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At Thanksgiving and always…

  • November 25, 2020/
  • Posted By : admin/
  • 0 comments /
  • Under : Live Well

It’s a season for giving thanks. And we wanted to thank you, our dear clients and friends, for allowing us to do what we love every day.

We’re thankful for the opportunity to work toward a mission that we truly believe in — helping families and communities articulate, underwrite, and fully embrace their great lives.

Please know that at Thanksgiving and always, we’re grateful for you.

May the good things in life be yours in abundance throughout the holiday season.

Happy Thanksgiving!
The NorthStar Team


Kintsugi: How adversity can unlock growth.

  • November 17, 2020/
  • Posted By : admin/
  • 0 comments /
  • Under : Live Well
This year has been difficult for many of us, often in ways we could never have anticipated.

Some of us might even feel shattered.

But often, when we put ourselves back together, we’re stronger for it.

We made a short video showing how you can reflect on this year and discover how you’ve grown (or are still growing) as you put the pieces of 2020 together and consider your next steps.

You can watch it here.

Click to watch it here.

 

Transcription:

Hello, I’m Dr. Chris Mullis with NorthStar Capital Advisors and I’m here to help put this year’s adversity into perspective and learn from it.

Recently I’ve been thinking about a Japanese art called Kintsugi. Have you heard of it? When a piece of pottery becomes broken, the artist puts the pieces back together using gold lacquer. This results in a unique work of art that’s far more striking than the original, unbroken version. At its core is the philosophy that scars and imperfections shouldn’t be hidden, they should be embraced and highlighted to create something more beautiful than before.

I think we can learn a lot from that philosophy. Especially this year.

I don’t know your circumstances as you watch this video. Maybe the life you thought you were living is in pieces around you. Maybe you’re just getting by. Maybe this year was your time to shine.
Wherever you are, I’d like you to take a few minutes to reflect on the lessons you can take from your experiences this year.
 
Why? Because hard times can teach us so much about ourselves if we take time to stop and think.

Here are five questions I’d like you to consider.

Question #1 — What “fell apart” for me this year? 

While for some of us it may be tempting to just say “everything,” really take a moment to list the plans that were canceled, opportunities that were lost, relationships that changed, and so on.

Question #2 — How did I adapt to the things outside my control? 

Maybe you planned a zoom wedding. Maybe you stopped working to stay home with kids or elderly parents. Maybe you re-examined your spending or decluttered your house. Or maybe you broke down. All answers are OK.

Question #3 — What did I learn that surprised me? 

Did you discover a new passion for cooking? Did you learn new things about your friends and family? Did you discover that you actually miss spending time in the office? Any surprise, good or bad, can make the list.

Question #4 — How have I grown from these experiences?

Maybe you’ve questioned some long-held beliefs or shifted your priorities. Or perhaps you found strength you didn’t know you had. Reflect on the many ways you’ve become more resilient this year.

Finally, Question #5 — What am I grateful for?

Gratitude and thankfulness are so important. Especially during the tough times. Research consistently shows that people who actively notice and express the things that make them grateful are much happier. So give it a shot. No matter how big or small, list the things you’re grateful for.

I’ll start. I’m so grateful for my family and particularly my wife Rita. I couldn’t have gotten through this year without them. I’m also grateful for my clients and my friends. And I’m grateful for you, taking the time to watch this video.

When a cup shatters on the floor, we can’t put it back together exactly as it was before. But we can accept and embrace its history — and make something better and stronger with the broken pieces.
Whether you’ve felt more like the shattered cup or the shining gold lacquer this year, consider the ways you’ve grown from the experience and how you’ll use them to become stronger.

You may be in the middle of a growing pain right now.  If there is anything I can do to help you make sense of your current situation or make a new plan for moving forward, please reach out anytime. I’m here to give you a hand if you need one.

Thank you and be well.


What Issues Should You Consider Before the End of the Year?

  • November 11, 2020/
  • Posted By : admin/
  • 0 comments /
  • Under : Best Practices, Financial Planning, Personal Finance, Saving Money

The end of the year provides a number of financial planning opportunities and issues. These include tax planning issues, issues surrounding investment and retirement accounts, charitable giving, cash flow & savings, and insurance & estate planning issues.

We use the checklist below to proactively scan for many actionables to help serve our clients. In this checklist, we cover a number of planning issues that you need to consider prior to year-end to ensure you stay on track, including:

  • Various issues surrounding your investment and retirement accounts including matching capital gains against any investment losses in taxable investment accounts and ensuring that all Required Minimum Distributions (RMDs) are taken.
  • Tax planning issues including moves dependent upon your prospects for higher or lower income in the future. You will also want to review where you sit relative to your tax bracket as this is a good time to make moves to fill out your tax bracket for the current year that also might prove beneficial down the road.
  • For those who are charitably inclined there are several strategies that will also help reduce your tax liability that can be considered based upon your situation.
  • For those who own a business, tax reform has created some opportunities surrounding pass-through income from your business to your personal return. Accelerating or deferring business expenses presents another solid planning opportunity.
  • It’s wise to review your cash flow situation as you near year-end to see if you can fund a 529 plan for children or grandchildren or to see if you can save more in an HSA or employer-sponsored retirement plan like a 401(k).

This is a comprehensive checklist of the types of year-end planning issues that you should be discussing with your financial advisor to ensure you maximize cash flow and tax opportunities in the current year and beyond.

Issues You Should Consider Before the End of Year
ASSET & DEBT ISSUES

Do you have unrealized investment losses?
If so, consider realizing losses to offset any gains and/or write off $3,000 against ordinary income.

Do you have investments in taxable accounts that are subject to end-of-year capital gain distributions?
If so, consider strategies to minimize tax liability.

Did you reach your Required Beginning Date, or are you taking an RMD from an inherited IRA?
If so, under the CARES Act, RMDs are waived for 2020.

TAX PLANNING ISSUES

Do you expect your income to increase in the future?
If so, consider the following strategies to minimize your future tax liability:
– Make Roth IRA and Roth 401(k) contributions and Roth IRA conversions.
– If offered by your employer plan, consider after-tax 401k contributions.
– If over age 59.5, consider accelerating IRA withdrawals to fill up lower tax brackets.

Do you expect your income to decrease in the future?
If so, consider strategies to minimize your tax liability now, such as Traditional IRA and 401(k) contributions instead of contributions to Roth accounts.

Do you have any losses for this year or carryforwards from prior years?
If so, consider the following:
– There may be tax-loss harvesting opportunities.
– You may be able to take the loss or use the carryforward to reduce taxable income by up to $3,000.

Are you on the threshold of a tax bracket?
If so, consider strategies to defer income or accelerate deductions and strategies to manage capital gains and losses to keep you in the lower bracket. Consider the following important tax thresholds:
– If taxable income is below $163,300 ($326,600 if Married Filing Jointly [MFJ]), you are in the 24% percent marginal tax bracket. Taxable income above this bracket will be taxed at 32%.
– If taxable income is above $441,450 ($496,600 if MFJ), any capital gains will be taxed at the higher 20% rate.
– If your modified adjusted gross income (MAGI) is over $200,000 ($250,000 if MFJ), you may be subject to the 3.8% Medicare surtax on the lesser of net investment income or the excess of MAGI over $200,000 ($250,000 if MFJ).
– If you are on Medicare, consider the impact of Medicare’s Income-Related Monthly Adjusted Amount (IRMAA) surcharges.

Are you charitably inclined and want to reduce taxes?
If so, consider the following:
– For 2020, the CARES Act created a $300 above-the-line deduction for contributions to certain qualifying charities. This can help reduce AGI for taxpayers claiming the standard deduction.
– If you expect to take the standard deduction ($12,400 if single, $24,800 if MFJ), consider bunching your charitable contributions (or contributing to a donor-advised fund) every few years which may allow itemization in specific years.

Will you be receiving any significant windfalls that could impact your tax liability (inheritance, Restricted Stock Units vesting, stock options, bonus)?
If so, review your tax withholdings to determine if estimated-payments may be required.

Do you own a business?
If so, consider the following:
– If you own a pass-through business, consider the Qualified Business Income Deduction eligibility rules.
– Consider the use of a Roth vs. Traditional Retirement plan and its potential impact on taxable income and Qualified Business Income.
– If you have business expenses, consider if it makes sense to defer or accelerate the costs to reduce overall tax liability.
– Some retirement plans, such as a Solo 401(k), must be opened before year-end.

Have there been any changes to your marital status?
If so, consider how your tax liability may be impacted based on your marital status as of December 31st.

CASH FLOW ISSUES

Are you able to save more?
If so, consider the following:
– If you have an HSA, you may be able to save $3,550 ($7,100 for a family) and an additional $1,000 If you are over the age of 55.
– If you have an employer retirement plan, such as a 401(k), you may be able to save more but must consult with the plan provider as the rules vary as to when you can make changes.
– For 2020 the maximum salary deferral contribution is $19,500, plus the catch-up contribution if over the age of 50 of $6,500 per year.

Do you have a 529 plan? If so, consider the following:
– You can contribute up to $15,000 ($30,000 if a joint gift is made) each year without filing a gift tax return.
– Alternatively, you can elect the Five Year Accelerated Gift of $75,000.

INSURANCE PLANNING ISSUES

Will you have a balance in your FSA before the end of the year?
If so, consider the following options your employer may offer:
– Some companies allow you to roll up to $550 in your FSA account over the previous year.
– Some companies offer a grace period up until March 15th to spend the unused FSA funds.
– Many companies offer you 90 days to submit receipts from the previous year.
– If you have a Dependent Care FSA, check the deadlines for unused funds as well.

Did you meet your health insurance plan’s annual deductible?
If so, consider incurring any additional medical expenses before the end of the year at which point your annual deductible will reset.

ESTATE PLANNING ISSUES

Have there been any changes to your family, heirs, or have you bought/sold any assets this year?
If so, consider reviewing your estate plan.

Are there any gifts that still need to be made this year?
If so, you can make gifts up to $15,000 ($30,000 if a joint gift is made) per year to an individual without filing a gift tax return.

OTHER ISSUES

Do you have children in high school or younger who plan to attend college?
If so, consider financial aid planning strategies, such as reducing income in specific years to increase financial aid packages.


Good stuff in 2020?

  • November 3, 2020/
  • Posted By : admin/
  • 0 comments /
  • Under : Economy

It’s been a long journey to reach this election day and, if you’re like me, you’re plenty tired of the relentless politicking.

Case counts are rising around the country and winter is coming (34F overnight here in the Queen City of Charlotte).

A stimulus deal to help the folks who are scraping by seems stalled.

Markets are down (and up and down).

It’s hard to feel positive some days.

I’ve been noodling with a question I’d like to ask you.

When we take a look at 2020, it’s easy to see it as a long string of disasters, one after another.

And the last year has exacted a terrible cost. In lives cut short and dreams shattered.

But what if we look for the good stuff that happened as well?

Sometimes, it’s hard to remember the good things because they slip in quietly and often go unnoticed.

While the bad news announces itself loudly, instantly, and overwhelmingly.

What if we paused to ask: what good has come to my life because of this year?

I’ll start.

I’m grateful for the additional time spent with my wife Rita and our children. It’s so easy to get caught up in the shuffle of work, school, activities, travel, and everything else. I’m glad we had the opportunity to slow down and make each other our refuge.

I developed a new appreciation for my neighbors in SouthPark. We were all thrown together during lockdown and I’m grateful for the opportunity to have gotten to know them better (especially John in the house across the street who generously introduced me to the joys of mechanized leaf removal).

I reconnected with old astronomy and physics major friends from the University of Virginia over Zoom. We’d drifted apart over the years and I’m glad we could catch up.

I think our grand experiment in remote work is going to yield big benefits to our society.

What good things came about in your life?

Will you share them with me (chrismullis@nstarcapital.com)? I’d love to know. Hearing good news helps us all stay positive and moving forward.

Warmly,
Chris

Chris Mullis, Ph.D., CDFA®
Founding Partner
Financial Planning.
Wealth Management.
Since 2006AskNorthStar.com
(704) 350-5028

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FROM OUR BLOG
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