Dollars & Sense Column - Orange Town News (Reprints)

Don’t be Tricked by Numbers 

(October 26, 2022) We know that overall markets are down substantially as we, once again, enter “bear market” territory.  As the end of this turbulent year ends, more and more investors will focus on their year-to-date returns (or lack thereof).  When faced with substantial losses, investors tend to forget the gift of positive returns we have experienced since the last recession in 2008.  Keep in mind that as of this writing (9/21/22), the S&P 500 has had an “average annual return” of 10.62%.  It looks good; however, investors must dig a little deeper to understand what average returns actually mean to your account values.

Dollars & Sense: Relearning “Economics 101”

(August 25, 2022) This summer revisited economic phrases we haven’t heard in over ten years and other terms not mentioned since the 1980s.  Recession, inverted yield curves, inflation, GDP and CPI.  These words and acronyms are somewhat familiar, but perhaps only because they have represented headline news for several months now.  What do these words mean, and how do they impact our day-to-day lives?

Dollars & Sense: Something New on Your 401k Statements

(June 23, 2022) The timing of this information is probably not very good.  If you have a 401k plan, more than likely, you will not be in a hurry to open up your June 30th statement, or any investment statement.  It hurts to see the losses on your statements, even if it is “only on paper.”  Back in December 2019, Congress passed the SECURE ACT and now requires all 401(k) and 403(b) statements to include illustrations of the monthly payments you would receive if your current plan account balance was used to purchase an annuity.

Dollars & Sense: Be A Savvy Senior: Know the Warning Signs of Elder Fraud

Presented by Roberta L Nestor

(May 26, 2022) Just browse through the latest true crime documentaries on your preferred streaming network and you’ll see that people of all ages and income levels are vulnerable to financial scammers. Unfortunately, as we get older, certain factors put us at greater risk.  Social isolation, recent loss of a spouse or close family member, diminished cognitive abilities, and accumulated wealth can make those over age especially attractive to fraudsters.

Dollars & Sense: Capturing a Lifetime of Mom Memories

Getting Started

(May 5, 2022) It doesn’t take much to start capturing valuable memories—just a notepad, an audio recorder, or a video camera.  While you could write down all the answers, it might be easier and more fun to record them for future generations to hear or, better yet, see!  While recording your memories might feel a bit forced at first, you’ll be surprised at how easy it flows once you get started.

Dollars & Sense: What’s in Your Bond Basket?

(April 14, 2022)

As investors, we are more concerned about headline news concerning the overall stock market than that of its vanilla-like counterpart, the overall bond market.  Generally, investors do not worry themselves with the bond market.  Bonds are considered “safe” and historically, do not have the type of volatility that exists with equities.  It would be easy for investors to attribute any negative year-to-date returns to be a result of the recent downturns in the stock market.  This time, investors may have to dig a little deeper into their investment statements than just the bottom line.  The most important measure of the overall investment grade bond market is the Bloomberg Aggregate Bond Index and, as of 04/06/2022, this index is down 7.23% for the year.  According to a New York Times article dated April 1st, “This is the worst bond market since 1980.”  Simply stated, bonds have three areas of risk.  Default risk, inflation risk and interest rate risk.  It’s safe to say that presently we are hitting 2 of the 3 risk parameters.

Dollars & Sense: Dealing with Uncertainty 

(March 10, 2022) Why do leprechauns always ask their advisors for advice twice?  To be sure, to be sure.  That is the problem facing all investors today, we are not sure of anything.  For seasoned investors it is easy to just shake our heads and say, “here we go again” knowing that in time, the uncertainty will be over, and things will be back to normal.  For newer investors, it is not so easy to just move on and act like nothing is happening.


Dollars & Sense: Together in Marriage, Separately for Taxes?

(February 10, 2022) While the IRS tax tables have given married couples the option of filing Married or Married Filing Separately for decades and decades, the question comes up all the time.  What are the differences between the two filing statuses and when does it make sense to file separately?  In general, if you utilize the Married Filing Separately status you will keep your own tax liability separate from your spouse’s tax liability.  When you file jointly, you will each be responsible for your combined tax bill (if either owes taxes).

2022 Focus on Financial Literacy

(January 13, 2022) Is financial literacy an issue in this country?  Just about anyone will tell you, yes, it is a problem and, one that is easily identifiable.  The good news is that more programs are being developed to devise solutions that will start to ensure that more Americans understand how to make better financial decisions and lead more comfortable lives.

Making the New Year a Year to Share

(December 16, 2021) Parents share so much with their children and other family members.  Whether it be a story about the past, a family heirloom, recipes passed down for generations or those special childhood memories – that is what families do, we share.  We share our day-to-day lives, our health issues and brave families are even able to share their feelings about politics, the latest news and world events.  In a nutshell, most of us don’t have any issues when it comes to sharing our lives with our families.  Let’s put one caveat in the sharing.  We tend to be willing to share everything and anything, as long as it does not have anything to do with money.

Thank You to All of the Nation’s Caregivers

(November 17, 2021) It is appropriate that November is the month we recognize and give thanks to our nation’s caregivers.  Caregiving has evolved and touches the lives of millions of Americans each year.  Sadly, providing care for family members has not gotten any easier and each year the amount of family members providing care for loved ones is increasing.  By the millions.  Providing care for a loved one is an act of love, commitment, and compassion.  It enables family members to receive the support they need to live a life with dignity.  The chart above speaks for itself.

Dollars & Sense: Lessons Learned 2.0

(September 30, 2021) One doesn’t have to go back very far into investment history to find out what can potentially happen to a portfolio when the markets turn negative.  Unfortunately, many of the lessons learned from severe market downturns has been at the expense of the small investor.  It seems like the investment industry, Congress and other interested parties adds safeguards and new regulations after the fact.

Refresher Course on 529 College Savings Plans

(September 01, 2021) It’s hard to believe that 529 College Savings plans have been available for 25 years.  That longevity has led to multiple changes from the original IRS Code (which is what the 529 stands for).  With each year, these changes have lent themselves to be more and more favorable in making 529 plans one of the best options to prepare for college costs.  Apparently, families have already warmed up to these college savings plans.  According to a new report from Morningstar (published in May 2021), total 529 plan assets reached a record high of $384 billion.

Dollars & Sense: Tax Freedom in Retirement

(June 24, 2021) For Connecticut residents,“Tax Freedom Day” has come and gone.  That is the date each year that represents when we have worked enough to fully pay all our federal and state income tax liabilities for the calendar year.  In our state, working individuals achieved tax-freedom on April 25th of 2021.  Tax Freedom Day is specific to those who are still in the workforce.  But how and when can retirees achieve tax freedom?

Dollars & Sense: Helping Mom this Mother's Day

(April 29, 2021) We count on our Mom’s for so many things in life.  Think of all the sacrifices, time and love she has given over the years.  Moms truly are amazing people.  One of the greatest gifts a Mom gives is her advice.  Whether about etiquette, relationships, school, work or planning your wedding – all Moms love to give their children and families advice.  Moms are also very impressive as they have adapted so well to surfing the web, downloading apps on their phones, paying their bills on-line, posting and sharing photos on Facebook and have even mastered on-line shopping.  But…are they doing it safely?

Dollars & Sense: A Starter Guide to Selling Your House

(April 01, 2021) From the moment you decide to sell to the day you hand over the keys, selling a home is often unpredictable and time consuming. By being as prepared as possible, you can keep the process moving and achieve the optimal price in the current market...

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