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Your Unique Journey to Financial Wellness

In a study done by Merrill Lynch in partnership with Age Wave, it was found that 70 percent of women believe that men and women have a fundamentally different life journey when it comes to career, family expectations, aging, and finances, reinforcing the need to better understand women’s financial concerns and opportunities. In recent decades, there has been a seismic shift in women’s personal and financial representativeness.

Since 2015, women or female run households have had control of more than 50% of our nation’s wealth. With this new wave of women investors and financial heads of household comes the need to identify what can be done to reinforce independence, mitigate longevity risk, encourage financial knowledge and education, and empower women to find their path to financial wellness. Financial independence affords women the confidence in meeting their financial obligations, experience the life that they want, achieve their goals and take care of loved ones.

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Have you been underpaid? What Widows need to know about Social Security

The Social Security Administration recently reported that it had underpaid $224 million to about 25,000 widows and widowers. In a random sample of this group, it found that 82 percent could have gotten a higher monthly benefit if they had claimed survivor benefits first and delayed claiming their own retirement benefits until age 70. The audit also found no evidence that SSA employees informed the people about their option to delay their retirement benefits to age 70, which is required. If you believe that you have been underpaid, we recommend contacting your local social security office to determine if they will give you any retroactive benefits.

Widow’s social security benefits are complex so we recommend that you call or visit your local SSA branch to get an initial determination of your options and then get a second opinion with an expert on social security claiming strategies to help you fully understand your benefit.

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Feeling a Little Uncertain? Focus on Fixed Income

It’s been approximately a decade since the Great Recession began. By year-end 2008, the U.S. Federal Reserve (the Fed) had lowered the target federal funds rate to near-zero and embarked on an aggressive quantitative easing campaign, hoping to resuscitate the economy with a big booster shot of lending, borrowing and spending dollars.

Perhaps the economic recovery that followed was a direct result of these and other Fed initiatives. More likely, there were a number of contributing factors. Either way, the Fed has begun to reverse course, restoring its policies and targets closer to historical “norms” through quantitative tightening and gradually rising rates.

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Will I Lose my Mortgage Interest Deduction This Year?

After the Tax Cuts and Jobs Act (TCJA) was passed, there was concern that the beloved mortgage interest deduction for home equity loans had met its demise. While, on its face, that is what the law says, there is a loophole that taxpayers can use if they meet certain criteria.

As long as the loan is secured by a qualified residence (primary home or vacation home) and not for an investment property then you can begin evaluating whether the loan qualifies for the technique we are discussing that was approved by the IRS on February 21, 2018.

• The proceeds from the loan must be used for home improvements.
• The loan must be characterized as an acquisition debt. The law states that the debt was incurred to “buy, build or substantially improve” a qualified residence.

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The ABCs of Behavioral Biases: Overconfidence, Pattern Recognition and Recency

So many financial behavioral biases, so little time! Today, let’s take a few minutes to cover our next batch of biases: overconfidence, pattern recognition, and recency.

OVERCONFIDENCE

What is it? No sooner do we recover from one debilitating bias, our brain can whipsaw us in an equal but opposite direction. For example, we’ve already seen how fear on the one hand and greed on the other can knock investors off course either way. Similarly, overconfidence is the flip side of loss aversion. Once we’ve got something, we don’t want to lose it and will overvalue it compared to its going rate. But when we are pursuing fame or fortune, or even going about our daily lives, we tend to be overconfident about our odds of success.

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How to Approach Charitable Giving in 2018 and Beyond

Now that the tax season is a wrap for most Americans, it’s time to start contemplating how the 2017 Tax Cuts and Jobs Act (TCJA) will impact your 2018 and future tax plans. One of the frequently asked questions we’ve been fielding is on charitable giving: How can you keep giving, and get a little back on your taxes? Following are four practical possibilities to consider for charitable giving under the TCJA rules.

No New, But Possibly Improved Opportunities

It’s worth mentioning that none of these four tax--planning possibilities are new; they’ve all been available well before the TCJA passed. The difference is, they may be more applicable to you under the new tax codes.

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ABCs of Behavioral Biases: Hindsight, Loss Aversion, Mental Accounting, Outcome Bias

There are so many investment-impacting behavioral biases, we could probably identify at least one for nearly every letter in the alphabet. Today, we’ll continue with the most significant ones by looking at: hindsight, loss aversion, mental accounting and outcome bias.

HINDSIGHT

What is it? In “Thinking, Fast and Slow,” Nobel laureate Daniel Kahneman credits Baruch Fischhoff for demonstrating hindsight bias – the “I knew it all along” effect – when he was still a student. Kahneman describes hindsight bias as a “robust cognitive illusion” that causes us to believe our memory is correct when it is not. For example, say you expected a candidate to lose, but she ended up winning. When asked afterward how strongly you predicted the actual outcome, you’re likely to recall giving it higher odds than you originally did. This seems like something straight out of a science fiction novel, but it really does happen!

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Reckoning With Your Retirement After the Loss of a Spouse

Losing your spouse is hard enough without having to worry about the retirement you have built together. After many years of responsible saving and planning for a comfortable retirement together, it can be devastating to face the prospect of taking on those carefully laid plans alone. Though nothing can ever make up for the loss of a spouse, there are ways in which a widow or widower can lessen the financial burden by collecting some of a spouse's retirement funds.

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ABCs of Behavioral Biases: Fear, Framing, Greed, Herd Mentality

Let’s continue our alphabetic tour of common behavioral biases that distract otherwise rational investors from making best choices about their wealth. Today, we’ll tackle: fear, framing, greed, and herd mentality.

FEAR

What is it? You know what fear is, but it may be less obvious how it works. As Jason Zweig describes in “Your Money & Your Brain,” if your brain perceives a threat, it spews chemicals like corticosterone that “flood your body with fear signals before you are consciously aware of being afraid.” Some suggest this isn’t really “fear,” since you don’t have time to think before you act. Call it what you will, this bias can heavily influence your next moves – for better or worse.

When is it helpful? Of course, there are times you probably should be afraid, with no time for studious reflection about a life-saving act. If you are reading this today, it strongly suggests you and your ancestors have made good use of these sorts of survival instincts many times over.

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Don't Let Your Sweepstakes Dream Become a Nightmare

Publishers Clearinghouse has long been famous for its big checks and big winnings, but it has recently come to our attention that scammers have been using the PCH name and logo to commit fraud.

Although PCH's sweepstakes are legitimate, you still need to be very cautious if you receive a prize notification from PCH or any other company claiming you are a big winner. We are advising all of our clients to shred and ignore notifications from PCH and to be wary of all prize notifications, especially ones that ask for money.

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The ABCs of Behavioral Biases (A-F)

Welcome back to our "ABCs of Behavioral Biases." This article introduces you to four self-inflicted biases that knock a number of investors off-course: anchoring, blind spot, confirmation and familiarity bias.

ANCHORING BIAS

What is it? Anchoring bias occurs when you fix on or "anchor" your decisions to a reference point, or default when required to estimate an unknown value.

When is it helpful? An anchor point can be helpful when it is relevant and contributes to good decision-making. For example, if you've set a 10 pm curfew for your son or daughter and it's now 9:55 pm, your offspring would be wise to panic a bit, and step up the homeward pace.

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