Updated: Jan 11, 2021
As the summer months wrap up and kids start heading back to school, we’ve been busy with meetings, meetings, meetings, such as tax planning meetings with clients, networking meetings with fellow advisors, and informational meetings with other professionals to help us serve our clients better.
This month’s newsletter contains some items that you may find interesting, both financially and personally.
Building Up Tax-Free Growth Over Time
All About the Roth
Our founder, Kristen Moosmiller, had the opportunity to share her insights on one of her favorite financial topics, Roth accounts, with CNBC late last month. Be sure to check out the article!
Stabilizing U.S. Pensions
‘Butch Lewis Act’ Passed to Save Pensions
On July 24th, 2019 the U.S. House of Representatives passed the ‘Butch Lewis Act’ to help stabilize pensions across the country. This act has been structured to create a loan program to help failing pension plans meet their commitments. According to a recent NPR article, “there are 1,400 such pension plans covering 10 million people across the country. Approximately 1.3 million workers are facing significant cuts to their pensions due to funding problems.” The bill now heads to the Senate for consideration.
Planning to travel this autumn season?
Check Your Passport
Taking a trip? Check your passport!
If you are planning to travel outside the country, make sure to check your passport when you book!
According to the U.S. State Department, some countries require that your passport be valid at least six months beyond the dates of your trip. And it is so much easier to renew your passport when you have time to wait for it to arrive, as opposed to hurrying to get it done on the fly—before you fly.
For more information on how to renew your passport, visit the information page on the U.S. State Department website.
Ohio Driver License & Getting a Federal ID
The Ohio Bureau of Motor Vehicles is introducing the new Ohio driver license and identification (DL-ID) card in an effort to promote increased security and identity protection, as well as comply with federal regulations. Ohioans now have the option to choose between Compliant or Standard DL-ID cards.
The new Compliant cards meets the national travel security requirements. The Compliant card will be required to fly commercially, access military bases, or other federal facilities. To obtain the Compliant card, the following documents need to be provided to the Ohio BMV at the time of your visit:
o full legal name
o social security number
o date of birth
o proof of Ohio residency – TWO documents, from different sources, proving the Ohio street address that are listed on the Acceptable Document List are required for proof of Ohio residency.
o proof of name change
Per the Ohio BMV website, the Standard card does not meet the national travel security requirements and will need to be used in conjunction with a passport or other accepted documents approved by the Transportation Security Administration in order to fly commercially, access military bases, or other federal facilities. The Standard card does not need additional documentation, unless it is being issued for the first time.
Per the Ohio BMV, the new DL-ID card will be mailed to you and take about 10 business days to arrive.
DL-ID cards issued prior to July 2, 2018, will not be accepted by the Transportation Safety Administration (TSA) after October 1, 2020. However, if you would like to be able to use your DL-ID card to fly after October 1, 2020, renew your card early!
If you have any questions, check out the Ohio BMV’s FAQs.
FPA: Succession Planning
Succession Planning for financial advisory firms was the topic at the August meeting of the Financial Planning Association’s (FPA) Central Ohio chapter. With Kristen, Chandler, and T.J. in attendance, attorney and financial planner, Ralph Antolino Jr. of Antolino & Associates shared that there are more financial advisors over age 80 than under age 30, so this is going to become more and more important in the ensuing years. While the advisors at NorthAvenue are closer to 30 than to 80, we made it a priority to have a specific, written succession plan in place when we launched the firm in January.
Monthly NAPFA Meeting Focus: Medicare Advantage Plans & Medigap Plans
Medicare Advantage plans and Medigap plans were the topic of discussion at the recent local study group meeting of the National Association of Personal Financial Advisors (NAPFA). Kristen, T.J., and Martina attended a presentation by Scott Miller of Seniority Benefits Group. Miller said that roughly half of their clients opt for Medicare Advantage, which rarely has monthly premiums but has co-pays for medical expenses. He said that the other half opt for Medigap, which has a monthly premium, but does not require one’s doctor to be in the network like Medicare Advantage plans.
Federal Reserve Lowers Interest Rates
Interest Rates Cut by the Fed
The Federal Reserve lowered interest rates by 0.25% last month, on Wednesday, July 31. Policymakers voted 8-2 in favor of cutting the federal funds rate, which marks the first interest rate reduction since the 2008 recession.
The federal funds rate is one of the tools at the Fed’s disposal to stabilize prices, promote employment, and moderate spending. By lowering this rate, the Fed effectively has made it cheaper for Americans to borrow money. While the effect is not seen overnight, the purpose is to stimulate the economy. The rate reduction will eventually be reflected in the rates of CDs, mortgage rates, and other financial products and securities.
The United States economy is experiencing its longest economic expansion in history. This small rate cut was made in effort to continue prolonging this period, but not all policymakers agree with this rate reduction. They argue that Federal Reserve interference is unnecessary, as there are many signs that point to a prospering economy, such as historically low unemployment rates and consumers are spending.
Ohio 529 Plan Ranks #1 in the Nation
CollegeAdvantage, Ohio’s 529 education savings plan, has been ranked first in the nation for five-and 10-year investment performance by Savingforcollege.com, who provides unbiased research and rankings of all 529 plans in the nation each quarter. Way to go, Ohio!
From Beachbags to Backpacks
Burkett Family Vacation
T.J. and his family recently spent a week vacationing on Lake Erie in Huron, Ohio. He said that it was great to rent a little beach shack and spend the week swimming, playing in the sand, and fishing. They stayed close to the beach for the most part, but did get a chance to take the ferry to Put-in-Bay on a rainy Sunday (the kids loved the ferry ride) and visit the lighthouse at Marblehead (T.J. learned that his wife is obsessed with lighthouses). They vacationed on Lake Michigan last year and Lake Erie this year, so next year they plan to visit one of the three other Great Lakes. He said that suggestions are welcome!
First Day of School
August 14 was a big day in the Burkett household: T.J.’s son, James (please do not call him J.J. anymore, per his repeated admonishments), started his first day of kindergarten at Worthington Estates Elementary. Surprisingly, nobody cried. In the days leading to this milestone, he said he was “excited, but a little bit nervous,” but when he came home, he raved about the school’s library and the “huge TV” in his classroom. T.J. told him about how he and Kristen use a “huge TV” in her office when they meet with clients.
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