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For people who work conventional jobs, preparing for retirement is straightforward. Work, save and then retire when you have accumulated enough money to last for the remainder of your life. For business owners, there are a lot of different factors that can come into play when planning for retirement. For people who worked hard to build a successful business, leaving the business, and beginning retirement is not cut and dry. There are financial and emotional considerations that accompany walking away from your life’s work. As a business owner, you probably have given some thought to what will happen to your business when you are ready to retire, but you may have options available that you hadn’t considered. Common ways that business owners stop working include family succession, retiring while retaining ownership, selling outright or liquidation. Understanding your options and understanding which solutions will work best for you and your business are important aspects of business continuation planning. Your business likely has assets such as real estate or equipment, but have you considered other parts of your business that have a intangible value to you? Assets, current earnings, projected future earnings and even your ideas (intellectual property) factor into your business’s value. Understanding your business’s current value can help you to grow your valuation to position yourself more favorably for the future. A formalized business valuation will outline a detailed explanation of the worth of your company and can be valuable in helping you determine the market value of assets that may be liquidated or for determining the sales price of your business. You may choose to purposely grow your business to make it more marketable or you may determine that it is attractive as it. This can also help you determine any tax consequences that may occur with the sale of your business. Have you considered who might want to step into your business when you retire? For many people a business partner or family member are the logical choice, however it’s not the only option. You may consider selling your business to someone that you don’t know such as a competitor. You may choose to sell it yourself or use a broker to market and negotiate a deal. Selling your business to someone you don’t know can take considerable time. If you are choosing to sell your business, you may want to get the ball rolling sooner than you expect to retire. It can take years to find a suitable buyer and sometimes deals fall through. Many times, when a buyer is assuming the business, the former owner will stay on for a period to help transition the business over and retain revenue and preserve client relationships. As a seller, you may also choose to finance the sale, which may be an attractive option for buyers. While you may have envisioned leaving your business behind completely, you may consider stepping back and allowing employees and managers to handle your business while retaining ownership. For some businesses, this is a feasible option that can provide an income source for you while you enjoy additional freedom. When choosing to retain ownership, you may however, find yourself at a crossroads at some point in the future when you decide to relinquish ownership. Determining how you will exit the day-to-day operations of your business can be a big undertaking. Careful planning can allow you to feel like you’ve exited on your terms. If you are not sure where to start, a business consultant who specializes in Business Continuation Planning or Exit Strategy Planning can help. Together, you can create a customized approach to exiting your business. Not sure where to start? We can help. Our team of business consultants are ready to help you create an efficient transfer of your business.   Rebecca Agamaite Investment Advisor Representative  Rebecca joined the firm in 2011 as an Investment Advisor Representative. In this role, she works with clients to manage their investment assets and help them obtain their financial objectives. Rebecca brings a great deal of experience to the team having worked for several years at Marshall & IIsley Bank and MetLife. She earned a Masters of Business Administration degree (with an emphasis on finance) from Concordia University. Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin.   Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security.  Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses.  Please do not send orders via e-mail as they are not binding and cannot be acted upon.  Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation.  This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services.  Any subsequent, direct communication by AMG  with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.  A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

While the term Sandwich Generation may be unfamiliar, you, or someone you know is likely part of this growing demographic. Between the trend of people starting families later and grown children leaving the nest later, many middle-aged adults are left feeling like they are stuck in the middle of people needing their help. This pinch can leave people feeling stressed out but can also have financial ramifications. If you find yourself sandwiched, here is what you should know when it comes to your financial future. Financially Supporting Others Although you may think of the day-to-day things that you do to help your loved ones such as running errands, providing transportation, or advocating for health care, many people also provide financial assistance for their loved ones. According to the U.S. Census Bureau, nearly 4.3 million adults provided financial support to their parents. This is roughly the same as the amount of people who pay mandatory child support. AARP reports that aside from money contributed to aging parents, nearly half of parents provide money to adult children over age 25. Self-Sacrifice for the Sake of Others While both men and women are part of the Sandwich Generation, the burden of caring for surrounding generations falls heavily on women. For women in the workplace, this can mean forgoing promotions, taking lower paying jobs that offer more flexibility, or even stepping away from the workforce temporarily. The pay gap between men and women is narrowing, but women often choose caring for family over financial advancement whether it is a long-term arrangement or a temporary situation. Caring for others can significantly affect what you save for retirement. Less saved and less growth on that money can create a huge gap in money for retirement. Time away from work or lower income can also affect pensions and Social Security. Since the squeeze of caring for others is a temporary situation, it is important to not lose sight of your own long term financial goals. Looking out for Loved Ones Most of us will come to a crossroad where tasks as simple as managing daily expenses or health care become difficult. People that are part of the Sandwich Generation often help their parents by becoming financial or medical advocates for their parents. When this happens, it is important to have the right authorization in place well ahead of time. Without planning, you may find yourself in a bad spot if your family member needs you to take over and they are unable to sign the necessary forms. Estate planning documents are typically drawn up by an attorney, however hospitals, doctors’ offices and financial institutions often have their own forms that they require. Here are a few documents that you may encounter: POA (Power of Attorney) grants someone the authority to conduct business on your behalf. Once someone has passed, this arrangement stops immediately. POD (Payable Upon Death) or TOD (Transfer on Death) is listing a beneficiary on accounts. If someone passes away and has a POD/TOD on an account, the account will transfer directly to the beneficiary listed. This is regardless of what is stated in a will. POD/TOD can be put on anything from a checking account to real estate. Health Care Directives tell others what kind of heath care you prefer or prefer to avoid. Although these topics can be uncomfortable, people should talk about how they should be cared for. Health Care Directives clearly spell out instructions about care if a person is close to death or has experienced a medical event they are not expected to recover from. Wills are documents that spell out the wishes for your property as well as outlining the care of dependent children and pets. If you are feeling sandwiched, there are resources that can help. Getting in contact with your local Aging and Disability Resource office is a great first step to helping parents. Aside from programing that can help low-income individuals, they also have resource libraries, educational events, and some have medical equipment that you can borrow for short-term needs. Your own financial and tax advisors may also be a great resource. You may feel hesitant to ask about your family members’ situations but know that they are here to help you navigate all of the situations that arise during your phases of life.   Rebecca Agamaite Investment Advisor Representative  Rebecca joined the firm in 2011 as an Investment Advisor Representative. In this role, she works with clients to manage their investment assets and help them obtain their financial objectives. Rebecca brings a great deal of experience to the team having worked for several years at Marshall & IIsley Bank and MetLife. She earned a Masters of Business Administration degree (with an emphasis on finance) from Concordia University. Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin.   Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security.  Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses.  Please do not send orders via e-mail as they are not binding and cannot be acted upon.  Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation.  This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services.  Any subsequent, direct communication by AMG  with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.  A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

Whether you are shopping for a new advisor, or you have had the same advisor for years, it is important to understand how your advisor and their firm generate revenue. While cost only seems to matter if you fail to see value in the services you are receiving, there are several reasons why it is good to understand the fee structure of your investments. Read more to learn about fee-based vs.  fee only financial advisors. Traditionally, the finance industry was made up of broker-dealers that hired a sales force to sell products. Registered representatives of these broker-dealers earn commission on products that they sold to clients. Products range from loaded mutual funds, brokerage accounts and insurance products such as annuities and life insurance. When transactions or trades are made, the advisor receives a commission. If no transactions are made, the advisor does not receive compensation. Advisors who work for broker-dealers are often referred to as brokers or registered representatives. In recent years, the industry has shifted, and more advisors are working with their clients under fee-only advisory platforms, managing assets for a fee and providing financial planning for a fee. Fees in most cases are assessed based upon how much money is being managed or how many hours are spent on planning, not on how many trades are made. This type of business is offered by a Registered Investment Advisor. Registered Investment Advisor or RIA firms focus on implementing advice driven solutions and work under a fiduciary standard. Investment Advisor Representatives are required to put their client’s best interests before the interests of the company, firm, and themselves. Some firms will choose to register as both a Broker-Dealer and an RIA firm. These dually registered firms blur the line between the two business models which can really be confusing to investors. Advisors who work under this model often refer to themselves as Fee-Based Advisors. They may choose to manage money or prepare financial planning for a fee and sell products. They can switch their role with a client at will and it can be difficult to determine when products are being sold and when fiduciary advice is being given. This can create a conflict of interest for an advisor who must choose between selling a product that creates commission or acting as a fiduciary. Some of the most expensive investments generate high commissions for advisors, which can mean higher costs for clients. Portfolios that have higher costs will need to be invested more aggressively to overcome the expense. If costs are excessive, portfolios may not be able to overcome the expense and may have disappointing returns. How can you avoid choosing advisors with possible conflicts of interest? Choose Fee-Only. Fee-Only Registered Investment Advisors are required to always work under a Fiduciary Standard. They do not sell products, are not registered as sales agents for any investment company. They do not use investments to generate commissions and are never compensated by anyone other than their client. They are not swayed to choose one investment over another based upon how they will be paid. It can be hard to determine whether an advisor is a Fee-Only Fiduciary or Fee-Based Dually Registered Advisor, but you can determine the difference by asking the right questions. Check out this Fiduciary Questionnaire that can help you differentiate between Fee-Only Fiduciaries and Fee-Based Advisors.   Rebecca Agamaite Investment Advisor Representative  Rebecca joined the firm in 2011 as an Investment Advisor Representative. In this role, she works with clients to manage their investment assets and help them obtain their financial objectives. Rebecca brings a great deal of experience to the team having worked for several years at Marshall & IIsley Bank and MetLife. She earned a Masters of Business Administration degree (with an emphasis on finance) from Concordia University. Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin.   Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security.  Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses.  Please do not send orders via e-mail as they are not binding and cannot be acted upon.  Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation.  This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services.  Any subsequent, direct communication by AMG  with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.  A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

This year, the average American household plans to spend over $1000 this holiday season on gifts, decorations, travel to family, and holiday meals. This, on top of normal monthly spending, can make December one of the most expensive months of the year. Without a plan of attack, December’s holiday magic can easily turn into January’s credit card nightmare. Taking just a little time now (even just an hour) can save you a lot of stress, money, and time later on when you’d rather enjoy the holiday season. Keep reading for a few easy, important tips to get organized now for a successful shopping season later. Part one: 5-step early holiday shopping budget 1. Review last year’s budget Dig out last year’s shopping list. In today’s digital age, “digging out” last year’s shopping list is hopefully as easy as opening a saved file on your computer, tablet or smartphone. Take a look at who you shopped for last year and how much you spent. This can refresh your memory, help create a budget for this year and kick-start your new shopping list. 2. Set a maximum spend and account for extras Knowing how much you spent on gifts last year is helpful, but you should also survey this year’s financial situation to see how much you can afford to spend. If you have a savings account for holiday shopping, check the balance. Also see what expenses are coming up and make sure you have a cushion for emergencies. When creating a budget for the holidays, give yourself a spending limit for gifts and don’t forget to account for entertaining and party hosting, decorations and travel costs. For even more control over your budget, you can narrow down a budget per person on your shopping list. If this is sounding like more lists than you know how to manage, you’ll want to check out the next tip. 3. There’s an app for that Download a holiday planning app. Technology saves the day again: There are several helpful (and free) apps to help you plan, budget and organize the holiday season. Santa’s Bag is a popular iOS app that gives you an easy and colorful platform for budgeting, planning and checking off the items on your list. You can create a total budget amount and an amount per person, and the app will automatically update your budgets when you tell it how much you spent. The app allows you to enter everything from your gift ideas to whether an item has been purchased and even wrapped. Christmas Gift List is a similar solution for Android users with the ability to track all your shopping, keep an overall and per person budget, and even archive lists so you can check back on previous years. 4. Prioritize shopping After you start your list, you might notice there are a few gifts that are more specific than others. Your wife might be hoping for a new cashmere sweater, but your daughter has that specific new smartphone in mind – plus, she’d love it in that hard-to-find color. For gifts that will fly off the shelves early, make it a priority to get these first. Note which gifts on your list need early attention and which ones are more generic or flexible that can wait until later. 5. Subscribe to stores and coupon websites Now is the perfect time to get on the email lists of the stores where you know you’ll do most of your shopping. You’ll be first to know when they have flash sales or free shipping days. You can also follow the accounts of your favorite shops on social media for exclusive sales and promotions. Subscribe to coupon and cashback websites and sign up for alerts now, and you’ll have all the best deals hitting your inbox directly – the perfect solution when you need an idea for the sibling who has everything. See, that wasn’t too hard. Now that you spent a little time getting organized for the holidays, you can go back to enjoying the season. Part two: Tips for sticking to your budget (and saving money) 1. Shop online Using a credit card is the most secure way to shop online. It is easier to dispute a fraudulent transaction on a credit card than with a debit card. Remember not to charge anything you cannot pay off when the statement comes. Check multiple websites to make sure that you are getting the best deal. Aim to get free shipping and check for coupon codes. Avoid paying more for something than you should. Items like gaming consoles and other highly desired items are often sold brand new by private parties for a healthy upcharge to parents who are willing to pay anything just to get something that they can’t find in the stores. These items can often be purchased at a fair price after the holidays when the demand drops. 2. Avoid holiday scams and frauds Be mindful of your purse, wallet, and credit cards. Watch for skimming devices and be discreet about how you enter your PIN number. Track packages and know when they are being delivered. Arrange to have them shipped to your place of employment or to have a neighbor pick them up off your porch. Be wary of vendors selling goods online who ask for gift cards as payment. This is a common internet scam, and it is likely that you will not receive the goods you purchased. Review your credit card statements often. Report and dispute any suspicious transactions right away. More holiday budgeting tips from Advisors Management Group By being prepared and organized, you can save time and money so that you can focus on what really matters this holiday season. When you’re ready to get started with robust financial planning, call Advisors Management Group. May your shopping be stress-free and may your holiday season be merry and bright!

Are you one of the millions of Americans who have changed jobs during the pandemic? A report published by Prudential Financial, states that at least 26% of the workforce will change jobs during the current year. Changing jobs can carry a mix of emotions depending on the reason for the career change. Regardless of the reason for the job change, one thing everyone needs to know is what their options are with their 401k account from a previous employer. After you leave your job, you have four options for your old 401k account. Option 1: Leave it where it is. In most cases, you can leave your 401k in the former employer’s plan.  This option requires the least amount of work since there is no additional paperwork needed. Also, your account is still able to grow tax-deferred until you withdraw funds. While this option might be an easier option it may not be the most advantageous. One of the limits of a 401k plan is that there can be fewer investment options. Also, 401k maintenance fees may be passed on to you, which can increase the expenses of the 401k plan. Another restriction is that you cannot contribute to a 401k once you no longer work for that employer. Finally, it can be complicated to keep track of where you have funds if you have multiple 401k with past employers. Option 2: Roll it over to your new employer If your new employer has a 401k and the plan allows rollovers, consolidating your 401k from your previous employer with your new employer may make it easier to keep track of where your funds are located.  Earnings will accrue tax-deferred until you withdraw funds. Some 401k plans allow loans, by rolling over your previous 401k to the new one you may be able to borrow against that balance in the future. The are some potential downfalls of rolling over your 401k to a new employer. Most 401ks plans have limited investment options.  Those investment options can be replaced by the plan trustee without your approval. In addition, record keeping and administrative fees of the plan may be passed on to you. Option 3: Cash out your 401k Cashing out your 401k is another option for an old 401k. While this option allows you to gain access to your funds, it usually carries a penalty if you don’t meet certain qualifications. If you withdraw the money from your 401k and do not meet the required qualifications for a withdrawal (such as age, typically 59.5, financial situation, or disability) you will be required to pay a penalty for the early withdrawal. In addition to the early withdrawal penalty, income tax may also need to be paid on the withdrawal. Option 4: Rollover 401k to an Individual Retirement Account (IRA) Rolling your 401k to an IRA allows for the most flexibility with your investment choices. This can give you access to mutual funds, exchange traded funds, stocks and bonds, to name a few.  You may also have greater flexibility with investments that provide income, such as dividends and interest.  IRAs can provide for greater flexibility with withdrawals and various tax withholding.  IRAs continue to allow for tax deferred saving. There are some possible disadvantages to using an IRA.  You are not allowed to take a loan against an IRA.  Depending on your investment choices there could be upfront commissions, high annual fees or even back-end charges limiting you from withdrawing money from the IRA within a certain period of time. It is important to remember everyone’s situation is different. When deciding what is the best option for you, it is wise to research all options and understand the fees involved with those options. These decisions are difficult, and you may want to reach out to a financial professional to assess your situation. In doing so, we suggest you work with a fiduciary, an advisor that works in your best interest. Shay Benedict Trading Specialist Shay joined Advisors Management Group in June of 2020. Shay works as a Trading Specialist for AMG. He works alongside the advisors to trade client portfolios. He helps to provide continuous improvement within the trading department, to ensure we meet our client’s needs. Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin.   Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security.  Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses.  Please do not send orders via e-mail as they are not binding and cannot be acted upon.  Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation.  This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services.  Any subsequent, direct communication by AMG  with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.  A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

You may have heard people talk about bull markets and bear markets or even use the term to describe how they feel about investing. You may hear people say, “I am feeling bullish” or “I am feeling bearish, but what exactly are they talking about? While the actual reason behind why bulls and bears have become synonymous with investing is unclear; history is full of folklore on why this association has been made over time.  One theory is that the bear representation comes from bearskin traders who would sell bearskins prior to receiving them from trappers in hopes that the future prices would drop and result in a bigger profit.  Bulls were considered the opposite to bears, stemming back to medieval times where blood sports pitted the bear against the bull in a battle to the death. Let’s break it down because once you know, it is easy to remember the difference and you can even begin to use these terms in your own conversations. The terms “bull” and “bear” are thought to come from how these animals attack their opponent. A bull attacks with its horns and pushes its opponent upward. Therefore, a bull market is a market that is going up. If market enthusiasm has got you excited, you are bullish. You are optimistic that the market will continue to go up. On the other hand, when a bear attacks, it claws its victim downward. Therefore, a bear market is going down. If you find yourself feeling pessimistic then you are bearish and you are expecting the market to drop. While we many never know the exact origin of the terms bull and bear markets, they will continue to be commonly mentioned in the world of investing. Rebecca Agamaite, MBA Client Experience Manager, Investment Advisor Representative Rebecca joined the Advisors Management Group in 2011 as an Investment Advisor Representative. Rebecca brings a great deal of experience to the team having worked for several years at Marshall & IIsley Bank and MetLife. 

It has been nearly a year and a half since the pandemic began and while many businesses are beginning to see things start to return to normal there are many other small businesses that are still struggling because of the pandemic. For those business that were negatively impacted by the pandemic several programs have been launched to provide those business with some additional financial support.  Many of these programs for small businesses were a part of the various stimulus packages that were created throughout 2020 and the early part of 2021. Along with the stimulus payments for qualifying individuals, there were programs created specifically to help small businesses deal with the impact of the pandemic. While many of these programs are based on wages paid to employees, the actual money provided by the programs in some situations can be spent on other necessities to continue business operations.  Payroll Protection Program Loan First, there was the Payroll Protection Program Loan. This loan had a first draw and possibly a second draw if your business experienced a decrease of 25% in revenue. These loans could possibly be forgiven and not taxed by the federal government.  Taxation can vary from state-to-state. They required an approved application based on spending requirements, mostly tied to payroll. Shuttered Venue Operators Grant / Restaurant Revitalization Fund Depending on the industry or nature of your operations, some businesses also qualify for the Shuttered Venue Operators Grant or the Restaurant Revitalization Fund.  The Shuttered Venues Grant is meant for those businesses that host live events, such as concerts, and were not able to be hold those events over the past year.  This grant does have an order of priority which is determined based on the magnitude of the revenue loss experienced by the venue from April 2020 - December 2020.  If a business received a PPP Loan, it may reduce the amount of the grant for the business. Restaurants, food carts and trucks, bars, saloons, bakeries, breweries, wineries and other businesses whose on-site sales comprise 33% of their revenues could qualify for the Restaurant Revitalization Fund.  The purpose of this loan is to account for lost revenues from 2019 to 2020 based on the business’s tax returns but are reduced for any PPP Loans received.  Both programs have requirements on how the funds are to be used and there can be additional reporting required in order to meet the requirements of these programs. Employee Retention Credit The final program is the Employee Retention Credit (ERC). The ERC is different than the previous programs because there is no application that needs to be completed and it is not submitted to a bank or the Small Business Administration (SBA).  The Employee Retention Credit is something a business can qualify for if either of the following occurred for 2020. 1) Gross Receipts decrease of 50% when compared to 2019 2) The business was fully or partially suspended by a government order due to COVID-19 during the calendar quarter. If either of those situations occurred and the business has less than 100 full-time employees, wages paid during those specific periods could be eligible for a credit of 50% on a maximum of $10,000 of wages per employee.  The $10,000 figure for 2020 is the full-year maximum. However, in 2021, there are a few changes, the first one being that you only need to experience a 20% decrease in gross receipts when compared to 2019, and the second is the eligible wages are $10,000 per quarter and a 70% credit on those wages. Understanding and coordinating all these programs can be an overwhelming task since each business’s situation is unique and could have a different plan when it comes to combining these relief opportunities. If you think your business could benefit from a discussion on any of the above programs, please reach out to Advisors Management Group today at (800) 488-4032 or schedule a meeting with a team member. Adam Pederson, EA Director of Business Consulting , Senior Accountant Adam joined the Advisors Management Group team in December 2015 and is now the Director of Accounting and Consulting. He has worked extensively in the accounting industry as an Assistant Controller and a Senior Accounting Analyst before coming to Advisors Management Group.

The financial world can seem a bit like alphabet soup at times, with so many acronyms used. QCD, RMD, IRA, ETF, and on and on. Today we will be highlighting one of these acronyms, in hopes of helping you understand if you could benefit from the QCD tax strategy. What is a QCD? In the financial world, “QCD” stands for Qualified Charitable Distribution. Normally when you take a draw from your Traditional IRA you are taxed on these dollars, even if you donate them to a charity later. However, amounts distributed as a QCD are excluded from your taxable income. What’s the difference?  Generally, if you take money out of your Traditional IRA, it counts as taxable income. Having more taxable income can move you into a higher tax bracket and may reduce your eligibility for some tax credits and deductions.  It can also cause more of your social security income to be taxable.  A donation given through a QCD can lower your taxable income, as opposed to a donation given from a regular IRA distribution. If you do not use a QCD, you could receive a deduction for your donation on your tax return if all of your itemized deductions are greater than the standard deduction for your tax filing status. With the higher standard deduction, fewer people are itemizing and are not getting a full deduction for their donation.  What are the rules for a distribution to count as a QCD? You must be at least 70 ½ years old at the time you request the funds Funds must be transferred directly from your IRA to a qualified charity. Have your custodian make the check payable to the charity. Only certain accounts are eligible for QCDs Traditional IRAs Inherited IRAs SEP IRAs SIMPLE IRAs The maximum annual QCD limit is $100,000 per individual. How are QCDs reported on your income tax Return? A QCD, from a non-inherited IRA, is generally reported as a normal distribution on tax form 1099-R; for inherited IRAs, it is generally reported as a death distribution.  For this reason, it is important to keep a copy of the receipt you receive from the charitable organization for tax documentation.  QCD and the RMD Requirement Once you are age 72 or older, the IRS requires that you take a certain amount out of your tax deferred accounts each year.  This amount is called a Required Minimum Distribution, or “RMD.” Amounts taken as a QCD can work toward satisfying your RMD requirement.  If you are required to take out more money than what you need each year, a QCD could be option for you. If you have any questions or are wondering if a QCD is right for you, be sure to consult with your tax preparer or other financial advisor. Kate Pederson Investment Advisor Representative, Tax Preparer Kate joined Advisors Management Group in December 2017. Prior to joining the firm, she worked in manufacturing and healthcare during her career as a financial analyst.

Updated: March 26, 2020 There have recently been changes to the American Rescue Plan Act of 2021 that business owners should be aware of. We have highlighted a few of those changes below.  The Families First Coronavirus Response Act (FFCRA)-based leave may still take a payroll tax credit to cover wages paid has been extended through September 30, 2021. Additional Reasons Supporting Emergency Sick Leave – ARPA expands the reasons an individual may receive a tax credit for emergency sick leave to include: Is scheduled for the vaccine or recovering from adverse effects of COVID-19 vaccine. Is seeking or awaiting the results of a COVID-19 test when the employee has been exposed to COVID-19 or employer requested the test. Paid Sick Leave “Reset” – ARPA provides that employers may receive a tax credit for an additional 10 days of emergency paid sick leave between April 1 and September 30, 2021.  Nondiscrimination – ARPA requires that the employer extend emergency sick and/or expanded FMLA to all employees, not just to specific groups or classes of employees. Additional Reasons Supporting Expanded FMLA – Is now brought in line with the emergency sick leave reasons.  The employer can now claim a payroll tax credit for up to 12 weeks of leave for any of the following reasons: The employee is subject to or is caring for an individual who is subject to a federal, state, or local quarantine or isolation order. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 or is caring for an individual who has been so advised. The employee is caring for a son or daughter because the child’s school or place of care has closed or is unavailable due to COVID-19. The employee is receiving or experiencing negative effects from the COVID-19 vaccine or is awaiting the results of a COVID-19 test requested by the employer or necessitated because of close contact. Increase Cap on Expanded FMLA Dollars – The FFCRA had a cap of $10,000 of paid leave wages per employee, the ARPA raises the limit to $12,000. If you have any questions regarding the above information, please call us at (608) 782-0200. Updated: March 23, 2020 There has been new information released regarding the $10,200 unemployment tax break that was a part of the American Rescue Plan Act.  The IRS plans to automatically process refunds for taxpayers who had unemployment income in 2020 and filed their tax returns before legislation passed that made those benefits tax-free. The IRS Commissioner, Charles Rettig, is suggesting not to file an amended return at this time. The IRS believes they will be able to automatically issue refunds associated with the $10,200. People who had unemployment income in 2020 and have not yet filed their tax return may need to wait to ensure that they submit all information to the IRS correctly.   Both Wisconsin and Minnesota have extended the filing dates to May 17th for the 2020 returns. This extension does not include an extension for estimated payments thus far. Neither Wisconsin nor Minnesota have adopted the non-taxable unemployment as of March 18, 2021. Wisconsin will most likely have a Schedule I adjustment and MN has updated their tax form to make an adjustment to add back the non-taxable benefit to the MN return. As the IRS will releases more details in the coming days we will share more updates.    Updated: March 19, 2020 Recently, there have been new legislations and bills passed by the United States Government that could directly affect you. As we continue to learn more, we will update and post here on the latest news. American Rescue Plan Act An economic stimulus bill passed last week to speed up the United States recovery from the economic and health effects of COVID-19 pandemic. The American Rescue Plan Act will have major tax impacts for the 2020 and 2021 tax returns which include: Tax-Free unemployment benefits for 2020 Up to $10,200 of unemployment benefits received in 2020 is EXEMPT from federal income tax for households with an adjusted gross income under $150,000. If you are married, you and your spouse can each exclude up to $10,200 of unemployment compensation. If you have already filed your 2020 taxes, we suggest waiting for further guidance from the IRS. It is unknown if individuals will need to amend their taxes or if the IRS will automatically adjust. Retroactive refunding of the advanced premium tax credit If you qualify for a premium tax credit for healthcare purchased on the exchange and you had an excess premium tax credit for 2020, no repayment is required. If you have already filed your 2020 taxes, we suggest waiting for further guidance from the IRS. It is unknown if individuals will need to amend their taxes or if the IRS will automatically adjust. Stimulus checks to individuals $1,400 stimulus checks ($2,800 for married filing joint) will be issued to eligible individuals. This includes $1,400 for each minor and adult dependent.  This is different from the previous two stimulus packages that cut off payments for dependents that were 17 and older. There are income limits for this payment. You will receive the full payment amount if you fall beneath the thresholds listed below.  If your income is within the thresholds you will receive an adjusted payment amount. If your income is above the listed thresholds you will not qualify to receive a payment.  Single: $75,000 to $80,000 Married filing joint: $150,000 to $160,000 Head of household: $112,500 to $120,000 Distributing checks, the week of March 15th How will people get the check? Direct Deposit Physical checks-sent to home address Debit Cards-Prepaid Visa Card sent to home address Expanded child tax credit for 1 year (2021) Individual filers with income up to $75,000, married filers with income up to $150,000 and head of household filers with income up to $112,500 will get $3,600 for each child under 6 years old. For children 6-17 the credit is $3,000 When will people get the child tax credit? Families could receive half their total credit on periodic basis - up to $300/month per child up to age 6 and $250/month per child ages 6-17. This could start as early as July and run through the rest of the year. Families could claim the remaining half on their 2021 tax returns. Tax filers above the income threshold will still be eligible for the existing $2,000 child tax credit that phases out at $200,000 ($400,000 for married filing jointly). Required Minimum Distributions (RMD’s) Secure Act changed the start date for RMD’s from 70 ½ to 72 years if individual reaches age 70 ½ after December 31, 2019. If an individual turned 70 ½ after Dec. 31st, 2019, they are not required to take an RMD until age 72. If an individual turned 70 ½ in 2019 they are required to take an RMD by April 1st, 2020 but due to the CARES ACT the deadline was waived. If individual did not take their first RMD in 2020, they need to take it by April 1, 2021 and the 2021 RMD by Dec 31st, 2021. This only applies to those who turned 70 ½ in 2019 and did not take an RMD in 2019.   Deadline for 2020 Taxes to be filed for Federal extended until May 17, 2021. The deadline for State returns has not been determined.  We will continue to make updates as soon as we learn more. 

We spend a lot of time worrying about running out of cash in retirement. But you might be surprised to see some of the things you'll find yourself spending less on in your golden years. A popular retirement guideline suggests retirees need 80% of their preretirement income to make ends meet, and some experts encourage saving even more to avoid running out of money. Facing such daunting goals, 53% of preretirees say they plan on working past age 65 to ensure that they have enough money, according to the Transamerica Center for Retirement Studies. But the 80% rule isn’t for everybody, and it may lead to inflated savings goals that cause undue anxiety as you plan for retirement. Consumer spending actually decreases -- significantly -- as you age. Data from the Bureau of Labor Statistics shows the average retired household spends 25% less than the average working household. In order to know how much you need to save for retirement, it’s important to know what your spending will look like once you actually retire. Here’s a little pep talk: You’ve actually been practicing for retirement for the last year if you’ve been locked down this entire time. Now, consider these 10 budget line items on which you’ll likely spend less in retirement.   Transportation Life has turned upside down during the pandemic, with many of us working from our computers at home. If you’re still working remotely, that’s pretty much what your transportation life will look like in retirement: You’ll be using your vehicles far less -- my household temporarily went down to one car during the mandatory stay-at-home period. Plus: no more long commutes in rush-hour traffic. Pre-pandemic, the average worker spent roughly an hour a day commuting (in my case, three!)  For many, saying goodbye to rush-hour traffic and long commutes is a highlight of retirement.  Not only will you spend less on gas, you’ll also be saving money on vehicle maintenance, insurance and registration (as well as bus and rail fare) in retirement. Before retirement (and the pandemic), the average working household spent $9,761 each year on transportation. That number drops to $6,814 for the average retired household, a 30.2% decrease in household spending, according to the most recent data from the Bureau of Labor Statistics.   Clothing Before we were all in the pants-optional world of working from home, it's likely you spent what you needed to look sharp at your job. In retirement, no more pressed shirts or high heels, and your wallet gets a break from updating your work wardrobe. The average retired household spends $1,070 a year on apparel, while the average working household spends $1,866 a year. Also, factor in the money you’ll save on dry cleaning (averaging as much as $1,000 a year in some metropolitan locations). A caution though: Although household spending on apparel decreases overall in retirement, Marguerita Cheng, the chief executive officer at Blue Ocean Global Wealth, says that she sees spikes in spending from recently retired clients who feel the need to update casual wardrobes in the first few years of retirement.   Groceries Even if you dream of a retirement filled with steak dinners and brunch dates, chances are you’ll still spend less on the food you consume in and out of your house. The average household spends 25% less on food in retirement. According to Erik Hurst and Mark Aguiar, professors from the University of Chicago and Princeton University, the logic to this is simply that you have more time to shop. When you’re not in a hurry at the grocery store, you’re more likely to compare prices on similar products, use coupons and spend more time planning meals for the week ahead. Spending on dining out drops even more sharply — as much as 35%. Hurst and Aguiar say that the story behind this is similar. When you’re working, much of your dining out may be quick lunch runs or costly lattes on the way to work. Instead of patronizing fast-food restaurants more frequently, retirees reserve their eating-out dollars for table-service restaurants.   Entertainment Plenty of time for plenty of fun, am I right? No. There’s a common misconception that you’ll spend more dough-re-me in retirement on entertainment — concerts, movies, clogging, you name it — because you have more time. But the numbers don’t back this up. And who knows when entertainment venues will fully reopen to large crowds, if ever, post-pandemic? See how much you’re saving right now, pre-retirement? This decline likely corresponds with changes in mobility as you age. You may also be nervous about being in crowds as COVID-19 still rages. Or you just want to chill after years of slogging to the office. Even if you occasionally splurge to see your favorite college band, you may find yourself opting to watch Netflix instead of going out every weekend. But be careful. Streaming services are popping up everywhere, and their layered charges for more and better options can jack up your entertainment bill. We’re looking at you, Paramount+, Discovery+, Disney+ and all your compadres.   Mortgage Hopefully, you’ve timed this right: According to the Bureau of Labor Statistics, 61.7% of Americans between the ages of 65 and 74 don’t have mortgage debt, and 82.5% of Americans 75 and older are mortgage-free. To be sure, housing costs don’t disappear entirely in retirement. Even if you’ve paid off the mortgage, you’ll still spend on home maintenance, property taxes, utilities, and you’ll incur moving costs associated with downsizing, relocating or moving into senior-living facilities. Still, average annual spending on housing for Americans who are 55 to 64 is $18,006. It decreases to $15,838 for those age 65 to 74, and it drops further to $13,375 for those 75 and older.   Education The average retired household sees a big decrease in personal spending on education, setting aside just about $350 a year for any education, from pre-K through college. That is almost a 79% decrease from the $1,639 of average annual education spending of a working household. Even if you are thinking about going back to school in retirement, many colleges and universities offer classes free of charge (or nearly so)  to those age 65 (in some cases, 55-60) and up. Note: In calculating spending in retirement, the Bureau of Labor Statistics does not factor in money retirees contribute toward college-savings plans for their grandchildren.   Insurance The amount you’ll spend on insurance (excluding health coverage) drops dramatically once you hit retirement age. The average under-65 household spends approximately $8,100 a year on insurance—including annuities, life insurance and other personal insurance plans, such as homeowners insurance. In retirement, that number drops to $2,840, an almost 65% change in spending. Most people pay for life insurance while they have a family to support and may opt out once their children are no longer financially dependent. At the same time, retirees may be eligible for discounts on auto and homeowners insurance. Most states offer older adults discounts on car insurance if they complete a defensive driving class, such as those offered by AARP or AAA. And the Insurance Information Institute says that retirees are more likely to receive discounts on homeowners insurance because they are at home more often, reducing the risks of burglary and fire.   Alcohol and Tobacco Products The New York Times reports that in retirement  many Americans find they are less stressed—and therefore smoke and drink less, are less obese, and may be more inclined to exercise. A study by the Journal of Human Resources found that after a few years of retirement, adults are less at risk for serious illnesses, less likely to report loneliness, and may have an increased sense of purpose and camaraderie that lowers their likelihood to binge eat, drink and smoke.  (Only 9% of seniors smoke, compared with 15.5% of all adults, according to data from the Centers for Disease Control and Prevention.) The average working household spends $381 a year on tobacco and tobacco products, while the average retired household spends $198 a year, almost 50% less. Spending on alcohol also decreases in retirement. According to BLS data, the average working family spends $519 a year on alcoholic beverages, while the average retired family spends $370 a year.   Pets and Pet Supplies It’s often reported that having a pet in retirement can benefit your health in big ways. A four-legged friend can provide companionship for lonely retirees and encourage regular exercise. However, the promised perks don’t have to translate into massive spending. Working households spend an average of $553 each year on pets and pet supplies, while retired households spend approximately $477 on average. The Bureau of Labor Statistics says that having children, particularly older children at home, increases household spending on pets.   Taxes In an effort to ease the financial burden on retirees, many states waive or lower property taxes for those older than 65 and exempt a portion of retirement income—particularly from pensions, Social Security and retirement-savings plans—from state income taxes. According to BLS data, households in which the adults are 55 to 64 spend an average of $2,502 each year on property taxes. This number declines to $2,149 for households in which the adults are 65 and older, and to $1,924 in households where adults are 75 and older.   Source: Kiplinger