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20 Fun, Free Online Activities at Home

20 Fun, Free Online Activities at Home

You’re already washing your hands and staying home. As we deal with the reality of our new normal, here are some resources for staying occupied while staying home. Please let us know if you have any cool resources to add to our list.

 

Stay Connected

Coordinate with friends and family members to shares experiences. You can use Netflix Party, a Chrome extension to share a movie experience on Netflix. 

Set up virtual happy hours and meals using FaceTime, Zoom, or other virtual conference services. 

Cook new foods together from pantry staples with some easy New York Times recipes.

 

Yoga and Exercise

Down Dog app – personalized experience based on your time, level, focus, voice, and music. Free for everyone until May 1, and until July 1 for health care workers, students, and teachers. 

Core Power Yoga offers some free classes and a free week trial. 

Headspace – Offering resources and guided meditations to decrease stress and anxiety, improve sleep, and stay healthy. 

Join Oprah and Deepak in their free 21-day meditation series Finding Hope in Uncertain Times 

The Nike Training Club app helps you reach your fitness goals with expertly designed workouts from our world-class Nike Master Trainers.

Arts and Entertainment

Travel and Leisure magazine put together a list of 12 museums around the world that you can tour virtually. 

Stream Broadway shows with a 7-day free trial from Broadway HD 

Get your fix of classical music and opera with this list of streaming concerts and broadcasts including the NY Metropolitan Opera and symphonies around the world from ClassicFM. 

 Travel the world from the comfort of your couch to visit over thousands of museums, zoos and theme parks now offering virtual tours.

 

Kids

Epic! is a digital library for students that now has free membership.

Check out the wonders of our plant with the National Geographic Kids website for videos, experiments, and games. 

Students can become film makers using their mobile video and camera. Movie making editor apps like iMovie or Windows Photo App.

 

Sports

Watch classic games with free access to NFL and NBA League Pass websites.

Take a walk down memory lane by watching the top 50 sports movies of all time.

 

Online Learning and Reading

Class Central, an online course aggregator, compiled a list of more than 400 classes in Humanities, Science, Computer Programming and Data Science, Art and Design, and many others. 

Internet Archive is a non-profit library of millions of free books, movies, software, music, websites, and more.

Libby by Overdrive gives you access to your local library or any library you have a library card for. Borrow ebooks and audiobooks instantly on your mobile, tablet or Kindle.

 

 

 

 

We would love to explore your possibilities with you.

IRS Tax Deadline Changes

IRS Tax Deadline Changes

Recently announced IRS changes.

 

In response to the pandemic, the IRS moved the federal income tax filing deadline back three months from April 15 to July 15. The July 15 deadline applies to:

  • Filing income tax returns
  • Payment of income taxes due
  • Payment of estimated taxes due for the first quarter of 2020
  • Funding retirement account contributions for 2019
  • Funding Health Savings Account contributions for 2019
  • In addition, this 3-month period will be disregarded for calculating interest, penalties, and additional taxes for failure to file returns or pay taxes.

The new deadline applies to individuals, trusts, estates, partnerships, associations, and companies and corporations.

For California residents, the Franchise Tax Board also extended tax deadlines to July 15. You can delay filing and payment of taxes (including second and first quarter estimated payments), LLC taxes and fees, and non-wage withholding payments. California is also waiving interest and penalties for individuals and businesses.

Taxpayers that are entitled to a refund.

You are encouraged to file as soon as possible in order to get your refund more quickly.

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

When Will Mortgage Rates Drop?

When Will Mortgage Rates Drop?

 

So, the Federal Reserve Bank lowered interest rates to a range of 0% to 0.25%. Why aren’t mortgage rates following? Well, time to dust off that old college economics book. Let’s answer that by following the chain of economic reactions to the Fed’s actions and the principals of supply and demand.

 

How is the benchmark federal funds rate related to mortgage rates?

 

The rate that the Fed cut is the benchmark federal funds rate.
This is the short-term interest rate banks charge other banks for overnight lending and borrowing. So, bank to bank loan deals.

 

The Fed dropped this rate on March 15 for the second time in 2020 in response to the economic disruption caused by the Coronavirus. When the target federal funds rate decreases, banks typically follow by lowering their prime interest rates. The prime interest rate is used to set variable interest rates.

 

So, that new credit card application you just got in the mail might have a lower rate than your current credit card. Lowering the prime rate will cause other consumer interest rates tied to the prime rate to decrease as well. Businesses will have access to short term loans with lower interest rates to help with cash flow needs.

 

How does the federal funds rate and prime rate affect mortgage rates?

 

Mortgage rates are different from other consumer interest rates. Generally, mortgages rates don’t track the Fed’s movements. Mortgage rates are long-term loans, versus the short term variable rate we talked about earlier. So mortgage rates will go up or down depending on long term bond yields. The bond market exerts more influence over mortgage rates, not the Fed.

 

When the stock market falls, investors flee to government bonds for safety and stability. When the demand for bonds goes up, the price of bonds goes up. Bond prices and yield/interest rates have an inverse relationship. So, when bond prices go up, interest rates go down. Mortgage bonds are the same. When demand for mortgage bonds goes up, mortgage rates go down.

 

When will mortgage rates drop?

 

Early in March, mortgage rates dropped because the demand for long-term mortgage bonds was high. In response to low mortgage rates, the market was flooded by consumers looking to refinance. The supply of mortgage bonds increased and the demand for mortgage bonds dropped. Within a week or two, mortgage rates rose quickly.

 

The Fed is using other tools in their arsenal to cushion the economy, including buying Treasuries and mortgage-backed securities. As the demand for mortgage bonds grows, mortgage rates will come down again. However, consumers aren’t likely to see 0% mortgage rates. Mortgage bonds are considered riskier than government bonds. Interest rates are higher to compensate for the additional risk banks take in making the loans.

 

If you are looking to refinance your current mortgage or buy a house, keep your eyes on the rates. Be ready to go when rates dip. Be aware that you won’t be the only one refinancing when rates are attractive. Mortgage brokers will be busy and lock-in periods of 60 to 90 days (or even longer) are becoming more common.

 

 

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

You’ve Maxed Out Your Retirement Contribution. Now What?

You’ve Maxed Out Your Retirement Contribution. Now What?

Many investors who are able to save a lot of money max out their 401(k) contributions and want to know where the rest of their savings should be invested. Unfortunately, there comes a time when you will have maxed out all your tax-deferred savings! At that point the remainder should go to your nontaxable brokerage account for investing.

That’s not a bad thing. Having a mix of taxable and tax-deferred assets means that you don’t have to withdraw money out of your retirement accounts for emergencies if you’re under 59 ½. So you won’t have to pay the early withdrawal penalty. You may also have some more near-term goals that you can invest in, since you’ve put away all the retirement funds.

But maxing out your 401(k) or TSP doesn’t necessarily mean that you’re finished with retirement accounts, however. There are a few more things you can consider.

After-tax deferral to employer retirement plans

The deductible limit for employer plan contributions in 2020 is $19,500, with the additional catch-up provision of $6,500 for those over 50. Does that mean if you’re over 50 your contribution limit is $26,000?

Not necessarily. That is the deductible limit that you can contribute. Your employer may also provide a match. The limit for all contributions is actually $57,000. Some employer plans will allow you to contribute after-tax dollars until you reach the $57,000 maximum.

Suppose you contribute the full $26,000 and your employer matches a total of $4,000. Contributions are $30,000. If your plan allows, and plans vary when it comes to this, you may be able to contribute an additional $27,000.

Bear in mind that this additional contribution is not tax deductible. However, it is tax-deferred. You won’t receive a current year tax deduction on it, but you won’t pay taxes on it as it’s growing. As you can see, it’s a good choice for investments that generate plenty of current income.

Not sure if your plan allows for it? Check with the TPA (third-party administrator) to see if it’s a fit for you.

IRA retirement contributions

Traditional and Roth IRAs are not considered employer plans. Once you’ve maxed out your employer retirement, you can still make IRA contributions. SEP and SIMPLE IRAs are considered employer plans, so you can’t make additional contributions to them above the $53,000 limit.

As you might recall, additions to a Traditional IRA are 100% deductible for workers not covered by an employer plan. Households filing jointly but covered by an employer plan can deduct their contributions as long as their modified AGI stays under $104,000. Over that, the deductibility phases out until you’re unable to deduct contributions if you make $124,000 or more.

Income limits for Roth IRAs are slightly higher but don’t depend on whether you’re covered by an employer plan. The ability to make contributions starts phasing out at joint AGI of $196,000, and if you make $206,000 or more, you can’t add to your Roth.

However, no matter what your income is, you can always make contributions to a Traditional IRA. The caveat is that they’re not deductible when your income is over $124,000. But you can still contribute and have those contributions grow tax-deferred. Just as with the after-tax deferrals outlined above for employer plans.

You will need to keep good records for your IRA if you contribute both deductible and nondeductible money over time. Many custodians won’t keep the record for you. When it comes time to start withdrawing, you’ll need to be able to show the funds with a non-zero basis. Deductible contributions have zero basis and so they’re fully taxable.

When it comes to withdrawal time, you can’t tell the management company to only withdraw the nondeductible funds. That could lower your taxes, and that would be too easy! Withdrawals will contain a proportional amount of basis and non-basis money. For example, if you have several IRAs and one-third of the funds were nondeductible, then one-third of the withdrawal will come from funds with basis.

529 accounts

These types of accounts are a great way to stash tax-deferred money away. If the funds are used for qualified expenses at a qualified institution, then the withdrawals are tax-free as well. Otherwise you pay a penalty on the gain. Depending on your tax bracket and the size of the gain, it might very well outweigh investing in a taxable account.

Originally the 529 accounts were for college and higher education, but they’re now available for secondary school as well. Contributions are limited by gift tax exclusion rules. In 2020 you can gift $15,000 per person per year. If you have five kids (or grandkids), you could set aside $75,000 tax deferred with no gift tax limitations.

In contrast with UGMA and UTMA accounts, the owner of the 529 account is the adult, not the minor. If you’re concerned that one child may not go to school or may end up with enough scholarships to cover costs, you can simply change the beneficiary of the account when you get to that point.

And the beneficiary can be yourself as well. There are plenty of qualifying golf and cooking schools, for example.

Whether you’re a parent or a grandparent does make a difference. If you’re a grandparent setting up 529s for the grandkids be careful. As you may know, all students applying to American colleges and universities are required to fill out the financial aid form known as FAFSA.

The student’s assets weigh more heavily in the equation, and therefore reduce the amount of student aid that they qualify for. UGMAs and UTMAs are student assets. 529 accounts are not. If parents own the 529, then the account is considered as a parental asset. These have a lighter weighting in the equation.

The grandparent’s 529 isn’t listed on the FAFSA. However, withdrawals from a non-parental account are considered income to the student. Up to half the student’s income is available for college expenses, so it reduces the amount of financial aid required.  

However, the FAFSA uses income tax returns from two years prior. As long as the grandparent doesn’t distribute until junior year, the FAFSA won’t recognize the income.

How about retirement contributions to taxable accounts?

After you’ve gone through the above list, you’ve pretty much maxed out the available tax-deferred accounts. The remainder goes into your taxable accounts.

Don’t forget that when you have capital losses, they’re netted out against your capital gains. And as long as you held them for a year or more, you qualify for the more favorable capital gains treatment.

 

Are you interested in seeing how much you can potentially contribute to tax-deferred accounts? Give us a call at 619.255.9554 or send us an email.

 

Why You Should Sit on the Board of Directors of a Company

Why You Should Sit on the Board of Directors of a Company

As a member of a Board of Directors, you are responsible at a high level for the activities of the organization, whether it’s a nonprofit or corporation. You’re not concerned with the nitty-gritty details, because the officers of the organization handle those. The mission of the corporate board is to maximize the benefits to the shareholders.

Bylaws of the organization spell out what your specific duties are, but there are some common tasks that most boards share.

Board members act as fiduciaries to the organization. (Just as your independent wealth manager is a fiduciary to your portfolio!) Meaning that they must put the organization before their own personal interests.

At the beginning of the organization’s existence, the board is responsible for its mission. A mission statement is important to develop, so everyone’s rowing in the same direction. Later on, a board may decide to change the mission of the organization, but this should only be done after careful thought.

The board will set the overall policy for the organization, without getting bogged down in the daily minutia. It also oversees the organization’s officers and executives. At the end of the year, the board holds an annual meeting where any changes to mission, bylaws, etc. are announced or any elections held. At a corporation annual meeting, there’s usually the announcement of any dividends being paid.

Organizations like to have certain professions on their board, such as financial advisors, accountants, or lawyers.

Potential liability concern should not be a deterrent when considering a seat on the board of directors.

If you’re concerned about liability, know that board members have a pretty wide latitude when dealing with policies and other oversight duties. Many companies offer officer and director liability insurance. But you can be sued and held personally liable for acts committed while serving, which this type of insurance doesn’t cover.

For nonprofits, the board typically hires the executive director, and may face issues if the director is derelict in their duties. If you’re on the board of a nonprofit, the expectation is that you will fundraise for the mission. This could be your own money, finding outside sponsors or donors, etc. You’ll set policy as a board member, but implementation is left up to the staff.

 

As a board member you can help direct operations for a cause you believe in.

Most people find that a great way to give back to their community is to join the board of a nonprofit whose mission they believe in and are passionate about. You may find similar satisfaction with a corporate board.

Charitable boards tend to be volunteer positions only, which makes it all the more important to ensure that the mission aligns with your own beliefs and values! Nonprofits, especially the smaller ones in your community, run lean. This provides a greater opportunity for you to be hands-on in shaping the policies and programs of the charity you’ve chosen to work with.

Sitting on the board of directors will strengthen you leadership skills

Being on a board, whether it’s for a company or nonprofit, gives you the chance to experience different leadership styles. Watch how other leaders respond to issues that may be similar to your own. You’ll also likely be exposed to situations you’re not already familiar with.

Working through them with people you may not know as well, outside your own comfort zone, provides an opening to really stretch yourself as a leader. Eventually you may develop very close friendships with the other board members, as a result of spending so much time together solving problems.

You may even have skills you weren’t aware of, that you may be called upon to deploy as you serve. You may also discover some weaknesses that you didn’t know about, and can begin to work on them in order to improve your leadership capabilities. Awareness is half the battle!

Broaden your network with other Board of Directors

Unless you’re joining a group of old friends, you should be meeting some people you might not otherwise have met. A board that’s composed of directors based on the needs of the organization, instead of who knows whom, is an excellent way to expand your network.

When you develop tight friendships with other leaders, it often results each of you getting to know their connections. You end up helping to build each other’s networks.

As you work together, serving the organization, you’ll be able to see the strengths and weaknesses of your fellow board members.

Remember that networking is about building relationships. Meeting with your fellow board members outside scheduled times, can help you better solve problems. Face-to-face meetings are always preferable, but not always possible. Phone calls or online meetings can assist you to fill in the gaps.

 

Some extra income

As noted above, most of the time you’re going to be volunteering, if you’re sitting on a charity board. By contrast, most companies recognize that the monthly and annual meetings and travel do add up in terms of time and resources. Some of them will provide a stipend for your service.

Especially when you’re facing retirement, serving on a board can keep income coming in as well as keeping your business skills sharp. Which you may not need for business after you retire, but can keep you in good mental shape.

 

Career perks

You may have heard that people who serve on boards are more likely to be promoted. Anyone trying to get you to sit on their board has probably mentioned that to you! In fact, it’s true.

An article in Harvard Business Review showed that being on a board does provide career perks. In addition to being promoted, those who serve on boards are more likely to be named as CEO and often see an uptick in their annual income.

It’s a seal of approval to be chosen for a board, especially a corporate one. Other executives are demonstrating their belief that you have leadership skills. In fact, large companies groom their execs by having them serve on other boards.

At Platt Wealth Management, we understand the importance of serving on a board of directors. Both our financial planners sit on boards for a variety of different causes and continue to stay involved.

 

If you’re interested in legacy planning that includes a mission important to you, please call 619.255.9554 or email us to schedule an appointment.

 

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