rrying about the overall health of your lawn. My wife may
t share that last sentiment...
INDUSTRY INSIGHT
YOUR FINANCES
has been the most exciting, joyous, and fulfilling time of
y life. That said, even as a financial planner, it hasn’t been
thout its nagging thoughts: Am I saving enough? Am I
king advantage of my benefits through work? Should I be
inking about saving for college already? Would my fam-
be okay (financially) if something terrible happened to
n my last article,
e? Should I have I outlined
an estate
plan in place? What the heck
the
a Bumbo?
noteworthy
I
SPONSORED CONTENT
A LOOMING TAX PROBLEM?
adjustments to
though a lot our
of these
issues
tax code
under are uncomfortable to discuss
d an added 2017’s
expense
during
Tax Cuts and an already expensive time,
ndling them Jobs
now Act.
will For
not
only give you peace of mind but
most,
olid foundation
for securing
the new
tax reform your family’s financial future.
will result in paying
less taxes to the
ollege Planning
government.
Great an (almost illogically) expen-
you know, college
is already
news…right?
Of is not slowing the majority of
ve journey. That, however,
course.
As
we’ve
ivate colleges from increasing tuition year after year. If it’s
continued
to run
ur family’s wish
to help
cover some or all of these costs,
2018
tax
projections
art saving when they’re in diapers. The earlier, the better.
for our clients,
ok to establish
a 529 plan and set up an automatic month-
however, we’ve
contribution for an amount that fits into your cash flow.
noticed a surprising
u won’t even notice it after a few months. Also, let the
and troubling trend
andparents know. They just may want to lend a hand.
for many W-2 wage
earners.
Come tax filing time,
this couple will feel
as though they were
wronged by the new
regulations. After all,
like many, they’ve
grown accustomed
to receiving a refund
each year. If their
financial lives have
remained the same,
and they didn’t make
any adjustments to
their withholdings,
they have good
reason to be a bit
you’ve reached retirement, you’re no longer relying
on wages
thrown.
to sustain your family’s lifestyle. From that mindset, term
life insurance is truly the most effective (and cheapest!)
way
IN CONCLUSION
to go.
Fortunately,
this withholding
So how do you know how much to purchase?
If you’re won’t
not rear
inconsistency
running
a
thorough
analysis
on
your
existing
portfolio,
its ugly head for everyone. Self-
though there THE
are PROBLEM
many and they will differ from company
growth, individuals
and future
cash
flow,
a good required
rule of
Although
taxes one
have in decreased,
paycheck anticipated employed
will be
spared
as they’re
to make
company, I wanted
to Federal
highlight
particular—the
thumb
is
10x
salary.
Have
a
qualified
adviser
go
out
to W-2
bid wages.
withholding
has overreacted
— and This
declined
even further.
quarterly payments. Retired individuals don’t rely on
ependent Care
Flexible Spending
Account.
account
What
undoubtedly
to is taxes
a lot of in individuals
And, many
young families
will receive
a generous
child
tax credit,
to find a reputable
insurance
company
that will
provide
that
ows the parent
to this
set will
aside
income lead
before
order and
families
being
surprised
by
a
potentially
meaningful
tax
bill
next
which
will
offset
any
shortfall.
coverage
at
the
most
cost-effective
rate.
If
you’re
not
in
help pay for the costs of childcare. Depending on your tax
is not
the on
taxpayer
anything good
wrong health, Human
nature has
us family
that a minor
increase
in cash flow
if you smoke,
or shown
have a
history
of heart
acket, this can spring.
easily This
save
you a result
20 to of
30%
what doing
you elect
or
adjusting
their
withholdings
incorrectly.
This
is
simply
a
result
usually
finds
its
way
to
another
expense
—
not
savings.
Unless
disease,
for
instance,
the
low-cost
alternative
may
be
to
contribute.
of the IRS withholding tables being out of whack with the obtain
end
fall of
into coverage
the camp through
above, or typically
receive a large
that you
level
your employer.
They refund,
taxpayer – you.
be prepared
to tackle
a tax bill at
next
spring.
Better
guaranteed
coverage
group
rates
for yet,
up consult
to
fe Insurance If you’re one to check your bank account on a weekly or will likely offer
an accounting
professional for tax advice or contact a CERTIFIED
some
multiple
of
salary.
e focus of life insurance is to cover a period of time in
ork Benefits
monthly basis, you’ve noticed an increase in your net take-home
hich your family
is 2018.
financially
This always
window
pay for
A rise in vulnerable.
monthly cash flow
seems welcome,
liability typically
during
but in exists
this case,
it may your
be an working
indicator years.
that your Once
withholdings
FINANCIAL PLANNER® to review your entire financial picture.
Whether it’s for peace of mind, setting expectations, or taking
Continued.
action, you’ll be glad you did.
need to be revisited.
A SCENARIO
As a quick (and overly simplified) example, let’s take a look
at a working couple who are W-2 employees for XYZ Company.
When the withholding tables updated earlier this year, they each
began receiving an additional $100 per semi-monthly paycheck.
All was right with the world, but…
When they go to file their Federal taxes next spring, they
could owe over $3,500.
HOW DO YOU FIGURE?
As a result of the new legislation, this couple’s annual tax
bill went down by $1,200. Good news. Since they’re both paid
semi-monthly, that equates to tax savings of $25 per pay per
person—or $100 per month. With the new IRS withholding
tables, however, they are now pocketing an extra $100 per pay
per person—or $400 per month.
The additional $300 they’ve been receiving each month
should have continued to go to the Fed. That $300 per month
translates to $3,600 over an entire year.
This Industry Insight was written by Matthew D.
Kelly, CFP®.
As an adviser with Allegheny Financial Group, Matt
helps guide individuals and families toward achieving
their distinctive financial goals. Matt and his wife, Mia,
left the city life behind for Mt. Lebanon in 2016. A few
months later, they welcomed a son into the world,
and are enjoying family life in such a welcoming
neighborhood.
For a better understanding of how Matt could
work with you and your family, please call him at
412.536.8076 or email at [email protected].
Allegheny Financial Group is a Registered Investment Advisor. Securities offered
through Allegheny Investments, LTD, a registered broker/dealer. Member FINRA/
SIPC.
MT. LEBANON
❘
SUMMER 2018
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