resources to assist with loan modifications.  For example, in MA we have the HomeCorps program which provides assistance to those facing foreclosure.  http://www.mass.gov/ago/news-and-updates/initiatives/addressing-the-foreclosure-crisis/homecorps/
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Bryant Alumni Bulletin - Athletes Helping Athletes

bryantpic   November 13 – Bulldog ConnectionBryant alumnus and former lacrosse player Tim Duffany ’06 networks with current student-athletes as part of the Bulldog Connection program that brings former athletes to campus to mentor current athletes. If you are a former varsity athlete, plan to join us for the spring program on April 6, 2013. Legendary American football coach Vince Lombardi said, “Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.” No one knows better than Bryant’s student- and alumni-athletes how true this is. The and annual Bulldog Connection – a networking event for student- and alumni-athletes – on November 3 began with a panel discussion in  the morning, followed by networking opportunities, and a victorious Bulldog football game. Highlighting the event were a dozen outstanding alumni who shared their amazing career experiences and tips for the future with about 60 student-athletes. Alumni working at such prestigious organizations as the Boston Celtics and Amica Insurance gave valuable advice about strategizing professional careers  following graduation.“Experience is...
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