According to Sallie Mae’s 2015 How America Saves for College survey, while 89% of parents believe college is an investment in their child’s future, only 27% of savers are using a 529 college savings plan. What’s more, 48% use a traditional savings account, despite the low yield on this type of savings vehicle in today’s current interest rate environment.  529 plans are attractive because parents can invest money in the stock market and, hopefully, grow their savings without facing a taxable event when they use the money for qualified higher education expenses such as tuition, books and room and board.

One of the biggest and most helpful changes to 529 plans for this year is what can now be deducted as a college expense.

According to Rick Castellano, a spokesman at Sallie Mae, in the past, parents weren’t able to deduct computers, tablets and other electronic devices as a qualified education expense, but now they can. When the rules were passed for 529s back some twenty years ago, computer equipment wasn’t found in every classroom and attached to every college student’s hip. Now, it’s almost a requirement on college campuses around the country.

In addition to giving families greater flexibility in terms of what their 529 savings can get them, the government has made it easier for students to take off from school without being penalized. Up until Jan. 1, students who used money from a 529 college savings plan and for whatever reason had to drop out of school with a full refund weren’t allowed to redeposit the money into the 529 savings plan. That meant that if an illness, family emergency or other circumstance prevented the student from attending college, the money that initially went to pay for college would be treated as income and taxed accordingly. “529s treated it as once you get the money, it is a distribution and is a completed transaction,” says Betty Lochner, chair of the College Savings Plans Network.

That all changes this year. Now, students who have to withdraw from college for whatever reason and get their tuition back can reinvest it into the 529 account and avoid a tax bill.

Medical Related

(Total expenses must exceed 10% (7.5% if age 65+) of Adjusted Gross Income to be deductible)

1. Alcoholism and drug abuse treatment
2. Contact lenses, eyeglasses and hearing aids
3. Long-term care insurance premiums
4. Medical transportation costs, including the standard mileage rate of 23 ½ cents
5. Lodging expenses incurred for medical reasons

Employment Related

1. Costs of looking for a new job in your present occupation
2. IRA deduction for contributions made after the end of 2014 but before April 15, 2015
3. Employee’s moving expenses
4. Education that is work related
5. Unreimbursed employee expenses, such as license fees, business subscriptions
6. Health care insurance premiums and 50% of self-employment tax for self-employed
7. Medicare premiums paid by the self-employed
8. Simplified Employee Pension (SEP) IRAs for self-employed

This is the fifth annual FT 300 list, produced independently by the Financial Times in collaboration with Ignites Research, a subsidiary of the FT that provides business intelligence on the investment management industry.

More than 1,500 pre-screened RIA firms were invited to apply for consideration, based on their assets under management (AUM). Applicants that applied were then graded on six criteria: AUM; AUM growth rate; years in existence; advanced industry credentials of the firm’s advisors; online accessibility; and compliance records. Neither the RIA firms nor their employees pay a fee to The Financial Times in exchange for inclusion in the FT 300.

Richard Smart traveled to New York in December to accept the recognition on behalf of Annuity Strategic.  We are pleased to have been selected to such a prestigious list.

Why?

Fans of the television show Blue Bloods enjoy watching the multi-generational family dinners. The fictional Reagans also hold family meetings when important issues pop up. We believe family meetings should be scheduled before there are issues and while all generations are still active. HFA recently held a Lunch & Learn seminar on this subject, which was a big success. Some of our guests have already scheduled family meetings.

A family meeting should be designed to map out what you want to happen in the future. Possible reasons for a family meeting include:

• Promote Stewardship, which is the responsible oversight and protection of something worth caring for and preserving.
• Share values as well as estate and financial plans.
• Embrace the challenge to discuss thoughtful planning and its impact on family members.
• Perpetuate a family legacy.
• Discuss multi-generational planning.
• Judiciously communicate details when all generations are still living.
• Prepare heirs for future roles and responsibilities.
• Establish a forum for collaborative decisions.
• Educate heirs on financial literacy or estate planning.
• Create an atmosphere of trust.
• Open lines of communication that may have closed.
• Establish family leadership roles and responsibilities.

As part of our UX contingent, he will work on research, conceptualisation and interface design for digital and multiplatform products. From initial user insight to final shipping of the product.

Key skills

• A desire to design ambitious digital products
• Good communication and collaborative skills, both visual and verbal
• Have experience of (or a desire to!) work across multiple platforms, including mobile, tablet, desktop, TV
• A familiarity with user centered design methodologies
• A passion and curiosity to solve, communicate and discuss complex interaction systems
• An ability to interpret and transform a client’s requirements into an industry leading product

Annuity Strategic has a long-term view of individuals developing their skills and experience in the areas we specialize in. Subsequently, when looking for new members of the team we’re fairly agnostic to seniority or experience, provided people show potential.

If you’d like to discuss the role further, please contact steve-garcia@annuity7.com.au with a CV and a bit about yourself.

Oh, and no recruiters, please!

• Can we retire soon or how much longer do we have to work?
• Should we collect Social Security at age 62 or wait until full retirement age (and what does that mean, anyway)?
• We have pensions, Social Security benefits, bank accounts and retirement plans — but what is the best way to provide our retirement income?
• Are we being too conservative or aggressive with our investments?
• Should we pay off our mortgage so that we are debt free heading into retirement?
• Why are we paying so much in taxes every year — is there anything we can do about it?
• We have several life insurance policies — do we still need to have them or should we cash them in (or can we cash them in)?
• What about Long Term Care insurance, do we really need that?
• We want to take care of our children and grandchildren — is there a best strategy?

We acknowledge that some people are more comfortable with their own version of financial planning, whether through a true “do it yourself” mode or with a “Robo Advisor” type of experience.

Mathematical projections can be done fairly easily to account for the 25 or 30 years of living in retirement, projecting income and expenses compared to assets and liabilities for the entire period using assumed rates of return and estimated life expectancy.

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In today’s video we discuss some of the common investment mistakes made by novice investors and how having a financial advisor would have helped to mitigate these mistakes.

Some examples discussed in the video are cases where someone buys an investment without having a strategy to sell the investment. Or, a strategy is in place, but when the moment to sell arrives the investor “moves the goal posts”, or becomes emotionally caught up in the investment and is unable to make the correct decision. Additionally, novice investors don’t always consider the tax consequences of buying and selling investments.

Many investors seek help in managing investments, but the quality and type of help they seek can vary dramatically depending on one small little detail — who’s paying your adviser? In turn, that begs the question… is your adviser on your side of the table?

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It’s important to understand the nature of the relationship between you, your adviser, and the investments he/she recommends.

Advisers come in three blanket varieties.

1. Fiduciary Advisers: These are advisers that work solely on behalf of the client. This means simply that they accept no payment from any investment or investment company. Their only loyalty is to the client.
2. Brokers: Brokers are simply paid to “broker” a transaction between two parties. They are often paid by both parties to do this. Since they essentially represent both parties in a transaction they actually don’t have any loyalty to one or the other.
3. Agents: Agents are just the opposite from fiduciary advisers. They work solely on behalf of the institution, such as a bank or insurance company. Their loyalty by definition is to their employer, whose products they must represent. If this person sounds like a salesman, it’s because they are.

Recent statistics show ownership of life insurance policies is at the lowest level in decades: One in four consumers have no life insurance at all. One of the biggest problems is many consumers simply have no idea how much life insurance they need or the best place to get it.

So, who needs insurance?

Simply put: If you have anyone in your life who depends on you financially, you need life insurance. While many Americans get life insurance policies through their job, the coverage is usually lower than individual policies and is only in place while they’re employed. Fewer than half of Americans between the ages of 25 and 64 with annual household incomes between $35,000 and $100,000 have their own life insurance policies, according to new data released by the insurance industry group LIMRA. In its survey, most consumers said they were not financially prepared for the death of a family member and would need to make a drastic or significant financial change if that occurred.

So how much insurance is enough?

Some experts say you should have enough life insurance to cover five to 10 times your annual income (especially if you have a young family), but often that’s just a guess. The answer really depends on how much money your family and/or dependents will need after you’re gone.

There are three key steps to take to determine the amount of life insurance that is right for you:

Evaluate your family’s needs. How much money does it take to run your household? Do you have unpaid medical bills, a mortgage balance and/or outstanding debts? Don’t forget to add funeral expenses and possible estate taxes to the mix. Life insurance policies can pay immediate expenses, including medical costs, as well as funeral bills, taxes, mortgage payments and other debts. The equivalent of all of that will get you close to the amount of life insurance you may need.

Consider future financial obligations. You should also have enough coverage to pay for future financial obligations. If you intend to help pay for college for your kids, say, factor in pending tuition bill and fees as well. Outline your family’s cash-flow needs as well as financial goals. Add it all up to figure out the estimated amount of money that your survivors would need.

Tally up the resources. Now look at the money that would be available. What is your spouse’s income? Do you have long- and/or short-term savings? Add up the balances in your 401(k)s, IRAs, 529 college savings plan, emergency reserves and estimated Social Security survivor benefits, as well as any existing life insurance policies (perhaps through your employer).