Let’s start with a working definition of tax loss harvesting. Investopedia defines it as the timely selling of securities at a loss to offset the amount of capital gains owed from selling profitable assets.           The simple answer to our proposed question is this: You can reduce your tax bill.   Being cognizant of the potential capital gains from your taxable brokerage account can positively impact you. It forces you to pay more attention to your account's performance, regardless of whether that is good or bad. Being proactive with your portfolio can be a significant advantage rather than taking a set-it-and-forget-it approach. Another important fundamental fact in our capital gains discussion is the 2025 capital gains rates listed in the table below.     Tax rate Single Married filing jointly Married filing separately Head of household 0% $0 to $48,350 $0 to $96,700 $0 to $48,350 $0 to $64,750 15% $48,351 to $533,400 $96,701 to $600,050 $48,350 to $300,000 $64,751 to $566,700 20% $533,401 or more $600,051 or more $300,001 or more $566,701 or more   Simplest way to avoid paying capital gains As you can see, not everyone, including most retirees, has to pay capital gains tax . Some may realize gains in the 0% capital gains bracket. According to the Motely Fool, the average retirement income is $75,000. Many married Americans with two incomes earn around $100,000. They assume they will have to pay capital gains on their winning stock if they sell it, when in reality, they may not need to based on their income level.   Remember, the standard deduction reduces your income before determining your capital gains rate. With the standard deduction for a married couple being $30,000 this year, a couple could have a gross income, before any deductions, of $126,700 and still be in the 0$ capital gains bracket. Keep in mind that realizing capital gains may increase your taxable income, which could bump you into the next capital gains tax rate.   For Example Let’s say you bought Nvidia at a good time and had a long-term capital gain (stock owned for at least 12 months) of $10,000 in the stock. If your gross income is $121,700, only realizing a $5,000 gain this year would make sense. This way, you stay in the 0% capital gains bracket. If you wait until the following year to sell the rest of your gain, it is possible not to pay any taxes while realizing all of your gain on your stock.   This strategy should work well if you make sales in December and January because the stock's price is less likely to swing massively from one month to the next. But suppose the first sale is in the first quarter of the year. In that case, the strategy may be less effective because the stock has the potential to move significantly over the year before deferring the second sale of the following calendar year.   This same mindset and strategy of spreading gains out over two calendar years can also apply for investors on the other end of the spectrum: those making around $600,000 would want to avoid the 20% capital gains bracket, if possible.   Nuts and bolts of navigating capital gains Let’s focus on those squarely in the 15% capital gains bracket. A nuance of tax loss harvesting  is that you can only write off $3,000 of long-term capital loss each year. If you happen to get out of the stock that you have a significant loss on, you can eventually use all of the losses, but only $3,000 per year until all of the loss is realized. It is more desirable to realize the full effect of a loss immediately, so having some significant gains is ideal when you want to get out of some losing stocks.   For instance, if you had $13,000 in securities losses and had no gains to offset them, it would take you five years to use up your loss. But if you had at least $10,000 in gains in the same year, you could use all of your losses in just 1 year.   The timing of realizing gains and losses does not matter, only what calendar year they fall in. That is why if it appears that it makes a lot of sense to exit a position early in the year, you don’t need to feel the urgency to make an immediate offsetting move (gain or loss) if you don’t feel like there aren’t any obvious additional moves to make.   The Helping Hand Investing can be confusing at times, but a trusted financial advisor  can help guide you in the right direction. If you have questions about your portfolio or want to get started with investing, contact one of Whitaker-Myers Wealth Manager's Financial Advisors Team  Members and schedule your appointment today.

Life is filled with moments of change — from marriage and the birth of children to purchasing a new home or losing a loved one. Along with these milestones come essential decisions, one of the most significant being determining beneficiaries in your financial and estate planning. Whether for a life insurance policy , retirement accounts, or a will, beneficiaries are the individuals or organizations you choose to receive your assets when you pass away.   However, many people make the mistake of setting these beneficiaries once and forgetting about them. Updating your beneficiaries regularly, especially after key life events, is crucial for ensuring your wishes are fulfilled and your loved ones are protected. Here’s why:   Reflecting Major Life Changes As your life evolves, so do your relationships and responsibilities. Changes such as marriage, divorce, the birth of a child, or the death of a loved one all have an impact on who should inherit your assets. For example: Marriage : If you get married and do not update your beneficiaries, your spouse may not automatically receive the benefits you intended, especially if your prior beneficiaries were someone else, such as an ex-spouse or a parent. Divorce : It’s important to revisit your beneficiary designations after a divorce. In many cases, an ex-spouse will still be listed as the beneficiary of various accounts, even if the marriage has ended. Failure to update this could result in your ex-spouse receiving assets you intended for someone else. Children : The birth of a child or adding dependents means that your existing beneficiaries may no longer reflect your current priorities. It’s crucial to make sure that your children or new family members are properly included in your estate plan. Death : The passing of a loved one could affect your estate planning, especially if they were previously named as a beneficiary. You may wish to redirect those funds to others or update your intentions in light of the loss.   Ensuring Your Wishes Are Honored By failing to update your beneficiaries, you risk unintentionally leaving assets to someone who would not have been your intended recipient. For example, if you named a family member who has since passed away, the assets may go into probate, causing delays and potential complications. This could be avoided simply by reviewing and revising your beneficiary designations after significant life changes.   Avoiding Legal Disputes and Confusion Outdated or conflicting beneficiary designations can lead to confusion and even legal disputes among surviving family members. If there is a discrepancy between the beneficiaries listed in your will  and those on your life insurance policies or retirement accounts, it can create a lengthy and costly legal process. Regularly reviewing and updating your beneficiaries can help avoid this and ensure that your loved ones receive the intended inheritance without unnecessary conflict.   Maximizing the Efficiency of Your Estate Plan Designating beneficiaries is an important part of your estate plan because it can help avoid probate and ensure your assets are transferred quickly and efficiently. Keeping your beneficiaries up to date ensures that your estate plan continues to work as you intended, particularly in terms of minimizing tax burdens and simplifying the distribution process. By aligning your beneficiary designations with your current life circumstances, you can ensure your estate plan remains effective and aligned with your goals.   Adapting to Changes in Tax Laws or Financial Circumstances Tax laws and financial regulations can change over time, impacting how your assets are distributed. A change in tax policy might make it more beneficial to adjust your beneficiaries to take advantage of certain tax exemptions or strategies. Additionally, shifts in your financial status, such as an increase or decrease in wealth, may warrant reevaluating who should receive your assets and how they should be divided.   Protecting Minor Children or Dependents If you have minor children or dependents who rely on you financially, updating your beneficiaries to include them can provide them with financial security. This is especially important if you're the primary income earner for your household. If you pass away, your chosen beneficiaries can ensure the necessary funds are allocated to care for them in your absence. You can even set up a trust within your estate plan to manage these assets until your children reach adulthood.   What Happens When You Don’t Have Beneficiaries When beneficiaries are not listed on accounts, the assets in those accounts may not be distributed according to the account holder’s wishes after their passing. Without designated beneficiaries, the account typically becomes part of the estate and is subject to the probate process, which can be time-consuming and costly. The distribution of the assets may also be determined by state laws, potentially leading to unintended consequences or delays. Additionally, without beneficiaries, the process of transferring assets to heirs can be more complicated, and it may increase the likelihood of legal disputes among family members or other parties. To avoid these challenges, it’s important to designate beneficiaries for all relevant accounts.   Conclusion While updating beneficiaries may not seem like an urgent task, it plays a pivotal role in ensuring that your estate plan functions as intended. Regularly reviewing and adjusting your beneficiaries in response to life changes guarantees that your assets are distributed according to your wishes and that your loved ones are properly cared for when you're gone. If you've recently experienced a major life change, contact our team  today to update your beneficiaries.   Remember: Life changes — and so should your beneficiaries. Keep your plans current to protect what matters most.

Private Mortgage Insurance Saving for a house is a significant milestone that involves many moving parts and key factors to consider throughout the process. One of these factors that should be addressed is Private Mortgage Insurance (PMI).     History of PMI Private Mortgage Insurance (PMI) was introduced in the 1950s to reduce the risk for mortgage lenders and make homeownership more accessible for borrowers who could not afford to put 20% down. This widened the entry point for homeownership, as before PMI, larger downpayments were required to secure a mortgage. This insurance protects the lender if the borrower defaults on the loan, ultimately allowing the lenders to offer loans to a broader range of people.   Types of PMI BPMI The most common type of PMI is borrower-paid PMI or BPMI. This structure includes monthly premiums with your mortgage payment. The lender selects the insurance company; the cost typically ranges from 0.2% to 2% of the loan amount annually. The price is dependent on the borrower's risk factors, such as credit score, loan-to-value ratio, and loan type.   LPMI Lender-paid mortgage insurance (LPMI) is another type of PMI where, unlike BPMI, the lender pays the PMI premium instead of the borrower. However, this typically results in higher interest rates on the mortgage. Since the PMI cost is incorporated into the interest rate, the borrower doesn't make a separate PMI payment. The process for removing LPMI differs significantly from BPMI. To remove LPMI, the borrower would usually need to refinance the loan, as the PMI cost is embedded in the interest rate.   Lump-Sum PMI Single-premium mortgage insurance is a lump-sum PMI paid at closing or financed into the loan balance upfront. This structure covers the entire cost of PMI for the life of the loan. Because this cost is a one-time upfront, it is non-refundable. One thing to be aware of is that if you sell or refinance your home, you will not get a refund for the premium you paid. The lack of flexibility that comes with single-premium mortgage insurance should be assessed when looking at your situation.   Removing PMI Under the Homeowner Protection Act, lenders must automatically cancel PMI when the loan balance reaches 78% of the original home value. You must be current on your mortgage payments to be eligible for the automatic removal. Refinancing into a new loan without PMI may be an option if your home has appreciated and your equity is at least 20%. For individuals who have a second loan (e.g., HELOC or piggyback loan), your ability to remove PMI  can be a bit more complex.   We recommend waiting to buy a house until you have saved up the entire 20% downpayment. As we have seen, PMO is a cost to you and only protects the bank, If you are already in a mortgage, work on paying down your principle and removing the PMI as soon as possible.   Help with understanding Buying a home has a lot of moving pieces and parts. Knowing how ready you are can be tricky, and knowing the best strategy can help save you money. If you are planning to buy a home soon and want to get a clearer understanding of how that will affect your finances, schedule a meeting with one of our Financial Advisors  if you have any questions about your financial situation.

When it comes to financial planning, it's important to recognize what we can and cannot control. We can control our own behavior, make thoughtful financial plans, and adjust our strategies as needed. However, we don't control the economic cycle, market movements, or policy decisions that impact the broader financial landscape. Recognizing this distinction allows us to focus on the aspects of our financial lives where our decisions truly matter.    With some investors now worried about a possible recession and the stock market facing heightened uncertainty, we believe it’s a good time to review the fundamentals of business cycles and how they affect financial planning.  It is also important to note that market corrections are normal and necessary.  Check out this video  by our Chief Financial Planning Officer and CFP, Tim Hilterman,   about navigating choppy markets.   What is the business cycle? Business cycles represent the broader economy’s movement through periods of growth and recession, measured by metrics like GDP, employment, industrial production, and more. While the duration of a business cycle can vary significantly, they tend to occur over long periods, lasting 5-10 years on average.   According to the National Bureau of Economic Research, there have been twelve recessions since World War II. In the last 25 years, we have experienced three: the 2020 pandemic recession, the 2008 global financial crisis, and the 2001 dot-com bust. Of course, there have been many more cases when investors and economists feared there might be a recession.   Business cycles have also grown longer since the “stagflationary” period of the 1970s and early 1980s. The steady growth period until 2008 is often known as “The Great Moderation” - a period when the economy was strong, inflation was moderate, unemployment remained low, and the average cycle length was nearly nine years.   Phases of the business cycle While each business cycle is unique, some patterns have emerged over time. In general, business cycles can be characterized by four distinct phases:   Expansion  - During this phase, the economy grows, unemployment falls, consumer confidence rises, and business activity increases. GDP growth is positive, and companies often invest in new capacity. Peak  - This is the point where growth reaches its maximum. The economy is operating at or near full capacity, inflation may begin to rise, and signs of overheating might appear. Contraction  - During this phase, economic activity slows, companies may reduce hiring or lay off workers, and GDP growth slows or becomes negative. Consumer spending typically decreases during this phase. Trough  - This is the lowest point of the cycle, where economic decline bottoms out before beginning to recover. Unemployment is typically at its highest, and business confidence is low.   Each phase may not be equal in length, and there are both situations where business cycles last longer than some expect and cases where cycles end abruptly.   For example, during the 1990s business cycle, the economy slowed sharply in 1995 without falling into a recession. The Fed was able to achieve a so-called “ soft landing ” by lowering inflation without negatively impacting economic growth.   In contrast, the 2008 global financial crisis resulted in a swift economic decline due to a rapid collapse in the financial sector. The same is true in 2020, when the nationwide shutdown resulted in a sharp decline in economic activity.   Trying to precisely time business cycles is notoriously difficult. This is one reason economics is often referred to as “the dismal science” - it has a poor track record of predicting recessions and often predicts ones that never occur. However, recognizing where we generally are in these cycles can help us make better financial decisions nonetheless.   Distinguishing between business and market cycles Market cycles can be more volatile and occur more frequently than business cycles. The stock market can experience multiple corrections within a single business cycle, including several short-term pullbacks each year, due to investor sentiment, liquidity conditions, and other factors beyond the economy.   This is because the market is anticipating the future, while economic data is often backward-looking. Economic data certainly influences markets, but investors also take news headlines, sentiment, and many other data points into consideration. This means that markets can often overreact to short-term events.   Financial planning through cycles Rather than attempting to time markets, the following approaches can help. The key is to ensure you stay on track with your financial goals throughout business and market cycles:   Maintain a long-term perspective  - Short-term market movements often appear as mere blips when viewed over decades. They can sometimes be inaccurate indicators of the business cycle. For example, the 2022 stock market correction did not accurately predict an economic decline. Portfolio rebalancing  - Regular portfolio rebalancing enforces the discipline to “buy low and sell high” by reducing positions that have appreciated and adding to those that have underperformed. When appropriate, this systematic approach can help navigate market cycles without succumbing to emotional decision-making.  Adjust expectations by cycle phase  - During late-cycle periods when valuations are stretched, future returns may be lower. Consider moderating return expectations during these phases rather than chasing higher yields through excessive risk-taking. Have an emergency fund  - Financial plans should take into account the fact that downturns are inevitable. Emergency funds  covering 6-12 months of expenses provide crucial flexibility during contractionary periods, particularly if job security becomes a concern.  Dave Ramsey has helped millions of people by giving this very advice.  He calls it ‘ Baby Step 3. ’   Portfolio resiliency across all phases of the business cycle Constructing an appropriate portfolio remains the cornerstone of investing across business cycles. Different asset classes  can respond in unique ways to changing economic conditions. For example, stocks typically benefit from economic expansions but struggle during contractions. In contrast, bonds can generate income during expansions and provide portfolio balance during contractions.   The right portfolio differs for each person, balancing these asset classes according to your time horizon, risk tolerance, and financial goals. A well-diversified portfolio might underperform the hottest asset class during any given cycle, but it also avoids the most severe drawdowns that can derail financial plans.   The bottom line? Market and business cycles are natural parts of the investing experience. Rather than trying to predict each turning point, history shows that it’s better to maintain a well-constructed portfolio that can weather all parts of the cycle. As our good friend, Dave Ramsey , always says, “The only people who get hurt are the ones who jump off the roller coaster in the middle of the ride.”   If you have questions about your investments during this choppy market time or want to know more about the market, reach out to your financial advisor . With the heart of a teacher, they are happy to help explain so you feel comfortable and confident with your investments.

March is supposed to bring college acceptance letters and financial aid offers, but instead, we’ve got a bit of a hot mess. First, there was the not-so-smooth rollout of the new Better FAFSA,  and now Congress is talking about cutting more areas of student aid packages. If you’re a parent of a college-bound student, be sure to read this article, as it could help save your hard-earned dollars in your wallet.   So, what’s going on?   If Congress follows through on these cuts, Federal Pell Grants could shrink, and programs like Federal Work-Study and Public Service Loan Forgiveness might be on the chopping block. That means fewer opportunities for students to earn aid and more families forced to take on debt.   Student Loan Changes on the Table Here are just a few of the ways Washington is thinking about “fixing” student loans: Public Service Loan Forgiveness Reform Congress wants to limit who qualifies for this program, making it even harder for borrowers to get relief. Repealing Borrower Defense to Repayment Repeal a Biden administration rule that made it easier for a borrower to discharge loans as a result of a school's misconduct, etc. Eliminating Grad and Parent PLUS Loans by 2028 Not that we encourage taking out loans to cover college, but if you were counting on these loans to cover costs, that may not be the case.   Understanding Your College’s Offer March is when most financial aid packages arrive, and that’s when reality hits parents in the face. “Wait, this is what we have to pay?!” Yep. And to be honest, that letter can be complicated if you’re not familiar with knowing what to look for.   Here’s what to look for: Total Cost of Attendance This should include tuition, room & board, books, and personal expenses. Scholarships & Grants Free money. Take it and run. Loans Most schools automatically offer federal loans, but remember, loans are not aid. Work-Study If offered, great! But it’s not guaranteed, and you’ll have to work for it. Parent PLUS Loans If they list this as “aid,” don’t fall for it—it’s just another way for you to go into debt. Can You Negotiate a Better Deal? Yes, you can! But you need to know who negotiates and who doesn’t. State schools?  Nope. What you see is what you get. Private colleges?  Many will negotiate—especially if they really want your student.   Think of it like buying a car. Savvy shoppers get multiple offers, compare prices, and use one deal to push for a better one. Colleges don’t like the word “negotiate,” but they absolutely do it—they just call it “re-evaluating financial aid.”   If you’ve got a better offer from another school, show them. If your financial situation has changed (job loss, medical bills, etc.), tell them. The worst they can say is no.   Don’t Let College Wreck Your Retirement Here’s the truth: You can borrow for college, but you can’t borrow for retirement. Yet every year, parents wreck their financial future by taking on massive student loan debt.   Before you sign on the dotted line for a Parent PLUS Loan or take out a second mortgage, ask yourself: Can I actually afford this? If the answer is no, it’s time to consider different options. Community college for two years Save a ton of money and transfer later. State schools over private schools It's less fancy but a whole lot cheaper. Scholarships, scholarships, scholarships Your kid should be applying like it’s their part-time job. Get them started on these today.   Final Thoughts Every year, I hear parents say the same thing: “I wish I had known this sooner.” Don’t wait until it’s too late to make a wise decision. The goal isn’t just to get your kid into college—it’s to get them through it without burying yourself in debt.   If you have questions about saving for your kid’s college future and need help with college planning, reach out to your financial advisor to discuss options and hear suggestions during the planning time.

Last week, we took a look at tax loss harvesting  and reviewed how to avoid capital gains, but we also saw examples of how this could benefit you in a specific scenario.   This week, we will look at the investment strategy of tax loss harvesting.   Look at the big picture of your investment strategy Remembering tax rules and strategies, such as tax loss harvesting, can be a hassle. Thankfully, these rules are irrelevant in tax-favored accounts such as traditional IRAs, Roth IRAs, and similar retirement accounts.   Most people should be more aggressive and active inside a retirement account to minimize trading that triggers capital gains. Emergency funds should be composed of guaranteed investments like CDs, money markets, or Treasury Bonds. Taxable brokerage accounts should be set up to buy and hold to minimize realizing gains that could be taxable.   Those with workplace retirements, like 401(k)s, may notice their investment options are limited. If you’d like to be more active in a retirement account, we’d recommend first contributing enough to your retirement plan to get the full match from your employer. Then, additional investments can be shifted to a traditional IRA or Roth IRA. The IRAs will have more investment options, allowing you to be more active with your trading. Remember, Dave Ramsey and his team at Ramsey Solutions  recommends always saving at least 15% of your income into retirement accounts such as 401(k)s and IRAs.   For those who have maxed out their retirement accounts and still haven’t hit their 15% savings rate, we recommend adding funds to a brokerage account . We all hope each of our investments gains value each year, but the market does not go up in a straight line. If you have a brokerage account, you may find yourself with holdings that have lost value. Tax loss harvesting refers to selling these holdings in order to realize losses, which can help offset other gains and save you on taxes.   Seek professional guidance We recommend consulting with financial advisors  and accountants to help navigate the tax loss harvesting minefield. Even if you feel like you have a good grasp of the tax laws, having a second set of eyes and ears to look through and help evaluate and affirm various moves can be very helpful in giving you confidence that you are making both legal (in tax reporting) and fundamentally sound moves. Striking a balance of making good decisions on entering and exiting which positions and minimizing the tax impact of those moves simultaneously can be challenging to get right without the proper understanding, insight, and experience.   Even if you are the rare investor who feels comfortable navigating the tax implications of buying and selling stocks efficiently in a brokerage account, hiring a fee-only advisor would be well worth the small investment to ensure you make the best possible moves in tax loss harvesting each calendar year. A good advisor will keep you from being so hyper-focused on tax loss harvesting that you either make moves that do not make sense or fail to make moves that do make sense within your securities portfolio.   If you have questions and don’t have an advisor, reach out to our team of financial advisors  today!

As we near the conclusion of this tax season, I have been reflecting on how confusing the tax process can be.  For those who don’t live in the financial world on a daily basis, taxes can be an even more confusing topic. Some financial advisors partner with CPAs to help interpret and implement various tax codes, working closely with their clients during tax season.   The Importance of a CPA According to the National Association of the State Board of Accountancy, as of August 29, 2024, there are approximately 671,855  certified public accountants (CPAs) in the United States.  For the fiscal year 2023, Forbes reports  that the IRS processed more than 162 Federal individual tax returns and supplemental documents.  Easy math tells us that, from the individual filing perspective, each CPA is responsible for approximately 241 filers.  This does not include the various other responsibilities CPAs attend to, such as taxes for businesses, partnerships, and trusts.   A key question people often ask is: “When is the best time to find a CPA?”  When asked, Kage Rush of Whitaker-Myers Tax Advisors shared that the best time to look for a CPA is before tax season begins. By already being scheduled and on their calendar, you can avoid the late rush of trying to get in at the last minute and the potential for needing to file for an extension.   Now that you are on your CPA’s schedule, what information and paperwork do you need to gather before your meeting?   Tax forms to bring In addition to bringing a copy of last year's tax return, having the correct paperwork that shows your income and employment status is necessary. Additionally, if you invest, having the proper forms is needed to file your taxes correctly.   Below are some simplified overviews for each tax form you may be required to bring, which inform the IRS of your income and how your employment status should be reported.    Work Forms W-2 This form informs the IRS that a company employs you and is only responsible for half of the Social Security and Medicare tax. Which, if you did not know, for each individual, the Social Security, and Medicare tax  is 15.3%. The employer pays half of this amount (6.2% for Social Security and 1.45% for Medicare). The W-2 shows the IRS your Gross income, how much you paid towards State, Local, and Federal taxes, including Medicare and Social Security, and if you contributed to an employer's retirement plan.   1099 – NEC The 1099 NEC indicates to the IRS that you are filing as an Independent Contractor.  As a contractor, you are now responsible for paying the entire 15.3% of Social Security and Medicare taxes. This allows the IRS to determine the starting point for your base taxes.  Then, as an independent contractor, you can include your business deductions on your 1099 to lower your income and reduce your tax burden.  An important side note for 1099 contractors: It is recommended that you file quarterly estimates to avoid significant penalties from the IRS.     Investment Forms After your work tax forms, if you invest in IRAs or Brokerage accounts, you will also need tax forms from these different accounts.    5498 If you saved money in a Roth IRA or a pretax IRA, your custodian (the company that holds your IRA, such as Fidelity or Charles Schwab) will send you this tax form in You might ask, “If I have to have all my tax information completed by April 15th, why do custodians wait until May to send me this form?” The simple answer to this question is that individuals have till April 15 to make contributions for the prior tax year.  One reason an individual might use this contribution strategy is to determine their tax liability and then make a contribution to reduce that tax burden, or ensure they fall within the income range to make contributions for their Roth IRA.    However, if you want to file your taxes before April 15, you can request the amount you contributed for the prior year from your financial advisor and then report it on your tax return. Once your Form 5498 comes in May, you should keep it with your other records.    1099 If you are investing money in a non-retirement brokerage account, you will receive a 1099-Composite tax form.  This informs the IRS of realized gains within your Brokerage account.  It will categorize the gains as either Short-Term or Long-Term gains .  Short-term gains are taxed at ordinary income rates. Short-term gains occurs when an investment is sold within one year of purchase for a gain. Individuals that day trade with single stocks  will see this type of gain. Long-term gains occur when a person buys a position and holds it for longer than 365 days.  At this point, you benefit from potentially lower Capital Gains  tax rates.    1099–R This is a significant tax document for clients who are now retired and are collecting income from a Pension, an Annuity, Retirement/profit-sharing plans, IRAs, and Insurance Contracts. This informs the IRS of the total amount of money you received from these various income sources and the federal taxes that were withheld.    1099 – SSA This tax form is one document that makes little sense to me since a person that is receiving Social Security Benefits is only collecting a benefit for which they paid FICA taxes their entire working lives! And now that they are collecting a benefit, a portion of the benefit may be taxable. Regardless, this form provides the IRS with the total amount of benefits you received in the prior tax year. The helping hand As shared, taxes can be confusing. Knowing which tax forms you need and the reasons for each one is beneficial to know ahead of time. However, if you have questions, always feel free to reach out to your financial advisor . If you’d like help filing your 2025 taxes or tax preparation assistance for 2025, schedule a meeting with Whitaker-Myers Tax Advisors  to guide you through the process.

Introduction One topic that comes up very often during initial meetings with clients is whether or not they have a will or trust set up. We believe estate planning is essential to creating a holistic financial plan. We want to ensure that our clients know where their assets will be going after they pass and their options for how the assets will be distributed. In this article, we will define “trust” and paint an overview of the different types of trusts and how they compare to a will and one another.    What is a trust? Before explaining what a trust is, a few terms are important to know when describing a trust. The first is the grantor or settlor  – this is the person who creates the trust and sets its specifications. Next, the trustee , which can either be an individual or an institution, oversees the grantor’s assets and makes sure they are handled and or distributed according to the trust.   A trust is a legal contract in which a third party holds and manages the grantor's assets on behalf of their beneficiaries . Depending on the type, trusts can be set up during the grantor’s lifetime or after their death and can be customized to help meet the grantor's goals.   How a Trust Differs from a Will Although both a will and a trust are used to distribute assets, there are several significant differences between the two.    The first and probably most significant difference is that most wills go through the probate process, in which a court validates the will. Trusts generally avoid the probate process, making them quicker to administer and more private. It also allows trusts to avoid any legal fees that would come up from probate.    The second difference is when each one goes into effect. A will only takes effect after the person passes away. Depending on which type of trust is created, it can either go into effect immediately after creation or at a specified time. The third difference is the management of assets. A will can only control how assets are distributed, which is then executed by an executor after the person passes. However, a trust allows for ongoing management of assets, both while the grantor is alive and after their passing. The trustee can manage the estate during the grantor’s lifetime or distribute assets according to specific instructions after the grantor passes away. The last main difference between a will and a trust is that a trust can specify what happens should the grantor become incapacitated before death. A will does not address this possibility, which means that a couple’s affair would have to be managed by a court-appointed guardian if they were incapacitated.   Types of Trust There are several different types of trusts, each with a specific purpose. The following are the most common types and what distinguishes them.   Revocable Living Trust This is one of the most flexible types of trusts. It allows the grantor to alter or revoke the trust at any point during their lifetime. The grantor maintains control of the assets while they are living, and upon their death, the trust distributes assets accordingly while avoiding probate. One drawback of this type is that, since it is revocable, the assets are still considered a part of the grantor’s estate and may be subject to estate taxes.   Irrevocable Trust As the name would suggest, in an irrevocable trust, once the assets are transferred to the trust, the grantor no longer owns them, and the trust is managed according to its terms. This provides asset protection from creditors and may reduce estate taxes since the assets would not be considered a part of the grantor’s estate. Any changes to the trust would have to be approved by the trust's beneficiaries.   Testamentary Trust This type of trust is created through a will and does not come into effect until the person’s death, much like an irrevocable trust. The will outlines the terms of the trust. The downside of this type is that since it is created using a will, the assets must go through probate.   Special Needs Trust These are designed to provide for the financial needs of a person with disabilities while maintaining their government benefits, such as Social Security and Medicaid. Charitable Trust Charitable trusts are established to benefit a specific charity or the public in general. There are two main types of charitable trusts: Charitable Remainder Trusts (CRT) and Charitable Lead Trusts (CLT). In a CRT, the grantor places assets into the trusts, which then pays the beneficiaries for a set period of time, which can be either their lifetime or a set number of years. The remaining assets are then given to the charity. A CLT is the opposite, in which the trust pays income to a charity for a set amount of time, and after that, the remainder is given to the beneficiaries. Spendthrift Trust This type of trust is designed to help the beneficiaries from squandering their inheritance. It is capable of protecting assets from creditors and ensures the beneficiaries receive the money gradually.    Conclusion Whether you choose a will or a trust depends on your specific situation, goals, and needs. If your financial situation is straightforward and you do not mind your assets going through probate, then a will may suffice. If you prefer privacy, avoiding probate, and want to protect your assets from creditors, you may want to consider setting up a trust.   Whitaker-Myers Wealth Managers  has partnered with EncorEstate Planning, a national estate planner, to help clients get their estate planning  in order. If you have any questions about what would be more beneficial to you, reach out to a financial advisor  on our team.

STRS announced an early retirement incentive  for members with the defined benefit (also known as the BD Plan, which is the pension plan) of any age and with 33 years of service, or those aged 60 and with at least 5 years of service between June 1, 2025, and July 1, 2027.    There are also options to take a reduced benefit, which I’m generally not a fan of, but can be evaluated if you have an estimate for a reduced age or amount to compare to an unreduced one.   Below is a table indicating the eligibility requirements: So, the question is, should I take STRS up on this offer? What you’d like to do may differ from what you can afford financially.  To determine what you should do depends on the rest of your financial situation.   If you’d like to see which option is best for you, here’s what you’ll want to do. Run your STRS pension (retirement benefit) estimate for: 1)     the earliest age at which you’re eligible (when you have 33.0 years of service) or the end of the school year 2)     when you hit 34.0 years of service (the normal years of service requirement) or the end of the school year after you hit 3)     If you’d like to consider a third option for comparison, feel free to run that as well.   (It’s very easy to run different estimates)   STRS has instructions on how to run an estimate here .   If your district has negotiated salary increases for the next several years, make sure to include those salary increases when running your retirement benefit estimate.  If you’re not aware of what those are, you can contact your district’s treasurer’s office.   Next Steps for Retirement Planning If you’d like help with running this estimate or have exceptional circumstances (eligible to buy back time), we recommend scheduling a meeting with an STRS counselor to discuss this further.   Once you have your estimates, you should reach out to your financial advisor at Whitaker-Myers Wealth Managers to discuss the best option for you.

Lifestyle creep has a way of quietly sucking away your wealth unless you understand how to manage it. The key to long-term prosperity is learning how to manage surplus money without relinquishing control over your finances.   Recognizing and Managing Lifestyle Creep You've found your first big-kid job or landed that great promotion—finally, financial independence! But before you know it, you're renovating your apartment, buying all-new clothes, or dining out every evening. Ring a bell? That's lifestyle creep  raising its ugly head. While it's okay to treat yourself, allowing your spending to increase simply because of your income can prevent you from ever becoming wealthy. In this article, we will discuss what lifestyle creep is, how to identify it, and how to avoid it while still living a fulfilling life.   What is Lifestyle Creep? Lifestyle creep occurs when your spending gradually increases in line with your income. What that means is that rather than investing or saving, you start spending more on current items or additional items, unintentionally. A bit of indulgence here, a pricey upgrade there, and before you know it, your bank balance isn't growing as it should.   Lifestyle creep occurs when your spending increases as your income rises, but your savings don’t.   A common sign is upgrading to a nicer apartment or car, or buying more clothes or accessories, simply because you received a raise, not because you actually need them. If you notice that you're spending more each month but not saving much, it could be a problem. You might also find yourself justifying impulse purchases by thinking, "I work hard, so I deserve this."   Another warning sign is using credit cards to buy things you don’t need, with the intention of paying them off later. Ultimately, if you’re still struggling financially despite earning more money, it’s a good idea to take a closer look at your spending habits.   How to Keep Lifestyle Creep at Bay Below are a few suggestions on how to spend less, save more, and stay on track.   Create Clear Financial Goals Before you continue to spend, ask yourself this: Where do I want my money to be directed? Whether it's towards a house, paying off debt , or creating an emergency fund , having a goal in mind will make it easier to resist unnecessary spending.   Automate Savings and Investments Make it simple to save. Automatically transfer money to savings or increase 401(k) or Roth IRA contributions when you get a raise. You won't even notice it.   Create a budget At Whitaker-Myers Wealth Managers , we suggest creating a Zero-Based Budget plan . This plan allows you to designate your monthly income, telling it where and how it will be utilized, knowing you are the one in control of your money.   Avoid Big Ticket Purchases Impulse purchases are the cause of lifestyle creep. Use the 24-hour rule—wait 24 hours before making a discretionary purchase, especially one of a significant dollar value. You will probably find that you don't need it.   Track Your Spending You can't fix what you don't measure. Utilize budgeting programs like Mint, YNAB, or Personal Capital to track where your money is being spent. Or our personal favorite from Ramsey Solutions, the EveryDollar Budget App .   Stop Comparing Your Life to Everybody Else's Social media causes your life to become too readily compared to everyone else's highlight reel. You don't need to go on the same luxury vacation simply because your best friend is going away. Stick to your budget instead.   Celebrate Victories Without Breaking the Bank It's okay to treat yourself—just be mindful of it. Rather than blowing your paycheck on new shoes or a designer handbag each time you receive a raise, consider buying something more worthwhile, such as a weekend trip or a delicious meal. Preventing Lifestyle Creep: Achieve Financial Success with Whitaker-Myers Wealth Managers Lifestyle creep is sneaky, but you don’t have to fall into the trap. By setting financial goals, automating savings, and being mindful of where your money goes, you can enjoy your income and build wealth for the future.   At Whitaker-Myers Wealth Managers , we specialize in helping young professionals create a financial plan that supports their long-term goals while still allowing them to enjoy life today. Whether you're looking to invest wisely, eliminate debt, or plan for the future, we’re here to guide you every step of the way.   Don't wait until lifestyle creep takes control—take action today! Meet with a financial advisor and start making your money work for you.

In a global economy where international trade policies, such as tariffs, can heavily affect an investor’s portfolio, understanding how different types of companies will be affected by these shifts is valuable for investors to understand their portfolios. This article looks at Dave Ramsey’s four investment categories —Growth, Growth & Income, Aggressive Growth, and International—and examines how potential tariffs will likely affect each category.   Growth The Growth category consists of already large, well-established companies that expect to continue to grow. Examples include Apple, Amazon, Microsoft, and Ralph Lauren. A lot of Growth companies would also be considered blue-chip companies.   Of all four categories, the Growth category will most likely feel the weight of the potential tariffs the most. Due to the size of these companies, most have heavy international reach in one way or another. Whether companies get materials from foreign countries, build products in a foreign country, or sell the products in foreign countries, they will feel the impact of tariffs that may be put in place. At some point in their business process, these companies will be forced to pay higher prices for their products, which will inevitably be passed to consumers. Higher prices typically decrease sales of a product. Additionally, when U.S. products are more expensive in a foreign country, consumers of that country will be driven to the cheaper alternative, which will most likely be the products made in that country.   Growth & Income The Growth & Income category consists of large, well-established companies, but don’t expect to see rapid growth like the Growth category does. Because of this, these companies pay dividends to their shareholders as an incentive to invest with them. Some examples of this category are McDonald’s, Walmart, Exxon Mobile, General Electric, and more.   Much like the growth category, the size of these companies most likely expands into international business. However, the Growth & Income category is a highly diverse group of types of companies, and the degree of effect of the tariffs depends on the kind of company. A company like Walmart, which sells a large portion of imported products, will feel a significant hit due to the increase in product prices to sell due to the tariffs. On the other hand, a company like McDonald’s, whose international reach is simply having locations in foreign countries, has almost all of their products are sourced locally for the restaurant, meaning they do not import many, if any, products. Because of this, they will not feel much of an impact from the tariffs at all.   From the investor side, these companies are typically built to be good investments as they will try to continue providing dividends to their shareholders. There may be slight dips in stock price due to the tariffs, but the dividends will ease that dip. Additionally, you will not have officially lost anything until these stocks are sold, which means your account will continue to grow (although the dips may make it not seem that way) as you are paid the dividends from these companies.   Aggressive Growth The Aggressive Growth category includes smaller companies looking to grow in size. Some well-known examples of this are Chipotle, Roku, Hasbro, GAP, and more. Although these may seem like big, well-established companies, they are still relatively small compared to some other companies in terms of their market share.   Companies in the aggressive growth category are expected to do well if tariffs are implemented. Tariffs will make the products foreign companies send to the U.S. more expensive. Consumers are almost always driven to the less expensive product. Since U.S. company products will remain at the same price while foreign products will become more expensive, more consumers will be driven to the domestic products. This will increase sales and revenue for the U.S. companies.   It is also important to consider the smaller size of these companies. Most smaller companies are not built to have the same reach as the bigger companies. Although it is not a uniform rule across the board, most smaller companies do not have the international reach that big companies have, if they have any at all. Without the international pull, these companies will feel much less of the tariffs negatively, if they feel it at all. When factoring this all together, the companies in the aggressive growth category will feel little to no negative impact from the impact while simultaneously getting a boost in revenue as consumers are driven to their now cheaper products.     International The International category includes companies based outside of the U.S. There are around 54,000 companies located outside of the United States. In comparison, only around 10,000 companies are located inside the U.S. This means there is a lot more investment opportunity outside the U.S. than within. Many of these companies are unfamiliar to U.S. citizens, but some well-known examples include Sony, Nestlé, Samsung, and many more.   International companies are expected to do well in the wake of the potential tariffs being implemented. Tariffs will make U.S.-exported products more expensive in other countries. Since consumers are almost always driven to the less expensive product, more expensive U.S. products will drive consumers to the products produced in that country. International companies will likely see an increase similar to the aggressive growth category. They will likely see an increase in sales and revenue from these tariffs, and will likely perform well in these times.   It also helps that the U.S. dollar will most likely become weaker globally because of this. As the U.S. dollar weakens, foreign currencies will become relatively stronger for the most part. A stronger currency will be very beneficial for the foreign companies, as it will make their currency able to buy more.   This is why Dave’s four categories are so important to invest in over the long run. They are designed to minimize risk in uncertain times, mitigating dips in the market to feel less of an impact in your portfolio than if you were only investing in one category.   The Expertise of a Financial Advisor Knowing and understanding how current economic situations, such as possible tariffs , can affect investments can be confusing, overwhelming, or even scary at times . But that is why having the help and expertise of a financial advisor  is so beneficial.   If you would like to meet with one of our financial advisors to discuss this more in-depth, review your investments, or create a financial plan, reach out to a member of our wealth management team   today!

National Debt With the new administration in place and past their first 100 days, we continue to see a moderate amount of clarity around what a second Trump presidency means for the country. A large focus has been on the deficit and reducing waste in the government, and rightfully so. In 2024, we unfortunately had a deficit of 1.8 trillion dollars in the US.   That is a lot of debt. Which means, Dave Ramsey and his team at Ramsey Solutions are not happy. To put that in perspective, there are 1,000 billion in a Trillion, and 1,000 million in a billion. The national debt currently sits at 36 trillion.   So, what’s the problem? The problem is in the weeds. In 2024, the US generated $4.9 trillion in revenue. And the US spent, among other things, the following: Social Security $1.5T, Medicare $865B, Medicaid $618B, defense $850B, and Interest on debt $881 B. The total is $4.71 trillion in spending annually.   These items seem to be untouchable, and rightfully so. All but defense fall under entitlements, which are mandatory pieces of our spending. That is not good; we have $200 billion left for everything else, like transportation, natural resources, education, energy, agriculture, and space.   The point is that we cannot cut enough discretionary spending to get to a balanced budget. We must grow our tax income through economic growth, increase tax rates broadly in hopes that the extra tax revenue doesn’t come at the cost of economic development, or reduce defense spending.   Efforts in Trying to Fix the Debt Problem There has been a recent push to remove excess government spending through DOGE efforts. They have found many areas of government that have waste and abuse, and have worked to correct these abuses. The goal is to balance the budget and eventually get to a point where we run a surplus, which hasn’t been done since 1998 under Clinton.   I believe DOGE's efforts have been somewhat effective in finding and eliminating waste. They are a great start; however, much like cleaning up personal finances, eliminating debt can be a long and painful process.   The national debt is now roughly 7.3 times our annual tax revenue. Let's say your annual take-home pay is $75k. The equivalent personal debt would be $547,500. The outlook isn’t good. But if you are disciplined, you can get things paid off. It would require additional jobs, side hustles, and lowering your spending, but it is possible (sounds a little like Gazelle Intensity for all the Dave Ramsey fans out there!).   This is the kind of approach we need to embrace as a nation if we are serious about reducing the national debt and securing long-term fiscal stability. While we haven’t yet seen comprehensive, solution-focused conversations that could realistically lead to a balanced budget, there is reason to believe such discussions are within reach. Entitlement programs and defense spending remain complex and sensitive issues, but with thoughtful leadership and bipartisan cooperation, progress is possible. Americans hold differing views on the role we play in global affairs and border protection, yet there is common ground to be found. The most promising path forward lies in strong, sustained economic growth that boosts tax revenues and reduces our reliance on borrowing. With innovation, responsible policymaking, and shared commitment to prosperity, we can meet this challenge head-on. The math may be tough, but so are we – and with the right momentum, a balanced budget is an achievable goal.   The Support of a Financial Advisor With times of uncertainty, which often create uneasy feelings about finances, having the guided help of a financial advisor can create clarity and peace during choppy markets. If you do not have a financial advisor and would like to talk to one, reach out to a member of our team and schedule an appointment today.