Friday Financial Five – June 20th, 2014

Friday, June 20, 2014

Dan Forbes, GoLocalProv MINDSETTER™

 

Some bits of good news for May

View Larger +

Last month included positivity, as the country added over 200,000 jobs and the consumer price index (CPI) jumped 0.4%, the largest increase in over a year. While higher employment is typically considered good, it’s counterintuitive to see higher inflation as positive. Economic growth is in the doldrums, so increased prices could mean a strengthening of the economy and upward wage pressure. Continued growth might lead to higher interest rates, cacophony to the ears of those buying a house or car, but this would be indicative of a healthier economic environment. On the jobs front, May’s growth was strong for the third month in a row, and the lion’s share took place in the private sector.

Another tool to help Social Security decisions

Trying to compare different Social Security projections can be onerous, but this tool helps users assess comparisons depending on what age they take their money. The decision about when to take Social Security should not be taken lightly, and there is no shortage of information available to assist in the decision. Of course, with recipients now more informed than ever, it’s possible that lawmakers will have to change options because too many people are learning how to maximize their benefits.

$10,000 fine possible for not reporting offshore accounts

By the end of the month, those that hold an account offshore or have authority over one may need to file an FBAR– Report of Foreign Bank and Financial Accounts. This applies to those with an aggregate of accounts over $10,000 at any time during the calendar year and must be filed directly with the Treasury. Those with higher amounts may need to file a form to comply with FACTA. The penalty for non-compliance can be steep, with the minimum fine being $10,000. Check here for specific details. This may even apply to those that have signing authority on a relative’s bank account in another country, so it may be time to reconnect with those long lost relatives.

GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST

Two pertinent Supreme Court financial rulings

The U.S. Supreme Court ruled on two issues that could have financial bearing for individuals. First, they ruled unanimously that there is no protection for inherited IRAs from creditors in a bankruptcy. This could have serious ramifications for indebted children who inherit assets from baby boomer parent savers. More recently, the Court ruled that taxpayers can challenge IRS summons enforcement actions. This means a taxpayer is entitled to a hearing, though limited in nature, to determine if the IRS summons was issued in good faith.

The Clinton’s efforts to protect their estate

This Bloomberg article on Bill and Hillary Clinton’s use of estate planning strategies is mildly amusing. They would hardly be the first politicians to decry or champion a policy publicly while privately protecting themselves from a perceived financial harm. The irony is that, due to this story and the couple’s popularity, it’s possible that they’ve inadvertently inspired members of the public to get their estate planning in place and minimize estate taxes.

Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected].

 

Related Articles

 

Enjoy this post? Share it with others.

 
 

Sign Up for the Daily Eblast

I want to follow on Twitter

I want to Like on Facebook