Author: Dr. Daniel Levine

A number of tax-saving opportunities are available for preserving your wealth, allowing you to accumulate more money for your retirement, your business,, your lifestyle, or for your heirs. Please read the following two tax tips carefully, and if interested, consider having a discussion about them with your financial planner so you can retain as much of your wealth as possible. Tax Tip #3: Nonqualified Tax Deferred Annuities: Consider smoothing your income through a deferred annuity. In those years when your income places you in the higher tax brackets, and if you invest in a deferred annuity, you can reduce your taxable income and possibly reduce both your income taxes and your NIIT (net investment income tax). Deferred annuities are useful tools and are often used to provide or supplement retirement savings. Deferred annuities are not qualified retirement plans but they do receive preferential tax treatment. Earnings on deferred annuities accumulate tax-free until funds are withdrawn. Deferred annuities can be either fixed or variable. A fixed annuity pays a guaranteed fixed interest rate. Variable annuities offer the annuity owner the choice of several investment options on the rates of return. Distributions of your annuity payments are subject to an exclusion ratio which divides the distribution into a taxable portion and, separately, a tax-free recovery of basis. Fixed and variable annuities have different exclusion ratio calculations. Even though the income from...

No one likes to hear the heavy tread of the tax man, so it’s incumbent on you, your financial planner and your tax specialist to take advantage of the many available tools that keep predatory taxes from cutting into your wealth. The following presentation offers you 10 Top Tax Planning Opportunities you may be able to use to your benefit. Top Tax Tip #1: Bracket Management Everyone fits into a tax bracket so Uncle Sam can assess the percentage of taxes you have to pay on your income. However, it is very likely you can manage your taxable placement and reduce your taxes. Brief Review: The 2017 Tax Cuts and Jobs Act created seven ordinary income tax brackets as follows: 10%, 12%, 22%, 24%, 32%, 35%, and 37%, in addition, the Act established three capital gains tax brackets: 0%, 15%, and 20%. (There are also two additional tax brackets for special income.) To add to the mix, even more tax brackets are possible with the new 3.8% net investment income tax (NIIT) that creates a 40.8% tax rate on ordinary income for high income taxpayers and a 23.8% tax rate applied to long-term capital gains. Because of the variety of tax brackets that could apply to your particular financial situation and because you might be in a position to save tax expenses by careful planning, the strategies of tax...

It’s a distressing thought that your portfolio can be subject to limitations, but once you consider the various ways in which your portfolio might be constrained, you have the opportunity for making changes that enhance your ability to increase your wealth while protecting your gains. Let’s take a look at how your portfolio’s performance could be restricted. 1. Time Horizon: This is a factor you probably don’t have much control over. We all know there is a strong likelihood your portfolio will eventually need to shift into more conservative holdings. Hopefully you began setting aside funds and made good investments at a very young age, and you’ve enjoyed the benefit of a long time horizon. As we know, time is an investment ally when you have a lot of it. If you began investing late in life, the limitation of years you’ve had to build your wealth might be a limiting factor when you reach retirement. 2. Taxes: Taxes can have a potent influence on your investment results, which is why taxes should be carefully analyzed for their influence on your wealth-building efforts. Even though your portfolio might be creating impressive gains annually, what really matters is how much money you retain after taxes have been paid, or will be paid as capital gains in the future. This is why investment advisors recommend you consider investment choices such as...

If your portfolio was one of these cars, which one would it be? Are you driving a conservative Model T portfolio, a suitably moderate family SUV, or an aggressive Lamborghini Urus portfolio at 124 mph? Each of these vehicles have their own benefits and detriments and you may find that you are driving a combination of these three cars, with the chassis of an SUV, the engine of a Lamborghini, and the suspension system of a Model T. Yes, that’s laughable, but you’d be surprised what people are driving out there! Let’s take a quick look under the hood of your portfolio, pull out the dipstick to check your oil level and make an initial determination of your portfolio’s road worthiness. The Conservative Model: The conservative model is designed for the cautious investor, one with a low risk tolerance and/or a short time horizon. This model is targeted toward the investor seeking investment stability and liquidity from investable assets. The main objective of the individual in the conservative risk range is to preserve capital while providing income. Fluctuations in the values of portfolios within this range are minor. Moderately Conservative Model: The moderately conservative risk range is appropriate for the investor who seeks both modest capital appreciation and income from his or her portfolio. This investor will have either a moderate time horizon or slightly higher risk tolerance than...

Are you the kind of person who enjoys a night at the casino, who knows better than betting too much but gets caught up in the excitement? Or are you someone who decides beforehand what your maximum losses should be before you even bet your first dollar? It probably comes as no surprise that many people are wary of losing their cash at card games and the roulette wheel but don’t have the same understanding or limits when risking their wealth in the markets. As we’re sure you know, there are no guarantees when investing your money because every investment, no matter how conservative, still has some degree of risk. For example, if you’re investing your money in the stock of only one company, you are not diversified and your risk is very high. If this company goes through a difficult patch, the value of your stock is likely to decrease. If the company goes out of business, you could lose the entire investment. Even if you invested in a United States government bond, your investment is likely to be more secure, but even with this apparent safety, the value of that bond could still decrease. The good news is that risk can be controlled, and a financial advisor can show you how to invest wisely, and potentially increase your wealth from an investment position that is prepared for...