Research & Insights

Let’s Go To the Beach

It’s summer and Americans are on the move. Tourism, travel and vacation spending are poised to be at record levels this year. After our memorable winter, Americans quickly scheduled some travel plans for something to look forward to. As a result, there’s been a surge in advance bookings for hotels, resorts and travel destinations both here and abroad. This great travel surge is just one of the hallmarks in a strong consumer spending pattern that is leading the current rebound in U.S. economic growth. After a brutal winter that suppressed both business and consumer spending in the first quarter, the advent of warmer weather has enabled both to “snap back” to elevated levels. In our last commentary in April, we highlighted the rebound in consumer spending, manufacturing orders and shipments we were seeing as the first quarter ended. Read the full article here

Is This the Breakout?

Despite the negative implications of the government shutdown in October, businesses and consumers ignored the Washington brinkmanship and led a huge economic surge in the third quarter of just over four percent annualized GDP growth. Business inventory accumulation accounted for over 1.6 percent of the total growth. Nonetheless, surprising strength in consumer spending and exports and building momentum in business shipments and production accounted for the unexpected expansion in the third quarter. These trends continue in the fourth quarter leading us to raise our expectations for fourth quarter and full year 2013 economic growth to a range of 2.5 to 3 percent. Click to read more

United States Economy on Hold

After the economy rose in the summer, businesses and consumers entered the third month of the third quarter cautious due to uncertainty regarding fiscal deliberations in Washington. That caution was validated when Congress failed to enact a new budget for the current fiscal year, thus shutting down the government on October 1, 2013, and barely avoiding a United States debt default on October 17. Click to read more

GDP Growth Decelerates in Second Quarter – is the Economy Weakening?

A Statistically Weak Second Quarter

The second quarter of 2013 is now expected to show slower economic growth below the revised 1.8 percent reported in the first quarter. The latter was a dramatic downward revision from the 2.4 percent growth rate previously reported. Continuing the trends seen since the end of the recession, strength in one quarter has led to retrenchment in a subsequent one and this year’s second quarter at first glance appears to follow the same script. After surging out of last year’s fourth quarter, economic growth momentum carried through January and February before weakening in March. That weakness continued through April and much of May before signs of economic strength began appearing just before the Memorial Day holiday. Click to read more

Economy Outperforms Expectations But…

A Surprising First Quarter

The first quarter of 2013 is shaping up to be stronger than early expectations despite what appears to be some weakening in March. Real gross domestic product is expected to grow in a range of 2% to 2.5%. This is far better than the 0.4% increase registered during the fourth quarter of 2012 and far stronger than the 1% projections entering 2013. Despite uncertainties from Washington regarding the federal budget and the enactment of higher taxes, consumers and businesses combined to “shake off” these “headwinds” and increase their spending during January and February. Click to read more

Out of the Frying Pan, into the Fire

U.S. Avoids Fiscal Cliff but Familiar Challenges Remain

With the noteworthy exception of the nation’s still expanding national debt, 2012 will be viewed by economic historians as predominantly a year of progress. Financial markets performed, the number of jobs expanded, unemployment fell, auto sales surged, housing prices stabilized and consumers were active. According to the most recently revised estimate supplied by the Bureau of Economic Analysis, national gross domestic product expanded 3.1 percent during the third quarter of 2012 on an annualized basis. The fourth quarter wasn’t nearly as good with the expectation that the U.S. economy expanded approximately 2 percent on an annualized basis during the quarter. For the year as a whole, it is estimated the economy grew at or slightly better than the 2.0 percent growth of 2011.
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U.S. Economy Steadily Creeping Toward 0 Percent Growth

After a disappointing second quarter, equity markets finished the third quarter of the year with strong gains. The Dow Jones Industrial Average rose 565.74 points during the third quarter or by 4.4 percent to 13,437.13 — just a few hundred points below its all-time high of 14,164.53 set in 2007 according to the Wall Street Journal. The S&P 500 rose 5.8 percent to 1,440.67 and the NASDAQ rose 6.2 percent to 3,116.23. Supporting the market was the Federal Reserve’s decision to move forward with QE3, which had been widely expected. The Federal Reserve’s latest initiative adds liquidity to financial markets, which in turn drives up stock prices all things being equal.
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Economic Uncertainty and Market

Volatility on the rise after an excellent first quarter, equity markets reverted into a now familiar pattern of volatility coupled with negative return. The Dow Jones Industrial Average sank 331.95 points or by 2.5 percent during the second quarter to 12880.09. The S&P 500 slipped 3.3 percent and the NASDAQ dropped more than 5 percent. A torrent of bad news from Europe coupled with growing evidence of U.S. economic softening was largely responsible. There were also other events that annoyed investors and shook confidence in the stock market, including Facebook’s poorly managed initial public offering and large trading losses at J.P. Morgan.
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The Beat Goes On…

Final estimates of real U.S. GDP growth for the fourth quarter of 2011 came in at 3 percent, the high end of our 2 – 3 percent projection. As discussed in our previous economic commentary, fourth quarter GDP growth was led by increased consumer spending (particularly in durable goods, led by autos); increased business investment led by strong inventory accumulation; and a significantly higher contribution from housing. Increased consumer spending was aided by upwardly-revised job creation during the fourth quarter.
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Summary: 401(k) Fee Transparency – What Does it Really Mean?

With the news of the final 401(k) fee disclosure regulations, which go into effect on July 1, 2012, it’s important to understand what that really means to 401(k) retirement plan participants and their plan sponsors. These new regulations are intertwined with some other factors that affect qualified retirement plans.
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White Paper: 401(k) Fee Transparency – What Does it Really Mean?

This White Paper provides an extended examination of the final 401(k) fee disclosure regulations, which go into effect on July 1, 2012. It’s important to understand what that really means to 401(k) retirement plan participants and their plan sponsors. These new regulations are intertwined with some other factors that affect qualified retirement plans.
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740 or bust: How to raise your credit score

Individuals with a solid credit score typically not only have access to lower interest rates on mortgage loans and credit cards, but — at a time when employers are increasingly running credit checks before making hiring decisions — also stand a better chance of landing a job. This article offers four steps to take to achieve a higher credit score.
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A Fourth Quarter Rebound in the U.S.: Is it Sustainable?

What a difference a quarter makes. In Q3 2011 we were concerned about weakening economic trends and the weak outlook for the final quarter. We were also concerned about conditions deteriorating further and triggering a “double dip” recession.
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A guiding light even after death – Incentive Trust

It’s not uncommon for people to worry about what might happen if their children should inherit their wealth before they’ve gained experience and maturity. But this article shows that an incentive trust will allow parents to establish specific criteria for their children to meet before becoming eligible to receive the trust’s assets. The trust can mandate that the child meet particular personal or professional goals, and it can be set up to spread distributions over a set amount of time.
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Advice for Recent Grads

With their college degrees in hand, it’s time for the recent graduates in your life to take on the responsibilities that come with the rewards of financial independence. And given today’s economic challenges, it’s critical for them to establish good money management habits from the outset. This article offers some key personal financial tips you can give them along with your graduation gift.
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Casting a safety net – buy-sell agreements

An owner of a closely held company must consider the possibility a co-owner will leave the company because of retirement, death or incapacitation. Designing and implementing a buy-sell agreement can be an effective tool for outlining an owner’s wishes for his or her company when he or she or a co-owner departs. This article discusses buy-sell agreements.
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Deciphering the language of trusts

This short article defines the most common terms related to the planning and structuring of trusts.
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Decision time-when to take social security benefits

To be financially prepared for the possibility of a lengthy retirement, one important decision to make is when to begin taking Social Security benefits. One can take reduced benefits at age 62, “full” benefits at the “normal” retirement age (65 to 67, depending on year of birth), or greater benefits after normal retirement age up until age 70. The trade-off between smaller payments sooner or larger payments later can hinge on a variety of considerations, including one’s current and future financial profile, along with health. The Social Security Administration offers some tools that can help start the decision-making process.
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Decisions – choosing your successor

Choosing a successor is one of the most important decisions business owners must make. Yet many fail to implement a succession plan until they are on the verge of retirement or forced to step down because of a sudden illness or disability. This article explains the process of choosing a successor.
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Disability Insurance -A cushion from life’s jolts

The prospect of being unable to earn a living may be agonizing, but people can give themselves some peace of mind with a disability insurance policy. These policies are often offered through employers, but some may want to consider buying an individual policy because it offers portability and allows them to determine the amount of coverage they need.
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Do you have enough life insurance?

Life insurance can help a family maintain its standard of living even if the breadwinner is no longer around to provide for it. A policy can help prevent a family from having to sell its house or make other dramatic adjustments in their standard of living to make ends meet. But different people have different insurance needs. This article explains what to consider when planning for the future, while a sidebar describes the differences between term and permanent insurance.
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Do you need directors and officers insurance?

In the current post-Sarbanes-Oxley business environment, investors expect greater transparency, and lawsuits are more common than ever. Not only can a company be held financially liable, but so can directors or officers. This is why a directors and officers (D&O) insurance policy is necessary to protect personal assets. But it’s important to determine exactly what a specific policy covers. This article explains why D&O insurance is important for nonprofit executives, as well.
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Do you think college financial aid is out of reach?

As college costs continue to rise faster than inflation, it’s never been more challenging — or more important — to have a plan for managing those expenses. But families more fortunate than others might not have realized the extent to which financial aid may be available to them. This article takes a look at grants, scholarships and loans, offers tips to increase eligibility for aid, and discusses the Free Application for Federal Student Aid (FAFSA) form that is often required when applying for aid.
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Donating a conservation easement to charity

Under the right circumstances, it’s possible to contribute a “partial interest” in real estate to a charitable organization in the form of an easement while the owners continue to own and use the property. Generally, property with an environmental or historical value can qualify for a conservation easement, but rules must carefully be followed to qualify for the charitable deduction.
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Don’t be an easy target – Asset Protection

Asset protection — the process of arranging affairs to shield assets from potential creditors, litigation and other legal hazards — should be a consideration for everyone. Business owners, however, are at particular risk. This article suggests several popular asset protection strategies, including tenancy by the entireties, shifting ownership of certain assets to a spouse, family limited partnerships and irrevocable life insurance trusts.
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Economy at a Crossroads

Beginning this month, ParenteBeard Wealth Management is distributing a quarterly economic update written for us by Morris Segall, President of SPG Trend Advisors. For the past four years Mr. Segall has been providing economic data and trend analysis to our family wealth guardians. This short article on the state of the economy can provide timely, relevant information that we hope you will find beneficial.
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How relocating will affect your taxes

When a person relocates to another state — or perhaps purchases a second home there — it’s important to research the tax impact. The person also must consider whether changing his or her domicile is necessary or desirable. This article explores the financial and tax implications of relocating.
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How to Choose A Wealth Advisor

Choosing a partner in managing your family’s wealth can sometimes feel like a game of “Eeny-meeny-miny-moe.” Armed with the right knowledge and the right questions to ask, you’ll be able to choose the best financial caretaker to help you guard and grow your family’s wealth for generations to come.
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Maximizing the tax benefits of your vacation home

Renting out a vacation home for part of the year can provide a much-needed getaway and some nice income. But depending on how frequently the property is used vs. rented, it may also mean a higher tax bill. This article explains the IRS’s rules regarding vacation home use.
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Nonqualified deferred compensation plans offer valuable tax benefits

Recent tax laws have tightened the rules and curtailed certain abuses of nonqualified deferred compensation plans, but they remain popular methods of motivating key employees. This article explains the plan’s features for participants, including how they’re funded and how payouts are made.
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Pass wealth with an incentive trust

It’s not uncommon for people to worry about what might happen if their children should inherit their wealth before they’ve gained experience and maturity. But this article shows that an incentive trust will allow parents to establish specific criteria for their children to meet before becoming eligible to receive the trust’s assets. The trust can mandate that the child meet particular personal or professional goals, and it can be set up to spread distributions over a set amount of time.
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Private Foundations

The general perception of private foundations is that they’re only for the wealthy. In fact, private foundations can be an effective strategy for creating a family legacy of giving. There is no official minimum and a person may be able to effectively establish a foundation with an initial contribution as low as $250,000. This article explores the benefits (and a few drawbacks) of creating a private foundation.
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Risk, Risk and More Risk

ParenteBeard Wealth Management is pleased to present the latest quarterly economic update from Morris Segall, President of SPG Trend Advisors. For the past four years, Mr. Segall has provided economic data and trend analysis to our family wealth guardians.
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Should you borrow from 401K?

Most 401(k) plans offer participants the option of borrowing against their balance at a low interest rate and with flexible repayment terms. Nevertheless, borrowing against a 401(k) can be a bad idea because it reduces the amount available for potential compounded growth. It can also be a problem if employees part way with their companies. In that case, they may be required to pay back their loan within 30 to 90 days.
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Should you put your trust in a living trust?

A living trust offers three key estate planning benefits: 1) It’s a means to bypass the probate process, 2) it acts as a blueprint for handling a person’s affairs and 3) it separates marital assets for married couples in community property states who had a substantial amount of property before the marriage. This article details how a living trust works.
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Take care of your 401k when changing jobs

When a person changes employers, one of the many transitions he or she may face is what to do with the money accumulated in his or her 401(k) plan. This article details four options to consider when deciding on what to do with a 401(k) plan when changing jobs.
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Talking finances with your aging parents

Many adults find themselves in an uncomfortable role reversal of managing the financial affairs of their parents as they age and become ill or mentally incapacitated. As this article explains, planning ahead can save families significant time, mental anguish and money. Families may want to consider such options as joint checking accounts, revocable living trusts and limited partnerships. They also are likely to benefit from a power of attorney agreement.
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Tapping the cash value of your life insurance policy

Life insurance can serve several functions that include funding a business buy-sell agreement, providing the liquidity to pay estate taxes, funding retirement or paying for a child’s education. Before tapping a policy’s cash value, however, policy holders should understand the consequences, including the possibility that a withdrawal could cause the policy to lapse.
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The best gift you’ll never receive

Because of the tax benefits, gifting highly appreciated securities — such as publicly traded stock, mutual fund shares and closely held stock — may be a more tax-efficient way to make gifts to a charitable organization. This article details this charitable giving strategy.
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Umbrella policies can mean extra protection

As this short article explains, umbrella insurance can protect assets against the possibility of an expensive lawsuit. It supplements the liability coverage offered by homeowner’s and automobile policies and also may cover things they don’t, such as medical bills and lost income of someone injured as the result of the policyholder’s negligence.
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Until death or divorce do we part

Despite love, hope and good intentions, more than half of marriages in the United States end in divorce. A well-crafted prenuptial agreement, commonly referred to as a “prenup,” provides protection for a person’s personal and business assets by outlining how they’ll be divided in the event of divorce or death. This article discusses the ins and outs of a prenup.
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What to consider when naming retirement plan beneficiaries

Income and estate tax ramifications are among the most important factors to consider when choosing retirement plan beneficiaries. This article explores those ramifications, and shows the advantages/disadvantages of choosing a spouse vs. someone else as a beneficiary, including a trust or charity.
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