Advice for Savvy Retirement Planning

Market Update for May 2015

Robert HendersonMAY 2015 ECONOMIC COMMENTARY AND CAPITAL MARKET UPDATE

Recap: The U.S. economy grew at a 0.2% annual rate in the first quarter. It was the worst economic performance in a year, with evidence of a slowing international trade sector and anemic business investment. A sharp deceleration in hiring in March also ended a year long stretch of heady job creation, raising concerns about broader economic growth amid mounting evidence of a slowdown. Closely watched indicators of consumer spending, capital investment and manufacturing output have all slumped in recent months. A strong dollar has restrained U.S. exports and could continue to drag down broader growth. Much of the recent sluggishness may be chalked up to harsh winter weather across much of the eastern U.S., but the signs of weakness don’t end there. The spending boost from cheaper gasoline appeared to have faded or at least not materialized yet. Low oil prices have led to oil-field layoffs.

Despite these poor numbers, the weakness in consumer spending can be chalked up to weather related effects since underlying economic fundamentals remained on solid ground. Monthly employment figures have averaged 275,000 jobs a month over the last twelve-months – its strongest pace in 15 years – while the unemployment rate has steadily edged lower. Helping to accelerate employment gains have been the number of job openings that have reached new cyclical highs with each passing month. Moreover, as employment opportunities have become increasingly plentiful, the number of people leaving positions for new opportunities has also hit new post-recession highs, highlighting the impact that improving labor market conditions have had on overall sentiment.

This confidence has manifested in consumers, as evidenced by the Conference Board’s Consumer Confidence index, which surged to 101.3 in March before dropping slightly in April. This rise in consumer confidence alongside gains to household income appeared to have filtered through to vehicle sales in April.

Housing data has also started to show signs of a spring thaw. Pending home sales have increased while mortgage applications have also turned decisively higher in recent months. And while housing construction data has remained soft so far this year, building permits – a leading indicator for housing starts – has continued to point to a pick-up in building activity in the months ahead. Putting all of these factors together makes a solid case for an uptick in economic growth over the remaining three quarters of 2015.

GDP: Real GDP grew by just 0.2% (annualized) in the first quarter of 2015. The downturn in economic growth reflected a number of one-off factors. Harsh winter weather had its impact on consumer spending as well as the delivery of equipment and inputs to production. Second, the West Coast dock workers’ strike disrupted supply chains and again altered the strength of consumer spending and production. Third, the one-time shock of lower oil prices influenced the pace of business investment for equipment and structures as well as energy sector hiring and, ultimately, corporate profits. More lasting has been the impact of the rising dollar, which continued to weigh on net-exports and likely will do so in the quarters ahead.

Q1 2015 GDP Growth

Q1 2015 GDP Growth

 

Going forward, economic activity is expected to pick up in the second quarter as the adverse impact of temporary factors, such as poor weather and the West coast port disruptions subside.

Retail Sales: Retail sales rose 0.9% (month-over-month) in March. Gains were broad-based, with 9 out of 13 sub-components rising in the month. Besides autos, sales of building materials and garden equipment also delivered sizable gains. After rising in February, sales at gas stations fell 0.6%. Reflecting declining prices, sales at gas stations have fallen for 9 out of the past 10 months.

Following three consecutive monthly declines, consumers staged a comeback in March, with both headline and, more importantly, core numbers posting gains. Given the rebound in March, consumer spending should continue to rise in the months ahead, supported by robust real income growth, high consumer confidence and improved household balance sheets.

Q1 2015 Retail Sales

Q1 2015 Retail Sales


ISM manufacturing index:
The combination of harsh winter weather, the West Coast port stoppage, plunging oil prices and the soaring dollar has proven to be a devastating mix for the nation’s factories. The Institute for Supply Management (ISM) manufacturing index fell by 1.4 points to 51.5 in March, marking the slowest pace of expansion since May 2013. Eight out of the index’s ten subcomponents edged lower in the month. The backlog of orders, employment, exports and imports led the declines. New orders and inventory also retreated with inventories falling more than the new orders. The spread between the two—which tends to be a leading indicator of future activity—has widened ever so slightly, increasing from 0.0 to 0.3 points.

This is the fifth decline in the ISM manufacturing index in as many months. While the index still remains above the 50-point threshold, which corresponds to expanding manufacturing activity, ongoing declines suggest that the pace of expansion has continued to taper. However, the steady rise in real disposable income growth in the United States—supported by robust job growth and low inflation—will induce higher spending in the month’s ahead, providing support to American manufacturers.

Q1 2015 ISM Manufacturing

Q1 2015 ISM Manufacturing


ISM non-manufacturing index:
The ISM non-manufacturing index edged slightly lower in March to 56.5. However, as the value remained well above 50, it is in the expansion zone and indicates moderate economic growth. There was an increase in new orders and backlogs and the employment index. Prices paid rose for the first time in three months, suggesting some firming in inflation.

The modest decline in the non-manufacturing index over the past few months indicates that the manufacturing sector has taken the brunt of the dollar’s appreciation and port-related disruptions, while the service sector has been affected much less.

Q1 2015 ISM Non-Manufacturing

Q1 2015 ISM Non-Manufacturing


Inflation:
Underlying U.S. inflation appeared to be firming despite slower economic growth, a potentially reassuring sign for the Federal Reserve as it weighs when to start raising interest rates. U.S. consumer prices increased for the second consecutive month in March after falling through much of the winter. The CPI increased 0.2% in March from a month earlier that matched the increase the previous month, which was the biggest rise since June.

The overall price gauge has trended downward since last summer when oil prices began to tumble. But the momentum appears to have shifted. Stabilizing energy prices have helped recent headline inflation measures move higher. This shift is expected to continue in the coming months as the early effects of low oil prices wane further. On the other hand, the core prices, excluding the volatile food and energy categories – have climbed 1.8% over the past year, reflecting higher costs for housing and medical care.

Small Business Optimism index: The NFIB’s small business optimism index unexpectedly declined in March, falling by 2.8 points to 95.2. All 10 of the major sub-components recorded declines in the month, with the largest deterioration coming from the percent of firms expecting the economy to improve and current job openings. The net percent of surveyed firms expecting to increase employment make new capital outlays and boost inventories over the next several months all recorded sizeable declines

The pullback in the percent of firms planning to hire is particularly discouraging, especially coming on the heels of last month’s weak payrolls report. Given the forward-looking nature of this subcomponent, the decline in March suggests that there may be more than lagged weather effects weighing on last month’s slowdown in employment.

Going forward, the overall economic backdrop should remain favorable for small and medium sized businesses. This is because of favorable accessibility to credit, a low interest rate environment and low commodity prices. These factors should provide a boost to overall household income and, in turn, support future sales growth.

US Dollar: For most of 2015, the dollar continued to rise rapidly. According to the Wall Street Journal SJ Dollar Index, the U.S. currency strengthened 12% against rivals in 2014, and gained more than 8% through the end of April. But the dollar’s rally has faltered in recent weeks. Despite the recent pullback, we still expect the dollar to appreciate as the U.S. economy maintains a faster growth rate than that of Europe and Japan though the rate of ascent should slow. The euro and yen will continue to struggle under powerful monetary easing measures, ranging from low – and even negative – interest rates to massive government asset purchase programs.

Trade: The U.S. deficit in trade in goods and services surged from $35.9 billion in February to $51.4 billion in March. Both exports (0.9% M/M) and imports (7.7%) rose in the month, with far greater movement in the latter. March’s sharp decline in the deficit was impacted by the port disruptions on the West Coast. However, there were also other reasons for lackluster export growth. Specifically, slow growth in some of the country’s major trading partners and the appreciation of the dollar, which rose more than 15 percent on a trade-weighted basis between the end of June 2014 and mid-March 2015.

In terms of the second quarter, this trade number starts the economy on a very poor footing. Even with a large upward turn in monthly indicators, second quarter real GDP growth could come in at a relatively subdued level, which would mean a weaker first half of the year than in 2014.

Fed: The Fed has attributed the economy’s sharp first-quarter slowdown to transitory factors, in effect signaling an increase in short-term interest rates remains on the table; although the timing has become more uncertain. The Fed now needs time to make sure its expectation of a rebound proves correct after a spate of soft economic data. The chances of a rate increase by midyear have diminished.

The Fed sees the risks to the economic outlook as balanced—an important sign that they aren’t at this point alarmed about the first-quarter slowdown. They believe that conditions are ripe for consumer spending to pick up in the months ahead, in part because employment, incomes and confidence have risen and falling gasoline prices have boosted household purchasing power.

International: So far, the European Central Bank’s quantitative easing program appears to have been successful at shoring up confidence and boosting economic activity in the Eurozone. Much of the impetus has been related to the sharply lower euro, which has declined over 20% in the past year. The lower currency has boosted exports. With imports unchanged, this has left the trade surplus higher for the single-currency area. Industrial production also surprised to the upside in March. The lower euro has helped inflation, which has remained slightly negative on a year-over-year basis as a result of lower energy costs, but appears to be turning the corner in light of stronger core measures.

The rest of the global economy is still adjusting to a new, more challenging, economic scenario created by the continuous slowdown in growth of the Chinese economy and by the recent collapse of the price of crude oil. The economies that are suffering most are those that have relied heavily on exports of commodities to China and the rest of the global economy. Those economies will now need to rely more on their domestic consumer markets to do the heavy lifting as external markets will remain constrained for some time. However, this is easier said than done, as many of these economies also relied on the revenues generated by this growth in exports to fund domestic demand.

But not all of the developing countries will be able to easily adapt to this new environment. Those countries that are linked more to the U.S. economy will continue to see relatively strong economic growth but those that relied more on the rest of the global economy will continue to lag behind. At the same time some of these countries put forward policies that were good in times of prosperity but that today are called into question. Perhaps the case of Brazil and its industrial policy is the most vivid example of policies gone awry with the scandal unearthed over the past several months regarding payments for projects contracted by Petrobras.

Outlook: The U.S. economy has been gathering steam, with evidence mounting that it will bounce back up in the second quarter. Auto sales rebounded strongly in recent months, after being depressed by weather in January and February; the housing market has shown signs of a spring thaw; and consumers have remained confident. The job market took a bit of a breather in March, but one months’ weak jobs tally needs to be put in the context of months of very solid hiring and a very harsh winter. Strength in the U.S. labor market will underpin the best pace of consumer spending in a decade in 2015.

Real disposable income should to rise in 2015 with gains reflecting the fundamentals of better job and compensation growth along with lower inflation. Meanwhile, continued gains in household wealth via financial assets and real estate should also support stronger consumer spending, as will easier standards for obtaining consumer credit.

Equipment and structure spending will bear the brunt of the decline in energy and other commodity prices. The slowdown in equipment and structure spending will reflect reduced investment in the mining and energy sectors. However, we do not project this weakness into a national slump as business credit continues to ease and other industries are in stronger positions to increase capital outlays.

Housing starts and residential investment should continue to improve over the course of the year. In addition, government spending continues to exhibit a turnaround after three years of negative impacts on growth.

Net exports are also in a turnaround situation—but this time there is flip from positive to negative. Both income and price effects have been negative. Weaker income effects reflect the sluggish global economic outlook for key trading partners. The price effect reflects the rise in the U.S. dollar exchange value. Add to these the fact that American consumers will boost imports, and the net effect is a negative impact on net exports and GDP growth.

Year-over-year inflation will continue to rise in the year ahead. The base effect of lower energy prices in 2014 will begin to drive up reported year-over-year numbers later this year. The FOMC will likely begin to lift the federal funds rate in the third quarter and we expect that the long-end of the Treasury yield curve will rise, but only partially, in response to a higher funds rate. However, we also anticipate that the credit cycle is ahead of the economic cycle, and decision makers need to be vigilant that investment decisions reflect the rising cost/declining quality of credit going forward. Corporate profit growth should overcome the energy hit and resume its 4%-5% pace for 2015. Finally, US dollar strength should persist over the remainder of 2015.

Sources: The Conference Board, NFIB, Wall Street Journal, Department of Commerce, Department of Labor, Institute for Supply Management

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

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Lansdowne Wealth Management in the News

Robert Henderson

Robert Henderson

Check out some of the articles that Robert Henderson and Lansdowne Wealth Management have published or been quoted in over the years.

Experts Share their #1 Retirement Planning Tip for Startup Founders

Mint.Com – Expert Interview with Bob Henderson on Managing Your Finances During a Divorce

LoanNow.com – Expert Interview with Robert Henderson on Preparing for Retirement

401K Contribution Limits for 2015

USA Today – Is Your Life Insurance Through Work Enough?, Alice Holbrook, NerdWallet

Investment News – Tips for Finding the Dirt During Due Diligence on Funds and Managers, Liz Skinner

Benefits Pro – Orphaned 401(k) Accounts Stacking Up, Paula Aven Gladych

Interest.com – 5 Good Reasons to Open a Roth IRA Right Now, Craig Guillot

NurseZone.com – Nurses Worried About Retirement Prospects, Jennifer Larson

Investment News – Noise of Potential Gov’t Shutdown Worries Advisers, Liz Skinner

Newsmax Finance – Analysts: Govt Shutdown Is Either a Stock Buying Opportunity or a Disaster, John Morgan

U.S. News and World Report – The 10 Most Difficult Retirement Decisions, Emily Brandon

Dividend.com – Financial Planners Every Investor Should Follow on Twitter, Shauna O’Brien

Time – Retirement Planning: How Do You Measure Up?

Benefits Pro – Should Retirement Plans Include Social Security Benefits?, Paula Aven Gladych

Social Security Leveling Options – The Retirement Workshop, Robert Henderson

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

See my Google+ Profile

Connect with me on FacebookGoogle+LinkedInPinterest and Twitter.

Financial Planners Every Investor Should Follow on Twitter

Robert HendersonI was very honored to be mentioned in Dividend.Com recently, for an article highlighting the 16 financial planners that every investor should follow on Twitter.

From writer Shauna O’Brien:
“Twitter can be a great place to find resources and articles that will help you on your financial journey. Although many financial planners avoid social media, there are many that are very active on Twitter. Below are 15 Certified Financial Planners that every investor should follow on Twitter.”

I am very proud to be mentioned alongside some very competent and well-known national financial-planning experts. I personally follow each of them and regularly read their commentaries and posts on a variety of financial topics. Each one of them is worth following.

You can see the article with the list of planners here.

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

See my Google+ Profile

Connect with me on FacebookGoogle+LinkedInPinterest and Twitter.

Interview with Robert Henderson on Saving for Retirement Later in Life for NewRetirement.com

Retirement Planning Later in LifeSee my interview in NewRetirement.com, talking about how to make up for lost time when saving for retirement…

“We’re guessing there might be one or two readers out there who are overwhelmed about the amount of money they need to save to retire comfortably.

But there’s no need to panic, says Robert Henderson, president of Landsdowne Wealth Management in Mystic, Conn.”

Read the full interview here.

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

See my Google+ Profile

Connect with me on FacebookGoogle+LinkedInPinterest and Twitter.

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About NewRetirement

We started NewRetirement to help our own parents and the millions of baby boomers and seniors like them to retire securely. When our parents asked for help with their finances, we realized that most people do not have the resources to hire an advisor and most financial advice is only geared toward wealthy households, not the average retirees.

Retirement planning is a very complex and tremendously important endeavor. Our goals are to make high quality retirement planning: 1) easy to understand 2) available to and affordable for everyone and 3) inclusive of products and strategies beyond asset allocation and drawdowns.

http://www.newretirement.com/

 

Best Paying Careers

Best Paying CareerThis is a great article from Business Insider showing the Best Paying Careers among 820 different occupations. The article shows a data chart which was constructed by Reddit user Dan Lin, pulling wage data from the Bureau of Labor Statistics.

This chart is a must-read for parents out there helping their children navigate the difficult waters of career-exploration. There are some simple take-aways from this article:

1. The highest paying careers (generally, $75K and over) are clustered among Medicine, the STEM categories (Science, Technology, Engineering, and Math), and Business.

2. The lowest paying careers are clustered among Personal Services, Food Service, Hospitality, Creative/Arts careers, and Retail

3. Moderate paying careers tend to fall within the general categories of Teaching, mid-level Management, Manufacturing, Skilled Labor, Therapists/Social Workers, Technicians, and Mechanics.

Highest Paying Careers

Highest Paying Careers

 

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

See my Google+ Profile

 

IRA Contribution Limits 2017

IRA Contribution LimitsIRA Contribution Limits

Each year the IRS publishes updated IRA contribution limits, as well as catch-up contribution limits for the new year. Typically, the limits the IRS sets each year is based on inflation factors (with minimum $500 increases), so they do not necessarily increase the limit each year.

The IRA Contribution Limit for 2017 has been established with NO increase over 2016.

The limit on IRA contributions applies to both deductible and non-deductible Traditional IRA’s, as well as Roth IRA’s. You may contribute to either type (if you qualify), but you are still subject to the same total aggregate contribution limit.

Income Limits Adjusted Up $1,000-2,000

IRA contributions are only allowed if your Modified Adjust Gross Income is below a certain level . For single filers in 2016, that income threshold starts at $118,000 (up from $117,000) and ends at $133,000 (up from $132,000). In that range, your contribution is limited, eventually reaching zero. For married filers in 2016, that income threshold starts at $186,000 (up from $184,000) and ends at $196,000 (up from $194,000).

2017 2016
Roth IRA Contribution Limit $5,500 $5,500
Roth IRA Contribution Limit if 50 or over $6,500 $6,500
Traditional IRA Contribution Limit $5,500 $5,500
Traditional IRA Contribution Limit if 50 or over $6,500 $6,500
Roth IRA Income Limits (for single filers) Phase-out starts at $118,000; ineligible at $133,000 Phase-out starts at $117,000; ineligible at $132,000
Roth IRA Income Limits (for married filers) Phase-out starts at $186,000; ineligible at $196,000 Phase-out starts at $184,000; ineligible at $194,000


READ:
2016 Social Security Inflation Adjustment
401K Contribution Limits 2017
Don’t Buy-and-Forget the Investments in Your 401K Plan

Recent History of IRA Contribution Limits:

As you can see, the IRA contribution limits do not rise dramatically each year. Although over time, if investors are diligent about increasing their contributions, it can certainly make a difference.

  • 2017 – $6,000
  • 2016 – $6,000
  • 2015 – $6,000
  • 2014 – $5,500
  • 2013 – $5,500
  • 2012 – $5,000
  • 2011 – $5,000
  • 2010 – $5,000
  • 2009 – $5,000
  • 2008 – $5,000

Over Age-50 Catch Up IRA Contribution Limits

For those of you that are over age 50 (or turn age 50 before the end of the year), you are allowed an additional IRA “catch-up” contribution. These limits have not adjusted for inflation, but may at some point in the future:

  • 2017 – $1,000
  • 2016 – $1,000
  • 2015 – $1,000
  • 2014 – $1,000
  • 2013 – $1,000
  • 2012 – $1,000
  • 2011 – $1,000
  • 2010 – $1,000
  • 2009 – $1,000
  • 2008 – $1,000

IRA Deduction Limits

Roth IRA contributions are not tax deductible.

Your deduction is allowed in full if you (and your spouse, if you are married) aren’t covered by a retirement plan at work.

If you ARE covered by a retirement plan at work, you can see the income limitations at the IRS website by going here.

IRA Income Limitations for Deductible Contributions:

If you ARE covered by a company sponsored retirement plan:

If Your Filing Status Is… And Your Modified AGI Is… Then You Can Take…
single or
head of household
$61,000 or less a full deduction up to the amount of your contribution limit.
more than $61,000 but less than $71,000 a partial deduction.
$71,000 or more no deduction.
married filing jointly orqualifying widow(er) $98,000 or less a full deduction up to the amount of your contribution limit.
 more than $98,000 but less than $118,000  a partial deduction.
 $118,000 or more  no deduction.
married filing separately  less than $10,000  a partial deduction.
 $10,000 or more  no deduction.
If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the “Single” filing status.

If you are NOT covered by a company sponsored retirement plan:

If Your Filing Status Is… And Your Modified AGI Is… Then You Can Take…
singlehead of householdor qualifying widow(er) any amount a full deduction up to the amount of yourcontribution limit.
married filing jointly or separately with a spouse who is not covered by a plan at work  any amount a full deduction up to the amount of yourcontribution limit.
married filing jointly with a spouse who iscovered by a plan at work $183,000 or less a full deduction up to the amount of yourcontribution limit.
more than $183,000 but less than $193,000 a partial deduction.
$193,000 or more no deduction.
married filing separately with a spouse who is covered by a plan at work  less than $10,000  a partial deduction.
 $10,000 or more  no deduction.
If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the “Single” filing status.

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

See my Google+ Profile

Best Financial Posts of the Week…07-22-13

Here is a roundup of some of the best posts of last week on the web:

Weighing the Week Ahead: It’s All About Earnings – Jeff Miller
http://oldprof.typepad.com/a_dash_of_insight/2013/07/weighing-the-week-ahead-its-all-about-earnings.html

Slower Growth Ahead for Emerging Markets? – Nouriel Roubini
http://www.project-syndicate.org/commentary/slower-growth-ahead-for-the-brics-and-other-emerging-markets-by-nouriel-roubini#HxZGAU62oWdjshht.99

The Era of Permanent Alimony May Be Coming to an End – Josh Crank
http://blogs.lawyers.com/2013/07/end-of-permanent-alimony/

Is This 2007 Redux? – Lance Roberts
http://advisorperspectives.com/dshort/guest/Lance-Roberts-130719-2007-Redux.php

Second Quarter Earnings Are Coming Up Short – Michael Lombardi
http://advisorperspectives.com/dshort/guest/Michael-Lombardi-130719-Q2-Earnings.php

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is a Certified Divorce Financial Analyst® and an Accredited Asset Management Specialist. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

Best Financial Posts of the Week…

Here is a roundup of some of the best posts of last week on the web:

Roger Wohlner, the Chicago Financial Planner, talks about how to Avoid these 9 Investment Mistakes
http://thechicagofinancialplanner.com/2012/08/08/avoid-these-9-investing-mistakes/

Russ Thornton of Wealthcare for Women talks about the importance of the Sequence of Returns in investing
http://www.wealthcareforwomen.com/return-sequence/

Apparently Standard & Poors didn’t think anyone believed that their ratings are “independent and objective”
http://qz.com/101722/sp-amazingly-says-no-one-should-believe-its-ratings-are-independent-and-objective/

Michael Kitces provides some valuable insight on the problem with annuities and potential healthcare shocks
http://www.kitces.com/blog/archives/572-Solving-The-Annuity-Puzzle-Inflexibility-For-Handling-Potential-Health-Care-Shocks-In-Retirement.html

An article by Yours Truly talking about the purpose and value of a Certified Divorce Financial Analyst
http://lwmwealth.com/blog/2013/07/what-is-a-certified-divorce-financial-analyst/

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is a Certified Divorce Financial Analyst® and an Accredited Asset Management Specialist. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

Financial Common Ground

Financial Common GroundOver the past few weeks, respected financial planner, author, and blogger, Tim Maurer addressed the financial planning community with what he saw as a breakdown in the authoritative qualities of our professional. More to the point, and to paraphrase what Tim said in his recent Forbes article, it seemed that the disagreement among various financial planners, bloggers, media personalities, and educators had become so vitriolic and uncomfortable that it has caused tremendous confusion in the eyes of the public.

So Tim set out to identify a series of principles that all financial professionals can agree on and live by. While there still remains many, many differences in the way professionals manage investments and dole out financial advice, the following are a list of the Principles that we agreed upon. In establishing these Principles, Tim reached out to the financial community to seek support, guidance, and collective wisdom in drafting these points.

His efforts culminated in his website entitled, Financial Common Ground – The Unifying Principles of Personal Finance. Here are the Principles that we agreed to:

  • Progress: The benchmark for success in personal financial planning is progress, not perfection. Excellence is more a product of good habits than a revolutionary event.
  • Discipline: A household must consistently spend less than it earns, regardless of the level of income. The foundation of financial success is a disciplined cash flow system (such as a budget), which is designed to make household spending decisions purposefully and in advance.
  • Debt: Debt wisely used can help build wealth, but fueling unsustainable lifestyles with borrowing is the quickest path to financial ruin. We are well-served to pursue an eventual debt-free path.
  • Buffer: Changes, surprises and failures are guaranteed, but their impact can be minimized through the creation of a financial buffer. This buffer—a cushion of cash savings—will help lessen the burden of emergencies and other unexpected events.
  • Risk: It is better to make an informed risk management decision than to act on a consequential reaction. Many risks can be adequately managed through risk avoidance, risk reduction or self-insuring through risk assumption. However, the potential for catastrophes from which a household could not survive financially should be transferred through insurance.
  • Investing: Investors have succeeded utilizing strategies on a continuum ranging from entirely passive to surprisingly active. None succeed purposefully, however, without following a disciplined strategy.
  • Taxes: Taxes are an important element of financial decisions, but rarely the most important. Tax minimization is wise while tax evasion is illegal.
  • Giving: Giving of time and money is good for everyone, donors and recipients alike, and may also result in a reduction in taxes.
  • Future: Plan for tomorrow, live for today. Failure to plan for major expenses, such as education and retirement, is folly; but deferring all gratification for the future strips the joy from life today.
  • Estate: Everyone, with very few exceptions, should have well-conceived and clearly written estate planning documents including, at minimum, a will (with or without a revocable trust), a durable financial power of attorney and advance directives (including a health care power of attorney and living will).
  • Legacy: Leaving a legacy—a relational impact on friends, family and community—is as or more important than leaving an estate—the sum of your assets less your liabilities at death.
  • Guidance: Whether from a book, blog, article, class, radio program, TV show, advisor or specialist, financial advice is only beneficial to the degree that it is consistent with your values and goals and leads to action.

Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

Class Offered: Building Your Retirement Income

Retirement WorkshopIf you or someone you know in the Mystic, CT area is getting ready to retire, or is already retired, and wants to learn more about how to structure their retirement income, this class may be helpful.

Education is the foundation of personal financial empowerment. Without the necessary comprehension, most feel ill-equipped to make the significant financial decisions we face today.

Lansdowne Wealth Management hosts classes to build the necessary framework for a successful retirement financial plan. On an ongoing basis our classes are focused on the areas we see most relevant and timely to your personal finances.

Consistent with our lifetime commitment: Classes are free of sales-pitches and commitments, and anyone is free to attend unless stated otherwise in the description. Since we are a fee-only registered investment advisory firm, we do not sell products.

To see the current classes offered and sign up to attend, you can go to our Retirement Workshop site here.

See the class description here.

Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog, The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.