Kevin Kroskey's Money & Mind

Motivational speaker Denis Waitley once remarked, “You must stick to your conviction, but be ready to abandon your assumptions.” That statement certainly applies to retirement planning. Your effort must not waver, yet you must also examine it from time to time. 1       Perhaps you may realize that you under-estimated your health insurance costs and will need more retirement income than previously assumed. Or perhaps, with today's low interest rates you are not getting the level of investment returns you counted on. With those factors and others in mind, here are some signs that you may need to double-check your retirement strategy.     Your portfolio lacks significant diversification. Many baby boomers are approaching retirement with portfolios heavily weighted in U.S. equities. As many of them will have long retirements and a sustained need for growth investing, you could argue that this is entirely appropriate. Yet, U.S. equities by some me...

What does it take to be a “one percenter?” How much do you have to earn before you fall into this rarified zone? A new study written by socioeconomists Estelle Sommeiller and Mark Price, looked at state-level tax data from the Internal Revenue Service over the past 35 years. They’ve created a chart which looks at annual income at the threshold of the top 1% in each U.S. state. If you live in Ohio you’re a “one percenter” if you earn more than $316,000 a year.  The top state is Connecticut at more than $678,000 a year…higher than New York’s threshold of $506,000, the $539,000 threshold in New Jersey, $555,000 in Washington, D.C. or $532,000 in Massachusetts. California ($438,000) and Texas ($423,000), which are considered wealthy states, actually came in behind North Dakota ($502,000). States with the lowest threshold include West Virginia ($243,000), Kentucky and Alabama ($263,000) and Maine ($274,000).   Nationwide, the total share of income going to...

On March 3rd, the Ohio 529 Board announced changes to the college savings program fund lineup. The Board announced, "Based on extensive research, Dimensional was recommended because it offers relatively low-cost options and has many products that are ranked highly by OTTA’s investment consultant, Wilshire Associates, Inc." This is great news for Ohio 529 plan participants. Dimensional Funds have a strong, empirical underpinning and have long been a core component of the True Wealth Design investment portfolios. For participants that well-utilize their funds, this should help provide more dollars on a tax-free basis for qualified higher education expenses. To Your Prosperity, Kevin Kroskey, CFP® MBA   Click here for the full news release  from the Ohio 529 Board.   Click here for  cover story from Baron's “A Different Dimension” for more information on Dimensional Funds and what makes them different. Selected highlights are below: ...

Yet another study showing how poorly prognosticators do. There's too much noise in the markets in the short run to have any forecasting methodology with reliable predictive ability. And if there were such a methodology, why would anyone share it rather than make huge profits for themselves?   - Kevin Kroskey, CFP, MBA   Gurus Achieve An Astounding 47.4% Accuracy ( From Forbes.com )   "After tracking 68 experts and 6,582 market forecasts, CXO Advisory Group has concluded that the average market prediction offered by experts has been below 50% accuracy.   The results are in and they are bad. After tracking 68 experts and 6,582 market forecasts, CXO Advisory Group has concluded that the average market prediction offered by experts has been below 50% accuracy. Flip a coin and your odds for predicting the market are better. It’s hard to imagine that the average market expert isn’t able to at least match the track record of a coin flip, but it’s true...

Should you rely on “will power” to bequeath assets? The more complex your estate, the more ill-advised that choice becomes. Having only a will in place when you die may not be enough. As MarketWatch noted recently, research from the Williams Group (a major estate planning firm) indicates that estate fights reduce inherited wealth for as many of 70% of families. 1   Inheritance is no simple matter. In a simpler world, an individual with a $3 million estate could pass away and simply leave $1 million each to his or her children – enough said, over and done. But life isn’t so simple: one heir may deserve more money as a result of a disability or fate dealing out hardships, while another may truthfully deserve less due to his or her behavior, or his or her financial success.    If you feel one heir should receive more of your estate than another, that wish needs to be articulated in your estate planning. Stating these wishes before you pass away (the why, the how, ...

From assorted survey data, an interesting snapshot emerges. Women are taking action to approach retirement with greater confidence. Some recent, intriguing survey data indicates that women are planning their financial futures with some degree of pragmatism, but also with considerable motivation.  One of the key motivations, it seems, is receiving financial advice. Results from a new TIAA-CREF survey (and other studies) bear this out. The retirement services giant polled a random, national sample of 1,000 men and women age 18 and older for its 2014 Advice Matters Survey, and it found that 81% of women who had obtained financial advice were more likely to feel informed about retirement planning and retirement saving than women who hadn’t. Additionally, 63% of women who had received financial advice felt confident that they were saving sufficiently for retirement. 1 What kind of difference does financial advice make? A significant difference, it seems. In the big pi...

Roth & traditional IRAs won’t get 2015 COLAs, but other plans will. A little inflation means a little adjustment . As the Consumer Price Index is up 1.7% over the last 12 months, the federal government is giving Social Security benefits a 1.7% boost for 2015 and lifting annual contribution limits on key pension plans as well. 1 401(k), 403(b), 457 & TSP annual contribution limits increase by $500. You will be able to defer up to $18,000 into these plans in 2015. The catch-up contribution limit will also rise by $500 to $6,000 next year, so if you are 50 or older in 2015 you are eligible to contribute up to $24,000 to these retirement savings vehicles. (The above adjustments do not apply to all 457 plans.) 2 SIMPLE IRAs get a similar COLA . Their base contribution and catch-up contribution limits also go up $500 for 2015. The limit for the base contribution will be $12,500 next year, and the catch-up limit rises to $3,000. 3 Limits also rise for SEP-IRAs and Solo(k)s . Small b...