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Understanding Medicare in Retirement

According to AARP, couples age 65 who retired in 2017 were estimated to pay $275,000 for health care over the course of their retirement. This is a 6% increase over 2016’s projections, and over a 70% increase since annual research began in 2002. The majority of retirees will enroll in Medicare to help cover medical costs during retirement. However, there are several things you need to know about how Medicare works, and how to enroll in order to avoid penalties. Read the rest of this entry »


New U.S. Tax Law – Tax Rates for Individuals/Families in 2018

A sweeping new tax law has been passed in the United States by the House of Representatives and Senate this week. How will it impact you? Let’s take a look.

Update: President Trump has signed this law (H.R. 1), known as the Tax Cuts and Jobs Act of 2017, on December 22, 2017.

The following rates take effect January 1, 2018, however the IRS is not expected to have tax withholding tables or forms reflecting new rates until further into the calendar year 2018. Read the rest of this entry »


Callahan Financial Planning Adopts CFA Institute Asset Manager Code of Professional Conduct

CFA Institute Asset Manager Code

Callahan Financial Planning Company is proud to announce that the company has adopted the CFA Institute’s Asset Manager Code of Professional Conduct.

Callahan Financial Planning joins approximately 1,400 firms worldwide that have adopted this professional conduct code.

The Asset Manager Code of Professional Conduct outlines the ethical and professional responsibilities of companies that manage assets for clients. This code serves as a point of reference for investors, establishing clear policies on what investors can expect by working with a firm that has claimed compliance with the code. Read the rest of this entry »


New U.S. Tax Law – Options to Consider in the Final Days of 2017

A sweeping new tax law has just passed in the final days of 2017. Given the swift passage of this legislation so close to year-end, taxpayers have been left with limited time to respond proactively. Nonetheless, below are some last-minute options you may have for reducing your taxes due for 2017 (for tax returns prepared in 2018 for tax year 2017). Learn more about this new, December 2017 U.S. tax law that takes effect January 1, 2018 here.

Taking action in this final week of December, 2017 may be helpful for three reasons: 1) itemized deductions will be limited beginning in 2018, 2) tax rates are generally higher in 2017, rendering deductions more valuable in tax year 2017, and 3) ‘lumping’ itemized deductions, such as charitable contributions, together every few years may become more common under the new tax rules given the higher standard deduction and limitations to itemized deductions. Read the rest of this entry »


Equifax Data Breach – What Do I Need to Do?

Equifax, one of the three largest U.S. consumer credit agencies, announced this month that a large data breach occurred estimated to affect 143 million Americans, or more than 57% of American adults.

This breach is believed to have included the theft of highly sensitive personal information, including Social Security numbers, names, birth dates, and addresses. 

For this reason, we have outlined some immediate and long-term actions you can take to begin protecting yourself right away.

Read the rest of this entry »


The End of File and Suspend for Social Security

(Congress Plans to Close Social Security “Loopholes”)

This week, budget legislation (Bipartisan Budget Act of 2015) passed in Congress to remove the ability for spouses to take advantage of the Social Security strategy commonly known as file and suspend. Previously, the file and suspend strategy allowed Spouse A, at full retirement age, to file and suspend their own retirement benefits to earn delayed retirement credits. This also allowed Spouse B to begin receiving a spousal Social Security benefit at that time (while earning delayed retirement credits on Spouse B’s benefits as well). The new law prevents a spouse from claiming a spousal benefit and later switching to their own benefit.

This strategy, often debated as a “loophole” by some, became possible in 2000, when Congress passed the Senior Citizens Freedom to Work Act. This allowed voluntary suspension of Social Security benefits for people who had already claimed, and then changed their mind and wanted to suspend them later.

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Beginning Retirement During Declining Markets

Retirement portfolios are generally intended to have withdrawals made regularly. These withdrawals provide the regular income necessary for a retiree’s living (and other) needs. However, when a multi-year downturn in the markets is combined with regular withdrawals, a retirement portfolio can deplete at a rapid pace.

The S&P 500 (a broad measure of large American business stocks) averaged a compound annual return over the last century of more than 9% (made up of the change in stock prices plus dividends). This long-term average has been remarkably consistent over long periods of time, but it is a poor predictor of returns over shorter periods of time. Let’s look at some examples to see why. Read the rest of this entry »