2020 Arizona Tax Credit Limits

The Arizona State Tax Credit program allows you to make a donation to an eligible organization and receive a dollar-for-dollar credit against Arizona state taxes owed. Donating to tax credit eligible organizations will most likely leave you in a tax neutral situation – meaning you’ll pay about the same total amount whether you use the tax credits or just pay the tax. But by donating you get a say in how the money is spent by choosing which of the tax credit eligible organizations you contribute to. You can contribute up to the amount of your expected Arizona tax liability. If you

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How to Make a Retirement Income Plan

Our next online retirement planning class, How to Make a Retirement Income Plan, will be on Thursday, January 21, 2021. How much will you need to retire, and where will it come from?  In this class, we will show you how make a detailed retirement income plan by creating a series of timelines that chart out your future income and expense. You will see how you can put together a crystal-clear picture of your future retirement income.  About the Class We’ll be covering: • How to make a retirement budget and the most commonly overlooked expenses. • What a future income timeline looks like. • How to

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How to Build a Retirement Portfolio That Will Stand Up Over Time

When working and saving, typically you invest your retirement portfolio in a way that gives it the potential to earn the highest returns possible while planning to ride out any big market downturns. Once retired, the goal changes. A different goal means a different portfolio. A retirement portfolio needs to produce reliable cash flows that last the rest of your life regardless of the variety of market conditions that occur over your retirement years. In other words, you need a retirement portfolio that remains standing under all conditions. There are four primary ways you can construct such portfolios. 1. Total Return With a total return

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How Required Minimum Distributions Work

Upon reaching age 72, (it was age 70 ½ before the passing of the SECURE Act in December 2019), you must begin withdrawing money from tax-deferred retirement accounts. This provision of the law is called Required Minimum Distributions (RMDs). Let’s walk through the what, why, when, and how much of Required Minimum Distributions (RMDs). What are Required Minimum Distributions? The IRS requires that you start taking withdrawals from your qualified retirement accounts (Traditional IRA accounts, 401(k)s, 457 plans, and other tax-deferred retirement savings plans like a TSP, 403(b), TSA, SEP, or SIMPLE) once you reach age 72.  (Note – all RMD requirements were

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Sensible Money Ranked One of Best Phoenix Financial Advisors

In 2020, for the fourth year in a row, Sensible Money was ranked by an independent rating firm, AdvisoryHQ, as one of the top ten financial advisory firms in the Phoenix and Scottsdale area. This reward does not require firms to pay a fee or buy an ad in a publication. (Many “top financial advisor lists” solicit expensive ads from the firms they select.) AdvisoryHQ explains their policy as follows, “Firms do

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How to Election-Proof Your Retirement

The impact of election results on our country’s future weighs heavily on everyone’s minds. The stakes have rarely felt higher. But to what degree should you let politics affect your financial decisions? Should you adjust your retirement date? Rearrange your investment portfolio? Based on what you think will happen? Or just to be cautious? The answer, of course, depends on your investment objectives and time frame. The problem is that most people set personal goals, and then, as human nature is so inclined to do, find themselves caught up by current events. The result? They lose focus on their long-term aims. Here are

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After the Death of a Loved One

Experiencing the pain of losing a loved one is difficult. And when you have responsibilities for settling their estate, it can be hard to balance out the emotions you’re feeling along with the analytical process required to deal with the paperwork and financial decision-making. While learning to live with the loss can be a life-long process, the majority of the legal and financial tasks required will happen in the initial weeks and months that follow your loss. Overall, it may take a year or two to complete all estate settlement responsibilities. Larger estates can take even longer to settle. To get prepared,

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Don’t Cheat Your Retirement With the 4% Withdrawal Rule

Follow 5 new rules instead Many retirees rely on a common rule of thumb for retirement withdrawals known as the 4% rule. According to this rule, if you withdraw 4% of your portfolio each year and increase your withdrawals with the rate of inflation, you should have enough income to last your lifetime. So what’s the problem? While the rule can provide a rough estimate for planning purposes early on, its embedded assumptions can actually work against you once you retire. Here’s a brief look at some of the factors the 4% rule doesn’t account for, plus steps you can take to be

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IRA and Roth IRA Basics: Rules and Contributions Limits

An Individual Retirement Account, most often called an IRA, is a type of retirement savings account that offers special tax treatment when you contribute funds to save for your retirement. Can anyone contribute to an IRA? Not exactly. A set of IRS rules determine if you can make an IRA contribution, the type of IRA you can contribute to, and how much you can contribute. Knowing the regulations can help you save thousands in taxes while growing your nest egg. Can I Make an IRA Contribution? The Earned Income and Age Rules The first qualification for being eligibility to contribute to an IRA of

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How Do You Rebalance Accounts in Retirement?

Smart investors follow a plan, specifically an asset allocation plan. An asset allocation plan tells you how much of your total investments should be in stocks versus bonds. From there, you drill down into additional details such as how much should be in large-company U.S. stocks (or index funds) vs. international vs. small cap. You maintain investment ratios by rebalancing on a predetermined basis, perhaps once a year. In a 401(k) plan, rebalancing frequency is often accomplished automatically by checking a box that says something like “rebalance my portfolio every x months to this allocation.” In general, while you are saving, rebalancing can

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