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AUTHORS: Jennifer Climo Jean Fullerton Jonathan Harrington Nick Prigitano Jenna-Rose Finnie Kyle Labelle

Series I bonds really are yielding over 9% right now. Should I buy them?

June 17, 2022 Investments Jonathan Harrington

Series I bonds (the I stands for inflation) are all the rage right now because of their currently high yields in an otherwise low-yielding savings environment. But before you tap into your home equity line of credit to max out your I bond purchases, you need to understand the mechanics of how I bonds work. What is an I bond? An I bond is a bond issued by the US government on which you earn interest at a rate tied to inflation and guaranteed by the federal government. If you buy an I bond today (June 2022), you will earn 9.62% interest, which is tied to the Consumer Price Index (CPI-U). The bond earns interest for up to 30 years. You can also defer paying federal tax on the interest until you redeem (cash in) the bond, and there is no state or local tax on the interest.

Should You Pay Off Your Mortgage Early? With Rates Rising, the Answer Gets More Complicated

May 27, 2022 Interest Rates Nick Prigitano

A common question we get asked as financial planners is whether homeowners should put extra money toward their mortgage to pay it off early. Of course, the exact answer will depend on your goals, but with previous mortgage interest rates being near historic lows, it often didn’t mathematically make sense to pay down the mortgage. While past performance does not guarantee future results, over the long term, the return from the stock market has been higher than the interest rate paid on these mortgages. However, with interest rates on mortgages rising, the math part of the equation gets a little more fuzzy if you’ve taken out a mortgage recently, or may in the near future. Here are some things you should consider before deciding whether to allocate extra money toward paying off your mortgage.

The Levels of Risk for Stock Investments – Why Diversification Is Key to Prudent Investment Management

May 6, 2022 Investments Nick Prigitano

Anyone who has heard anything about the stock market knows it’s volatile. There will be swings up and down. But, although past performance does not guarantee future results, historically over the long term, it has rewarded investors who have stayed the course. However, when referring to the stock market, most people mean a broad-based benchmark (like the S&P 500) that invests in lots of different companies. Long-term returns are not the same for someone holding individual stock or a group of stocks that differ from the given benchmark.

Gargantuan Gas Prices — Working from Home Gets Even More Appealing

April 22, 2022 Cash Management Nick Prigitano

Everywhere we go we see inflation. At the grocery store. When shopping on Amazon. At the gas pump. The insidious increase of inflation is sneakily eating away at people’s paychecks, putting a strain on us when purchasing the things we need to get by. Most companies review pay annually, and with a steep jump in prices continuing early this year, the pay raise you received in January may be eaten away by inflation before it’s reviewed again at the end of the year. Because of this, more companies are at least considering reviewing pay more often, although this is still uncommon.

Flight From Fixed Income – Why the Bond Market Has Been Down Recently

April 16, 2022 Nick Prigitano Working Professionals

When investors refer to the bond market, it is usually described as being “safer” than the stock market. Bonds are generally stable and pay a fixed income. While it is true that bonds tend to be less volatile than stocks because of the fixed payments, it does not mean that they are completely immune to volatility. There are certain factors that can impact bonds fairly significantly: inflation and interest rate changes. Unfortunately for bonds, when inflation is rising, that is often also a time when interest rates are adjusted. These two factors are the main reasons bonds have been performing poorly recently. Here’s what you should know about how inflation and interest rates impact bonds and what you should do about it.

What to Do if You Contribute Too Much to an HSA, Roth IRA or 401(k)

April 8, 2022 Jonathan Harrington Taxes

It is common for individuals to make excess contributions to health savings accounts, Roth IRAs, 401(k)s, 403(b)s and 457(b)s. So common, in fact, that the IRS has a lenient policy for removing these excess contributions to avoid most penalties. So, if you discover that you’ve made an excess contribution to any of these account types, don’t worry, because there is a way to fix it. Note: For purposes of this article the tax filing deadlines are noted as April 15th and October 15th even though the exact days in these two months may vary from year to year.

What Are the Risks to Your Investments, and What Should You Do About Them?

March 11, 2022 Investments Nick Prigitano

The world is riddled with uncertainty right now. A glance at news headlines shows that. Inflation has not been this high in decades. There are mounting geopolitical risks from the largest land war in Europe since WWII. There are still remnants of a global pandemic. All these crises have led to ballooning US debt during a time when interest rates are poised to rise. Risks abound, and this has been reflected in the stock market, both globally and domestically, with recent drops from all-time highs. With risks coming from all sides, what is an investor to do? Like anything in life, investing comes with trade-offs. In this post, we will discuss some of the biggest risks to investing, and the trade-offs of hedging against them.

Why the big spike in Medicare premiums?

February 25, 2022 Insurance Jean Fullerton

Medicare is the primary health insurance for most people over age 65. Medicare Part A, which covers hospitals, is typically free. Medicare Part B charges a monthly fee that covers doctor visits and outpatient services. Most people pay for their Part B premium from their Social Security check. Each year, Congress and the Centers for Medicare & Medicaid Services (CMS) decide how much to charge for Part B. This year, the increase ($21.60/month) is the largest dollar increase in Medicare history and the largest percentage increase (15%) since 2016.

2021 Is No Normal Tax Year – Some Changes That May Impact You When Filing Your Return

February 25, 2022 Nick Prigitano Taxes

It’s that time of year again when CPAs are locked in dark rooms crunching numbers on a laundry list of IRS forms and ordinary citizens scramble to gather their appropriate tax forms before the ever-looming tax deadline. Tax time tends to be exceptionally stressful for most people. To complicate things further, since the pandemic began in 2020, like everything else, we really haven’t had a “normal” tax season. While tax laws are always changing, there have been numerous special temporary tax provisions to try and alleviate some of the financial burdens of the pandemic. Like 2020, there are a variety of special tax rules for filing your taxes for 2021. Here’s what you should know about your 2021 tax return so that you don’t overpay your taxes this year.

Maximizing Retirement Plan Contributions with an Individual 401(k)

February 18, 2022 Jonathan Harrington Retirement

Imagine that you are a sole proprietor with a high income, and you’re looking for a way to maximize your retirement savings while reducing your taxable income. You’ve heard about SIMPLE IRAs and SEP IRAs, and you used to contribute to a 401(k) when you had a corporate job. Did you know that it is simple to set up your own 401(k) and you can contribute up to $61,000 a year to it ($67,500 if over age 50)? Introducing the Individual 401(k)! Individual 401(k)s are also known as Solo 401(k)s, Solo-ks, Single-ks, Self-Employed 401(k)s, Uni-ks and One-participant ks. This type of plan is like a traditional 401(k) covering business owners with no other employees. The plan can also cover the business owner’s spouse. It is also possible for the business to have employees, but they cannot be full time, as defined by the plan document.

Interest Rates Going Up? Should You Be Worried?

February 9, 2022 Cash Management Nick Prigitano

Inflation has remained persistently high longer than the Federal Reserve anticipated. This is due to a confluence of factors, including labor shortages, supply disruptions, insatiable consumer demand, and low interest rates, among other things. One of the weapons in the Federal Reserve’s arsenal to combat inflation is the power to raise interest rates. Although interest rates have not increased yet, analysts are expecting multiple rate increases in 2022. If interest rates do go up, what does that mean for you?

Should You Increase Your Home Insurance? — Why the Recent Housing Market Warrants a Review

January 28, 2022 Insurance Nick Prigitano

The largest asset most Americans own is their home. That’s why it’s crucial to have adequate insurance to cover the physical dwelling. Home insurance, though, can be somewhat complex because not only does homeowners insurance cover the home itself, but it also usually covers other aspects such as the property inside the home and personal liability, and may even tag on some umbrella coverage as well. To complicate things further, homeowners and homebuyers alike have seen home prices skyrocket in recent years. Residing in New England, we can personally attest to the rapid increase of home prices in the New Hampshire and Massachusetts area. But just because home prices are increasing, does that mean you need to up your insurance coverage as well