The goal of BWFA’s summer program is to provide guidance, educational opportunities and real life experience to our interns. While we aim to make the experience as meaningful as possible for them, we too gain so much from our time… Read More
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Bypassing Probate
You may have heard about the horrors of probate, but in truth, probate has gotten an undeservedly bad reputation, especially in recent years. If you bypass probate, your estate will go to your beneficiaries without any court proceeding, and you… Read More
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What About 1968?
In the most recent June 2020 BWFA Advisor magazine, I wrote, “What a Difference 100 Years Makes…or Does It?”. In the article, I drew comparison to today’s pandemic with the Spanish Flu pandemic of 1918. What we saw is, despite… Read More
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Net Unrealized Appreciation: The Untold Story
If you participate in a 401(k), ESOP, or other qualified retirement plan that lets you invest in your employer’s stock, you need to know about net unrealized appreciation — a simple tax deferral opportunity with an unfortunately complicated name. When… Read More
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Taxation of Investments
It’s nice to own stocks, bonds, and other investments. Nice, that is, until it’s time to fill out your federal income tax return. At that point, you may be left scratching your head. Just how do you report your investments… Read More
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Which is Better, a Financial Buyer or a Strategic Buyer?
If you decide to sell your business to an outside acquirer, you’re going to have to decide between a financial and a strategic buyer—understanding the different motivations of these two buyers can be the key to getting a good price… Read More
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6 Wellness Lessons from The Waltons
I’ve admittedly been feeling a bit reflective lately. Perhaps this stems from the slower pace fostered by the recent shelter in place orders or perhaps I’m simply contemplating life a bit more these days. In keeping with this frame of… Read More
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The Power of Perseverance
THE CASE FOR STAYING INVESTED Although short-term volatility swings can be difficult to stomach, it’s important for long-term investors to persevere. While it may be tempting to pull out of the stock market, investors may miss out on a potential… Read More
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What a Difference 100 Years Makes… Or Not?
What can the 1918 influenza pandemic, the so-called “Spanish Flu”, teach us about how the markets have responded to current health concerns—and also how to act accordingly? There has been a “protracted discounting” of the market and the underlying value… Read More
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Bonds, Interest Rates, and the Impact of Inflation
There are two fundamental ways that you can profit from owning bonds: from the interest that bonds pay, or from any increase in the bond’s price. Many people who invest in bonds because they want a steady stream of income… Read More
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Teaching Your College-Age Child About Money
When your child first started school, you doled out the change for milk and a snack on a daily basis. But now that your kindergartner has grown up, it is time for you to make sure that your child has… Read More
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Education Tax Credits
It’s tax time, and your kitchen table is littered with papers and forms. As if this isn’t bad enough, you recently paid your child’s college semester bill, and you don’t know where you’ll find the money to pay the taxes… Read More
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Qualifying for the Home Office Deduction
Working from home can certainly provide you with personal benefits, such as a flexible schedule and more family time. But increasing numbers of people are discovering the tax advantages as well. It’s no secret that you generally can’t deduct certain… Read More
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The Big Thing Holding Back Small Businesses
Small businesses stay small either by choice, or because they start chasing growth in the wrong places. When you strip away the layers, it all comes down to darts. Imagine a dartboard with a bull’s eye and around it is a… Read More
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Why Should I Invest in the Stock Market Now?
NAVIGATING THROUGH MARKET VOLATILITY WHERE IS THE MARKET HEADED? Volatility may have some investors contemplating when they should pull out of the market or if they should sit on the sidelines and wait for the best time to invest. If you’re… Read More
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Tips for Those Caught in the Sandwich Generation
At a time when your career is reaching a peak and you are looking ahead to your own retirement, you may find yourself in the position of having to help your children with college expenses or the financial challenges of… Read More
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Spring Cleaning Your Way to Better Finances
Spring is a good time to clean out the cobwebs, and not just in your home or apartment. Your personal finances can benefit from a good spring cleaning, too. Here are some questions to ask yourself regarding your budget, debt,… Read More
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Is it Time to Review Your IRA Estate Planning Strategies?
The Setting Every Community Up for Retirement Enhancement (SECURE) Act, which was passed in December 2019 as part of a larger federal spending package, included a provision that warrants special attention from those who own high-value IRAs. Specifically, the “stretch”… Read More
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Risk Management and Your Retirement Savings
By investing for retirement, you are helping to manage a critically important financial risk: the chance that you will outlive your money. But choosing to invest is just one step in your financial risk management strategy. You also need to… Read More
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Charitable Gifting
WHAT CONSTITUTES A GIFT TO CHARITY? A gift to charity is simply a gratuitous transfer of property to a charitable organization. The key is that your gift must be some kind of property — your time or personal services do… Read More
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How to Protect Your Business from Future Uncertainties
A new decade always comes with a slew of predictions that can be scary for small business owners. Without a crystal ball, you might feel helpless. There are three practical steps you can take to protect yourself from whatever… Read More
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Deciding When To Retire: When Timing Becomes Critical
THINKING ABOUT EARLY RETIREMENT? Retiring early means fewer earning years and less accumulated savings. Also, the earlier you retire, the more years you’ll need your retirement savings to produce income, and your retirement could last quite a while. According to a… Read More
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The Joys and Financial Challenges of Parenthood
Parenthood can be both wonderfully rewarding and frighteningly challenging. Children give gifts only a parent can understand — from sticky-finger hugs to heartfelt pleas to tag along on Saturday morning errands. You raise them with a clear goal that you… Read More
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Health Insurance in Retirement
At any age, health care is a priority. When you retire, however, you will probably focus more on health care than ever before. Staying healthy is your goal, and this can mean more visits to the doctor for preventive tests… Read More
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What To Do In 2020?
In a phrase, keep investing in stocks. At the risk of appearing blindly bullish, this eternal optimist will attempt to provide some context for BWFA’s thinking going forward into 2020 and our overall approach to investing for our clients. As… Read More
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Personal Deduction Planning
Taxes, like death, are inevitable. But why pay more than you have to? The trick to minimizing your federal income tax liability is to understand the rules and make the most of your tax planning opportunities. Personal deduction planning is one… Read More
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Ownership Has Its Privileges
Walk down Nashville’s Lower Broadway any night of the week, and you can hear aspiring artists belting out cover tunes from Elton John to Garth Brooks. In many cases, these musicians come to Nashville to be discovered but pay their rent… Read More
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Our Summer Interns
This summer we had a team of five interns who helped us work on a variety of different projects supporting the financial planning, investment management, and tax teams. In addition, they assisted us plan for a few Client Appreciation Events,… Read More
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Record Keeping for Your Own Business
Keeping good business records will not only help you stay in business but may also help you increase profits. Your business records let you analyze where your business is and where it’s going. They point out potential trouble spots and… Read More
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Converting Investment Assets to Retirement Income
During your working years, you’ve probably set aside funds in retirement accounts such as IRAs, 401(k)s, or other workplace savings plans, as well as in taxable accounts. Your challenge during retirement is to convert those savings into an ongoing income… Read More
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Financial Basics for Young Adults
With age comes responsibility, so if you’re a young adult in your 20s or 30s, chances are you’ve been introduced to the realities of adulthood. While you’re excited by all the opportunities life has to offer, you’re also aware of… Read More
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Merging Your Money When You Marry
As I am a newlywed as of August, I thought an article about merging finances with your spouse was fitting. Some of these topics are good food for thought for many couples, not just newlyweds. Getting married is exciting, but… Read More
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Asset Protection in Estate Planning
You’re beginning to accumulate substantial wealth, but you worry about protecting it from future potential creditors. Whether your concern is for your personal assets or your business, various tools exist to keep your property safe from tax collectors, accident victims,… Read More
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Tax Withholding
A common question we encounter is: How much in taxes should I have withheld from my paycheck? This is a frequent thought once the prior year’s tax returns have been filed and individuals are looking ahead to the current year. Reviewing… Read More
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More on Taxes… What Happens to My Charities?
Many of you are BWFA tax clients, and our team of tax professionals assist you with filing your annual tax returns, doing quarterly analysis of the proper amount of estimated taxes where necessary, and a host of other tax analyses. The… Read More
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Growth vs. Value: What’s the Difference?
There are generally two schools of thought about how to choose stocks that may be worth investing in. Value investors generally buy stocks that appear to be bargains relative to the company’s intrinsic worth. Growth investors prefer companies that are… Read More
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Choosing a Beneficiary for Your IRA or 401(k)
Selecting beneficiaries for retirement benefits is different from choosing beneficiaries for other assets such as life insurance. With retirement benefits, you need to know the impact of income tax and estate tax laws in order to select the right beneficiaries. Although… Read More
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Inheritance: Strategies for Successfully Navigating Sudden Wealth
What would you do with an extra $10,000? Maybe you’d pay off some debt, get rid of some college loans, or take a much-needed vacation. What if you suddenly had an extra million or 10 million or more? We are… Read More
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Personal Residence Issues in Retirement
WHAT IS IT? As you grow older, housing issues become an integral part of your retirement plans. You may be living on a fixed income and want to get additional cash by borrowing against the equity in your home. You… Read More
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Planning for Succession of a Business: Can I Give It Away?
When you develop a succession plan for your business you have two basic choices: you can sell your business, or you can give it away. In the January 2019 Advisor, we focused on options for selling your business. There are… Read More
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How Does Everyone Feel About Taxes?
I’m assuming you all have answers I don’t want to hear. Last quarter, Amy Cudia (Tax Advisor) took the time to tell you about Federal tax credits and how they work. Let’s discuss even more ways to save you money…. Read More
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Past Performance is Not an Indication of Future Results
“While results vary from asset class to asset class and from time period to time period, experience suggests that for predicting future values, historical data appear to be quite useful with respect to standard deviations (risk), reasonably useful for correlations,… Read More
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Is There a Gender-gap in Investing?
There is a plethora of research suggesting that, at least at the individual level, women may be better investors than men. For example, a major financial institution looked at over 8 million client accounts and found that women outperformed men… Read More
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What To Do With Cash Reserves
In times of crisis, you don’t want to be shaking pennies out of a piggy bank. Having a financial safety net in place can ensure that you’re protected when a financial emergency arises. One way to accomplish this is by… Read More
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Balancing a Retirement Portfolio with Asset Allocation
The combination of investments you choose is as important as the individual investments themselves. In fact, many experts argue that it’s even more important, since the mix of various types of investments accounts for most of the ups and downs… Read More
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Stay Well With Good Health Insurance
Your goals and priorities will probably change as you plan to retire. Along with them, your insurance needs may change as well. Retirement is typically a good time to review the different parts of your insurance program and make any… Read More
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Four Reasons Your Parents Might Be In Financial Trouble
As your parents age, they will probably need more help from you. But it may be difficult to provide the help they need, especially if they’re experiencing financial trouble. Money can be a sensitive subject to discuss, but you’ll need to… Read More
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Planning for Succession of a Business
BUSINESS SUCCESSION PLANNING — WHAT IS IT? One of the important decisions a business owner must face is when and how to step out of the business — in other words, business succession planning or exit planning. Do you expect… Read More
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Understanding Personal Tax Credits
Have you ever thought that you’re paying too much income tax? You may be, if you’re not claiming all of the tax credits for which you are eligible when you file your federal tax return. These credits may significantly reduce… Read More
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The Roth 401(k)
Some employers offer 401(k) plans that allow participants the opportunity to make Roth 401(k) contributions. If you’re lucky enough to work for an employer that offers this option, Roth contributions could play an important role in helping enhance your retirement… Read More
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Understanding Risk — Pick Your Poison!
Currently, the public is quite focused on volatility. This is otherwise known as Market Risk—referring to the possibility that an investment will lose value because of a general decline in financial markets, due to one or more economic, political or… Read More
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Lump Sum vs. Dollar Cost Averaging: Which is Better?
Some people go swimming by diving into the pool; others prefer to edge into the water gradually, especially if the water’s cold. A decision about putting money into an investment can be somewhat similar. Is it best to invest your… Read More
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Umbrella Liability Insurance
When your local weather forecaster tells you that it’s going to rain, what do you do? That’s easy—you reach for your umbrella. So why not purchase an umbrella that can protect you in stormy financial weather? Umbrella liability insurance (ULI)… Read More
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6 Ways to Fight Fear of Volatility with Facts
You wouldn’t be human if you didn’t fear loss. Nobel Prize-winning psychologist Daniel Kahneman demonstrated this with his loss-aversion theory, showing that people feel the pain of losing money more than they enjoy gains. As such, investors’ natural instinct is… Read More
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How Can Losses Help Reduce Taxes and Benefit Your Long Term Results?
You are taxed on your earnings. Generally speaking, your earnings equal your income and gain, less your allowable expenses and losses. Because losses reduce your earnings, losses can help to reduce your tax liability. It is important, therefore, to know… Read More
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Client Services Update
New and Improved AdvisorClient.com The team at BWFA strives to provide an unparalleled level of service to all our clients. This includes addressing all client issues and concerns immediately and efficiently, providing important information to our clients that may help them… Read More
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When will the Bull Market End?… When Did it Actually Start?
• S&P 500 average length of a bull market is 97 months • S&P 500 average length of a bear market is 18 months Consider what are alleged to be the two longest running bull markets in modern financial history—one… Read More
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Concentrated Stock Positions: Considerations and Strategies
Whether you inherited a large holding, exercised options to buy your company’s stock, sold a private business, hold restricted stock, or have benefited from repeated stock splits over the years, having a large position in a single stock carries unique… Read More
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Estate Planning: Trusts
Whether you’re seeking to manage your own assets, control how your assets are distributed after your death, or plan for incapacity, trusts can help you accomplish your estate planning goals. Their power is in their versatility — many types of… Read More
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The Great Joy of Traveling
Some of the best conversations I have with our clients is finding out where folks have gone and what adventures they have encountered during the year. Nothing makes me happier than seeing our clients happy, healthy and yes, wealthy. Wealth… Read More
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Funding a New Business
You’ve written your business plan, you’re excited about your business idea, and now it’s time to get started. One problem: You don’t have the financing to fully realize your dream. What are your options? Aside from using your own funds… Read More
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Gift and Estate Taxes
If you give away money or property during your lifetime, those transfers may be subject to federal gift and estate taxes, as well as state gift tax. The money and property you own when you die (i.e., your estate) may… Read More
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Asset Allocation in Retirement
Your asset allocation strategy in retirement will probably be different than the one you used when saving for retirement. During your accumulation years, your asset allocation decisions may have been focused primarily on long-term growth. But as you transition into… Read More
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Following the (News) Crowd… Is it Good for You?
There is no finer example of humans’ herd mentality than listening to, and acting upon, the tidbits of the financial news media. As was commented recently, what if you left the design of elevator buttons to these folks in the media? Instead of “UP and… Read More
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Teaching Your Teen About Money
Your teen is becoming more independent, but still needs plenty of advice from you. With more money to spend and more opportunities to spend it, your teen can easily get into financial trouble. So before money burns a hole in… Read More
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How to Help Your Aging Parents Prepare for Retirement
Some people stride into their retirement years with the same self-assurance they’ve demonstrated all their lives. They’ve got the retirement thing figured out, and they don’t need help from anyone. But others go into retirement never entirely certain they’re actually… Read More
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Life Insurance for Business Owners
If you own your own business, chances are you’ve at least thought about the conditions under which you will leave the business and who is going to take over after you’re gone. Business continuation is difficult enough under normal circumstances,… Read More
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Taxes Are Changing! What Do We Do?
Don’t worry, we’ve got you covered. We are going to work our way through a 1040 (individual income tax return) and give the highlights of the tax changes. The first item on the return that changed is alimony. Starting in… Read More
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Dividends in a Portfolio
WHY CONSIDER DIVIDENDS? Dividend income has represented roughly one-third of the total return on the Standard and Poor’s 500 since 1926. According to S&P, the portion of total return attributable to dividends has ranged from a high of 53% during… Read More
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Interest Rates Rising… What About the Stock Market?
• What is the relationship between interest rates and the stock market? • Can stocks rise in a rising interest rate environment? • Do interest rates impact all stocks the same? Logic, and recent stock market volatility, would seem to… Read More
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Millennials: Coming of Age
In March 2018, Pew Research Center released a new study seeking to more conclusively define the Millennial generation. The study concluded that a Millennial is someone born between 1981 and 1996, making them now, in 2018, between the ages of… Read More
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Making a Large Financial Commitment? Borrow or Pay Upfront?
For those who were raised in the Great Depression Era or raised by Great Depression Era parents, we sometimes have developed an aversion to borrowing money. Let us explore the benefits today of borrowing, versus paying outright for a large… Read More
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Inflation Doesn’t Retire When You Do
The need to outpace inflation doesn’t end at retirement; in fact, it becomes even more important. If you’re living on a fixed income, you need to make sure your investing strategy takes inflation into account. Otherwise, you may have less… Read More
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BWFA’s Rob Carpenter Featured in January 2018 Business Monthly
President and CEO Rob Carpenter gives an astute prediction of the market’s direction for the coming year in this month’s edition of The Business Monthly, the business newspaper of Howard and Anne Arundel Counties and the BWI Business Corridor. You… Read More
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Choosing an Entity for Your Business
Now that you’ve decided to start a new business or buy an existing one, you need to consider the form of business entity that’s right for you. Basically, three separate categories of entities exist: partnerships, corporations, and limited liability companies…. Read More
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Tax Planning for the Self-Employed
Self-employment is the opportunity to be your own boss, to come and go as you please, and oh yes, to establish a lifelong bond with your accountant. If you’re self-employed, you’ll need to pay your own FICA taxes and take… Read More
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Holding Equities for the Long Term: Time vs. Timing
Legendary investor Warren Buffett is famous for his long-term perspective. He has said that he likes to make investments he would be comfortable holding even if the market shut down for 10 years. Investing with an eye to the long… Read More
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What Rising Rates Could Mean for Your Money
After years of keeping the benchmark federal funds rate at historic lows, the Federal Reserve has been raising it gradually. Near-zero rates were an emergency measure, and gradual increases reflect greater confidence in the U.S. economy. However, rising rates can… Read More
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Women: Moving Forward Financially After the Loss of a Spouse
The loss of a spouse can be a devastating, life-changing event. Due to longer life expectancies, women are more likely to face this situation. This has hit close to home for BWFA as very recently some long standing clients have… Read More
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Six Potential 401(k) Rollover Pitfalls
You’re about to receive a distribution from your 401(k) plan, and you’re considering a rollover to a traditional IRA. While these transactions are normally straightforward and trouble-free, there are some pitfalls you’ll want to avoid. 1. CONSIDER THE PROS AND… Read More
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New Year’s Resolutions
A new year means fresh beginnings, time for reflection and hoped-for changes. New year’s resolutions abound! They are a time-honored tradition for many of us, including myself. According to research, about 60% of us acknowledge making New Year’s resolutions, but… Read More
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Are Your Cash Investments Fully Insured?
As many of you know, a person’s bank accounts are only covered by the Federal Deposit Insurance Corporation up to $250,000 per person. Many people may be unaware that any cash held in a savings, money market and checking accounts… Read More
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Transferring Your Family Business
As a business owner, you’re going to have to decide when will be the right time to step out of the family business and how you’ll do it. There are many estate planning tools you can use to transfer your… Read More
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BWFA Focus: Tax Services
Art Buchwald, the famous American humorist and syndicated newspaper columnist, once said—“Tax reform is taking taxes off things that have been taxed in the past and putting taxes on things that haven’t been taxed before.” Since Benjamin Franklin long ago… Read More
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Pay Down Debt or Save for Retirement?
You can use a variety of strategies to pay off debt, many of which can cut not only the amount of time it will take to pay off the debt but also the total interest paid. However, like many people,… Read More
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Monte Carlo Analysis
When you sit down with a BWFA financial professional to update your retirement plan, you may encounter a Monte Carlo simulation, a financial forecasting method that has become more prevalent in the last few years. Monte Carlo financial simulations project… Read More
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Health Insurance In Retirement
At any age, health care is a priority. When you retire, however, you will probably focus more on health care than ever before. Staying healthy is your goal, and this can mean more visits to the doctor for preventive tests and… Read More
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Our Summer Interns
This summer BWFA was fortunate to have seven talented student interns work with our team. Each brought their individual skills to the table and, hopefully, each gained some meaningful exposure and experience from their time with us. The team of… Read More
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BWFA Client Advisory Board
Today, the CAB consists of approximately 30 members, typically serving 2-4 year terms. The board meets twice a year, usually at a local restaurant, for luncheon presentation and follow up discussion. Among the current members are professionals, retirees, small business… Read More
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Retirement Plans for Small Businesses
As a business owner, you should carefully consider the advantages of establishing an employer-sponsored retirement plan. Generally, you’re allowed a deduction for contributions you make to an employer- sponsored retirement plan. In return, however, you’re required to include certain employees in the… Read More
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Gift & Estate Taxes
If you give away money or property during your life, those transfers may be subject to federal gift and estate tax and perhaps state gift tax. The money and property you own when you die (i.e., your estate) may also be… Read More
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Time in the Stock Market + Market’s Resiliency = Potential for Long Term Financial Success
In the last quarterly newsletter, I wrote about the benefits of time in the market and, conversely, the perils of missing the most successful, unpredictably timed, individual positive days in the market. Simply stated it is “time in the market” that trumps “timing… Read More
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Financial Planning: Helping You See The Big Picture
Do you picture yourself owning a new home, starting a business, or retiring comfortably? These are a few of the financial goals that may be important to you, and each comes with a price tag attached. That’s where financial planning comes… Read More
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Establishing a Budget
Do you ever wonder where your money goes each month? If so, you may want to establish a budget to help you keep track of how you spend your money and help you reach your financial goals. EXAMINE YOUR FINANCIAL… Read More
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Caring for Your Aging Parents
Caring for your aging parents is something you hope you can handle when the time comes, but it’s the last thing you want to think about. Whether the time is now or somewhere down the road, there are steps that… Read More
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