Our Investment In You

With any occupation, there are aspects you may thoroughly enjoy and others that prove difficult, challenging and maybe even painful. While I certainly believe ours is tilted heavily into the positive, it also is no different.

I know I, and all of us at Cherry Tree, are incredibly fortunate to be in a position to help others achieve their goals, their hopes and dreams, their life’s mission. As an investment advisor, we are often tasked with putting all of the financial, professional and personal aspects together into a plan that encompasses all a client may hold dear. With that great fortune comes an arguably more important responsibility as life comes closer to an end. Over the years, clients have become more than clients; they are grandparents, uncles, aunts, brothers, sisters, parents, and in most cases thus far, people I admire and are proud to know.

Today was a hard day. It didn’t include death, but it did give a stark reminder that it is inevitable. I understand one of the most important elements of our job is being someone and something that can be counted on without fail in some of life’s most difficult moments. While we are tasked with managing financial investments over time, I find I have made equally as important investments in who I work for and who I work with. It is a unique perspective to be both a liaison and witness to love between spouses who make decisions selflessly, to be a bridge between generations as they pass down both their wisdom and values, to be the assurance that things will be okay even when they are gone.

Our investment in you is our devotion of our time, energy, ideas and resources as well as our emotional stake. There are some clients that hire us to be a trusted investment advisor and nothing more, but I am lucky to know that most continue working with us over time because we care.

About the Author: Conner Kolodge

 

Conner transitioned into personal finance to utilize his knowledge and skills to make meaningful differences in the lives of family and friends. He strives to connect client’s life goals with their finances. Conner has been recognized as a “FIVE STAR wealth manager” by Twin Cities Business Magazine for 2019, 2020, 2021, 2022, and 2023.

Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. CTW gathers its data from sources it considers reliable. However, CTW makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.

The Step-Up (or Down) in Basis

While the step-up in basis rule at death has been on the chopping block in Washington the past few years, it has maintained its form through each challenge. The cost basis rule, when used correctly, can save the next generation (or surviving spouses) anywhere from 10’s of thousands of dollars to millions in select cases.

As in physics, there is an equal and opposite reaction: in tax law, for all of the benefits offered, there are plenty of situations where they can turn detrimental.

The prime example in my mind is the step-up in basis. Step-up in basis, in its most basic definition, is the adjustment in the cost basis of an inherited asset to its fair market value on the date of the decedent’s death. These investable assets can range from stocks, mutual funds, real estate, precious metals to your home if held outside of a retirement account. Because of the growth in many of these markets over time, planning for the step-up in basis can be an incredibly important element of estate planning.

As many stock market indexes across the board have seen double digit losses so far this year, some recent investors may find themselves holding assets underwater for the time being.

 Enter “the Step-down in basis”.

Straight from the definition above, at death the ”adjustment in the cost basis of an inherited asset to its fair market value.” It most certainly doesn’t clarify that the adjustment must be up or down. In financial planning terms, by passing away with an imbedded capital loss in an asset, neither you nor the next generation can use that capital loss to offset other capital gains.

To avoid losing these tax benefits, one must be diligent in knowledgeably tax-loss harvesting later in life.

While we can’t predict where the market will go nor how long we will live, being diligent about both a step-up and step-down in basis can help pass on the most legacy to those we care about.

About the Author: Conner Kolodge

Initially focused in financial compliance, Conner transitioned into personal finance to utilize his knowledge and skills to make meaningful differences in the lives of family and friends. He strives to connect client’s life goals with their finances.

Conner has been recognized as a “FIVE STAR wealth manager” by Twin Cities Business Magazine for 2019 and 2020.

Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. CTW gathers its data from sources it considers reliable. However, CTW makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.

Starting a New Job

Starting a New Job

Whether you are climbing the corporate ladder in a new role or changing careers altogether, starting a new job can create a sense of excitement. Often times that excitement is accompanied by a nervousness due simply to a lack of familiarity. A part of the uneasiness comes from the many financial decisions that go hand in hand with this transition.

  • What should I do with my prior 401k/403b?
  • Am I choosing the right health benefits for my family?
  • Is the tax withholding correct going forward and incorporating other current year income?

For most of us, these questions aren’t those we think about often, but can be critically important to our personal financial success. As you begin your transition by answering the questions above, you can move onto more in-depth questions that can help you get the most out of your new job.

  • Am I taking advantage of an employer match in the new 401k/403b plan?
  • Should I be utilizing employee stock purchase plans (ESPP) offered?
  • Do I have a strategy to monetize stock option/restricted/performance stock compensation?

Each question above can be answered in generalities, but it is paramount your answers are tailored to your financial situation, your career aspirations, and your personal goals.

Let us help turn your new job “to-do” checklist into a much more meaningful discussion.

Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. CTW gathers its data from sources it considers reliable. However, CTW makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.

By Conner Kolodge | October 29th, 2019 | Wealth Management

About the Author: Conner Kolodge

Initially focused in financial compliance, Conner transitioned into personal finance to utilize his knowledge and skills to make meaningful differences in the lives of family and friends. He strives to connect client’s life goals with their finances.

Mind Your Withholding

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Mind Your Withholding

[/fusion_text][fusion_text]Citing the new tax bill passed last December, payroll departments have implemented new IRS withholding tables in order to attempt to match the average individual’s estimated tax liability for the calendar year 2018. In fact, if you are mindful of your personal cash inflows and outflows, you may have noticed an increase in your paycheck in the month of February.

Generally, I like paying less in taxes. However, it is important to note that my estimated withholding may not be an accurate depiction of my 2018 estimated liability. In order to get an idea if you are on track to receive a tax refund or to write a big check to the Treasury, the IRS has put together a withholding calculator on its website.

https://www.irs.gov/individuals/irs-withholding-calculator

I will be frank. The IRS doesn’t put in the time (or money) to make this calculator very pretty, but the results can allow us to get an idea of what we will actually owe in federal taxes.

In my specific situation, the tax cut is not really a cut at all. So it’s important for me to change my withholding (filling out a new W-4 form) or prepare to write a check come April, 2019.

In the first year of the new tax bill, tax planning can be even more important to set expectations and to make both tax-effective and tax-efficient decisions going forward. Although many of us are more occupied with the 2017 tax return filing, the earlier we can get a handle on our 2018 tax situation, the better![/fusion_text][separator style_type=”single” top_margin=”” bottom_margin=”” sep_color=”” icon=”” width=”” class=”” id=””][fusion_text]

Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. ASA gathers its data from sources it considers reliable. However, ASA makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.

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Speaking of Money….

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Speaking of Money….

[/fusion_text][fusion_text]I’ve been fortunate to be given a platform to speak to thousands of people over the last several years on a wide range of personal and financial topics. Even today, I get the privilege of spending time in front of, and speaking with employers and employees all around Minnesota (and the virtual world). For fun, I give lectures as a consultant on behalf of employee benefit companies like Anthem, Blue Cross Blue Shield, Medica, Optum, and more.

Employee benefits are continuing to evolve to include not only the traditional basics like health and life insurance but emotional support and coaching. I have thoroughly enjoyed my role as one of the “financial coaches” for an hour or so at a time. What our jobs and roles demand of us changes over time, similar to our needs and wants from our workplaces.

Take a moment to make sure you are making the most of any opportunities your work place is already affording you. You may be eligible for coaching or counseling, or for student loan payment assistance and retirement contributions. Knowledge about your potential benefits can allow for a more fulfilling working experience and simply a better daily life.

If you need any assistance navigating your benefits, investment and insurance options or financial planning, please do not hesitate to reach out. And if you are ever in the audience at an in-person lecture or webinar, please take the time to say hello![/fusion_text][separator style_type=”single” top_margin=”” bottom_margin=”” sep_color=”” icon=”” width=”” class=”” id=””][fusion_text]

Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. ASA gathers its data from sources it considers reliable. However, ASA makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.

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