Thursday, December 31, 2015

Your Checklist to Year-End Financial Planning

The best financial decisions are made with the benefit of time, thoughtful consideration, and trusted professional advice. As tax time approaches, take the time to prepare for sound, long-term financial decisions to minimize expenses, taxes, and the headache of organizing your finances at the last minute.

Thursday, December 24, 2015

A Christmas Greeting from Mark Kemp

Merry Christmas Eve!
Let me take this opportunity to express my warmest wishes—from all of us here at Kemp Harvest Financial Group—for a joy-filled Christmas season.  The holidays are a great time to get together with extended family and friends, but it can get busy, and quickly. Our family has a few traditions we make certain we celebrate that hold meaning to us and the holiday season. At Thanksgiving, when we have our family and friends (who are more like family) around the table, we share what we are thankful to God for—usually things from the past year.  Christmastime brings about the story of the First Christmas, the simple truth of Jesus’ miraculous birth, which our family always reads together. Merrymead’s Live Nativity is something we visit every year, and our family is always rolling on the floor with laughter after the annual reading of The Best Christmas Pageant Ever by Barb Robinson. You can bet my family knows my Christmas theme song is “I’m Getting Nuttin’ For Christmas” and if you ask them, they’ll tell you why.
One more tradition that serves for both our home and office: we participate in Operation Christmas Child. This is a once-a-year gift-giving effort to provide a shoebox full of toys, school supplies and hygiene items to children around the world who could never expect to receive a Christmas present otherwise.
Finally, let me leave you with my prayer that your holidays (no matter which ones you cherish and celebrate) will be blessed.
With Gratitude,
Mark Kemp & Family

Thursday, December 17, 2015

Setting Your Lifestyle Ceiling

As we approach the holidays each year, it becomes a wonderful time to spend with family and friends. It also becomes a time to step back, count our blessings, and reflect on how fortunate we are. You might also find that your budget is tighter this time of year, and a little concerned about how that will impact 2016. Let’s take a moment to quiet those concerns, and talk about lifestyle ceilings.

Imagine yourself as a high school senior (which may be painful, depending on how you styled your hair back then), and consider your options for after graduation. College could’ve been an option, but it wouldn’t necessarily have been a guarantee. Chances are, the likelihood of entering the workforce was much higher. Today, it’s pretty much expected that anyone who wants to attend college can. They might end up with student loans, they might have to work their way through it, they might even live at home to save costs, but it’s very much a given.

Thursday, December 10, 2015

Gift Taxes: What to Expect

With only two weeks until Christmas, gifts seem to be high on everyone’s radar. While this article is about gift-giving, it’s not necessarily about those presents wrapped under the tree. Gifts, in the IRS’ mind, qualify as any transfer made without receiving full (or any) value in return. The gift tax is applied on these transfers, whether or not the giver intends for it to be a gift. This might sound like a damper on the holiday season, but the gift tax may not be exactly what you expect.

The Basics
The federal government imposes a substantial tax on gifts of money or property above certain levels. Without such a tax, someone with a sizable estate could give away a large portion of their property before death and escape estate taxes altogether. For this reason, the gift tax acts more or less as a backstop to the estate tax. Yet few people actually pay a gift tax during their lifetime. A gift program can substantially reduce overall transfer taxes; however, it requires good planning and a commitment to proceed with the gifts.

Thursday, December 3, 2015

Deck the Halls (and Save Your Money)

Christmas is a time of togetherness and tradition – but it can too easily turn into a financial nightmare. If you’re buying gifts, planning parties, decorating the house, baking cookies, singing carols, and trying to make sure everyone’s happy, Christmas gets a little overwhelming. We’ve gathered a few tips to help you de-stress, save money, and enjoy the season.

Thursday, November 19, 2015

Life After Debt

Many American families are finding themselves deeper and deeper in debt. Complicating matters even more, legislation makes it harder to declare bankruptcy, and saddles filers with a greater percentage of their debts to repay. If you, too, find yourself in trouble financially, there are usually no easy answers - but there are some ways out for those willing to commit to changing their spending habits.

Life Without Debt – But How?
Your ability to pay your bills can be affected by situations beyond your control such as serious illness, divorce, or unemployment. Poor financial management can also threaten your economic security. You may be able to juggle your creditors for a time, but eventually you may come to realize you need help in resolving your financial problems.

Thursday, November 12, 2015

More on Mortgages: Understanding the Underwriting Process

Even though it's probably the largest purchase they'll ever make, few consumers take the time to really go "behind the scenes" to more fully understand the complex world of mortgage lending. Learning the terms and working to understand your mortgage can help save you time, money, and a whole lot of headaches.

Qualifying for a Mortgage
Whether you're looking for a first mortgage on a new home, to refinance an existing mortgage, or take out a second mortgage, the interest rate you'll be offered depends on the same factors:

Thursday, November 5, 2015

The Mysteries of Mortgages: Unveiled

With home ownership in the United States now approaching 70% of all households, the chances are good that you've either taken out a mortgage in the past or have one now. However, many homebuyers don't research and act as carefully as one might imagine given the amount of money borrowed and the huge difference even a few basis points (one one-hundredth of a percentage point) can make over a lengthy loan.

Instead, homebuyers often search for the home they want, then apply for a mortgage and hope for the best. A far better approach is to find out how much mortgage you can qualify for, then look at homes you know are in your price range. Known as "prequalification," having this piece of paper in your hand can also set you apart as a serious, committed buyer in hot real estate markets where properties are fetching multiple offers.

Thursday, October 29, 2015

Higher Education for a Lower Cost? Saving With Scholarships

Finding Scholarship Opportunities

The vast majority of the nation's institutions of higher learning offer various types of scholarship, granting money to college students based on a host of criteria such as academic merit, financial need, and in some cases, racial or ethnic background.

Although the application process can be complicated and redundant between scholarships, a great deal of money is available for those who are willing to jump through the right hoops and prove their merit and/or need.

Thursday, October 22, 2015

Higher Education for a Lower Cost? Rising Costs and Funding Strategies

Despite a decade of low inflation, the price of higher education has seemed to defy gravity. According to The College Board, a not-for-profit membership association whose mission is to help students and parents prepare and pay for college, tuition and fees at both private and public institutions have nearly doubled in constant dollars over the last 20 years.1

But a college education is an investment that can pay big dividends down the road. The College Board, citing U.S. Census Bureau statistics, estimates that individuals with a bachelor's degree earn over 70% more, on average, than those with only a high school diploma.2 Over a lifetime, that earnings gap translates into more than one million dollars - more than enough return to justify the investment, even if the rise in prices is outpacing inflation.3

Thursday, October 15, 2015

Higher Education for a Lower Cost?

College is expensive, and costs are only increasing with time.  Even if you haven't been able to save all the money you’d like for tuition costs, several alternatives exist to potentially help make up the difference.

Financial assistance comes in many shapes and sizes - from scholarships and grants, which do not need to be repaid, to federal loans, which carry very favorable interest rates and terms, but must be repaid eventually. The following are a few of the most popular sources of financial assistance:

Thursday, October 8, 2015

Leaving Debt Behind

Last week, we discussed eight ways to build a budget. One of these was eliminating debt, which quite honestly, deserves a post of its own. Debt can be all-consuming, but it doesn’t need to be. While it is easy to fall into and much harder to get out of, becoming debt-free is not unattainable! Millions of people have done it; but it will take dedication and the ability to see the bigger picture, beyond a sea of minimum payments.

With all of this in mind, debt-free living requires a plan. It is not an overnight decision, but a collection of weeks, months, and sometimes years of choosing to eliminate debt.

We suggest beginning by listing out your debts. Putting pen to paper will allow you to see exactly what you are dealing with, and how you can start eliminating payments. Once you can visualize exactly what you’re working with, the next steps will seem easier to take on.

Thursday, September 17, 2015

8 Ways to Build a Budget

The idea of budgeting is not difficult – decide where you want your money to go, then make sure it goes there. However, it’s much easier said than done. Budgeting is made up of lots of little decisions, all used to uphold the one greater decision of creating a budget to get your financials under control. With all of this in mind, we’ve compiled eight steps to help jump start you into budgetary bliss!

Thursday, September 10, 2015

Saying Goodbye to Coupons?

Couponing has turned into an extreme sport for some, even granting its own TV series and cult-like following. They’re saving loads of money, for sure, but not everyone has the ability to commit to such an undertaking! For those who don’t have the time or energy to pour into couponing, there are ways to still save money on your weekly shopping excursions. We found our inspiration for this list from Dave Ramsey’s recent blog post, found here.

Thursday, September 3, 2015

Our Top 3 Tools for Smarter Saving

No one wants to work their entire life, only to run into financial troubles in retirement. However, this is exactly what’s happening to the majority of Americans. Statistics say the average household will not have enough money to sustain the lifestyle they lead before retiring. Breaking the cycle comes when you choose to be financially responsible in the years leading up to retirement. It will take some discipline, deferred gratification, and a well-established budget, but you are more than capable of setting yourself up for financial independence in retirement.

To get you started, we’ve pulled together three of our favorite budgeting programs. Hopefully, these will help you spend less time worrying about your money, and more time enjoying every other part of life!

Thursday, August 20, 2015

Understanding Required Minimum Distributions - Part II

In an earlier post, we reviewed the basics of Required Minimum Distributions (RMDs). In this post, we will continue the discussion with some rules about RMDs and mistakes to avoid when you have multiple retirement accounts.

In particular, it is important to note the type of retirement account in question. For 401(k) and 457(b) accounts, RMD must be calculated for and taken from each individual account. However, for 403(b) and IRA accounts, RMD must be calculated for each individual account, but the IRS allows individuals to take the collective total from one or more of the accounts.

Thursday, August 13, 2015

Making the Most of Your Morning

Whether you’ve been retired for ten years, or you’re on the last leg of your nine-to-five, embracing the morning can help elevate your productivity, allowing you to make the most of every day. 

Life is incredibly busy, with hardly any signs of slowing down. Hitting snooze is one of the easiest decisions to make in the morning, but the payoff of deciding to get up and out of bed, choosing to create a better day from the moment your eyes open – those are the decisions that will allow you to transform your mornings into a time of true rejuvenation.
We’ve narrowed it down to three simple decisions – eat, refocus, and get moving.

Thursday, August 6, 2015

Understanding Required Minimum Distributions - Part I

If you have an account in a qualified retirement plan, you need to understand that one day you will be forced to take withdrawals from your account whether you want to or not. For many this is not a significant concern as these accounts were designed to provide their income in retirement and they are or will withdraw more than enough from them to satisfy the rules. Either way, we will cover some of the basics about Required Minimum Distribution (RMD) along with some key considerations.

Required Minimum Distributions, as already stated, apply to employer sponsored retirement plans including 401(k), 403(b), 457(b), and profit-sharing plans. RMD also applies to traditional IRAs and IRA-based plans such as SEPs, SARSEPs and SIMPLE IRAs.

Thursday, July 23, 2015

College Savings – 529 Plans and UTMAs

In previous posts we’ve discussed considerations for college planning. In this post we are going to discuss saving for college and, specifically, two of the more common accounts for college savings: Uniform Transfer to Minor Account (UTMA) and Section 529 Plans.

The Uniform Transfer to Minor Account (UTMA) was an early popular choice for many families to save for college education as it offered a few advantages over traditional savings accounts. First, the transfer of assets was treated as a completed gift which removed the assets from the donor’s gross estate. As a gift, it was subject to the current annual gift exclusion ($14,000 in 2014). Second, any unearned income received favorable tax treatment, albeit lessened with the advent of the “kiddie tax.” Unearned income is generally investment income including interest, dividends and capital gains. Under the current tax code, the first $1,000 of unearned income is exempt using the standard deduction for dependents; and the next $1,000 of unearned income is taxed at the child’s income tax rate. However, any unearned income in excess of $2,000 is taxed at the parent’s marginal tax rate. One drawback to the UTMA is it is considered an irrevocable gift. When the recipient reached the age of maturity – 21 in Pennsylvania and most other states – the custodianship ends, meaning the recipient now has full control and can dispense with the assets however they choose.

Thursday, July 16, 2015

3 Retirement Blogs You Have to Read (& Might Even Make You Start Your Own!)

It’s no shock that retirement brings about a lot of free time. Some fill it to the brim, while others enjoy a slower pace. No matter where you fall on the spectrum, blogging is a hobby that can keep up with whatever speed you decide to take.
Whether you decide to start your own blog, or just browse through the musings of fellow retirees, here’s three retirement blogs that we think you’ll love!

      Couple Tim & Lynne Martin sell their home, live out of suitcases, and spend their days touring the world with the money they would have spent on their Californian lifestyle. Lynne writes about their travels, gives advice to others who may choose to follow in their footsteps, and maintains a nationally recognized blog all the while. Read Tim’s take on how they found themselves traveling full-time here!

Thursday, July 9, 2015

Long Term Care: What You Need to Know

With Baby Boomers beginning to reach age 65, the topic of long term care is drawing increasing attention. Unfortunately, long term care is often misunderstood and, as a result, is poorly planned for, if at all.

Long term care refers to a range of services from home health care, to assisted living, to skilled nursing homes. These nursing homes provide assistance and support to manage and meet personal and health needs. Long term care does not always refer to medical care, it may simply be to provide assistance with “Activities for Daily Living”, or ADLs, including eating, bathing, dressing, toileting, transferring, or continence. Long term care may be needed for weeks, months or years.

Recent estimates predict that 50% of Americans will need some type of long term care during their lifetime. For couples over age 65, the statistics indicate there is a 70% chance one partner will need long term care.*

Wednesday, July 1, 2015

Major Purchases and the "Cool Off Period"

Whenever my family goes to the Jersey shore for summer vacation, two things always happen.  First, when we arrive I always say, I wish we had a beach house.  I always say maybe someday we'll get a place at the shore -- maybe once all the kids are off to college.  Second and without fail, after we’re there for a week, as much as I’ve enjoyed it, I can’t wait to go home and my kids all howl with laughter because I say, I don’t need to have a beach house.  It’s become the running joke of our family vacations.

Thursday, June 25, 2015

Boomerang Children Part 2: 3 Ways To Launch Your Adult Child

As mentioned in part 1 of this post, adult children move back home with their parents for a number of different reasons including recently graduating from college or losing a job.  A few times a week I hear from clients seeking guidance on how to encourage their adult child who has moved back home to live independently again.  In part 2 of this post, we will look at three practical ways to launch your adult child.

Friday, June 19, 2015

How To Make The Rest Of Your Life, The Best Of Your Life

Recently, we posted a quote to our Facebook page that garnered great interaction.  The simple yet powerful quote read, “I’m going to make the rest of my life, the best of my life.”  Many recent retirees may find themselves resonating with this quote or similar inspiring phrases.  During a transition period as significant as retirement, many will reflect upon practical ways to ensure that the years ahead are filled with happiness, satisfaction and unrivaled fulfillment.  After reflecting upon the above quote, we have compiled a list of simple, practical ways to truly make the rest of your life, the best of your life.

Friday, June 5, 2015

When It Comes to Retirement Planning, One Size Does Not Fit All Part 2: How Much Income Will I Need In Retirement?

As discussed in our previous blog post, When It Comes to Retirement Planning, One Size Does Not Fit All Part 1: The Safe Withdrawal Rate, individuals facing retirement are now being involuntarily thrown into the role of retirement planner due to the gradual extinction of defined benefit pensions.  Without the proper education and training, these individuals have to trust broad, general assumptions regarding retirement planning; which, needless to say, presents several problems.

Thursday, May 28, 2015

Boomerang Children and Retirement Savings

Do you currently have an adult child living at home?  Maybe your child just graduated and is weighed down by college loans, or maybe your child just lost his/her job and needs some help figuring out what’s next.  Adult children return home for a number of different reasons and, for the most part, parents want to help.  While it’s very common for parents to help their adult children financially, there’s one question they must consider: How will this support affect my retirement savings?  Without proper planning and open communication, financial support of a boomerang child could quickly drain your retirement fund. 

Thursday, May 21, 2015

Life Insurance Policies: Children and Grandchildren

Have you ever wondered how to help secure the financial future of your children or grandchildren beyond college expenses?

Fewer companies are offering pensions, with the share of Fortune 500 companies that provide them to new hires falling to 24 percent at the end of 2013 from 60 percent in 1998. Only 7 percent of employers offer new employees traditional pensions, which pay out a certain amount at retirement based on a worker’s pay and how long they stayed with a company. (1)

Thursday, May 14, 2015

What Phase Of Retirement Are You In?

Hang up the work clothes, turn off the alarm clock and forget about those “back-to-work blues.”  You made it: welcome to retirement.  While many people view retirement as an event, we like to think of it as a process that includes several different stages or “stops” along the way.  Depending on what stage you find yourself in, your feelings towards retirement may vary a great deal.  In fact, according to researcher Robert Atchley, retirement can be broken down into six distinct phases; two of which we will discuss in this post: The Honeymoon Phase and the Disenchantment Phase.

Thursday, May 7, 2015

When It Comes to Retirement Planning, One Size Does Not Fit All Part 1: The Safe Withdrawal Rate

An involuntary shift is taking place with the gradual extinction of defined benefit pensions: the individual is being thrust unwittingly into the role of retirement planner. As a firm that specializes in retirement planning, we have been cautioning clients for years about the dangers this represents. Foremost among them is the lack of training and education obtained by most who now must depend on themselves to tackle topics as broad as investment management, risk assessment and management, tax planning and economics, to name but a few.

Monday, April 27, 2015

What's In Your Retirement Plan? The Four Buckets Strategy

We’ve all seen the popular Capital One credit card commercials that always end with the same question: “What’s in your wallet?”  In the same way, I like to ask an equally important question: “What’s in your retirement plan?”

When considering this question, I’m reminded of a conversation I recently had with a couple who came to our office.  They asked if they could simply retain us and pay us by the hour, as opposed to having us manage their investments.  They went on to explain that the reason they didn’t want us to manage their investments was because they wanted to maintain the ability to pull their money out at any given time. 

Thursday, April 16, 2015

Do I Really Need a Will, Living Will and Durable Power of Attorney?

A visit to our office will always include the question, “Do you have your will, living will, and durable power of attorney in place?”  Some of our clients affectionately refer to this list of questions as the “nag list.”  Our intention is not to nag our clients, but rather, to emphasize the importance of having your will, living will, and durable power of attorney in good order.  Even the most comprehensive financial plan can crumble without the appropriate legal documents in place.

Thursday, April 9, 2015

How Will You Spend Your Retirement Years?

Retirement.  A single word that holds significant weight and meaning for many different people.  What does retirement mean to you?  Although the term can be interpreted differently based on personal dreams and passions, author Catherine Pulsifer seems to accurately capture the universal idea: "Planning to retire? Before you do, find your hidden passion, do the thing that you have always wanted to do."  Check out the list below of some of the most common retirement hobbies; maybe you’ll find your hidden passion!