Author: SynergiaFinancialGroup

Medicare Open Enrollment beings on October 15^th, 2021. There are new changes to Medicare for 2022 that may impact your coverage and services in addition to regular Medicare coverage for Americans who are ages 65 and older and younger people with disabilities. First, let’s review Medicare and what’s new for 2022:

What Does Medicare Cover?

Medicare Part A pays for hospital costs while Part B covers doctor visits. Medicare Part D offers coverage for prescription drugs. After you enroll in Medicare Part A or Part B, you may replace them with Medicare Advantage. This private health insurance plan usually includes Part D and additional benefits you won’t have through Medicare Part A or B, like dental and vision benefits. 

You may want to supplement Medicare Part A or Part B with a Medigap plan. If you choose a Medigap insurance plan, Part A and Part B will cover most of your out-of-pocket costs, while the Medigap insurance plan will take care of your coinsurance and deductible. 

What’s new to Medicare?

Covid-19 Coverage

Many people with Medicare are at higher risk for COVID-19 illness, so it’s essential to take the necessary steps to keep yourself and others safe. Medicare now covers several items and services related to COVID-19:

• FDA-authorized Vaccines
• Diagnostic tests to check to see if you have COVID-19.
• Antibody tests
• Monoclonal antibody treatments (You must meet certain conditions to qualify)

Cognitive assessment & care plan services

Medicare covers a cognitive assessment to help detect the earliest signs of cognitive impairment. If you show signs of cognitive impairment, Medicare also covers a separate visit with your regular doctor or specialist to thoroughly review your cognitive function, establish or confirm a diagnosis like dementia, including Alzheimer’s disease, and develop a care plan.

Blood-based biomarker test

Medicare covers this lab test in some instances (if available), once every three years.To be eligible you must meet all of these conditions:

• You’re between ages 50-85.
• You show no symptoms of colorectal disease.
• You’re at average risk of developing colorectal cancer.
• You pay nothing for the test if your doctor or other qualified health care provider accepts the assignment.

How Do You Sign Up for Medicare?

If you receive Social Security benefits when you turn age 65, you’ll automatically enroll in Medicare Part A and Part B. If you would like Medicare Part D or prescription drug coverage, you’ll have to enroll on your own as it’s not automatic. In the event you do not receive Social Security benefits but qualify for Medicare, you may enroll online via the Social Security Administration website. You will need to enroll three months before your 65th birthday month, during your birthday month, or three months after your birthday month. Keep in mind that you do not have to sign up for Medicare if you continue to work or have other health coverage before turning age 65.

Medicare and Retirement Planning

It’s essential to consider your healthcare options in retirement, including Medicare, and plan for remaining medical costs. By understanding your health care insurance options before you enroll in any Medicare plan, you may be able to avoid medical expenses that can deplete your retirement savings. 

Consult Your Financial Professional

Your financial professional can help you navigate Medicare and design a plan for your healthcare expenses in retirement. Contact them today.

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Working from home has heightened the need for internet security, and businesses are experiencing more cybersecurity attacks, with their remote workers being the prime targets. Social distancing has increased device use and strained businesses’ infrastructure security protocols. Cyber-security attacks are often directed at companies, while other episodes are at individuals who are often unaware their daily events create opportunities for cyber-criminals.

 “Home-based working has increased the potential cybercrime victim-pool. People take greater risks online at home which inadvertently exposes corporate IT to cybercriminals. Phishing will continue to enable malicious access to critical systems for criminals and other advanced actors.”—Cybercrime and COVID19: Risks and Responses, United Nations Office on Drugs and Crime.

With remote work increasing threats to business and personal information, what can you do to help protect yourself?

Set up alerts on all sensitive accounts- Credit card providers, banks, and other financial companies already have alerts for suspicious log-ins or transactions on your accounts. You also can enable alerts to notify you of suspicious activity. If you don’t have alerts set up, contact these institutions to enable alerts on all your accounts.

Enable two-factor authentication on smart devices- All smart devices have the option to enable two-factor authentication where you must answer questions, provide pins or passwords at least twice to gain access to use the device. If working remotely on a company-provided device or personal device, enable two-step authentication to help hinder an attack.

Always check the source- When receiving emails, click on the sender’s email address before opening the email to see if it is a real source. Why check first? Opening an email from a cyber-hacker can result in compromising your device. Often, cybercriminals install a bot when you open the email and watch for opportunities to take passwords and more!

Use different passwords for every account or a password manager- For websites that require a password to log in, use different passwords or a password manager to generate unique passwords. Unique passwords contain random phrases or include a combination of letters, numbers, and symbols is one way to help deter cyber-hackers.

Restrict your social media profiles- Lock down your personal information on your social media profiles by leaving your date of birth, address, location information, and social connections private. Also restrict your social media profiles by not making them public. Common security questions to sensitive accounts often ask security questions about pets, family members, or other information to verify your identity making these Q & A’s easy for cyber-criminals to use.

Keeping yourself and your devices safe is an on-going process but can be successful when you take steps to deter cybersecurity risks.

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In 2021, 44.7 million Americans are facing the burden of student loan debt. They owe more than $1.53 trillion in student loans. These alarming statistics prove the importance of saving for higher education. 

In the past, many parents prioritized saving for their child’s college or trade school. But today students are financially contributing to cover the cost of their own higher education and keep their student loan debt to a minimum. 

Benefits of Saving for College or Trade School

When students make an effort to save for their education after high school, they get a head start on adult life with minimal debt. Instead of spending years trying to pay off their student loans, they are able to focus on other financial goals such as buying a house or saving for retirement. Saving for college or trade school may also motivate students to choose a major that provides job opportunities and encourages them to complete their degree.

How Students Can Save for Higher Education

There are a number high school or college-aged students can save for higher education: 

• Apply for Scholarships: Scholarships provide money for college that students don’t have to repay. If they’ve excelled in academics, athletics, or extracurricular activities, it may be in their best interest to apply for scholarships. Even small scholarships can help save hundreds or thousands of dollars on the overall cost of secondary education.
• Enroll in AP Classes: A high school student can earn college credits by taking Advanced Placement or AP classes in high school. The fewer credits they need to complete their degree while in college, the more money they’ll save. 
• Work: While balancing classes, homework, and studying while working can be difficult, it’s not impossible. If your student can work part-time or occasionally during the school year or summer, they can save money and build their resume. 
• Open a College Savings Account: Your child can help contribute to a college savings account to help grow the money they’re saving for their education.
• Delay College: If your student is serious about graduating debt-free, they may delay college or trade school and work for a few years. Once they have enough saved up, they can begin their higher education journey.
• Attend a Community College: If your student completes prerequisites at a community college initially and then transfers to a public or private four-year university or college, they may save on tuition depending on secondary education costs in your area.

Consult Your Financial Professional

Together we can review your financial situation and develop the ideal college savings plan for your student. Contact us today to get started.

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If you plan to retire someday, a 401(k) plan may be on your radar. 401(k)s can help you save retirement money to help you enjoy your golden years financially secure. In honor of National 401(k) Day on September 10th, here are three facts about the 401(k):

The History of the 401(k)- In the Revenue Act of 1978, a “Section 401(k)”allowed employees to avoid paying taxes on deferred compensation. In 1980, a benefits consultant named Ted Benna was looking for a tax-friendly retirement program for one of his clients. 

He referred to Section 401k and decided it was a good idea for employees to contribute pre-tax money into a retirement plan while earning an employer match. Even though Benna’s client didn’t follow through with his idea, Benna incorporated the idea into his own company, The Johnson Companies. In 1981, the IRS started allowing employees to fund their 401(k)s through payroll deductions, and the rest is history. 

How a 401(k) Works- If your employer offers a 401(k) plan, you may choose to enroll as long as you meet the eligibility requirements. Before you contribute to a 401(k), you’ll need to determine whether you want a Traditional 401(k) or Roth 401(k) and decide how much you want to save. Here’s how each type of 401(k) works:

Traditional 401(k): Contributions are made with pre-tax dollars with a Traditional 401(k). Your contributions will help reduce your income tax by offsetting income. With pre-tax contributions, you won’t pay taxes on the money you contribute or your investment’s growth until you withdraw from your investment account. When you retire, the funds are taxed as regular income.

Roth 401(k): If you contribute to a Roth 401(k), your contributions are made with after-tax dollars. Your contributions will grow tax-free, and you won’t be responsible for paying taxes on the contributions or accumulation inside the account on withdraws during retirement. 

How to Contribute to a 401(k)- You have the freedom to choose how much you contribute to your 401(k). Keep in mind, however, that the IRS sets maximum contributions every year. For 2021, the maximum is $19,500 if you’re under 50. If you’re 50 and over, you can contribute $6,500 more or a total of $26,000.

So how do you know how much to contribute? It all depends on how much you can afford, how much you want to save for retirement, and how much you may need in retirement. Your financial professional can help you determine all of these factors. Ideally, contribute enough to meet your employer match, so you don’t miss out on “free money.”

After you decide how much you want to contribute, set up a payroll deduction with your HR department or 401(k) custodian. Each time you get paid, a certain amount will be deducted and go directly into your 401(k) account. Your human resources department can guide you through this process. 

Consult Your Financial Professional– Your financial professional can help you determine a 401(k) plan for your unique lifestyle and retirement goals.

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There are countless benefits of charitable giving. Through generous donations, you can make a difference in your community and society. You may also feel happier and even save on your taxes. On September 5th, consider participating in the International Day of Charity by donating to a cause or organization you value. Here are some key things to need to know regarding charitable giving.

Types of Charitable Giving:

• Donor-Advised Funds: A donor-advised fund allows you to donate cash or securities, which are non-refundable to a non-profit organization. 
• Real Estate: If you have a property you no longer need, you can donate it to charity. 
• Cash: With a simple cash gift, you’ll receive a tax deduction that is equal to the amount of money you donated minus the value of any products or services you received in return.
• Charitable Trusts: The two types of charitable trusts you may want to incorporate into your financial plan include charitable lead trusts (CLTs) and charitable remainder trusts (CRTs). Consult your legal professional and financial professional if you plan to include securities in your trust.

Tax Benefits of Charitable Giving

If you choose to itemize your taxes, charitable contributions can reduce your tax bill. It may be an excellent idea to itemize if the total of your deductions plus charitable gifts equals more than the standard deduction. Thanks to the Consolidated Appropriations Act, you may deduct up to 100% of your adjusted gross income every time you make a charitable cash deduction to a public charity in 2021. 

If you decide to give to a charity, ensure it’s a 501(c)(3) public charity or private foundation to receive tax benefits. Then, keep a receipt or another record of your contribution. At tax season, itemize your deductions (if appropriate to your situation) and file your tax return. Your tax professional can help you determine how charitable contributions will impact your tax situation.

The Impact of COVID-19 on Charitable Giving

Charitable giving was at an all-time high during the pandemic. Charitable Giving reached a record of $471 billion in 2020. Many Americans choose charitable giving as a way to help others during this unprecedented time. Since they couldn’t volunteer in-person at local charities, many donated their financial resources, despite the economic hardships they may have endured.

Consult Your Financial Professional If you have any questions on charitable giving or how it may affect your financial situation, we’re here to help. Contact us today to learn more about how securities can help impact your giving ability.

To accumulate wealth, people may choose to invest their money into various types of investments. Investing creates opportunities that otherwise would be difficult to manage due to the consistency of contributing to the investment.  However, investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

Whether people choose to invest in stocks, bonds, mutual funds, real estate, alternative investments, or some other investment, often their goal is to increase the value of the cash they contribute toward the investment. Investing your money may have the potential for a higher return versus in a savings account. Often investors assume the higher the rate of return, the more they may earn on their investment, but investing is not without risk.

Deciding to invest involves setting a goal, assessing your income, age, risk tolerance, and the time horizon until you liquidate your investment. The reasons people choose to invest also vary as well. Some save for their retirement, pay for education, or to increase their net worth. Here are some additional reasons why people choose to invest:

To reduce their taxable income- Investing in a tax-sheltered retirement savings account enables you to invest pre-tax dollars into a retirement fund and reduce your taxable income. In some instances, losses from the investment may offset income from another investment. Your tax professional can help you determine if you’re eligible to take losses on your income tax.

To participate in a new venture- New businesses often cannot secure startup funding in traditional ways such as through a financial institution, often relying on investors to fund their business. When investing in a new venture, there is no guarantee that you will make money or receive your investment back. Therefore, due diligence must take precedence before participating in any investment.

To benefit others- Some investors choose to participate in sustainable or ESG, investing which benefits someone or something. These types of investments have environmental, social, or governance criteria that must be met, along with the requirements of producing a return for investors.

Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.—Investopedia

To receive matching dollars- Companies often match employee contributions to a certain amount if the employee contributes to the company’s retirement savings plan. The only way to obtain a company’s match is to participate—making saving for retirement in a 401(k) one way to grow one’s net worth.

There is no guarantee that you’ll make money from the investments you make, but getting the facts about investing, creating a plan to invest consistently, and working with a financial professional to monitor your investments can help you achieve your goals.

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August is National Black Business Month, a time to celebrate black-owned businesses throughout the country. This celebration is a time to support black-owned businesses and organizations to promote economic freedom and entrepreneurship within the black community.

According to the U.S. Census 2018 Annual Business Survey, black-owned business ownership is on the rise. The number of black or African American-owned firms grew 34.5 percent between 2007 and 2012 — from 1.9 million to 2.6 million in 2012. Black or African Americans owned 124,004 employer businesses in 2017. This accounted for 2.2% of the 5.7 million employer businesses in the United States.

However, the number of black-owned businesses accounts for 9.4% of all companies and is still below the 13.1 percent black or African American share of the adult U.S. population. In fact, of the 27.6 million businesses reported in this census, only 2.6 million of them are black-owned.

Black-American women contributed to an increase of 66.9% to 1.5 million black/female-owned businesses over these same five years, accounting for 58.9% of black-owned firms in the U.S. This trend shows significant growth for women-owned businesses in the U.S. and is a reason to celebrate as the gap between women and diverse gender-owned and other businesses is decreasing.

However, black entrepreneurs face difficulties compared to white entrepreneurs when obtaining financing and locating resources such as real estate, equipment, and business guidance. Many black entrepreneurs must find funding through private donors in their communities or through black-owned business organizations to open their doors.

What can you do to support black-owned businesses?

Shop local black-owned businesses- Deter from large corporate-owned retailers and seek out black-owned companies in your area. Use smartphone apps such as EatOkra to locate black-owned restaurants or Swivel to locate black-owned hair salons.

Use black-owned business directories- Choose to intentionally support black-owned businesses listed in directories such as WeBuyBlack or NextDoor, or contact your local business organization to seek out black companies in your area.

Partner with organizations that fund black entrepreneurs and startups- Organizations need your support to continue to fund the startup of black-owned businesses. Whether you offer support financially or through your expertise, investigate organizations in your area and involve yourself in the black-owned business ecosystem.

“The greatest equalizer of wealth disparity is business ownership. On average, minority business owners have a median net worth 12 times higher than those who do not own businesses.”—Entrepreneurs Access Network, EY.

This month and every month, choose to support black-owned businesses and to help our U.S. economy grow. Without investing in black-owned and all small businesses, the potential to employ others and create wealth hinders. When people have employment, they contribute to the overall economy through their spending, thus strengthening the resiliency of all U.S. businesses.

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Right now is a great time to evaluate your current tax situation and enact a few changes to improve it before the year ends. The first thing to evaluate is whether the correct amount of taxes is being withheld from your paycheck each month if you’re employed. Second, be mindful of deductions and Required Minimum Distributions if you’re over age 72.

Ways to help offset your income to lower personal taxes in 2021:

Although examining and updating your W-4 is a great start, there are a few more ways to save on personal taxes that you may want to consider: 

• Save more into a pre-tax-sheltered retirement savings account.
• Fully fund or increase your contribution into a flexible spending account (FSA) or health savings account (HSA)
• Determine if you’re eligible for the earned income tax credit (EITC)
• Evaluate if you qualify for the alternative minimum tax (AMT).
• Increase your deductions.
• Donate money to a charitable cause.

Be ‘Tax-Aware’ of these every-day situations when filing:

Stimulus Payments are Not Taxable– If you received a stimulus payment in 2021, rest assured it won’t be considered taxable income. Also, if you received more money than you qualify for based on your 2021 income, you wouldn’t have to repay the funds.

Unemployment Benefits are Taxable– Unemployment benefits are taxable income by the IRS and in almost every state. If you didn’t take taxes out of your payments, you might receive a 1099 form showing your unemployment benefits income by year-end. You’ll need to pay taxes on the amount of money you made through unemployment benefits in 2021. 

Home Office Deduction- If you worked from home because of the pandemic, you might assume you qualify for the home deduction. Unfortunately, work-related expenses are not eligible for deduction if you’re an employee on an employer’s payroll. A home office deduction is only an option if you’re a freelancer, entrepreneur, or another self-employed individual. 

RMDs Require Special Attention– Although Required Minimum Distributions (RMDs) were suspended for 2020, RMDs are not in 2021. Consult your financial professional to ensure you are set up for RMDs this year, or if you haven’t already taken yours, set up your distribution before the year ends.

Charitable Deductions May Save You Money– If you made charitable deductions in 2021, you could deduct up to 100% of your adjusted gross income (your total income minus other deductions) in qualified charitable deductions if you itemize your deductions. If you opt for the standard deduction, you can take advantage of the “above-the-line deduction,” which will allow you to write off up to $300 of charitable deductions you made in cash. 

Meet with your tax and financial professionals.

Meeting with your financial professional and tax professional mid-year helps to ensure you have achieved your ideal tax situation. A tax review is essential while saving for retirement or once you retire. Retirement is often when taxes on distributions from pre-tax retirement savings accounts hit, making pre-tax planning important.

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Since the beginning of 2021, signs of economic recovery have started to appear. Americans are actively spending in specific sectors, and some industries are faring well—while others are lagging. Consumers, ready to re-engage with the world after a year of social distancing and lockdowns, are eager to spend. However, some businesses lack the staff and inventory they need to serve them. This contradiction creates an uncertainty around the U.S. economic recovery. Are we on the path toward recovery or not?

Economic recovery occurs over time and not always as quickly as we expect. Economists track different areas on a week-by-week and month-by-month basis to determine how our economy is performing. Three of the most indicative measures economists use to monitor economic recovery include:

The Consumer Price Index- This index tracks the cost of consumer goods from one year ago. Increases mainly were in categories where the demand was high during the pandemic, plagued by supply-chain disruptions. Economists predict that this will ease in the coming months if no further trouble in supply occurs.

Unemployment Rate Index- The U.S. Unemployment rate is improving after the second-highest rate since 1980, with an employment rate of 14.8% in April 2020. Economists will continue to watch the unemployment rate as we move closer to the fall and year-end for signs of recovery to pre-pandemic levels.

Wages- Wages are tied to the Employment cost index and indicate recovery in employment. U.S. wages have increased by 2.8% overall in all industries since 2020. However, with an inflation rate of 2.4%, American workers likely will not feel like they’re making more money.

What about Inflation?

Not all consumer goods are experiencing inflation; food has slightly increased while gas and vehicles are experiencing double-digit increases. Other items experiencing inflation include construction materials, home furnishings, airline fares, and apparel. Since COVID-19, clothing at retail stores is continuing to deplete as manufacturing halted mainly overseas, creating demand for products ordinarily accessible. Economists predict the inflation rate to slightly increase over the next year and a half, then level in 2023.

Meet with your financial professional

If you are concerned about economic recovery in specific industry sectors or inflation and its impact on your portfolio or fixed-income investments, schedule a time with your financial professional.

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June is Home Ownership Month, and many Americans may be contemplating if now is the best time to buy a home.  Homeownership can provide benefits to families, neighborhoods, and communities across America. But this year, with our current housing market landscape, Home Ownership Month is a little different. Here’s why:

Most Americans still want their own home. Why are many Americans still allured by the idea of having their own home? Homeownership is still very much thought of as a part of the American dream. Nearly two-thirds of millennials and 45% of Gen Z say a desire to be a homeowner is the main reason they buy a home.

The benefit of building equity via owning a home as opposed to helping someone else financially is very much still real as well. In the United States, many people lean toward homeownership as it is a part of our cultural mindset and economy.

Are we in a housing bubble? It is increasingly evident that COVID-19 and working from home is driving demand for homes and increasing prices across the U.S. There is increasing concern from consumers that there is a housing bubble and anxiety about when the bubble will burst.  Google recently reported that the search “When is the housing market going to crash?” had spiked 2,450% in the past month. Also, more than half of this year’s first-time homebuyers expect some competition, while one in five believe they’re in for a lot of competition.

Don’t panic about buying or a housing bubble. Experts say we shouldn’t panic as not all bubbles look like the one from 2008. So, while the housing market has low inventory, high demand, and a risk-averse lending environment, extreme spikes in home prices could result in some prices returning to normal soon.

Should you save for a down payment or use your retirement assets? You can use your 401(k), but it comes at a cost. Here’s the low down on using retirement assets for a down payment:

• You can use 401(k) funds to buy a home by taking a loan from the account or withdrawing money.
• A 401(k) loan is limited in amount and must be repaid—with interest. However, it does not incur income taxes or tax penalties.
• Your 401(k) withdrawal is generally limited to the amount of the contributions you made to the account and can avoid penalties if it is classifies as a hardship withdrawal. However, the hardship classification will incur income taxes.
• Withdrawals from Roth IRAs, and some other IRAs, are generally preferable to taking money from a 401(k).

If you have questions about saving for a down payment or if you should use retirement assets for a down payment on a new home mortgage, your financial professional can provide you with these answers.

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