Important Financial Planning Numbers For 2025
To help you financially plan for 2025, we provide this resource with important numbers for the year.
By Senior Advisor Andrew Schaetzke, CFP®.
When planning for the coming year, it can be hard to keep track of all of the new financial and tax information. There are many important financial numbers to be aware of for 2025, including:
Tax rates and brackets, such as for federal income tax, capital gains tax, Social Security tax, and estate tax
Certain tax deductions, exemptions, and credits
Retirement plan (401(k), 403(b), IRA, SIMPLE IRA) and Health Savings Account (HSA) contribution limits
Required minimum distribution (RMD) table for certain tax-deferred retirement accounts
Medicare premiums & IRMAA surcharges
To help you financially plan for 2025, we provide the resource below. As always, we are here to help your family throughout your financial journey. We can provide resources, experience, and strategies that may be valuable to you. Please feel free to reach out to us if you have any questions.
Important Disclosure Information & Sources:
This resource was created by fpPathfinder. SJS pays an annual subscription in order to license resources from fpPathfinder.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal professional or tax professional for specific advice.
Hyperlinks to third-party information are provided as a convenience.
Suggested Reading
Financial To-Dos Before The End Of The Year
As we approach the end of the year, we want to highlight some important financial items to review before the new year.
By Investment Associate Bobby Adusumilli, CFA.
As we approach the end of the year, we want to highlight some important financial items to review before the new year:
Contributing to workplace retirement plans, health savings accounts, and 529 plans for education: Each of these accounts help you to save and potentially invest in tax-advantaged ways, though all contributions need to be completed prior to December 31st.
Required minimum distributions (RMDs) from pre-tax retirement plans: For those age 72+ who need to take RMDs from retirement accounts such as a Traditional IRA, ensuring that your RMDs are satisfied prior to December 31st can help you avoid a potential financial penalty from the IRS.
Charitable donations as well as gifting to loved ones: Particularly in a positive return investment year, it may be advantageous to donate appreciated securities from a taxable account. Additionally, for those age 70.5+, you are able to make qualified charitable distributions (QCDs) directly from your Traditional IRA worth up to $105,000 prior to December 31st. For those gifting to individuals, you can gift $18,000 per beneficiary without being subject to gift tax.
Private fund tax forms: For those investing directly in private funds, you may have received K-1 tax forms relating to your investments, which may need to be included as part of your taxes due by October 15th.
As always, we would be happy to assist you in reviewing your finances to help ensure you are achieving your financial goals.
Important Disclosure Information:
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Statements contained in this report that are not statements of historical fact are intended to be and are forward looking statements. Forward looking statements include expressed expectations of future events and the assumptions on which the expressed expectations are based. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice.
What Should You Do About Student Loans?
By understanding and preparing for the benefits as well as costs of higher education options, you can make better higher education decisions for your family for both now and the future.
By Investment Associate Bobby Adusumilli, CFA.
For many people, going to college is a dream come true. While in college, they grow and evolve as people, meet close friends, and have some of the best times of their lives. College degrees often provide people with the skills and qualifications that they need in order to get the jobs that they want. From an earnings perspective, getting a college degree is an important steppingstone in increasing career earnings as well as improving career opportunities, particularly for people who come from more disadvantaged backgrounds.[1]
And yet, earning a college degree is a real financial burden for a lot of people. As demonstrated below, the total student loan debt in the US reached a record $1.75 trillion in 2021, equating to nearly $38,000 per student who borrows.[2][3] Even 20 years after graduation, roughly half of borrowers still have around $20,000 in student loan debt on average. Student loan debt is even greater for people who pursue master’s or doctorate degrees, sometimes amounting to hundreds of thousands of dollars.[4] The costs of college have been only going up over the past 20 years, meaning student loan debts will remain a major burden for a lot of people throughout their lives.[2]
Source: “Student Loan Debt Statistics”. Melanie Hanson, 01-Mar-2022, educationdata.org.
By understanding and preparing for the benefits as well as costs of higher education options, you can make better higher education decisions for your family for both now and the future. In order to help your family with this, we first detail the different types of student loans and repayment options. Then we provide some actions that both parents and students can consider in efforts to lower the costs of higher education.
Types of Student Loans
If you need to take out student loans, you can borrow from the federal government and / or private lenders. Due to interest rates, qualification criteria, and repayment options, most people tend to borrow from the federal government. As further detailed by the Wall Street Journal, there are four primary types of federal student loans:[4]
Direct Subsidized (Stafford) Loans are available to undergraduates based on their financial needs. As long as you are enrolled in college at least half-time, you don’t begin accruing interest until six months after graduation.
Direct Unsubsidized (Stafford) Loans are available for both undergraduate and graduate students. Undergraduates typically receive lower interest rates. You begin accruing interest as soon as you take out the loan.
Direct Parent PLUS Loans allow parents of undergraduate students to borrow up to the full cost of attendance of the school. Interest begins accruing immediately.
Direct Grad PLUS Loans allow graduate students to borrow up to the full cost of attendance of the school. Interest begins accruing immediately.
In terms of lowest interest rate, the priority tends to be Direct Subsidized (Stafford) Loans, then Direct Unsubsidized (Stafford) Loans, then Direct Grad PLUS Loans, then Direct Parent PLUS Loans.[4]
Some people decide to take out private loans from third-party lenders such as SoFi and Earnest, particularly if they want to consolidate their outstanding loans into one loan in order to potentially take advantage of a lower interest rate. However, private loans are usually subject to more stringent rules, and you may need to spend more time monitoring private loans in order to keep taking advantage of lower interest rates.
Student Loan Repayment Options
While your future finances may be uncertain, we believe that choosing and sticking with a repayment plan can help you both pay off your student loans quicker as well as better plan other aspects of their finances. Private loans typically have strict criteria and scheduled repayments. Federal student loans usually provide borrowers with more flexibility. As further detailed by the Wall Street Journal, here are some ways that you can choose to repay federal student loans:[4]
The Standard Repayment Plan allows you to pay a fixed monthly amount with the goal of paying off the loan in 10 years. You are automatically enrolled in this plan, though you can choose a different repayment plan.
The Graduated Repayment Plan starts out with lower monthly payments and increases them about every two years, with the goal of paying off the loan within 10 years. This option may make sense if you expect your income to steadily increase.
The Extended Repayment Plan allows you to pay either a fixed or steadily increasing monthly amount over 25 years. You must have at least $30,000 in federal loans to qualify.
The Revised Pay as You Earn (REPAYE) Repayment Plan sets monthly payments at 10% of your discretionary income, which the US government calculates based on income and family size. The balance is forgiven after around 20-25 years.
The Pay As You Earn (PAYE) Repayment Plan sets monthly payments at 10% of your discretionary income. The balance is forgiven after around 20 years.
The Income-Based Repayment Plan sets monthly payments at 10% to 15% of your discretionary income. The balance is forgiven after around 20-25 years.
The Income-Contingent Repayment Plan sets monthly payments at the lower of 20% of your discretionary income or the amount you would pay on a fixed 12-year repayment plan. The balance is forgiven after around 25 years.
Under Public Service Loan Forgiveness, you must work for a nonprofit or government agency for 10 years, after which the loans would be forgiven. However, this plan is subject to strict rules, and the vast majority of people have not qualified in the past, though eligibility may expand in the years to come.[6]
The Loan Simulator for the US Department of Education allows you to compare what you would pay over time under the various repayment options.
When evaluating which repayment option best suits your situation, we generally recommend to pay off your student loans as fast as reasonably possible. Interest adds up over time, and debt can be a psychological burden. Additionally, we do not believe that people should expect the US government to further forgive federal student loans. By paying off student loans quicker, you can allow yourself to focus on other parts of your financial life, such as raising a family and preparing for retirement.
Helping Your Child Prepare For Higher Education Costs
Especially for parents who have time to help their child prepare for higher education, you can consider the following:
Apply for financial aid: While each school has different eligibility criteria, many schools offer needs-based financial aid as well as merit-based scholarships to eligible students. In order to determine whether you qualify, you should complete both the FAFSA form as well as the CSS Profile.
Apply for private scholarships: Many private organizations offer both needs-based as well as merit-based scholarships to students. While each organization has a different application process, you can ask your school counselor for organizations that other students have received private scholarships from. In addition, you can check out the websites Scholarships.com, Cappex, Scholly, and Going Merry.
Invest in a 529 account: 529 accounts are state-sponsored investment plans that allow people to save and invest after-tax money, with the gains being tax-free so long as the proceeds are used for qualified education expenses for the beneficiary. Additionally, many states offer state tax deductions for contributions to a 529 plan. You can find more information about 529 plans on the Saving for College website.
Analyze the costs and prospects of college options with your child: Each college has different costs, financial aid, scholarship criteria, and median career earnings prospects. By reviewing the various college and financial options with your child, you can increase their understanding of both the benefits and costs of the school that they ultimately choose. The College Navigator tool can help you compare the costs of colleges compared to people who are in a similar financial situation as you. For students who qualify for financial aid, the College Financing Plan is a standardized form provided by most colleges to help students understand and compare the expected college costs. The College Scorecard from the US Department of Education allows you to compare earnings and debt data for different degrees across various colleges.
If you want to loan your child money for school, set up a repayment plan: In order to help their children with student loans, many parents decide to loan their children some of the money for college, often with a low interest rate and more flexible repayment timeline. For parents who do this, we often recommend for you to create a promissory note to be signed by both you and your child that details the student loan repayment terms and schedule.
Higher education can be transformative for students, but it is important to recognize the costs of higher education. As you and your child are evaluating higher education options, we can provide resources, experience, and strategies that may be valuable to you. Please feel free to reach out to us if you have any questions or would like to talk through anything.
Important Disclosure Information & Sources:
[1] “How Big is the Racial Wealth Gap?“ Nick Maggiulli, 02-Jun-2020, ofdollarsanddata.com.
[2] “Student Loan Debt Statistics”. Melanie Hanson, 01-Mar-2022, educationdata.org.
[3] “Average Student Loan Debt”. Melanie Hanson, 10-Jul-2021, educationdata.org.
[4] “The WSJ Guide to Student Loans“. Wall Street Journal, 2022, wsjplus.com.
[5] “Consumer Price Index for All Urban Consumers: Tuition, Other School Fees, and Childcare in U.S. City Average“. Federal Reserve Bank of St. Louis, 2021, fred.stlouisfed.org.
[6] “Public-Service Loan ‘Forgiveness’: Answers to Common Questions“. Cheryl Winokur Munk, 03-Dec-2021, wsj.com.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice. This material has been prepared for informational purposes only.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
Looking Back On 2021, Looking Ahead To 2022
We asked four SJS Team members across the country to look back on 2021 to describe what they will remember, and to talk about what they are excited about for 2022.
2021 was an exciting year at SJS. We celebrated our 26th anniversary, welcomed three new Team members, and had the pleasure of meeting with many of you in-person more than in 2020.
To offer you an SJS perspective on 2021, we asked four SJS Team Members across the country to look back on 2021 to describe what they will remember, and discuss what they are excited about for 2022. We hope you enjoy reading their individual takes on the past year, and we look forward to seeing you in 2022!
Scott Savage; Founder & CEO; Sylvania, Ohio Office; Founded SJS in July 1995
Thank YOU for another year of partnership! We continue to be grateful and humbled by the faith and trust you place in Team SJS. We will never take your faith and trust for granted.
It is our custom at the end of the year to reflect on the previous 12 months and look forward to a brand new year. What did we learn? What are we worried about? What opportunities can we seize?
2021 will be known as year two of the Coronavirus pandemic. Early in 2020, a friend of mine who understands viruses and pandemics said to me, “COVID is going to be a marathon.” I can only hope that we are in the last painful miles - weary, legs heavy, and closing in on the finish line. In my opinion, we have been in this together, whether we realize it or not.
Ironically, many of the world’s equity markets rose, fueled by accommodating central banks like the Federal Reserve.[1] Global bond markets, plagued by low interest rates and eye-popping inflation, generally disappointed investors.[1]
We continue to evaluate the world’s investable markets that we believe will reward you over the long-term for the risks being assumed. We remain cautiously optimistic that 2022 will see the supply chain disruptions ease, labor shortages abate, inflation slow, and economic growth persist.
Jennifer Smiljanich, CFP®; Managing Director & Senior Advisor; Scottsdale, Arizona Office; Started at SJS in August 2010
One of the things I enjoy about coming to work every day is that I get to really know people: who they are, what they want, and what is important to them. I also am fortunate to have an opportunity to make a difference to you when you call on SJS. Finding a solution to a problem, taking away a worry, listening, showing you whether you are progressing towards a goal, and helping you to live a life that is meaningful to you. So as much as SJS manages investments, all of these other responsibilities are just as important.
Living in our current world has helped bring clarity to many people about what is most important to them. It might not be working in a job that historically has comfortably paid the bills. For some, their work has become more stressful with more to do and fewer hands to help. For others, income may not be as compelling given considerations of health, family dynamics, and fulfillment. This year, I’ve had the opportunity to help several clients review whether they could make a job change, move to part-time work, and even retire early to spend more time with loved ones. Providing guidance to someone who is wrestling with these kinds of decisions is rewarding. We are glad to help co-think the financial and other considerations of these life changes.
There seem to be no lack of pulls on our time. Like you, I find my inbox is always full and the “to do” list is never quite done. I appreciate being able to help you find time in your day to do the things that are important to you. So whether it’s helping you make sure you’ve done everything you need to do before year-end (from charitable giving, to distributions, to contributions), co-thinking options for financing or refinancing a home, figuring out how to get tax documents to your accountant securely, or helping you to consolidate your accounts on MySJS so you can view your financial status in a single place, we are glad to help!
Finally, while many people have been challenged in so many ways in 2021, you have cared. You care about your children and grandchildren. You care about your communities. And you give generously of your time and money to the people and causes you care about. I’ve spent many hours chatting with you about different ways to support the people and causes you care about, whether it’s giving to charities in tax-smart ways, helping support children or grandchildren though 529 plans or gifts, or in Arizona, making use of the state tax credits that support different organizations. As we head into a new calendar year, I am energized to help you potentially accomplish the things that matter to you, so you can focus on living your life to its fullest!
Tom Kelly, CFA; Chief Investment Officer; Chicago, Illinois Office; Started at SJS in June 2018
Reflecting on 2021, I am most struck by the resiliency of the human condition. Amidst continued uncertainty, trials and tribulations, the ups and downs, we are resilient. I was inspired by stories of resiliency of families, communities, and economies. One in particular (perhaps especially captivating after hearing my wife’s stories as a NICU Nurse) is Curtis Means, who was born 132 days premature at just 21 weeks and one day.[2] After round the clock care for nine months by the UAB medical team, Curtis was discharged and eventually named by the Guinness Book of World Records as the World's Most Premature Infant to Survive.[2] Resiliency of a child to fight, medical professionals to care, and a family to love!
In my life this year, one of the biggest accomplishments was the addition of diversified alternatives to our portfolios. While investment performance is not guaranteed, we believe many of the underlying strategies will provide some resiliency against forces of inflation, low-yields, and extended valuations, as well as potentially get stronger during times of market stress. Personally, I would be remiss if I didn't mention the blessing of our new baby, Oliver, at the end of the year – hopefully I’m developing resiliency to a little less sleep.
2022 will surely bring new challenges and new opportunities, and I am most focused on ensuring our portfolios are staying up to date with new research and strategies that are MarketPlus worthy. Additionally, I am excited to move into our new office at 55 W. Monroe in downtown Chicago, so next time you are in the Windy City, please stop by and say hi. We can toast to resiliency!
Katie Floyd; Associate Advisor; Sylvania, Ohio Office; Started at SJS in September 2021
After another year of ups and downs, the rollercoaster of 2021 came and went in the blink of an eye. Never knowing what turn the year might take next, I started to evaluate what was most important to me and realized that life was too short to wait for the “sign” to change. So, I stopped measuring my successes by the title of my job and more about how I felt each night before bed. I knew that I wanted to give more back to my community and leave the world a little better than how I found it. And then I found SJS Investment Services.
Starting over is always scary, but I felt the reward would far outweigh the risk. Although I’ve only been here for a few months, I feel like I’ve known my co-workers for years and have comfort that I made the right choice to change my career. At SJS, I feel empowered to explore the unknowns around me and take a chance at something new, and I encourage you to do the same. During my first few months, I’ve been able to meet with some of you and help prepare financial analyses and presentations to help you plan for your future. Additionally, I’ve assisted with marketing efforts and continue to help shape the future of SJS.
Looking to 2022, I’m excited to continue expanding my career with the amazing resources SJS has to offer, as well as getting to know you better, the people who make coming into work worthwhile. There is so much out there for us to discover, and I’m happy that I get to be a part of that journey with you. I hope that this next year brings you nothing but health, wealth, and normalcy, and when you aren’t sure what turn the year will take next, just know that we are here for you.
Important Disclosure Information & Sources:
[1] “SJS Weekly Market Update“. SJS Investment Services, 27-Dec-2021, sjsinvest.com.
[2] “Curtis Means, Alabama boy weighing less than a pound at birth, is world’s most premature surviving baby“. The Associated Press, 10-Nov-2021, al.com.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice. This material has been prepared for informational purposes only.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
Suggested Reading
Saving For Emergencies
Emergency savings can help you weather the toughest times, providing a cushion so that you can stay committed to your financial plan for the long-term.
By Senior Advisor Andrew Schaetzke, CFP® and Investment Associate Bobby Adusumilli, CFA.
Do you have money saved for emergencies?
Emergency savings can provide support in case something very unexpected happens. Unfortunately, most people and businesses don’t have enough saved. According to Bankrate’s 2021 Emergency Savings Survey, half of Americans have less than three months’ worth of expenses covered in an emergency fund.[1] That total includes 1 in 4 Americans who specified that they don’t have an emergency fund.[1] Based on research from the JPMorgan Chase Institute from 2016, approximately 50% of small businesses have 27 cash buffer days or less, meaning they would run out of cash within 27 days if revenue suddenly stopped coming in.[2]
By preparing for emergencies in advance, you are controlling what you can in order to be ready for the unexpected. Emergency savings can give you some peace of mind and allow you to maintain your focus on the long-term with your finances. We hope the below information helps you figure out what to do with your emergency savings.
How much should I save for emergency savings?
For most people, we recommend that you have at least 3-6 months' worth of living expenses in emergency savings. Some people like to have >1 years' worth of living expenses, particularly if they have health problems, dangerous jobs, or would just sleep better knowing they have more money saved.
How quickly should I fund my emergency savings?
Below are some general considerations, though please work with your financial professional to develop a plan appropriate for you:
First pay off any necessary short-term expenses.
Prioritize paying off any high-interest debts. However, many people like the security of also having emergency savings. Even if you prioritize paying off high-interest debts, you can still save slowly (such as $20 per week) for emergency savings.
After high-interest debts are paid off, prioritize growing your emergency savings to at least 3-6 months' worth of living expenses. While doing this, continue paying off any lower-interest debts.
After you paid off your high-interest debts and have enough emergency savings, then consider saving and investing more via tax-advantaged accounts. You can come up with a plan to help you save a little each week while also continuing to pay off any lower-interest debts.
When should I use my emergency savings?
When this cash is necessary for an urgent expense. While each situation is different, we typically recommend that people use their emergency savings before withdrawing from any long-term investments. However, we believe that people should replenish their emergency savings as soon as feasible.
Where should I keep my emergency savings?
The goal of emergency savings is to have cash for when you need it. Behaviorally, people are more likely to spend their savings unnecessarily if they frequently view the balance and if it is stored in the same place as other financial assets.[3] Therefore, we think people should keep their emergency savings separate from other financial assets.
Below are some options on where you can store your emergency savings:
Savings Account
Many online banks, local banks, and credit unions offer secure and low-hassle savings accounts that provide you with some monthly interest. The interest is subject to federal, state, and local income taxes, but the interest is usually more than you would receive in a checking account.
Make sure to choose a savings account which is FDIC-insured up to $250,000, as well as a trusted and reliable financial institution that will allow for quick and penalty-free withdrawals when needed.[4] For additional information on potential savings accounts, see this website from Nerdwallet.[5]
High-Quality Short-Term Bonds
Another option is to invest in high-quality short-term bonds. These bonds may provide more interest / yield than a savings account, but these bonds will fluctuate more in value compared to savings accounts. Certain high-quality short-term bonds (particularly municipal bonds) may be exempt from federal, state, and / or local taxes.
For many people, the easiest way to invest in high-quality short-term bonds is via a well-diversified low-cost ETF or mutual fund.
Short-Term Treasury Inflation Protected Securities (TIPS)
TIPS are offered by the US government to protect against inflation. The principal increases with inflation and decreases with deflation, as measured by the Consumer Price Index.[6] When it matures, you are paid the adjusted principal or original principal, whichever is greater. While TIPS are subject to federal income taxes, they are typically exempt from state and local taxes. Particularly if TIPS are in high demand, then investors may earn less than the rate of inflation.[6]
While you can buy short-term TIPS directly from the US government via the TreasuryDirect website, many people find it easiest to invest in TIPS via a well-diversified low-cost ETF or mutual fund.
Source: FRED, as of October 01, 2021. The Consumer Price Index for All Urban Consumers: All Items (CPIAUCSL) is a measure of the average monthly change in the price for goods and services paid by urban consumers between any two time periods. It can also represent the buying habits of urban consumers.
Series I Savings Bonds
Series I savings bonds are 30-year savings bonds offered to US residents by the US government, designed to match the US inflation rate.[7] Each individual can buy up to $10,000 of Series I savings bonds per year, and you can buy in increments of $25. You are restricted from selling your Series I savings bond within the first year, but after that you can redeem directly with the US government. If you sell within the first five years, you forfeit three months' worth of interest. When a Series I savings bond matures, you are paid the adjusted principal or original principal, whichever is greater. Series I savings bonds are subject to federal income taxes, but they are typically exempt from state and local taxes.[7]
You can buy Series I Savings Bond online directly from the US government via the TreasuryDirect website.
Conclusion
We can’t predict the future, but we can prepare for it. Particularly when times are toughest, that is when emergency savings can provide the most security for you. Emergency savings can help you weather the toughest times, providing a cushion so that you can stay committed to your financial plan for the long-term.
The idea of emergency savings is not new. The legendary investor Warren Buffett routinely talks about the importance of holding a large cash reserve for his company, largely driven by the teachings from his grandfather Ernest Buffett.[8] Below is a letter from Ernest Buffett to his family on the benefits of a cash reserve. [8] We hope you enjoy this, and as always feel free to reach out to us at SJS if you have any questions about emergency savings.
Source: “Berkshire Hathaway 2010 Shareholder Letter“. Warren Buffett, 2011, berkshirehathaway.com.
Important Disclosure Information & Sources:
[1] “Survey: More than half of Americans couldn’t cover three months of expenses with an emergency fund“. Sarah Foster, 21-Jul-2021, bankrate.com.
[2] “Cash is King: Flows, Balances, and Buffer Days: Evidence from 600,000 Small Businesses”. JPMorgan Chase & Co. Institute, September 2016, jpmorganchase.com.
[3] Your Money & Your Brain. Jason Zweig, 2008, Simon & Schuster.
[4] “Deposit Insurance FAQs.“ Federal Deposit Insurance Corporation, fdic.gov.
[5] “8 Best High-Yield Online Savings Accounts of November 2021“. Margarette Burnette, 01-Nov-2021, nerdwallet.com.
[6] “Treasury Inflation-Protected Securities (TIPS)“. U.S. Department of the Treasury, treasurydirect.gov.
[7] “Series I Savings Bonds“. U.S. Department of the Treasury, treasurydirect.gov.
[8] “Berkshire Hathaway 2010 Shareholder Letter“. Warren Buffett, 2011, berkshirehathaway.com.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice. This material has been prepared for informational purposes only.
Statements contained in this article that are not statements of historical fact are intended to be and are forward looking statements. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
Suggested Reading
What Should You Consider When Moving Out Of State?
To help you figure out what issues to consider if you move out of state, we provide this resource.
By SJS Investment Services Senior Advisor Andrew Schaetzke, CFP®.
Especially since the start of the pandemic, many people have moved in order to live in a less expensive place, to have more space, or to have different pace of life.[1] Moving can be exciting, as it may allow you to experience something new. At the same time, there a lot of logistical details to account for when you move. Particularly if you move out of state, it can be easy to forget or not even know that you have to do something important.
To help you figure out what issues to consider if you move out of state, we provide the below resource. From this, you may come away with answers and action items for the following:
Do I need to distinguish between residency and domicile?
What agencies do I communicate with in order to update records?
Do I need to update my family’s estate planning documents?
Are there potential tax advantages or additional expenses (such as for Medicare) that I should be aware of?
If I move because of a job, are my moving expenses tax-deductible?
As always, we are here to help you evaluate your personal situation and help you figure out what you need to do when moving out of state. Please feel free to reach out to us if you have any questions.
Important Disclosure Information & Sources:
[1] “Americans Up and Moved During the Pandemic. Here’s Where They Went.“ Yan Wu & Luis Melgar, 11-May-2021, wsj.com.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal professional or tax professional for specific advice. This material has been prepared for informational purposes only.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
Suggested Reading
What Accounts Should You Consider If You Want To Save More?
To help you figure out what accounts to use if you want to save more, we provide this resource.
By SJS Investment Services Senior Advisor Andrew Schaetzke, CFP®.
Having the money to save more can be a welcome and exciting feeling, allowing you to better prepare for your future while also feeling more confident in the present. You can save for your family, retirement, unexpected expenses, or many other causes important to you. At the same time, figuring out how to save can also be confusing, as there are a lot of options to choose from.
The good news is that once you figure out what you want to save for, there are usually a few accounts / options that are most beneficial for your situation, that can help you save on taxes and expenses. Additionally, by knowing some of the accounts ahead of time, you may better handle the situation if you do ever find yourself with more money to save.
To help you figure out what accounts to use if you want to save more, we provide the below resource. From this, you may come away with answers and action items for the following:
What retirement accounts should I prioritize, for anyone ranging from a young investor to a mid-career professional to a business owner?
How should I save for future healthcare expenses?
How should I save for my child’s future education?
Would an annuity or life insurance help me save more for retirement?
How much should I save in an emergency account for myself and my family?
As always, we are here to help you evaluate your personal situation and help you figure out what accounts may be best for you. Please feel free to reach out to us if you have any questions.
Important Disclosure Information & Sources:
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide tax advice. Please consult your tax professional for specific advice. This material has been prepared for informational purposes only.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
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What Should You Consider If You Suddenly Receive Wealth?
To identify some considerations that may arise if you suddenly receive a large amount of wealth, we offer this guide.
By SJS Investment Services Senior Advisor Andrew Schaetzke, CFP®.
Suddenly receiving wealth can be life-changing, allowing you to make purchases or investments, pay down debts, and / or give you more financial freedom to accomplish your goals and dreams. At the same time, receiving a large amount of wealth can also complicate your life - financially, psychologically, and relationship-wise.
The good news is that you don’t have to figure out everything on your own. There are many good people and resources available that can help answer your questions and offer you guidance. By knowing some of the issues ahead of time, you may better handle the situation if you do ever find yourself with a lot more wealth.
To identify some considerations that may arise if you suddenly receive a large amount of wealth, we offer the guide below. From this, you may come away with answers and action items for the following:
How may surplus wealth impact my spending habits and annual cash flow?
What tax considerations should I be aware of?
Should I pay off or restructure certain debts, such as student loans, mortgages, family loans, etc.?
What long-term planning issues should I consider, such as philanthropy, gifting, retirement changes, etc.?
As always, we are here to help you evaluate your personal situation and help you better handle the present while also planning for the future. Please feel free to reach out to us if you have any questions.
Important Disclosure Information & Sources:
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide tax advice. Please consult your tax professional for specific advice. This material has been prepared for informational purposes only.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
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What Should You Consider When Reviewing Your Investments?
To help you figure out what to consider when reviewing your investment plan, we provide this resource.
By SJS Investment Services Senior Advisor Andrew Schaetzke, CFP®.
Like most people, your financial situation will probably change significantly over time, whether due to new family members, new career, new expenses, additional assets, or various other changes. As your financial situation and financial goals change, your investment plan also probably needs to change in order to reach your financial goals. We find that people with well-thought-out investment plans are more likely to accomplish their financial goals than people who don’t create a plan.
To help you figure out what to consider when reviewing your investment plan, we provide the below resource. From this resource, you may come away with answers and action items for the following:
Do the goals, time horizon, and objectives of your investment portfolio need to be reviewed, updated, or documented? Do you need to create or update your written investment strategy and plan?
Do you need to review your risk tolerance or asset allocation?
Do you need to open a new account specifically tied to an investment objective, or consolidate existing accounts?
Are you trying to minimize your tax liability? If so, what are some ways to potentially decrease your tax liability?
As always, we are here to help you analyze your personal situation and help you plan for your future. Please feel free to reach out to us if you have any questions.
Important Disclosure Information & Sources:
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide tax advice. Please consult your tax professional for specific advice. This material has been prepared for informational purposes only.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
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Financial Gifting Strategies For Your Family
Many people want to explore how they can make gifts to family members without affecting their own financial security. We offer these possible gifting options.
By SJS Senior Advisor & Managing Director Jennifer Smiljanich, CFP®.
You'd like to experience the joy of gifting to your children and grandchildren during your lifetime. You'd like to be able to put a smile on the face of your child who is struggling to make ends meet. You are concerned about potential changes to estate tax laws and whether that may impact how much of your estate goes to Uncle Sam. Do any of these situations strike a chord with you?
In the last year, we have heard from many clients who would like to explore how they can make gifts to family members without affecting their own financial security. Some worry about potential tax changes, and how those may affect what legacy they can leave to future generations.
We have helped families create and implement gifting strategies for the past 25+ years. We are glad to help offer guidance to you and explain possible gifting options. Please note that all of the below gifting options apply to both children and grandchildren.
Gifting Money Directly
Each year, an individual may give up to $15,000 (for 2021) per child - or up to $30,000 for a child and their spouse - without using up any of the individual’s lifetime gifting limits.[1] A couple may gift a combined $30,000 per year per child, or a combined $60,000 to a child and their spouse.[2]
If an individual were to die in 2021, they could leave up to $11.7 million ($23.4 million for couples) to beneficiaries without paying federal estate and gift taxes.[1] There is discussion that these high estate and gift tax exemptions might be on the chopping block; President Biden has proposed decreasing estate and gift taxes levels to those last seen in 2009: $3.5 million per person for the estate tax, $1 million for the gift tax, and a top tax rate of 45%.[3]
Gifting For Specific Purposes
Tuition And Medical Expenses
Many parents want to gift money for specific purposes, instead of gifting cash with no limitations on potential uses. For example, there are some exceptions to the annual $15,000 gifting limits, including:[1]
Tuition for someone else
Medical expenses for someone else
Education Account: 529 Plan
To help pay for your child’s future education costs, you can create a 529 plan with your child (or grandchild!) as the beneficiary, and then donate to the 529 plan subject to gift tax rules. 529 plans can be invested in broad-market mutual funds, and can grow tax-free and penalty-free as long as withdrawals are used for the beneficiary’s qualifying education expenses.[4] A donor to a 529 plan has the ability to "frontload" gifts of up to five times the annual gift tax exclusion. However, if the donor were to pass away before the full five years, a portion of their gift could be added back into their estate and may result in gift taxes.[5]
Retirement Account: Roth IRA
You can also help your child save for retirement: as long as your child earns enough taxable income (but below the Roth IRA income limit) and has not contributed to a Traditional IRA or Roth IRA for the year, you can contribute $6,000 (2021 limit) directly to your child’s Roth IRA each year.[6]
Gifting Appreciated Securities
Generally, gifts can be made in cash or using appreciated securities (stocks, bonds, mutual funds, ETFs). Gifting highly appreciated securities to someone in a lower tax bracket may result in lower taxes for your family as a whole.[7]
Family Loan
If you want to help your child but don’t want to gift money, you can instead loan money. This may help your child get a loan for a specific purpose at a lower interest rate than third-party loan vendors may charge. To ensure the loan’s legitimacy, the IRS mandates that any family loan must have a signed written agreement, a fixed repayment schedule, and a minimum interest rate (you can use Applicable Federal Rates as the minimum).[8] If the loan exceeds $10,000 or the loan recipient uses the money to produce income (such as investing in stocks or bonds), you will need to report the interest income on your taxes.[8] We recommend that you consult with your tax advisor.
Summary
Parents often tell us: “We want to give our children enough so that they feel they could do anything, but not so much that they could do nothing.“ The better you manage your finances, educate your children on financial topics, and plan your specific gifting strategies, you may not have to gift as much as you think to help give your children all sorts of opportunities.
As always, we are here to help you go over gifting strategies, and help you choose and implement the best strategies for your family situation. If you have any questions or just want to talk with us about gifting strategies, please feel free to reach out to us.
Important Disclosure Information And Sources
[1] “Frequently Asked Questions on Gift Taxes“. IRS, irs.gov.
[2] “Will You Owe a Gift Tax This Year?“ ElderLawNet, 06-Mar-2021, elderlawanswers.com.
[3] “IRS Announces Higher Estate And Gift Tax Limits For 2021“. Ashlea Ebeling, 26-Oct-2020, forbes.com.
[4] “Topic No. 313 Qualified Tuition Programs (QTPs)“. IRS, irs.gov.
[5] “Do You Have to Pay Gift Taxes on 529 Plan Contributions?“ Mark Kantrowitz, 28-Jan-2020, savingforcollege.com.
[6] “Roth IRAs“. IRS, irs.gov.
[7]“How to Give Stock as a Gift (And Why Tax Pros Like The Idea)“. Chris Davis, 15-Dec-2020, nerdwallet.com.
[8] “Family Loans: Should You Lend It or Give It Away?“ Schwab, 24-May-2019, schwab.com.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice. This material has been prepared for informational purposes only.
Statements contained in this post that are not statements of historical fact are intended to be and are forward looking statements. Forward looking statements include expressed expectations of future events and the assumptions on which the expressed expectations are based. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
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Financial Considerations When Facing Divorce
We understand the transition when facing divorce, and will support your well-being, financial and otherwise. Some topics you should consider include the following.
By SJS Investment Services Associate Advisor Catherine Stanley.
You didn’t begin your married relationship thinking it will end in divorce. But life and people are imperfect, and if you find yourself facing a divorce, you know that significant changes are impending. Not the least of these changes is your financial situation. Fear of the unknown and uncertainty about outcomes can cause anxiety, and even take a physical toll.
During this emotional time, it is important for you to acknowledge the magnitude of this life transition, recognize that you don’t have to have all the answers now, and leave space to take care of yourself. Finding the support of qualified legal and financial advisors is an important step to take. At SJS, we are here to make this difficult time manageable for you and help you navigate to a life of new opportunity.
The divorce process requires couples to make decisions about dividing the property that was acquired during the marriage. State laws govern divorce, and each state has different laws that determine how property is divided. In addition, there may be consideration of whether one partner will provide child and / or spousal support, and how much. When dividing resources, it’s important to consider your full financial picture so you understand what is available to you. This includes a thoughtful consideration of the division of retirement assets, even if retirement seems a long way off. Tax implications and timing regarding division of the assets involved can have an important impact on your long-term financial health.
We understand this transition, and will support your well-being, financial and otherwise. Some topics you should consider include:
The most tax-efficient way to split assets, including a home, investments, and deferred compensation plans such as a pension, 401(k), or other type of retirement plan.
Consideration of all retirement plans from current and previous employment.
A possible new home purchase, and resources available to accomplish this.
Caring for children as a single parent, and resources available to accomplish this.
How and when to file taxes separately, and tax projections with a change in filing status.
Understanding spousal and child support, and any tax implications.
Eligibility for future Social Security spousal benefits, and how remarriage may impact eligibility.
Estate planning strategies so that transfer of assets remain with children, even in the event of remarriage.
Creating an appropriate asset allocation according to your personal risk tolerance, and designing a cost effective portfolio to support your goals.
Many of these considerations and decisions, if uninformed, can be costly and may not be reversible. We can help you understand the future impact of the financial decisions you are considering today so that you can make the best choices to support your new future.
Your direction and path of life has changed significantly. At SJS, we are here to be your trusted advisor and to accompany you as your personal and financial journey evolves.
For more information on how SJS Investment Services works with people going through divorce, please click on the below image.
Important Disclosure Information:
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
Advisory services are provided by SJS Investment Services, a registered investment advisor with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice. This material has been prepared for informational purposes only.
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2021 Financial Planning: Tax Rates, Retirement Plan Contributions, and More
We want to provide the below resource to help you easily find important financial planning numbers for 2021.
By SJS Senior Advisor Andrew Schaetzke, CFP®.
When planning for the coming year, it can be hard to keep track of all of the new tax and investment information. And yet, effectively managing your budget, investments, and taxes together can help decrease the amount of time to reach your financial goals as well as provide you more financial flexibility going forward.
We want to provide the below resource to help you easily find important financial planning numbers for 2021, including:
Federal income tax rates, capital gains tax rates, Social Security tax rates, estate tax rates, etc.
Standard federal tax deductions, retirement plan deduction limits, estate tax exemption, annual gift tax exclusions, education tax credits, etc.
Required Minimum Distribution (RMD) table for tax-deferred retirement accounts (401(k), IRA, SIMPLE IRA, etc.)
Retirement plan & Health Savings Account (HSA) options and contribution limits
We spend our days helping clients figure out and improve their finances. If you have any questions, we would be happy to help you as well.
Important Disclosure Information:
Advisory services are provided by SJS Investment Services, a registered investment advisor with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide tax advice. Please consult your tax professional for specific advice. This material has been prepared for informational purposes only.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
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The Importance Of Preparation
Over 25+ years of working with clients, we have learned that effective preparation can help you avoid potential problems and undesired outcomes in the future.
Financially Preparing For Future Life Events
By SJS Manager of Client Services Lisa Denstorff.
No matter how much you prepare, unexpected events will sometimes cause you financial stress. It could be a new health problem, a sudden job loss, a pandemic, or some other unexpected event. And yet, over our 25+ years of working with clients, we have learned that effective preparation can help you avoid potential problems and undesired outcomes in the future.
For example, we recently assisted a surviving spouse who had NOT been the primary caretaker of the family’s investment and estate planning. Unfortunately, some basic organizational and planning strategies such as beneficiary designations on investment accounts had not been completed. And the result was the need for the surviving spouse to hire a lawyer and work through the probate process – one more challenge to face during the grieving process.
The surviving spouse also reached out to us at SJS. We were able to help organize important financial documents, provide a summary of existing assets and liabilities, collaborate with the estate attorney and accountant, and simplify and consolidate investment accounts. Our new preparations helped design a more diversified investment portfolio.
Now, with proper account titling and beneficiary designations in place, the client can feel confident that one day the assets will pass on appropriately to loved ones or for charitable gifts as intended, without complications to the loved ones.
Working through important financial issues (such as applying for Social Security survivors benefits, selling / buying a new home, creating a new estate plan, filing taxes, etc.) is difficult, and can be exacerbated during periods of grief, anxiety, and stress. If we better prepare for these issues in times of relative calm, then we can potentially avoid much of the stress in more troubling times.
What can you do to financially prepare for future life events? We suggest you consider the following:
Inform a loved one or trusted contact as to where your financial documents are stored
Prepare a list of assets, custodians, debts, household bills, etc.
Store or back up this information electronically
Provide all important documents (will, healthcare power of attorney (POA), trust documents, etc.) to your financial advisor, accountant, estate attorney, etc.
Review beneficiaries and account registrations annually on all assets
If you have any questions or want to discuss handling life events, please feel free to reach out to us. The team at SJS is always here to listen and to help ensure your financial peace of mind.
Important Disclosure Information:
Advisory services are provided by SJS Investment Services, Inc., a registered investment advisor with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide tax advice. Please consult your tax professional for specific advice. This material has been prepared for informational purposes only.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
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What To Do When Your Baby Grows Up
With so many things to think about while raising good kids, do you have concerns that your child is not yet ready to shoulder this responsibility on his or her own?
How Do You Manage Those Accounts?
By SJS Director of Client Services Jeff Yost.
One minute, they’re newborns. The next minute, they’re in grade school. And the minute after that, they’re lobbying for a car – either yours, or one to call their own. The fact is, kids grow up fast and, while you likely have received plenty of well-meaning parenting advice over the years, you probably have received less advice on how to manage those investment accounts you or a loved one set up soon after your bundles of joy entered the world, or at some point during their childhoods.
With so many other things to think about like grades, colleges, activities, and – let’s face it – the 24/7 job of raising good kids, it’s no wonder that few parents think about what to do with their minor accounts, also known as custodial accounts, once their babies grow up.
Many people are unaware that the age at which a custodial account may terminate and convert to an individual account varies across states. In most states, termination occurs at either age 18 or 21. For example, in the state of Ohio, if your child is age 18, you have a choice. You can maintain investments in a custodial account until your child reaches age 21, or you can convert the investments to a new individual account in your child’s name. When your child reaches age 21, a custodial account must be converted to an individual account in your child’s name.
Do you have concerns that your child is not yet ready to shoulder this responsibility on his or her own? There is an option to add one or both parents as joint owners on the account, whether the account is converted at age 18 or 21.
No matter which option you choose, the process is simple. Just contact us or stop in and we’ll get the paperwork going. We’ll send you everything you need, including new account documents and an SJS investment management agreement for your adult child to sign. That’s it.
As long as you are working with us, you have a team who has managed the transitions and the accounts of countless SJS babies, many of whom are now second-generation clients. We believe no one is too young for good investment discipline.