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Articles written by Lance Patton


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  • Understanding life insurance

    Lance Patton, Financial Advisor|Jun 22, 2024

    Your most valuable asset may be your ability to earn an income. Over the course of your lifetime, you could earn several million dollars - money that helps support you and your family. If something happened to you, how would your family replace your lost income? Life insurance can help replace your income when needed at your death. However, with the wide variety of policies available, it's important that you understand some of the basic types of life insurance coverage. Term Life Insurance With...

  • Investor, know thyself: how your biases can affect investment decisions

    Lance Patton, Financial Advisor|May 28, 2024

    Traditional economic models are based on the premise that people make rational decisions to maximize economic and financial benefits. In reality, most humans don't make decisions like robots. While logic does guide us, feelings and emotions - such as fear, excitement, and a desire to be part of the "in" crowd - are also at work. In recent decades, another school of thought has emerged. This field - known as behavioral economics or behavioral finance - has identified unconscious cognitive biases...

  • Market measures: beyond the dow

    Lance Patton, Financial Advisor|Apr 27, 2024

    When you hear or read that the market is up or down, what does that really mean? More often than not, it reflects movement in the two best-known stock market indexes, the Dow Jones Industrial Average and the S&P 500. In fact, there are hundreds of indexes that track various categories of investments. While you cannot invest directly in an index, you can buy funds that track specific indexes, and you can look at indexes as a benchmark for certain portions of your portfolio. For example, the Dow...

  • How much income does Social Security replace?

    Lance Patton, Financial Advisor|Mar 30, 2024

    Social Security can play an important role in funding retirement, but it was never intended to be the only source of retirement income. The Social Security benefit formula is based on a worker's 35 highest-earning years (indexed for inflation), and the percentage of pre-retirement income replaced by the benefit is lower for those with higher earnings, reflecting the assumption that higher earners can fund retirement from other sources. Here are replacement rates - based on five levels of...

  • How savers and spenders can meet in the middle

    Lance Patton, Financial Advisor|Mar 2, 2024

    Couples who have opposite philosophies regarding saving and spending often have trouble finding common ground, and money arguments frequently erupt. But you can learn to work with - and even appreciate - your financial differences. Money habits run deep If you're a saver, you prioritize having money in the bank and investing in your future. You probably hate credit card debt and spend money cautiously. Your spender spouse may seem impulsive, prompting you to think, "Don't you care about our...

  • Can your personality influence your portfolio? New research points to yes

    Lance Patton, Financial Advisor|Feb 3, 2024

    Academic researchers have been exploring how investors' personalities might affect their financial decisions and wealth outcomes. In one study, three finance professors (Dr. Zhengyang Jiang from Northwestern University's Kellogg School of Management, Cameron Peng from the London School of Economics, and Hongjun Yan from DePaul University's Driehaus College of Business) surveyed more than 3,000 members of the American Association of Individual Investors - a relatively sophisticated group of...

  • You've received an inheritance, now what?

    Lance Patton, Financial Advisor|Jan 6, 2024

    If you've recently received an inheritance, you may be facing many important decisions. Receiving an inheritance might promote spending without planning, but don't make any hasty decisions. Here are some suggestions that could help you manage your inheritance. Identify a team of trusted professionals Tax laws can be complicated, so you might want to consult with professionals who are familiar with assets that transfer at death. These professionals may include an attorney, an accountant, and a fi...

  • REITs, rates and income

    Lance Patton, Financial Advisor|Dec 9, 2023

    Real estate investment trusts (REITs) can offer a consistent income stream that is typically higher than Treasury yields and other stock dividends (see chart). A qualified REIT must pay at least 90% of its taxable income each year as shareholder dividends, and unlike many companies, REITs generally do not retain earnings, which is why they provide higher dividend yields than most other stock investments. You can buy shares in individual REITs, just as you might buy shares in any publicly traded...

  • Year-end 2023 tax tips

    Lance Patton, Financial Advisor|Nov 11, 2023

    Here are some things to consider as you weigh potential tax moves before the end of the year. Set aside time to plan Effective planning requires that you have a good understanding of your current tax situation, as well as a reasonable estimate of how your circumstances might change next year. There's a real opportunity for tax savings if you'll be paying taxes at a lower rate in one year than in the other. However, the window for most tax-saving moves closes on December 31, so don't...

  • Put your money where your values are

    Lance Patton, Financial Advisor|Oct 14, 2023

    Financial worries are often cited as a major source of stress. For example, a 2021 study found that even before the pandemic and subsequent economic downturn, a majority of Americans said they felt stressed or anxious about their finances. Similarly, in 2022, research revealed that more than seven out of 10 financial planning clients experienced financial anxiety more than half the time. What causes financial stress? Lack of assets and/or income is certainly one reason. Another might be the...

  • Four key objectives of a sound retirement plan

    Lance Patton, Financial Advisor|Sep 16, 2023

    A sound retirement plan should be based on your particular circumstances. No one strategy is suitable for everyone. Once you're retired, your income plan should strive to address four basic objectives: earn a reasonable rate of return, manage the risk of loss, maintain a source of sustainable and predictable income, and reduce the impact of taxes. Earn a reasonable rate of return Your retirement savings portfolio will likely be used to provide at least a portion of your income throughout...

  • Coming in 2024: new 529 plan-to-Roth IRA rollover option

    Lance Patton, Financial Advisor|Aug 19, 2023

    In December 2022, Congress passed the SECURE 2.0 Act. It introduced two new rules relating to 529 plans and student debt that will take effect in 2024. The first provision allows for tax- and penalty-free rollovers from a 529 plan to a Roth IRA. The second provision allows student loan payments made by employees to qualify for employer retirement matching contributions. 529 plan to Roth IRA rollover 529 plans are tax-advantaged savings accounts specifically geared to saving for college. In an...

  • Give your money a midyear checkup

    Lance Patton, Financial Advisor|Jul 22, 2023

    If 2023 has been financially challenging, why not take a moment to reflect on the progress you've made and the setbacks you've faced? Getting into the habit of reviewing your finances midyear may help you keep your financial plan on track while there's still plenty of time left in the year to make adjustments Goal overhaul Rising prices put a dent in your budget. You put off a major purchase you had planned for, such as a home or new vehicle, hoping that inventory would increase and interest...

  • Municipal bonds: a tax-advantaged way to put capital to work

    Lance Patton, Financial Advisor|Jun 24, 2023

    Municipal bonds are issued by public entities such as state and local governments, health systems, universities, and school districts to help finance the building and maintenance of infrastructure projects such as roads, airports, water systems, and facilities. Despite the higher borrowing costs that resulted from the Federal Reserve's inflation-fighting interest-rate hikes, municipalities issued $308 billion in debt in 2022 to fund capital projects, after selling more than $321 billion in...

  • Diversifying with market caps

    Lance Patton, Financial Advisor|May 27, 2023

    The U.S. stock market struggled in 2022, with the S&P 500 index ending the year down more 19.4%.1 The S&P 500, which includes stocks of large U.S. companies, is generally considered representative of the U.S. stock market as a whole, and it is a good benchmark for broad market performance. But there are thousands of smaller companies, and many of those held onto their stock value better during the market conditions of 2022. The S&P MidCap 400, which includes midsize companies, ended the year...

  • Fixed for life: what can an annuity do for you?

    Lance Patton, Financial Advisor|Apr 29, 2023

    With stock and bond markets both faltering over the past year, it's easy to see why more near-retirees have a newfound appreciation for fixed annuities - insurance contracts that guarantee a specified rate of return. A fixed annuity maintains its value regardless of market conditions, and yields on these products have risen in response to the higher interest-rate environment. When you purchase a fixed annuity, you are shifting the risk for future investment returns to the insurance company....

  • Diversifying with market caps

    Lance Patton, Financial Advisor|Apr 1, 2023

    The U.S. stock market struggled in 2022, with the S&P 500 index ending the year down more 19.4%.1 The S&P 500, which includes stocks of large U.S. companies, is generally considered representative of the U.S. stock market as a whole, and it is a good benchmark for broad market performance. But there are thousands of smaller companies, and many of those held onto their stock value better during the market conditions of 2022. The S&P MidCap 400, which includes midsize companies, ended the year...

  • Time for a spring cleanup: organizing your financial records

    Lance Patton, Financial Advisor|Mar 4, 2023

    The arrival of spring is always a good time to dust off the cobwebs that have built up in your home during the winter. It's also a good time to clean out and organize your financial records so you can quickly locate something if you need it. Keep only what you need If you keep paperwork because you "might need it someday," your home office and file cabinets are likely overflowing and cluttered with nonessential documents. One key to organizing your financial records is to keep only what you abso...

  • Balancing stocks and bonds in one fund

    Lance Patton, Financial Advisor|Feb 4, 2023

    Maintaining an appropriate balance of stocks and bonds is one of the most fundamental concepts in constructing an investment portfolio. Stocks provide greater growth potential with higher risk and relatively low income; bonds tend to be more stable, with modest potential for growth and higher income. Together, they may result in a less volatile portfolio that might not grow as fast as a stock-only portfolio during a rising market, but may not lose as much during a market downturn. Three...

  • How life insurance could help mitigate taxes in retirement

    Lance Patton, Financial Advisor|Jan 21, 2023

    Higher taxes could follow in the wake of soaring government spending on pandemic relief measures – a likelihood that shines a new light on the tax advantages of life insurance. Permanent life insurance offers a tax-free death benefit, and a portion of each premium goes into a cash-value account that accumulates on a tax-deferred basis. The policy owner may also access the cash value, if needed, without triggering income taxes. Assets in tax-deferred retirement accounts will eventually be t...

  • Three stretch IRA alternatives

    Lance Patton, Financial Advisor|Dec 17, 2022

    The passage of the SECURE Act in 2019 effectively eliminated the stretch IRA, an estate planning strategy that allowed an inherited IRA to continue growing tax deferred, potentially for decades. Most nonspouse beneficiaries, including children and grandchildren, can no longer stretch distributions over their lifetimes. Moreover, proposed IRS regulations require most designated beneficiaries to take annual required minimum distributions (RMDs) within the 10-year distribution period if the...

  • Year-end 2022 tax tips

    Lance Patton, Financial Advisor|Nov 12, 2022

    Here are some things to consider as you weigh potential tax moves before the end of the year. Set aside time to plan Effective planning requires that you have a good understanding of your current tax situation, as well as a reasonable estimate of how your circumstances might change next year. There's a real opportunity for tax savings if you'll be paying taxes at a lower rate in one year than in the other. However, the window for most tax-saving moves closes on Dec. 31, so don't procrastinate. D...

  • Retirement savings in a volatile market

    Lance Patton, Financial Advisor|Oct 29, 2022

    If you worry about your retirement investments during market downturns, you're not alone. Unfortunately, emotions are often the enemy of sound investing. Here are some points to help you stay clear-headed during periods of market volatility. Markets can rebound Historically, even the worst bear market has bounced back and eventually gone on to reach new highs. In fact, since 1970, bear markets have lasted an average of 14 months. A chance to buy lower If you're investing a set amount of money...

  • What's your retirement dream elevator pitch?

    Lance Patton, Financial Advisor|Sep 17, 2022

    Imagine stepping into an elevator and realizing that you're about to spend the 30-second ride with someone who could make your retirement dreams come true - if only you could explain them before the doors open again. How would you summarize your financial situation, outlook, aspirations and plans if you had 30 seconds to make an "elevator pitch" about achieving one of your most important goals? Answering that question, and formulating your own unique retirement dream elevator pitch, could help...

  • Passive, active or both?

    Lance Patton, Financial Advisor|Aug 20, 2022

    Index funds, which try to match the performance of a particular market index, have drawn increasing interest from investors, but traditional actively managed funds still hold more assets (see chart). There is ongoing discussion in the financial media about which approach is most effective, but there may be good reasons to hold both in a well-diversified portfolio. Here are some pros and cons to consider. A simple approach Index funds typically hold the same securities in the same proportions as...

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