Estate Planning: A Beginner’s Guide

The end of the year is fast approaching, which means it's time to get your financial house in order before 2025. This can help ease tax season stress and ensure you're set up for a smooth start to the new year. To get ahead, here are eight key financial planning tips to consider: 1. Organize Your Documents for Taxes Tax season will be here before you know it, so now is the perfect time to start gathering important documents, like bills, bank statements, and receipts for any deductible expenses. Staying organized makes filing much easier and helps you avoid missing out on potential deductions. 2. Review Your Filing Status Did your marital status change this year? Getting married, divorced, or welcoming a new child into your family can impact your filing status and, consequently, your tax bill. Checking your status now can help avoid surprises and possibly lead to a bigger refund. 3. Max Out Your Retirement Contributions Have you contributed the maximum amount to your retirement accounts? For 401(k) and 403(b) plans, the limit for 2024 is $23,000. If you're 50 or older, you can take advantage of catch-up contributions, adding an extra $7,500. Looking ahead, those aged 60-63 can contribute even more in 2025 with an additional $10,000 catch-up limit. 4. Check Your Estate Plan Life changes can also affect your estate plan. Now is a good time to review your will, trusts, and beneficiary designations to ensure they align with your current situation and goals. Updates to estate tax laws could also mean adjustments are needed. 5. Review Insurance Coverages Open enrollment is coming up for many employer benefit plans, so it’s a great time to review your health, life, long-term care, and disability insurance. Make sure your policies provide adequate coverage, especially if you’ve had major life changes like marriage, a new baby, or purchasing a home. 6. Think About Your Investments The end of the year is a good time to review your investment portfolio and ensure it still aligns with your financial goals. If you have any underperforming stocks, consider selling them to offset capital gains elsewhere. And don't forget—if you've sold cryptocurrency, the profits are taxable too! 7. Plan for Required Minimum Distributions (RMDs) If you turned 73 this year, you’ll need to take your first RMD by April 1, 2025, and your second by December 31, 2025. RMDs apply to certain retirement accounts like 401(k)s and IRAs, so make sure you’re prepared to take the correct amount to avoid penalties. 8. Evaluate Your Charitable Contributions If you plan to make charitable donations, now is the time to do it. Donations made to qualified charities can be tax-deductible, and if you itemize, this can offer significant tax savings. For those over 70½, you can also use a qualified charitable distribution (QCD) to donate up to $100,000 tax-free. Financial health requires regular monitoring, and these year-end steps can help keep you on track for a prosperous 2025. Schedule a consultation today to make sure your financial plan is aligned with your goals.

Elections have always been a time of uncertainty for markets, with investors wondering how political changes might affect their portfolios. However, history tells us that markets are resilient, and long-term strategies often withstand the ups and downs of election cycles. Here’s how elections impact markets and why sticking to your plan can lead to strong returns. 1. Market Uncertainty vs. Political Affiliation One of the key drivers of market fluctuations during elections is uncertainty, not the political party in power. Markets generally dislike uncertainty, and elections introduce a sense of unpredictability as policies and leadership could shift. However, it’s important to note that since World War II, no political party has consistently experienced superior market returns. This suggests that while short-term volatility may occur, the markets have trended upwards over the long term, regardless of who holds office. For investors, this is a critical reminder: rather than reacting to the headlines, focus on the policies that will likely impact the market, such as tax reforms or regulatory changes, and not the personalities involved. 2. Historical Election Year Returns Historically, election years have been positive for investors who stayed the course. In 20 of the last 23 election years, a balanced 60/40 portfolio (60% stocks, 40% bonds) finished in positive territory. On average, election years delivered an 8.5% return. The three exceptions were due to broader macroeconomic factors, not political outcomes. This data demonstrates that, despite the uncertainties elections may bring, staying invested during these times has typically paid off. Pulling out of the market or drastically changing your investment strategy based on election results can lead to missed opportunities for growth. 3. The Impact of Tax Policies Tax policy changes are often a focal point during election cycles, and they can indeed influence markets. For example, past tax hikes have had mixed effects on market performance. Between 1931-1932, tax increases contributed to a market decline of -27.9%. However, from 1934-1936, the market saw a 24.9% increase despite higher taxes. More recent periods of tax changes, such as the 2012-2013 increases in individual and capital gains taxes, coincided with a 23.9% market gain. This historical perspective underscores that while tax policy changes can have short-term effects, they do not typically dictate long-term market trends. Investors should be prepared for potential policy changes, such as the expiration of the Tax Cuts & Jobs Act in 2025, but not allow these potential shifts to derail a well-thought-out investment plan. 4. Sticking to the Plan The most important takeaway for investors is that staying the course during election years and beyond has historically been a winning strategy. Research shows that forward 4-year returns following elections have been robust, regardless of the outcome. Reacting emotionally or making hasty changes in response to political shifts can undermine long-term goals. In times of uncertainty, it’s easy to feel compelled to make adjustments. However, having a solid investment plan, tailored to your goals and risk tolerance, means you shouldn’t need to react to short-term events, including elections. Webinar Invitation To dive deeper into how elections and other global events influence markets, join Stanton Advisory Group for an exclusive webinar on October 14th at 3 p.m. CST. In partnership with financial experts, we’ll explore more on this topic and provide actionable insights for navigating election year volatility. Email us to receive the registration link. Call to Action If you’re concerned about how elections might affect your portfolio or are unsure whether your current strategy is optimized for the long term, now is the time to take action. Schedule a consultation with Stanton Advisory Group today to review your plan and ensure you’re on track for financial success, regardless of the political landscape. Disclosure: Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. This material does not constitute legal, tax, securities, or investment advice. Consult a licensed professional for tailored advice.