Hello, and welcome to this month’s issue of my newsletter, which I hope will give you some financial food for thought as you make your way through November.
In this week’s podcast, you’ll meet Jason Friedman, the founder and CEO of AdvisorFinder. This month, he launched AdvisorFinder, an organization on a mission to build an online marketplace where people can search for the perfect financial advisor for them.
CNBC: “3 lesser-known ways to trim your 2022 tax bill or boost your refund before year-end”
November 25, 2022 — “After nearly a year of high inflation, rising interest rates, and stock market volatility, it’s easy to see why many Americans are cutting back on holiday gifts, says Kate Dore, CFP® in today’s article on CNBC. “While it may not feel like a top priority, experts say trimming your 2022 tax bill may boost your finances going into the New Year.”
As a result, she advises, “You’ll need to estimate your 2022 income, and possibly beyond, to know if these strategies make sense for you. When in doubt, it may pay off to run projections with a tax advisor.”
Kate turned to Marguerita Cheng, CFP® Pro, who suggested we prepare future medical expenses for a deduction.
“It’s not easy to claim the medical expense deduction,” Marguerita knows. “For 2022, there’s a tax break for unreimbursed medical expenses that exceed 7.5% of your adjusted gross income. But can only claim it if you itemize deductions. Typically, you’ll itemize if deductions — including charitable gifts, medical expenses and more — exceed the standard deduction, which is $12,950 for single filers or $25,900 for married couples filing together for 2022.
Knowing where each partner stands in financial discussions will go a long way toward keeping the peace in the relationship, even when it comes to issues like long-term care insurance.
November 20, 2022, Kiplinger — While money discussions might not be as important when two people are only dating, once they decide to take the next step, financial discussions before living together – as married or unmarried partners – must begin to take center stage.
Yes, some issues are more important to partners than money. But the recent experience of one of my clients has once again reminded me why potential partners should talk about money before moving in with each other. While Susan has robust insurance coverage that will protect her and provide care in the event of a long-term care event, Mike has an aversion to insurance and planning for the unexpected.
Such differences in opinions and attitudes become more significant when the responsible partner must bear the burden of the irresponsibility or indifference of the other party. Who pays when the partner indifferent to long-term care ends up needing it? Such situations can strain whatever love and affection started the relationship in the first place.
My client’s situation is often the experience of those in their second marriages or cohabiting with another partner after leaving their marriage. However, this situation is not unique to new partners, as married couples can also have conflicting attitudes toward financial planning.
What can financial advisers do to help potential partners or people who are already living together avoid, or resolve, these difficult situations? Click here to read more!
Marguerita Cheng, CFP® Pro, is elected to the Certified Financial Planner Board of Directors
November 15, 2022, CFP® Board – The Certified Financial Planner Board of Standards, Inc. (CFP Board) today announced that its Board of Directors elected three new members: Marguerita (Rita) Cheng, CFP®, Richard Shaw, CFP® and Steve Wallman. The Board of Directors is the policymaking and oversight body of the CFP Board and acts on behalf of the public, CFP® professionals, and other stakeholders.
“We are excited to have these three talented and accomplished individuals join the Board of Directors,” said CFP Board chair-elect Dan Moisand, CFP®. “Rita, Richard, and Steve bring diverse perspectives and insights to the Board. I look forward to working with them to benefit the public and uphold CFP® certification as the recognized standard of excellence for competent and ethical financial planning.”
The Big Reveal Show: Today’s Spotlight is on Marguerita Cheng, CFP® Pro
November 11, 2022 — On today’s episode of the Big Reveal, host Suzanne Siracuse interviews Marguerita Cheng, CFP® Pro, who offers advice on building her practice from scratch to becoming referrable to the importance of empathy, ethics, and risk.
Suzanne explains: “In this episode, the CEO of Blue Ocean Global Wealth shares how she used her life experience to jumpstart her career as a planner, the keys to making yourself referrable, and the undeniable power of empathy. She also shares practice management tips, why she teaches ethics, and her methods for communicating with clients during uncertain times.”
November 5, 2022: As a CFP® professional, your clients typically come to you because they want to plan for their futures. But what happens if one partner wants to plan and the other doesn’t? What if a couple has different financial situations and needs long-term care? Who will take care of them? These are challenging scenarios to navigate, but here are a few guideposts to help you on the way.
Paying for the partner who didn’t plan: What happens if the partner who didn’t plan for long-term care winds up needing it? The partner who planned ends up burdened with the financial and physical needs of the partner who didn’t. This is a recipe for a relationship breakdown, among other things. A married couple may need to spend down assets to qualify for Medicaid. Similarly, an unmarried, cohabitating couple may need to spend down one partner’s assets. In each case, what may conserve assets and solve some of these issues is if the healthy partner is willing to take on some of the caretaking cost and labor. On the other hand, the physical and financial strain could lead to the relationship ending. Spouses and partners should address who will take responsibility for the “what if” scenarios when either needs long-term care. They might need legal documents like trusts, wills, or prenuptial agreements to proactively address these scenarios.
November 3, 2022, Financial Advisor and Bloomberg — Marguerita Cheng, CFP® Pro, is featured in today’s article by Mackenzie Hawkins, who writes, “The Powerball jackpot swelled to an estimated $1.5 billion after no winner was declared in Wednesday’s drawing, nearing a record payout. As Americans flock to buy tickets for the next drawing on Saturday, it’s a good idea to think about how you would manage that much cash in the extremely unlikely chance — about one in 292 million — that you win. It’s no small task, and inflation, interest rate hikes, and a looming recession make it that much harder.”
Mackenzie explains that the lucky winner will have to choose between 30 annual payments that grow 5% each year and average $31.54 million after federal taxes or an immediate cash payout of $745.9 million, which would drop to roughly $470 million after federal taxes. There’s an argument for each strategy.
Marguerita, chief executive officer of Blue Ocean Global Wealth in Maryland, says: “The exact composition of that portfolio is really a function of the person’s risk tolerance and their time horizon. A lottery windfall is a great opportunity for impact investing as well as charitable or philanthropic giving.”
CNBC: “3 lesser-known ways to trim your 2022 tax bill or boost your refund before year-end”
The Big Reveal Show: Today’s Spotlight is on Marguerita Cheng, CFP® Pro
Rethinking 65: “When One Partner Plans for LTC — and the Other Doesn’t”