Mark Your Calendar

Mark Your Calendar

The beginning of any new year is a time for resolutions, like eating well, exercising, and flossing regularly. It is also a good time to think strategically about your financial life and, if necessary, resolve to implement a seasonal planning process that could make you “financially fit” by year end. A good place to start is with your investment plans, which should be defined in writing, and include information about your risk tolerance, time horizon, personal goals and return expectations. A formal policy statement should be created that guides initial investment decisions, and provides the framework for the on-going management of your assets.

The annual “March Madness” of tax compliance is unavoidable, but it is also a good time to do some related planning. For example, it might be a good year to exercise some non-qualified stock options if you plan to hold the stock, and thereby convert any future appreciation from ordinary income into capital gains—if held at least 12 months. Since most tax issues are personal, they require careful individual planning and you should have an in-depth discussion with your tax advisor.

Spring is a time for renewal and hope, but financial risks remain, so make sure insurance coverage is appropriate and adequate. Determine if life insurance is needed and structure it to cover survivor expenses and not necessarily to replace income. Except for estate liquidity needs, consider coverage only for the period during which you would have otherwise provided for dependents. Unless you still enjoy skydiving, disability is probably a greater risk, and group policies are typically the best, and cheapest, coverage—though supplemental coverage might be needed. Long-term care insurance depends on personal circumstances including health, family history, and financial resources. On the home front, insurance companies used to guarantee full replacement, even if rebuilding costs exceeded original policy amounts; but payouts are now usually limited to specified values, so make sure that they are sufficient. Additional premium discounts can usually result by combining auto and homeowners policies with the same insurer. Don’t forget personal liability—or umbrella—insurance, which offers extra protection for your assets if, for example, someone slips on your front doorstep.

As you celebrate Independence Day, feel “free” to think about your own freedom from work, but resist the temptation for summer daydreaming. Be realistic about your retirement plans and carefully consider different possible outcomes based on current portfolio values, estimated expenses, and other assumptions like expected returns. Monte Carlo analysis, which mathematically simulates thousands of possible scenarios, is especially helpful with cash flow calculations.

In the fall as school begins, examine 529 Plans and their potential for tax-free compounding and qualified withdrawals, which could make them attractive for college planning. They also offer estate planning opportunities to get assets out of your estate but still retain some control over them. As the days grow shorter, think about other estate plans. A simple will is a must and easy to implement. Various trusts exist for many reasons, including protection of privacy, avoidance of taxes, and philanthropy. Verify existing documents that might need to be updated and revised because of recent tax law changes or personal changes like new offspring.

By Thanksgiving, you might feel charitable and yet reluctant to make significant commitments to specific causes. If so, consider donor-advised funds, which allow current year deductions but delayed grant making. You can also give $14,000 to anyone without tax consequences. As the year ends, make any tactical moves like deferring income or accelerating deductions; however, consider doing the reverse if you are subject to alternative minimum tax (AMT) or expect to make more money next year. Determine how 2014 looks versus 2015 and beyond, and strive to achieve the lowest tax burden over multiple years. Tactical decisions depend on the calendar, but they ought to be considered in advance and simply implemented “at the last minute.” This is what planning is all about, and it should enable you to have “peace of mind” at a time of year when you should be thinking about “peace on Earth.”

Articles and Commentary

Information provided in written articles are for informational purposes only and should not be considered investment advice. There is a risk of loss from investments in securities, including the risk of loss of principal. The information contained herein reflects Sand Hill Global Advisors' (“SHGA”) views as of the date of publication. Such views are subject to change at any time without notice due to changes in market or economic conditions and may not necessarily come to pass. SHGA does not provide tax or legal advice. To the extent that any material herein concerns tax or legal matters, such information is not intended to be solely relied upon nor used for the purpose of making tax and/or legal decisions without first seeking independent advice from a tax and/or legal professional. SHGA has obtained the information provided herein from various third party sources believed to be reliable but such information is not guaranteed. Certain links in this site connect to other websites maintained by third parties over whom SHGA has no control. SHGA makes no representations as to the accuracy or any other aspect of information contained in other Web Sites. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. SHGA is not responsible for the consequences of any decisions or actions taken as a result of information provided in this presentation and does not warrant or guarantee the accuracy or completeness of this information. No part of this material may be (i) copied, photocopied, or duplicated in any form, by any means, or (ii) redistributed without the prior written consent of SHGA.


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All video presentations discuss certain investment products and/or securities and are being provided for informational purposes only, and should not be considered, and is not, investment, financial planning, tax or legal advice; nor is it a recommendation to buy or sell any securities. Investing in securities involves varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular client’s financial situation or risk tolerance. Past performance is not a guarantee of future returns. Individual performance results will vary. The opinions expressed in the video reflect Sand Hill Global Advisor’s (“SHGA”) or Brenda Vingiello’s (as applicable) views as of the date of the video. Such views are subject to change at any point without notice. Any comments, opinions, or recommendations made by any host or other guest not affiliated with SHGA in this video do not necessarily reflect the views of SHGA, and non-SHGA persons appearing in this video do not fall under the supervisory purview of SHGA. You should not treat any opinion expressed by SHGA or Ms. Vingiello as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of general opinion. Nothing presented herein is or is intended to constitute investment advice, and no investment decision should be made based solely on any information provided on this video. There is a risk of loss from an investment in securities, including the risk of loss of principal. Neither SHGA nor Ms. Vingiello guarantees any specific outcome or profit. Any forward-looking statements or forecasts contained in the video are based on assumptions and actual results may vary from any such statements or forecasts. SHGA or one of its employees may have a position in the securities discussed and may purchase or sell such securities from time to time. Some of the information in this video has been obtained from third party sources. While SHGA believes such third-party information is reliable, SHGA does not guarantee its accuracy, timeliness or completeness. SHGA encourages you to consult with a professional financial advisor prior to making any investment decision.

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