Carolyn Stewart

When you lose someone you cherish, their fingerprints, reminders of them, don’t vanish.

Grief over the loss of a loved one is not unlike the sea: a depth and breadth unfathomable at times; waves with an intensity to knock the breath out of you; a tide that laps incessantly (gentle at times yet ferocious at others); and unpredictable. The ache that feels crippling will ease as you work through reminders of your loved one. You will learn how to be kind to, and care for, yourself as you re-visit memories from the past.

After the loss of a loved one, these events–certain days, locations, objects, sounds, smells–can crash over you like a wave you didn’t see coming, leaving you feeling attacked and disoriented. These feelings are a normal part of the grieving process. In fact, while your reaction to these reminders may feel like a setback, this is a part of the journey and a necessary step in the healing process. The following tips may help you to embrace the time instead of dreading the moment:

1 Plan for the day. For the reminders you can anticipate (your loved one’s birthday or an anniversary), consider ahead of time how you would like to spend the day. You may choose to plan a gathering to mark the event, or you may prefer to schedule some form of self-care.

2 Honor their memory. Remembrances of your loved one may feel intense but could also be an occasion to pay tribute to their character, their contributions, and how they loved well. How can you carry your loved one’s legacy forward so that you and others might continue to benefit?

3 Invite others. Grief can feel isolating, and your journey is, after all, unique to you. Nevertheless, you do not have to move through this time alone. When you are missing your loved one, connect with a family
member or a friend who may appreciate reminiscing and being with you.

4 Share your feelings. The burden of grief is heavy, and you were not meant to keep your feelings bottled up inside of you. How you share your feelings is up to you. You may prefer journaling, or talking to someone, or even writing a letter to your loved one. The important part is to get your feelings out.

While healing from loss has no predetermined timetable, if you feel stuck in your grief and unable to manage day-to-day living, seek help from a mental health professional who can assist you in processing your experience and developing healthy coping skills. Reminders of a loss do not have to inhibit your healing; they can be a catalyst for personal restoration.

Ann J. Beckwith

Now is always the perfect time to evaluate your 401[k] with these four simple questions.

How much should I contribute to the plan?

Contributions to a 401[k] are either employee deferrals (via a paycheck) or employer contributions. Contributions of 15% of your annual salary will significantly impact your ability to comfortably retire. Your employer may match dollar-for-dollar contributions up to a certain percentage, which means your return on your contribution is an immediate 100%. How to start?

• At a minimum, contribute enough to maximize your employer contribution– free money.
• Start with 5% of your salary, and commit to a 1% increase in contributions each year.

How should I make my contributions?

Almost all 401[k]s give participants the option to make Roth or Traditional contributions. The difference between Roth and Traditional contributions?

• Roth — you pay tax on contributions today; the account grows tax-free; and no future taxes are due on the earnings for distributions after age 59.5
• Traditional — defer tax on contributions today; the account grows tax-deferred; and pay taxes on distributions after age 59.5

A traditional 401[k] contribution lowers your current taxable income today. Roth 401[k] contributions don’t lower your taxable income. If you expect to be in a higher tax bracket in the future, a Roth 401[k] may be best because your tax bracket is lower today than you anticipate in the future.

Let’s say you earn $1,000 and decide to defer $100 to your 401[k]. If you were to defer the $100 as a regular/traditional 401[k] contribution, you would be taxed on $900 of your income ($1,000 earning minus $100 contribution) and, in turn, deferring the taxes paid on your retirement account contribution. The funds in your 401[k] would grow tax deferred until you withdraw the funds, at which time your distributions from your 401[k] would be taxed as ordinary income (as a salary would be taxed). On the other hand, if you were to contribute the same 100 as a Roth 401[k] contribution, you would be taxed on $1,000 of your income because Roth accounts pay taxes today. The funds in your Roth 401[k] would grow tax-free until you withdraw the funds, at which time your distributions from your 401[k] would be withdrawn tax-free.

Everyone has a different tax situation and timeline to retirement, which may change the best tax strategy for saving to your 401[k].

How do I invest my money?

When thinking through how to invest your retirement account consider risk tolerance, diversification, and cost. Risk tolerance is your ability to tolerate a decline in the value of your investments.

Diversification is investing in a broad mix of investments to minimize the risk of any one investment performing poorly for an extended period of time. Many plans offer Target-date funds, which can be a good set-it-and-forget-it option for retirement accounts. These funds offer diversified portfolios that
automatically become more conservative over time as retirement approaches.

Low-cost investments are the ones with a lower expense ratio. The lower the expense ratio, the more you keep in your pocket.

Who inherits my 401[k] if I die?

Your will does not control the disposition of your 401[k], your beneficiary designation form does. A beneficiary is a person or entity you designate to receive these retirement funds when you die. Most retirement plans require your spouse to be listed as your beneficiary. You can name whomever you wish, but your spouse will need to provide written agreement if your beneficiary is someone other than your spouse. If no beneficiary is listed, state law determines the recipient of your retirement assets via the probate process. Be sure to keep a copy of this document with your will and other key documents.

If you have questions about your retirement plan, ask your employer for the contact information of the retirement plan advisor.

Anne Marie E. Ashworth

People who don’t go to the doctor much because they’re in good health and have been for most of their lives may think they don’t need a health care power of attorney. That may not be the case.

Mike Switzer interviews Abacus advisor Abby Mason.

J. Abigail Mason

Who must report?
Companies that are required to register with their state Secretary of State must register with
the Financial Crimes Enforcement Network (FinCEN). These entities include LLCs, corporations
and partnerships.

What companies are exempt?
The Corporate Transparency Act includes a number of exemptions including large entities that [1] employ more than 20 full-time employees, [2] gross more than $5 million/year, and [3] have a physical presence within the US. Tax-exempt entities are also exempt.

What must companies report?
Companies must report “beneficial ownership” information. A beneficial owner is someone who
exercises substantial control over the company or owns 25% or more of the company.

Companies must report the following information for beneficial owners:

1. Legal name
2. Date of birth
3. Residential address
4. Driver’s license or passport information

Alternatively, individuals may apply for a FinCEN identifier and provide the identifier
to the reporting entity instead.

What are the deadlines?
Companies created before 2024 have until January 1, 2025 to register.
Companies created in 2024 have 90 days to register.
Companies created after 2025 have 30 days to register.
Once a company reports, the company has 30 days to provide updated filing information
in the event of a change.

Who files this information?
Your tax advisor or your attorney may be able to assist. CT Corporation and Harbor Compliance
offer a filing service for a fee. You may also self-prepare. https://boiefiling.fincen.gov/

Jonathan J. Robertson

n this video, Cheryl Holland discusses Abacus’s tradition of planting pinwheels for Child Abuse Prevention Awareness month in support of the Children’s Trust of South Carolina.

Cheryl R. Holland

Financial advisors frequently help clients think through their estate plan prior (and in addition) to meeting with an attorney.  When parents begin working on their estate plan, the usual statement is:  “treat my children equally.”  Then the question arises:  “is treating equally actually fair?”  People often incorrectly mix fairness with equality.

Many different scenarios come into play when parents want to treat children differently as part of the estate plan. Sometimes treating children differently reaches an outcome that can be fairer than treating children equally. Differences come in many different forms:  (1) differing levels of assets going to children; (2) one child receives a specific asset; or (3) one child receives assets “outright,” while the other child receives assets in trust.

Why would parents want to leave more assets to one child than another?  A few examples are:

• One child has significant medical challenges.
• One child provides for a larger family.
• One child earns more money than the other(s).
• One child has received more financial support throughout his/her life, and the parents want to even things up after their deaths.
• One child provides more support to the parent as the parent ages, and the parent thinks it is fair to leave more money to this child as partial compensation.

Sometimes parents want to leave a specific asset to one child.  While parents may still provide the same level of assets to each child, the children still might not think of things as being equal. For example:

• If you own a family business, it may make sense to leave that business to the child who works in the business rather than to multiple children who may or may not be involved.
• Sometimes one child has a greater connection to the family vacation home (or the family home) than the others.

Another common scenario where “not being equal” arises is the manner in which your children inherit their assets.  It may make sense to use a trust structure for one child, but not for the other(s). This situation frequently arises wherein there is a significant gap in age (or skills) among the children, mental health or substance abuse challenges, or concerns about divorce and/or asset protection.

Inequality coupled with a lack of communication can cause pain.  When children lose a parent, they usually aren’t at their best emotionally, and tempers can run high.  It’s easy to assume the worst rather than the best.  Children can feel resentment towards each other and towards the financial advisor and the attorney.  It’s easy for a child to equate the amount of money parents are leaving to them with the amount of love that you feel for them.   Work beforehand to create a plan.  Fortunately, good communication can address many of these challenges and lead to successful outcomes—from a letter to meetings with children to honest conversations.

You can write a letter that goes with your estate plan. While a letter isn’t a legally binding document, it can explain your thought process as to why you chose to create your estate plan.  Children might disagree with your reasoning, but they will at least know you made your decision with both love and with thought.

Additionally, a family meeting may be helpful.  Sometimes clients choose to have these meetings as a group or one on one with each child (or as a combination of both).  A meeting allows you to answer questions and address concerns your heirs may have.

Perhaps the best plan is to have a conversation and also write the letter. People remember conversations differently, and memories change over time.  Having something in writing can go a long way to ensure that your children understand your choices when you are no longer around to tell them yourself. Talk with your legal (or financial advisor) to have help facilitating the meetings and/ or provide examples of letters to children.

While estate planning is not always an easy task, taking the initiative to ensure that your children understand your wishes and how you plan to distribute your assets will make it easier for your heirs when you are no longer alive. 

Jonathan J. Robertson

If you’ve been investing in the financial markets for a long time, you could have a portfolio that has grown significantly in value. Which could present a tax problem. However, there is a way to avoid some of these capital gains, and it involves tax planning across generations.

Mike Switzer interviews Abacus Advisor Stephen Maggard, CFP®.

Stephen E. Maggard

Many of us are not sure how long to retain certain financial records; consequently, we often end up keeping boxes of documents that take up precious space.  The list below outlines how long to keep your common financial documents and the time frames for keeping and/or destroying these documents.      

• Tax returns—seven years.  The IRS has six years to challenge your return if you underreported your gross income by 25% or more.  Keep all your supporting data with your returns (i.e., W-2s, 1099s, 1099-Rs, receipts, etc.).

• Brokerage statements—one year. Keep monthly statements for one year and shred them if your annual statement summarizes all activity for the year. 

• Retirement plan statements—one to seven years.  Keep statements for one year and shred them if your annual statement summarizes all activity.  Save annual statements for 3 to 7 years and keep records of non-deductible contributions indefinitely.

• Home improvement and other real estate records—until you sell the home, plus another seven years.  The records establish your cost basis in the home and could help lower your capital gains tax on the property when you decide to sell.

• Credit card statements—one month.  Shred credit card statements once you check them for accuracy, unless they are your only record of a tax-related transaction.

• Pay stubs—one year.  You can shred your pay stubs once you get your W-2, but check to be sure the numbers match before you destroy. 

• Utility and phone bills—one month.  You can shred these documents once you have received the next statement showing that you paid.  Keep the bills if they are needed for tax purposes. 

• Warranties and receipts—until the item is no longer owned, or the warranty has expired.  Receipts for big-ticket items are necessary to activate the warranty or to replace a defective item; receipts can also be used to prove an item’s value to an insurance company.

• Bank records—one to seven years. Keep monthly statements for one year.  Keep bank records related to your taxes, business expenses, home improvements and mortgage payments for seven years; shred those that have no long-term importance.

• Insurance policies—until the policy has lapsed or the property has been sold.

• Household inventory of valuable items—forever, or until items are no longer owned.  Make sure the inventory is updated when new items are purchased, sold, or given away. 

If you follow these guidelines for taking care of your financial documents in a timely manner, not only will you be able to free up space, but also you will have accurate, up-to-date files that can be easily

J. Abigail Mason

Target date retirement funds (also known as target date funds) are a popular option for managing your retirement savings. Often offered by retirement plan providers like 401(k) plans, these funds are designed to offer a simplified approach to long-term investing and retirement planning. Knowing how these funds work may help you to decide whether or not a target date fund will benefit your retirement.

How do target date funds work?

Target date funds are structured around a specific retirement year or “target date.” Investors should select a target date fund that aligns with their expected retirement year. Early on, the fund aims to maximize long-term growth potential by primarily investing in stocks. The specific allocations and investments within the fund are determined by the fund manager.  Younger investors typically have a longer investment horizon and can tolerate more risk. As the retirement date approaches, the fund gradually becomes more conservative, increasing its allocation toward bonds and other fixed income investments. The goal of this gradual shift in allocation is to focus on capital preservation and risk management as the investor approaches retirement age and may need to start withdrawing funds.

Why choose to invest in target date funds?

Target date funds are simple, convenient, diverse, and cost efficient.  The following offers more explanation of each:

• Simplicity and convenience: One of the primary advantages of target date funds is that they are designed to be straightforward and simple to use. Once you choose a fund based on your target retirement date, the fund manager handles all the asset allocation decisions and rebalancing (bringing your portfolio back in line with your target allocation). This kind of management can be particularly appealing if you lack the time, expertise, or desire to actively manage your investments.
• Diversification in a single fund: Target date funds are typically composed of a broadly diversified portfolio of investments, meaning the fund’s dollars are spread across different types of investments to help manage risk in your portfolio. Since holding multiple funds in your 401(k) may result in overlapping investments and differing objectives, owning a single fund provides the benefits of broad diversification while avoiding duplicate investments in your plan.
• Cost efficiency: Many target date funds offer competitive expense ratios, which can be lower than the fees associated with actively managed funds or having to build and manage your own diversified portfolio. Lower expenses can result in higher returns over the long term due to the power of compounding. Be sure to check with your plan provider to determine fund-specific fees.

Is a target date fund the right choice for me?

Target date funds can be a great choice for investors with straightforward goals and needs, or investors who lack the time or skill to construct a diversified portfolio. Consider your individual financial goals, risk tolerance, and investment time horizon when selecting a specific target date fund.

Not all target date funds are created equally, so it is important to review the details, fees, historical performance, and strategy of the specific fund before making an investment decision. Periodically review your investments to ensure they remain on track with your retirement objectives. As with any major investment decision, consider consulting with your financial advisor to ensure that your investment choices align with your long-term financial plan.

Bailey O. Davis