FPA-NENY Educational Articles

FPA All-Member Media Training Schedule

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Hello Members!

I am pleased to tell you that we have solidified our schedule for All-Member Virtual Media Trainings in 2017! These are opportunities for all members, regardless of their location, to join Ben Lewis from FPA National for a quarterly media training. While the trainings are open to all members, any CFP® professional member of FPA who attends one will then qualify to take part in FPA MediaSource, our automated media query system.

 

The dates of the trainings in 2017 are:

 

  • Thursday, March 16 from 4 to 5:30 pm ET​​
  • Thursday, June 15 from 4 to 5:30 pm ET
  • Thursday, September 14 from 4 to 5:30 pm ET
  • Thursday, December 14 from 4 to 5:30 pm ET

 

Anyone wanting to register can simply visit www.OneFPA.org/MediaTraining and click on the date they are interested in.

 

And a reminder, if your chapter is interested in hosting a media training with me exclusively for your chapter, please let me know. These can be done virtually or in-person. Just let me know if you want to discuss this or want to get something scheduled!

If you have any questions, feel free to contact our PR Director, Adam McNeill at 518.364.7899

Employment Opportunity – Curran Investment Management

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Financial Service Representative

 

Independent Investment Advisor located in Albany, NY is seeking a motivated individual experienced in servicing financial service customers to provide the highest level of personalized service and attention to our clients. If you have a passion and commitment for providing extraordinary client service and enjoy a small company environment, we could be the company for you.

 

The Financial Service Representative is the point of contact for personal communication with clients aiding them in all facets of client servicing, including:

  • Addressing their questions and concerns regarding their accounts
  • Develop, communicate and implement plans to meet their financial goals
  • Meet with them on a periodic basis to review their accounts and other financial concerns
  • Handle administrative duties such as opening accounts and disbursing funds
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Qualified candidates should have a minimum of a bachelor’s degree from an accredited college or university and one to three years of relevant experience in the financial service industry or a related field. Brokerage Sales Assistant experience would be highly beneficial. Organization skills, attention to detail, and a demonstrated ability to multitask are key requirements for this position. Proficiency in writing business correspondence, Microsoft Word, Excel, PowerPoint, Outlook, and CRM software is a must.

 

Salary is commensurate with experience.

 

For inquiries contact Catherine Groden at cgroden@curranllc.com

The Right Time — and the Right Way — to Refinance a Mortgage

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Mortgage rates have dropped again, and now you’re wondering, is refinancing your mortgage the right move? And if so, how to go about getting the best refinancing deal? The more you know about the refinancing process, the better equipped you will be to answer these questions for yourself.

 

That you’re keeping tabs on mortgage rates and considering the refinance option is a good first step, says Michael McKevitt, who brings a unique perspective to the refinance issue as both a licensed mortgage originator (NMLS #876603) and a Certified Financial Plannerat Guillaume & Freckman, a wealth management firm in Palatine, Ill.

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The next step is to determine, given your current circumstances and mortgage situation, whether you are indeed a good refinance candidate, according to McKevitt. With a refinance, “you either want to lower your [monthly mortgage] payment or shorten your term” — the length of the mortgage loan itself.

 

Gaining access to a lower rate provides the means to accomplish either, or both, of those goals. But because there is often a cost to refinancing — typically in the neighborhood of $2,000, according to McKevitt, unless it’s a “no-cost refinance” (more on that later) — the next step is to determine whether the new refinanced rate is low enough relative to your current rate to cover those costs while also providing a lower payment and/or a shorter loan term. The general rule of thumb (though certainly not a hard-and-fast rule) is that if the new refinanced rate on the mortgage is at least 0.25% lower than the rate on the current mortgage, pursuing a refinance could make good financial sense, McKevitt says.

 

Another factor to weigh in determining whether a refi makes sense is the term remaining on your current loan. If in doing the math — with the help of a mortgage agent, broker or financial professional — it’s determined that you would not be able to recoup the cost of the refinance during the remaining term of the loan, then a refi may not be justified.

 

Also consider your ability to qualify. People with a low credit score, those whose income has recently dropped (such as due to a lost job) or who already carry a high level of debt may struggle to qualify for a new mortgage.

 

If the above criteria suggest you would make a good refi candidate, then it’s time to start shopping for a lender and a loan. McKevitt’s advice: take the time to comparison-shop, as you may be able to save hundreds, even thousands, of dollars if you pay attention to a few key factors:

 

  • Lending source. You can refinance through a bank, a credit union, a mortgage broker or an online lender. McKevitt suggests requesting a rate from an independent broker that represents multiple lenders, as they “tend to offer lower rates than those offered by the big banks.” On the other hand, if you have an existing relationship with a bank or credit union, that relationship may net you a discount on the rate or on closing costs — the fees and costs you pay to refinance. Online, sites such as www.bankrate.com and www.lendingtree.com are places to begin researching refinance rates from lenders of all types.

 

  • Moving parts. The fees and costs that go into a refinance can sometimes be less than transparent, making comparisons from lender to lender challenging at times. Besides the actual interest rate on the mortgage, the loan origination charge can differ between lenders, as can the lock period for the refi rate the lender quotes you — that is, the period for which the lender agrees to “lock” the rate they offered lock to entice potential borrowers to move quickly with a refi decision. If you’re offered the same low rate with both a 30- and 60-day lock, all else being equal, in most cases it makes sense to go with the lender who’s offering the longer lock period, to give you more time to complete the refinance process.

 

Also pay attention to how a lender intends to handle the escrow account attached to a refinanced mortgage, urges McKevitt. Instead of the new lender rolling the amount required for your escrow account (to pay insurance, property taxes, etc.) into the cost of the refinanced loan amount, thus increasing the overall amount of the loan, and the amount on which you’ll pay interest, use cash you have on hand, if possible, to fund the escrow account for the refinanced mortgage. You stand to save thousands of dollars over the life of the loan by not paying interest on an escrow amount that’s been wrapped into your refinanced mortgage loan. “It’s definitely something to be aware of,” he says.

 

People who lack the funds to cover the cost of a refinance may be best suited to a no-cost refinance. In this case, a lender will waive the fees and costs associated with the refi in exchange for the borrower accepting a slightly higher interest rate on their loan. For people looking to avoid the upfront cost of refinancing, this is a viable option, provided the math makes sense with the slightly higher interest rate.

 

This column is provided by the Financial Planning Association® (FPA®) of Northeastern New York, the principal professional organization for Certified Financial PlannerTM (CFP®) professionals. FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process. Please credit FPA of Northeastern New York if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION. The marks may not be used without written permission from the Financial Planning Association.

Nine Tax Pitfalls and How to Avoid Them

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All it took was a quick glance at the young woman’s federal tax return form for Certified Financial PlannerAustin Lewis to spot an important omission — one that could net the college student a valuable $2,500 American Opportunity Tax Credit from Uncle Sam – and avoid a costly tax pitfall.

 

Fortunately this young woman consulted Lewis before filing her tax return, preventing her from succumbing to one of the many common and potentially costly pitfalls that can trip up taxpayers. With the tax deadline fast approaching, here’s a look at some of those pitfalls and how to avoid them:

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  1. Failure to consult a tax advisor. As much as the adage “You don’t know what you don’t know” seems like a useless tautology, it certainly applies to the tax filing process, where the nuances, complexity and changeability of the tax code make it vital for most taxpayers to consult a tax expert — someone with the know-how to spot omissions and potential red flags, to fix errors, to uncover tax benefits and generally to help a person get the most out of the tax hand they are dealt. “It’s important to meet with a tax professional earlier rather than later in the tax season,” asserts Lewis, founder of Rooted Financial Planning in Fort Worth, Texas, “so you have the benefit of time to analyze and prepare.” He suggests asking friends, family, etc., to recommend a tax professional who is willing to invest time to learn about their clients’ circumstances, for a reasonable fee.

 

  1. Waiting until the last minute to prepare and file tax returns. Hurriedly filling out and filing tax returns just before the filing deadline (typically April 15) invites errors, omissions and other problems that could come back to haunt you. It also doesn’t allow time to plan how to pull together money to pay the taxes you owe. And missing the filing deadline altogether may result in a substantial penalty from the IRS (and from the state in which you file).

 

  1. Withholding too much or too little from earnings. Many employees rely on their employers to automatically withhold money from their paychecks to cover income tax. Usually the amount the employer withholds is dictated by a person’s earnings, and by the information they provide the employer on their W-4 tax form about their filing status (single or married) and other withholding “allowances,” such as dependent children. The more allowances a person claims, generally speaking, the less their employer will withhold for taxes.

Trouble can arise when the information on a W-4 causes either too much or too little to be withheld by claiming not enough or too many allowances. The latter situation can be particularly sticky, says Lewis. “If you under-withhold, chances are you are going to owe more taxes than you expect.” And in the case of withholding too much, while that probably means you have a better chance of getting a tax refund, that’s money you could have used for more constructive purposes, like contributing to a retirement account, saving for college or paying down debt, he notes.

To avoid over- or under-withholding, check the W-4 form your employer has on file for you to verify the allowances accurately reflect your current situation. And when your situation changes — a salary increase, birth of a child, change in marital status, etc. — be sure your employer adjusts your allowances and withholding accordingly. For help figuring out what’s appropriate withholding, check out the IRS calculator at www.irs.gov/Individuals/IRS-Withholding-Calculator

 

  1. Needlessly waving a red flag at the IRS. Certain items in a person’s (or business’s) tax returns tend to garner unwanted attention — and, perhaps, an unwanted audit — from the IRS, according to Lewis. Those include:
  • claiming an excessive amount of work-related vehicle mileage relative to income.
  • claiming an inordinately large proportion of a home’s square footage as home office space.
  • claiming business losses over an excessive period of years.

  1. Forgetting to report retirement account contributions. If you save into a tax-qualified individual retirement account or a 401(k), be sure to report the amount you’ve saved into those accounts, as it will lower your amount of taxable income, and thus, perhaps, your overall tax tab. Your contribution amount should be reflected in the year-end statement supplied by the company that manages your retirement account or plan.

 

  1. Overlooking tax credits that you’re eligible to claim. Many taxpayers make the same mistake as the aforementioned young woman who was eligible for the education tax credit, overlooking tax breaks for which they eligible — breaks that can make a significant difference on their tax returns. So if you’ve done things like paid for a college education, purchased energy-efficient equipment or an electric vehicle, if you’ve saved money toward retirement, you could be eligible for tax credits and the like. Here again, a tax specialist who asks the right questions can help uncover those that may apply to you.

  1. Not looking over the prior year’s tax return. Be sure always to look back at your tax returns from the previous year, Lewis says, so you don’t miss things like capital losses that can carry over from the prior year.

 

  1. Taking a standard deduction when it would have been better to itemize deductions, or vice versa. Most taxpayers have a choice of filing with a standard deduction or itemizing their deductions. Their tax returns — and the amount they either must pay or get back as a refund — can differ substantially depending on which approach they use. If you qualify for deductions that exceed the amount of the standard deduction, it may be worth filing a return with itemized deductions. Be sure to consult a tax expert to determine which route is best for you.

 

  1. Failing to report income or loss from investment transactions. The proceeds from the sale of stock, for example, must be accounted for on your tax returns. Failing to do so could result in a major tax hit. This applies mostly to transactions involving taxable investments, not to those involving assets in tax-qualified accounts such as 401(k)s and traditional IRAs.

This column is provided by the Financial Planning Association® (FPA®) of Northeastern New York, the principal professional organization for Certified Financial PlannerTM (CFP®) professionals. FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process. Please credit FPA of Northeastern New York if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION. The marks may not be used without written permission from the Financial Planning Association.

Double-Edged Sword: Right and Wrong Times to Rely on a Credit Card

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Americans love their credit cards. Indeed, an estimated 167 million U.S. adults own at least one credit card, and most own more than one, according to CreditCards.com.

 

There’s a dark underbelly to that reliance on plastic, and it’s called debt. The average U.S. household with debt carries $15,355 in credit card debt, according to NerdWallet. What’s more, credit card debt costs consumers an average of $2,630 per year in interest, assuming an average interest rate (APR) of 18%.

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As convenient as credit cards can be for making purchases without cash changing hands, there’s a temptation to overuse them — to run up mounting balances that are beyond a person’s ability to pay from month to month. And the high interest rates attached to many cards mean those carryover balances tend to inflate fast, turning a minor debt issue into a major debt problem.

 

There are right times and wrong times to use plastic. Knowing the distinction will go a long way toward helping avoid the credit card debt issues that so many Americans face.

 

RIGHT: Use a credit card when you can pay off your balance in full, by the statement due date.

WRONG: Use a credit card when you’re carrying an outstanding balance that you can’t pay off. Avoid using plastic if you lack adequate cash flow to pay the monthly balance, or if you’re already carrying a large balance you’re struggling to pay down.

 

RIGHT: Use a credit card for discretionary purchases, knowing you have money in your budget to pay the card’s monthly balance. By paying off the balance in full, you won’t incur the interest charges that can cause credit card balances to inflate rapidly.

WRONG: Use a credit card to make impulse purchases, without regard to budget and your ability to pay off the card’s monthly balance.

 

RIGHT: Use a credit card to pay for unexpected expenses for which you expect to be reimbursed, such as medical expenses or home repairs (water damage, hail damage, etc.) — expenses that may be covered by an insurance policy.

WRONG: Use a credit card as an emergency cash reserve. “Everyone should have a liquid emergency fund of three to six months of expenses,” says David J. Haas, a certified financial planner with Cereus Financial Planning in Franklin Lakes, N.J., “so credit cards should never be used for actual emergencies…The worst thing to do is use a credit card as an emergency fund. It can quickly convert an emergency into a true disaster as you start carrying a balance and now your financial flexibility is instantly reduced further.”

 

RIGHT: Transfer a balance from a high-interest credit card to a lower-interest credit card. “That can be a smart move if you have a plan to pay the lower-interest credit card down,” says Niv Persaud, a certified financial planner with Transition Planning & Guidance in Atlanta, Ga.

WRONG: Repeatedly transfer funds from credit card to credit card, opening new accounts, closing (or forgetting to close) accounts associated with cards you no longer use. Not only can this game of leapfrog get confusing, the frequent opening and closing of credit card accounts can hurt your credit score/rating.

RIGHT: Take advantage of a credit card’s 0% interest offer on purchases. This can be a smart way to purchase a large household item, such as a new appliance. “Definitely consider these offers, as long as you have the discipline to pay off the amount of the purchase in the allowed time period,” says Persaud, noting that many such offers require the balance associated with the offer to be paid within a specific period, such as three or six months.

WRONG: Open and use a credit card to earn miles, points or other perks, even though the card carries a higher interest rate than other cards and you’re not committed to paying off the card balance in full each month. The debt burden this creates can be difficult to escape.

RIGHT: Use a credit card to earn points, miles or other perks, when you’re committed to paying off that card’s balance each month. Those perks can prove valuable for travel and other pursuits, notes Persaud.

 

RIGHT: Use a credit card for business expenses for which you will be reimbursed. This not only helps track business-related expenses, according to Persaud, but also can be a good way to rack up points, miles or other perks.

WRONG: Use a credit card to fund the launch of a business, without business revenue to pay off the card balance each month. This is a bad idea, she says, because missed payments can harm the business’s and the business owner’s credit score/rating.

 

RIGHT: Use a credit card to pay certain regular household expenses, such as utility bills, when you’re committed to paying off the card balance in full each month. This makes sense as another way to earn points, miles, etc., says Persaud.

WRONG: Use a credit card to cover regular household expenses, though you’re unable to pay the monthly card balance in full. Here’s another approach that invites debt problems.

 

This column is provided by the Financial Planning Association® (FPA®) of Northeastern New York, the principal professional organization for Certified Financial PlannerTM (CFP®) professionals. FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process. Please credit FPA of Northeastern New York if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION. The marks may not be used without written permission from the Financial Planning Association.