Posted By Lineweaver Financial Group
September 07, 2023
Category: Finance, Money, Dollar, Fitch, Rating
We have received questions recently regarding the U.S. Dollar and countries like Brazil, Russia, India, China and South Africa (BRICS) potentially developing alternative currencies and financial institutions. While we agree that the U.S. fiscal and monetary situation has deteriorated over recent years, and it is likely that China and Russia in particular are pushing to find alternatives to the U.S. Dollar and financial institutions, we do not view this as an imminent threat to the global economy or your investment portfolio.
The U.S. Dollar dominates global trade flows and we do not expect this to change in the near term. It’s estimated that the total value of global trade in 2022 was $32 trillion. The U.S. Dollar was 88% of those trades1. That is only down from 90% in 19881. Further, a reserve currency like the U.S. Dollar must be deep enough to support such large demand, be overseen by a country that can support large current account deficits, has a clear rule of law, does not impose capital controls, and supports property rights. To us, none of the BRICs demonstrate this resiliency. As such, we believe the U.S. Dollar remains the world’s reserve currency for the foreseeable future.
We think maintaining a diversified portfolio of U.S. and International stocks and bonds is the best defense against any potential actions by these countries, which is how we have invested your
Posted By Lineweaver Financial Group
August 24, 2023
Category: Finance, Wealthtrac, Analysis, Portfolio
We’re excited to share the arrival of our new product, the Lineweaver WealthTrac Analysis. This is a unique tool that helps us not only evaluate your current and future financial goals but to also consider emotions and behavior in a way that helps set you up for success.
This is a powerful tool that evaluates your current and future financial plan in 5 different areas: Personal Information, Financial Information, Investment Goals, Risk Tolerance, and Risk Score.
It considers variables like your employment, career and income, your Social Security, what you want out of your retirement, what your current financial situation looks like, and much more. By doing this, it can give you a great analysis whether you’re still working or retired.
Wealth planning is always about establishing a goal and working toward it. To help client’s do this, we look at their top three financial goals. We measure where they are now, and what it would take to meet their timeline.
Part of those goals is looking at three time horizons and the strategies that are best matched with each. You must think about the short-term, middle-term, and long-term goals.
A truly unique aspect of this program is how it lets us visualize how your risk tolerance and your emotional tolerance match up to the risk you’re actually taking, and the progress you’re making toward your goals.
Our unique analyzer also goes even further and offers you a score based on all of thi
Posted By Lineweaver Financial Group
July 13, 2023
Category: Finance, Tax, Inheritance, Trust, 529, IRA
For older Americans, leaving retirement savings to their grandchildren without also leaving them a big tax bill is becoming harder under new rules that took effect in 2020.
Previously, heirs other than spouses had decades to draw down inherited retirement accounts. After the rules change, now they must do it within 10 years.
To maximize their family’s after-tax wealth, grandparents are changing their estate plans and creating new trusts. The timing change also has grandparents making a series of Roth conversions or big generation-skipping lifetime gifts.
These choices make sense with the amount of money and taxes that are at play. According to the Investment Company Institute, Americans held $12.5 trillion in IRAs as of March 31, 2023 and 52% of households headed by someone 65 or older have one.
By choosing to leave a Roth IRA, you avoid some of the problems of the accelerated tax hit from an inherited traditional IRA since those can cause a big tax bill, especially if distributions fall during the heir’s highest earning years. Minor grandchildren may also need to file a tax return to report the IRA payouts, and the income could be taxed at the parents’ rate.
However, because of the 10-year payout period, there is a risk that your heirs will spend the money quickly.
Other options to consider when planning your legacy is to start making lifetime gifts to grandchildren as soon as they are born. That can look like pay
Posted By Lineweaver Financial Group
June 15, 2023
Category: Finance, Awards, Investment, Crains
Lineweaver Wealth Advisors is proud to announce that we have been named as one of the Top 15 Advisors in Cleveland by Crain’s Cleveland Business, moving up three spaces from 18 last year. We are humbled to have received this recognition and credit the hard-working team at LWA and the many clients that we have who put their trust in us.
According to the list, LWA is one of only 5 of the 25 on the list of Advisory services that grew over the last year. We do that in two ways. First, our goal is to make smart decisions with our client's money, which helps benefit them. And the second is that our clients, friends, and neighbors are constantly referring new clients to us. We want to help them be successful, so that it’s easy for our clients to say good things about us.
Our staff work hard and go the extra mile for our clients while adding a personal touch. People are sick of the phone tree and digital assistants where you’re the one that must answer questions when you have important questions you want to ask your advisor. Technology is important – we use it to help build and monitor our client’s customized portfolios. But, just as important is being able to talk directly to your advisor or a member of our service team if you need help.
We also believe everyone needs a Financial Quarterback –an experienced and knowledgeable advisor to coordinate the members of your team, and to help make sure your customized financial plan is consi
Posted By Lineweaver Financial Group
May 18, 2023
Category: Tax, Finance, 401k, Retirement
The idea of saving as much as possible during your career while making wise investments to have a comfortable retirement is nothing new for workers. But if you don’t consider a tax strategy with that plan, it can derail any retirement.
Many workers are able to get company stock either as part of their compensation or through the company’s 401(k) program and these are the stocks you want to pay attention to so you don’t lose money in taxes.
Typically, when people retire, they roll all of their 401(k) to an IRA and everything you paid for that company stock inside the 401(k) and all the appreciation through your working years will be taxed at your personal income rate when you take money out to supplement your retirement.
Instead, if you use the Net Unrealized Appreciation – or NUA – rules, you can roll the stock out of the 401(k) and pay ordinary income taxes only on the cost basis, or what you paid for the stock through the years. Then, if done correctly, you can have the appreciation of the stock taxed at the much lower capital gains rates. For most people, this could cut your tax bill almost in half.
For example, let’s say that you have $300,000 of company stock in your 401(k), that you paid $100,000 for. You roll the stock out of your 401(k) to a non-IRA account. You will pay taxes on the first $100,000 at your ordinary income rate, but the additional $200,000 would be taxed at your capital gain rate, which ca
Posted By Lineweaver Financial Group
May 04, 2023
Category: Postnuptial, Prenuptial, Agreements, Nuptial, Finance
Most people have heard of a prenup – or prenuptial – agreement, but a new law in Ohio will now allow for a postnuptial agreement.
A prenuptial agreement is an agreement a couple enters into before marriage describing how their assets will be divided on divorce or death. However, once you were married, you could not amend or terminate the prenuptial agreement or enter into any agreement regarding the division of assets.
Until now, all other states besides Ohio and Iowa allowed for an agreement after marriage to either amend the prenuptial agreement or have a whole new agreement describing how assets will be divided on divorce or death. But now that Senate Bill 210 has been signed into law, married couples in Ohio can go forward with a postnuptial agreement.
There are a couple of scenarios that a postnuptial agreement could lend itself to.
For example, at the beginning of a marriage, the husband and wife were about equal in finances and agreed in a prenuptial agreement that each would keep their own assets. Then they have three children and for twenty years the wife stays at home raising the family and the husband grows his business to be a very valuable asset. The wife might want some part of those assets since she lost the opportunity to grow her assets.
In that case, a postnuptial agreement could provide that she shares in some of the growth of the husband’s assets.
In another scenario, let’s say parents want to give a
Posted By Lineweaver Financial Group
January 25, 2023
Category: Finance, Markets, Bonds
COMMENTARY BY JERRY HERMAN, CFA®
As we sit in the darkest days of the solar year, we are encouraged to know that the days ahead will have more light – the days will be brighter. And for the financial markets we are optimistic that this will be true in the figurative sense as well. 2022 was a year of recognition and reality - recognition that the stimulus endeavors of prior periods needed to be unwound and the reality that the process could be painful. 2023 offers opportunities and optimism - opportunities being presented in sectors and asset classes that we haven’t seen for some time and the optimism that the Fed will get it right and avoid a deep recession, and global and domestic political and social tension will ease.
In 2022, the forces of pandemic-induced supply chain disruptions, exceptionally high consumer demand for goods such as housing, autos, and appliances, and services like travel and entertainment, combined with an energy shock brought on by the Russia-Ukraine conflict, drove inflation to its highest level in four decades! In June, the inflation rate hit 9.1% and averaged just over 7% for the year, more than double the historical average of about 3%. To combat inflation, the Fed increased interest rates seven times during the year to 4.25-4.5%, levels not seen since 2008.
The year was difficult for investors. Facing the headwinds of rising interest rates, a very tight labor market, and capacity and supply constraints in ma
Posted By Lineweaver Financial Group
January 25, 2023
Category: Resolutions, Finance, Goals, Coordination
By Jim Lineweaver, CFP®, AIF® President and Founder
It might not be so shocking to learn that many of us don’t stick to our New Year’s resolutions. In fact, according to a study conducted by the University of Scranton in Pennsylvania, only 8% of people achieved their New Year’s resolutions in 2021.
One problem that typically arises is that we set aspirational goals for ourselves instead of ones based on the reality of integrating them into our everyday activities. This can set us up for failure and create self-doubt in our abilities. Here’s a list of attainable resolutions I’ve put together to give you the confidence needed to stay true to your financial goals throughout the new year.
The first resolution that will help set a solid foundation to your financial plan is to set aside time to look at your insurance plans. You’ll want to make sure all your insurance is in proper order including life insurance, disability insurance and even property and casualty. Because we specialize in working with retirees, long-term care is of top priority to our clients. And if you have rental or vacation homes, you may want to consider an umbrella policy.
Another resolution is to establish your financial goals. Both long and short financial goals should be driven by your personal goals. That could look like sending your children or grandchildren to college, passing on the family business or having a retirement plan tha
Posted By Lineweaver Financial Group
January 13, 2023
Category: Second Opinion, Finance, Cosultation
People often question if they’re doing all they can to protect their portfolios from losses while taking advantage of buying opportunities. To help you gain more confidence in your financial well-being, it can be beneficial to get a second opinion. Even if you’re happy with your current plan, a second opinion can help pinpoint issues or call attention to parts that might be overlooked otherwise. Here are five reasons why it might be time to consider a second opinion.
All financial planners are different, and each offers different services and products. You need a planner who is truly independent and not forced to offer a limited selection of options to meet your goals and objectives. The advisor you want is one that can customize a solution for whatever your circumstances may be.
You’ll want to make sure your advisor is a fiduciary, which means that an advisor puts your needs and goals before their own. If you’re currently seeing an advisor that is not a fiduciary like ours, that may mean they’re not keeping your best interests in mind.
Make sure you’re working with someone with the proper credentials. Ideally, you’ll want to see a Certified Financial Planner (CFP) because they follow higher standards in terms of education and ethics. The best of both worlds would be an independent fiduciary who is a CFP. Then they’d have access to almost any strategy, product or security and have to put your inte
Posted By Lineweaver Financial Group
November 03, 2022
Category: Retirement, Certified Financial Planner, Finance
A question that comes around often is not only how much you should save for retirement, but how much you should spend in retirement.
When it comes to talking about how much to save, many times the rule of thumb is 10-15%. However, that assumes that you have saved that same amount for your entire career, and many of us haven’t.
Instead of just assuming a single savings rate, many financial advisors will suggest that you start by working backward. That means deciding when you want to retire and how much you’ll spend each year in retirement.
Once you set those targets, you can work backward to get the number you’ll need and then divide that by your remaining years and figure in market return. This will help you figure out how much you need to save.
While this is a valid strategy many advisors use, an issue that arises here is that situations change. If you do this in your 20s, 30s or 50s, your priorities can be completely different when you’re in your 60s. Working backward can work, but you may want to check that the plan you made 20 or 30 years ago will still appeal to you when it comes to the time of retirement.
When it comes to figuring out how much to spend in retirement, many investors and advisors use the 4% rule, which says you can take about 4% of your portfolio in distributions every year.
But as we’ve seen this year, inflation doesn’t always cooperate. If you don’t have strategies in your portfolio
Posted By Lineweaver Financial Group
October 03, 2022
Category: Market Update, Finance, Newsletter
Following the conclusion of its September meeting, The Federal Reserve (Fed) announced another “jumbo” interest rate hike of 0.75% and communicated that further interest rate increases will likely be appropriate in the coming months. The Federal Open Market Committee now projects its target interest rate to be raised an additional 1.00% to 1.25% by the end of 2022. Following this announcement stock markets declined, resulting in the S&P 500 index re-entering bear market territory (more than 20% below its January high).
In August’s inflation report, the Consumer Price Index rose 8.3% from a year ago, suggesting that inflation may prove higher and longer lasting than many previously believed. In response, Federal Reserve chairman Jay Powell reiterated that the Fed intends to continue raising interest rates, rather than prematurely pausing or pivoting as financial markets had hoped over the summer. From June lows to August highs, the S&P 500 index rallied nearly 19%. As you may recall, we took advantage of that run-up in equity markets to rebalance investment portfolios back in line with the asset allocation most appropriate to meet long-term investment objectives (for reference, asset allocation is the percent of a portfolio’s investments held in each major asset category, such as stocks, bonds, or other securities). We did this to manage risk as we entered what we felt may be a volatile fall.
Thus far, stock declines have occurred while corpor
Posted By Lineweaver Financial Group
October 03, 2022
Category: Finance, Commentary, Newsletter, School Tuition
Anticipation is swirling around the pending student loan forgiveness plan announced by the Biden Administration in late August.
The plan can cancel up to $10,000 in debt for eligible student loan borrowers who didn’t receive a Pell Grant. If a borrower is a Pell Grant recipient, they will be eligible for up to $20,000. To be eligible, you must be a student loan borrower with a federal student loan and earned up to $125,000 of annual income (or $250,000 as a joint filer) during the COVID-19 pandemic.
Here’s where the plan is so far:
An exact date for applying for loan forgiveness has not been set, but the U.S. Department of Education says to expect it by early October. The initial form will be available online, with a paper version available later.
The payment pause has been extended through the end of 2022, and another pause will not be coming. Interest will begin accruing again on January 1, 2023, and regular payments will resume. To receive loan forgiveness before the payment pause ends, the Department of Education recommends applying for relief before November 15.
Loan servicers will send a notification when relief has been applied to an account. Borrowers should see forgiveness applied to their loan balances within four to six weeks after submission of the application.
Note that borrowers with FFEL or Perkins loans not held by the Department of Education may not be able to obtain debt relief due to new guidance issued by the Depart
Posted By Lineweaver Financial Quarterback
July 08, 2022
Category: Commentary, Newsletter, Finance, Crain's
We are humbled and excited to share that we have been ranked in the top 20 of Crain’s Cleveland’s annual list of Registered Investment Advisors based on assets under management for the second year in a row. We were especially excited to move up on the list, after ranking in the top 25 in 2019 and 2020. While this is a great milestone and accomplishment for us, we know that there are really two reasons for it: a great staff, and client trust. Our staff work hard and go the extra mile for clients, and in turn clients trust us, use us as a valued sounding board, and introduce us to their family and friends. To us, there is no higher recognition.
We also believe in personal service. We know how frustrated people are with phone trees and digital assistants where they have to answer questions and are often transferred and re-routed. We live in a fast-paced world that requires cutting-edge technology and the latest market analysis to make smart, informed decisions for all our clients. But, when it comes to service, we believe in a personal touch. You’ll always speak with a person, and we pride ourselves on getting you answers to your questions in 24 hours or less.
For nearly 30 years, our team of qualified, experienced, and credentialed professionals has provided our private and corporate clients with a plethora of options for their financial needs. Our success lies in our continued commitment to providing clients with sound advice, world-class customer se
Posted By Lineweaver Financial Quarterback
July 08, 2022
Category: Finance, Commentary, Newsletter
By John Kunze, Vice President of The Brooks & Stafford Company
The real estate market has been crazy these last two years. Many of the home values in our area have increased 25% or more. The cost of building a new home has seen similar increases. There are many reasons, including a limited supply of homes for sale, lower interest rates, increased cost of building materials, shortage of skilled labor in the building trades, etc.
But, what if there was a terrible loss to my home? Do I have enough insurance? Is my home properly protected? Understanding your insurance policy will help you protect your home in the way that is best for you.
Homeowner’s policies use a Replacement Cost as the basis of coverage and claim valuation. Replacement cost is the cost to repair or replace the damage to your home without any deduction for age or depreciation, not the cost you could sell your home. Make sure your policy is Replacement Cost contract and not an Actual Cash Value policy. Your insurance agent or company should be able to help you determine a fairly accurate estimate of your home’s Replacement Value. Once that is determined, make sure your agent includes a provision that each year changes your Dwelling Limit to coincide with the change in the new building costs – many companies call that “Inflation Guard Protection”.
How do I protect against a huge increase in my home’s valuation during the policy
Posted By Lineweaver Financial Group
July 08, 2022
Category: Newsletter, Finance, Commentary
Breakfast is often described as the most important meal of the day, but is skipping this morning meal really detrimental to health? Newer research suggests this may not be as bad as many of us believe. In this Honest Nutrition feature, we take an in-depth look at breakfast and whether skipping it is really harmful.
Though around 15% of people in the United States regularly skip breakfast, many still believe it to be the most important meal of the day. Breakfast provides the body with important nutrients to start the day feeling energized and nourished. Many also believe that it can promote weight loss. But is breakfast really the most important meal of the day?
Most of the claimed benefits of eating breakfast are primarily derived from observational studies, which cannot prove cause and effect. For example, one 2021 systematic review of 14 observational studies found that those who eat breakfast seven times per week have a reduced risk for:
heart disease
diabetes
obesity
high blood pressure
stroke
abdominal obesity
cardiovascular-related death
elevated low-density lipoprotein (LDL) cholesterol.
Should You Eat Breakfast?
Because breakfast gives us the opportunity to fuel our body with nutrients, it is an important meal. However, according to recent studies, it may not be the most important meal of the day. Eating breakfast and listening to your hunger cues are very important if you wake up hungry in the morning. However, if you get busy and skip breakfast one day, there
Posted By Lineweaver Financial Group
June 29, 2022
Category: Finance, Blog, Newsletter, New Year, Educational
Financial markets are off to a challenging start this year as high inflation and rising interest rates have impacted both the stock and bond market. But at a time when news headlines and investors appear focused on the negative outcomes, we’re here to discuss some proactive moves investors can make to combat market volatility.
This year’s decline in both stocks and bonds has been painful for passive investors. Year-to-date a traditional portfolio of 60% stocks and 40% bonds has declined more than 10%, which is on pace for its worst year since 2008.
However, with the right professional financial advice, investors can be making proactive portfolio adjustments to better suit the current market environment.
Some of these adjustments might include implementing positions that benefit from higher inflation, shifting equity exposure from previous leadership to areas of the market that are emerging as winners in this new environment, and focusing on dividend stocks and higher yielding bonds.
Within equities, for over a decade, investors have been able to rely on growth areas of the stock market for leading market returns, however, now these areas such as consumer discretionary and technology are showing early signs of a possibly dimming return outlook.
While those areas may be challenged, prospects for other areas of the market appear to be brightening. These include areas such as the natural resource/energy sector
Posted By Lineweaver Financial Group
June 17, 2022
Category: Finance, Blog, Newsletter, New Year, Educational
We are humbled and excited to share that we have been ranked in the top 20 of Crain’s Cleveland’s annual list of Registered Investment Advisors based on assets under management for the second year in a row.
While this is a great milestone and accomplishment for us, we know that there are really two reasons for it: a great staff, and client trust. Our staff work hard and go the extra mile for clients, and in turn clients trust us, and use us as a valued sounding board, as well as introduce us to their family and friends. To us, there is no higher recognition.
We also believe in personal service. We know how frustrated people are with phone trees and digital assistants where they have to answer questions, and are often transferred and re-routed. We live in a fast-paced world that requires cutting edge technology and the latest market analysis to make smart, informed decisions for all our clients. But, when it comes to service, we believe in a personal touch. You’ll always speak with a person, and we pride ourselves on getting you answers to your questions in 24 hours or less.
For nearly 30 years, our team of qualified, experienced, and credentialed professionals has provided our private and corporate clients with a plethora of options for their financial needs. Our success lies with our continued commitment to providing clients with sound advice, world class customer service, and accessible resources for their current needs and future aspirations.
We bel
Posted By Lineweaver Financial Group
June 02, 2022
Category: Blog, Economy, Commentary, Finance, Portfolio
Student loans are a great investment when continuing your education so it’s important to know the different kinds that are available and the strategies for dealing with them.
According to data from Lendingtree.com, more than 2/3rds of graduates – from both public and private institutions – have student loans and it’s something that affects many Americans.
For parents and grandparents of current college students, there are a few different kinds of student loans to understand. These fall into four categories: Subsidized, Unsubsidized, PLUS loans, and private loans.
When it comes to Federal loans, there are essentially three kinds. Subsidized are only applicable to undergraduates with demonstrated financial need. Unsubsidized loans are not tied to financial need, and are available to all undergraduate, graduate, and professional students. PLUS loans are available for graduate and professional students, as well as the parents of dependent undergrads. Subsidized and unsubsidized federal student loans don’t require a credit check, and you are able to secure them simply by signing a form indicating that you will pay them back. However, PLUS loans and private loans will require a credit check.
Private loans come from banks and other financial institutions who lend directly to students and their families. These are similar to any private loans, in that they’ll require a credit check, and the lender will want to see proof that you are
Posted By Lineweaver Financial Group
May 12, 2022
Category: Blog, Commentary, Finance, Dividends, Series
As we all deal with continued market volatility, inflation, and other economic headwinds, qualified dividends can be a great strategy for your portfolio. This is the second in a two-part series discussing possible dividend strategies. So, what are the main benefits we can expect from qualified dividends?
There are three things you should consider when adding qualified dividends to your portfolio. First, they can be a major contributor to total return. Second, you need to carefully vet the quality. And third, they can have very beneficial tax treatment. There are many types of dividend-paying stocks, but there are two that are particularly timely: bank preferred shares, and oil and gas exploration and production.
Last week, we discussed Oil and Gas E & P, and we know from the number of calls we received, that many people were interested. This week, we’ll talk more about bank preferreds.
These are particularly timely as a strategy because many banks are flush with cash as a result of the stringent regulations after the financial crisis of 2008. These are currently attractively priced, and let you lock in your yield for at least 5 years – but possibly much longer. That doesn’t mean your money is tied up though because they can be sold any time.
And preferred shares typically decline in price as interest rates rise, so substantial discounts are already available. When you purchase at a discount to par, your total return
Posted By Lineweaver Financial Group
April 13, 2022
Category: Blog, Newsletter, Economy, Commentary, Finance, Portfolio
U.S. stock markets have been declining since the beginning of January and fell further into correction territory after the Russian invasion, though markets recovered from their lowest levels since then. During this correction, the S&P 500 declined nearly 15% from peak to trough, while the Russell 2000 Index and the Nasdaq Composite both briefly entered bear market territory (down 20% or more).
While we recognize that the current geopolitical landscape in Eastern Europe remains highly uncertain, we believe history may be a reasonable guide for what to expect from financial markets.
If history is any guide – and by history, we mean Iraq’s invasion of Kuwait and N. Korea’s invasion of S. Korea, since these are the most recent and similar events - financial markets tend to peak before the actual conflict date, as tensions rise, and the overall S&P 500 decline has historically been 14-21%. Therefore, equity markets may have more downside in the short term, but we may be closer to the end of this correction than the beginning, based on current geopolitical circumstances. However, we do expect financial markets to continue to experience heightened volatility in the short term.
In our experience, sometimes individual investors tend to make emotional and often irrational decisions during periods of financial market volatility. Your emotions in situations like these can be your greatest enemy when it comes to making the right financial