Same-Sex Couples May Now File Joint Income Tax Returns

The U.S. Department of Treasury and Internal Revenue Service have just established that several key income tax benefits previously only available to opposite-sex marriages are now available to those in a same-sex marriages as well.

Under the announcement (U.S. Treasury) and the rule (IRS), benefits now available include the ability to file a joint income tax return (which may cut your tax cost), but also increase the tax-free part of a couple’s estate for transfer to heirs (double an individual’s lifetime limit). Additionally, all the same income tax benefits that may come from filing a household income tax return are available, including deductions, exemptions and credits. Read the rest of this entry »

Fiduciary – An Important Term to Know

• Fiduciary noun. From the Latin fiducia, meaning “trust,” a person (or company) who has the power and obligation to act for another under circumstances which require total trust, good faith, and honesty. (Free Dictionary)

Fiduciary

As a registered investment adviser, we work as a fiduciary when we give advice and manage money.

We often try to approach our blog topics with a light touch and a sense of fun. We believe a little humor helps us communicate important financial issues more effectively. With this in mind, we think many people often feel that having to deal with financial matters is like having to visit the dentist – it may be necessary but not exactly something to look forward to. No disrespect meant to our dentist friends. They understand.

This article, however, is about something we take very seriously: Our fiduciary obligation to you, our client. Put simply, a fiduciary duty is the duty to put your interests ahead of our own in everything we do. It’s a legal standard we follow, but in our view, also a moral obligation we willingly accept.

Not all financial advisors are fiduciaries. As a matter of fact, the majority aren’t. Read the rest of this entry »

What is Annuitization? What is an Immediate Annuity?

One of the most confusing and least understood terms for the investing public is annuitization. Unlike stocks, bonds, mutual funds and exchange traded funds (“ETF’s”), annuitization does not come up in cocktail party or water cooler conversation very often. What does it mean?

Many investors have money saved and invested in a fixed or variable annuity – two types of contracts issued by insurance companies. Annuitization is the process of converting annuity funds into a stream of income, usually paid on a monthly basis. Choosing whether to annuitize or not is very important because often you can’t change your mind once payouts begin.

There are several ways to “annuitize an annuity” including but not limited to: Read the rest of this entry »

Happy 4th of July, Lessons From Our Forefathers

Perseverance and spirit have done wonders in all ages. – General George Washington

Have you read David McCullough’s book 1776?  If you haven’t, you might not find a better addition to your summer reading list – particularly over this long holiday weekend.  First published in 2005, it’s an entertaining must read not only for its historical recounting of our nation’s first year, but for its lessons in courage and perseverance.

For today’s investors, the book is a reminder of the old saying, “that which is well achieved is usually well earned!” Read the rest of this entry »

The Difference Between Mutual Funds and ETFs

This is a question we get a lot here at Callahan Financial Planning, and with all the recent news and new options, I thought it would be a good topic to revisit.

As a refresher, let’s start with a quick note on what Mutual Funds are:

  • An Investment Company that invests shareholders money in a (usually) diversified portfolio of securities like individual stocks or bonds.
  • Assets are held in custody at a third-party bank, and are subject to regular inspection by the SEC in addition to any independent auditors to the bank and mutual fund. Read the rest of this entry »

The Benefits Of Budgeting

When it comes to personal finance there is one word that makes almost everyone cringe… Budgeting. Most people feel that maintaining a budget means that it will be the end of all of the “fun”. In reality, establishing and following a sound budget does just the opposite. It not only allows you to control your spending, but also is the foundation to achieve the financial goals you truly desire.

Here at Callahan Financial Planning we simply define a budget as providing for your needs within scarcity, which is the limited amount of money available to you. This means living within the amount of money you earn while taking care of your needs. The goal of having a budget isn’t to restrict your spending, but to cover all your necessities and focus any remaining money on what is most important to you. Budgeting forces you to take an in depth look at where your money is currently going and decide if that’s where it should go in order to accomplish your true goals. Read the rest of this entry »

Do I Need Financial Planning?

Have you been thinking about creating a financial plan for yourself, but just don’t know if you actually need to take the time to do it? If you’re teetering on the idea, ask yourself the following questions:blank

  • Are you unclear about how your current investments are performing?
  • Do you and your spouse differ over how to handle your money?
  • Are you confused about the vast array of investment options?
  • Do you feel you pay too much in taxes?
  • Are you uncertain if you have the right kinds and amounts of insurance?
  • Have you delayed creating an estate plan?
  • Are you worried about not having enough money to retire?

If you answered ‘yes’ to any of the following questions, there’s a good chance you should consider financial planning. Read the rest of this entry »

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