Wealth management and financial planning; for individuals and businesses.

Investing for Women: A New Era of Financial Empowerment

Beth Roche • July 23, 2024
As we enter an unprecedented era of wealth transfer, women are set to control more money than ever before. This shift presents a unique opportunity for female investors, but it also comes with distinct challenges. Understanding these challenges and finding the right financial advisor can make all the difference. Here’s an explainer on why investing is different for women and how they can navigate these changes effectively.

The Great Transfer of Wealth

Women are at the forefront of a massive shift in wealth distribution. Over the next few decades, it's estimated that women will inherit and control an increasing share of wealth. This "great transfer of wealth" means more women will have the financial power to shape their futures and those of their families. However, with this newfound control comes the need for informed investment strategies tailored to women's unique financial situations.

Unique Challenges for Women Investors
  1. Longevity Concerns: Women tend to live longer than men, which means their retirement savings need to last longer. This requires careful planning to ensure that their savings can support them throughout their extended retirement years.
  2. Caretaking Responsibilities: Many women find themselves in the "sandwich generation," caring for both their children and aging parents. This dual role can impact their ability to save for retirement and necessitates a flexible and resilient financial plan.
  3. Underrepresentation in the Financial Industry: Women are significantly underrepresented in the financial services industry, leading to a lack of advisors who understand the specific needs of female investors. This makes finding a financial advisor who appreciates these unique challenges crucial.
Effective Strategies for Women
  1. Set Clear Financial Goals: Start by identifying your short-term and long-term financial objectives. Whether it's saving for retirement, your child's education, or a dream vacation, having clear goals will help guide your investment strategy.
  2. Assess Financial Health: Take a thorough look at your current financial situation. Evaluate your income, expenses, savings, and any debt. This assessment is the foundation for any effective financial plan.
  3. Leverage Retirement Tools: Make the most of employer-sponsored retirement plans and Individual Retirement Accounts (IRAs). These tools offer tax advantages and can significantly boost your retirement savings.
  4. Enhance Financial Literacy: Educate yourself on investment basics and financial planning. Understanding the fundamentals of investing will empower you to make informed decisions and avoid common pitfalls.
  5. Partner with a Certified Financial Planner (CFP): A CFP can provide tailored advice and strategies that address the unique financial milestones women face. They can help you navigate life's financial challenges and prepare for unexpected events, ensuring a secure retirement.
The Importance of a Knowledgeable Financial Advisor

Given the unique challenges women face in financial planning, working with a financial advisor who understands these issues is essential. An advisor who is attuned to the specific needs of female investors can provide invaluable support and guidance. They can help you create a comprehensive financial plan that accommodates your longevity, caregiving responsibilities, and other unique considerations.

At Meritrust Wealth Management, we specialize in helping women take control of their financial futures. Our team is dedicated to providing personalized advice that aligns with your life goals and financial situation.

Schedule a Consultation

Ready to take the next step in securing your financial future? Schedule a consultation with Meritrust Wealth Management today. Our experienced advisors are here to help you navigate the complexities of investing and create a strategy that ensures long-term security and peace of mind.

Prepare for Potential Tax Changes: Why You Should Act Now

October 1, 2024
The upcoming expiration of key provisions from the Tax Cuts and Jobs Act (TCJA) in 2026 could significantly impact your financial situation. With current tax rates still lower, there are key opportunities to consider today before these changes take effect. For those who prefer quick takeaways, here are some immediate recommendations: Key Recommendations: Consider Roth Conversions Now: Lower tax rates today, due to the TCJA, make Roth conversions attractive. However, your personal circumstances, such as age and whether you plan to move to a lower-tax state, should influence your decision. Plan for Changes to Mortgage Interest Deduction: The current $750,000 limit on mortgage interest deduction will revert to $1 million in 2026 when the TCJA provisions sunset, and home equity loan interest up to $100,000 will become deductible again. Take Advantage of SALT Deduction Expiration: The $10,000 cap on state and local tax (SALT) deductions will expire in 2026, potentially allowing individuals in high-tax states to deduct more of their taxes. Prepare for Miscellaneous Deductions: Deductions for unreimbursed employee expenses and tax prep fees, which the TCJA eliminated, will return in 2026 if they exceed 2% of your adjusted gross income. Review Estate Tax Planning: The estate tax exemption will revert to pre-TCJA levels in 2026. The exemption amount is expected to decrease from its current level of $12.92 million for individuals and $25.84 million for couples to approximately $5 million for individuals and $10 million for couples, adjusted for inflation. As we approach 2026, the expiration of certain provisions from the Tax Cuts and Jobs Act (TCJA) could bring significant tax changes. By acting early, you can take advantage of today’s lower tax rates while preparing for what’s ahead. One key area to consider is Roth conversions. Under the TCJA, tax rates are currently lower, making it an ideal time to convert traditional IRA funds into a Roth IRA. This strategy could be beneficial if you anticipate a higher tax bracket in the future. However, your personal circumstances matter. If you currently live in a high-tax state but plan to move to a lower-tax state in retirement, delaying the conversion might be a better option. Age also plays a role in deciding the best time to convert. Mortgage Interest Deduction Another major change tied to the TCJA is the mortgage interest deduction. At present, taxpayers who itemize deductions can deduct interest paid on the first $750,000 of mortgage debt, a limit set by the TCJA for debt incurred after December 15, 2017. However, when these provisions expire in 2026, the limit will revert to $1 million. Additionally, interest on home equity loans of up to $100,000—regardless of the loan’s purpose—will once again be deductible. If you have a large mortgage or home equity loan, these changes could increase your deductions, offering valuable tax savings. It’s important to review your mortgage situation and plan for these upcoming adjustments. SALT and Miscellaneous Deductions The state and local tax (SALT) deduction cap, which was a hallmark of the TCJA, is another significant change set to sunset in 2026. Currently, the deduction is capped at $10,000, limiting the benefits for individuals in high-tax states. Once the cap expires, you’ll be able to fully deduct state and local taxes if you itemize your deductions. Additionally, miscellaneous deductions, including unreimbursed employee expenses and tax preparation fees, were eliminated by the TCJA. These deductions will return in 2026, allowing those whose expenses exceed 2% of their adjusted gross income to claim these deductions once more. Estate Tax Changes Another significant change on the horizon is the estate tax exemption. Under the TCJA, the estate tax exemption was doubled, allowing individuals to pass on up to $12.92 million and couples up to $25.84 million without incurring federal estate taxes. However, when the TCJA sunsets in 2026, this exemption will revert to pre-TCJA levels, approximately $5 million for individuals and $10 million for couples, adjusted for inflation. This reduction in the exemption amount could affect your estate planning, especially for those with significant assets. Take Action Now With the expiration of the TCJA provisions on the horizon, now is the time to start planning. Whether you’re considering a Roth conversion or want to understand how these changes to deductions could impact you, it’s essential to consult with your financial advisor. Once November’s election is over and we have added clarity about potential tax policies, we will be prepared to execute a proper plan for you. If you’re already a client, reach out to your advisor today to discuss your options. If you’re not yet a client of Meritrust, don’t wait—call to speak with one of our advisors or schedule a meeting today. Together, we can review your current financial plan and ensure you’re maximizing the opportunities available before the TCJA sunsets in 2026. These potential tax changes could have a lasting impact on your financial future, and being prepared to take action quickly could help you secure greater financial stability for the years ahead.

Playback: Understanding Social Security and Medicare - Your Journey to the Essentials

By Megan Williams • September 19, 2024
Watch as your Meritrust Team discusses the basics of Social Security and Medicare while covering some of the ways in which financial planning can help you make the right choice for you and your goals.

Supreme Court Ruling on Buy-Sell Agreements – What Business Owners Need to Know

By Megan Williams • August 23, 2024
Key Points: Impact on Business Valuation: Life insurance proceeds must be included in the business valuation for estate taxes. Potential for Higher Estate Taxes: This could push estates over the exemption limit, increasing tax liabilities. Liquidity Concerns: Without proper planning, businesses may face liquidity challenges when covering estate taxes. Alternatives Available: Different buy-sell structures can help avoid these issues. As a business owner, planning for the future involves many complex decisions, especially when it comes to protecting the value of your business and ensuring a smooth transition in the event of an owner’s death. The recent Supreme Court decision in Connelly v. United States has introduced significant changes that could affect your estate planning, particularly if your business relies on an entity-purchased buy-sell agreement. Understanding the Supreme Court's Decision The ruling centers on how life insurance proceeds are treated within entity-purchased buy-sell agreements for estate tax purposes. The Supreme Court has ruled that these proceeds must be included in the business’s valuation within the deceased owner’s estate. However, the repurchase obligation—essentially the cost the business incurs to buy back the shares—cannot be used as an offset against the fair market value (FMV) of the business. This change could result in a higher valuation of your business, potentially increasing the estate's value and leading to larger estate tax liabilities. What Does This Mean for You? As a business owner, you might now face a situation where your estate's value is inflated due to the inclusion of life insurance proceeds, pushing you over the current estate tax exemption limit. This could result in a significant increase in the taxes owed upon your passing, creating challenges for your heirs and possibly requiring them to sell business assets to cover these taxes. Liquidity Issues: This ruling could also introduce liquidity challenges. Without additional life insurance or proper planning, your estate might struggle to cover the increased tax liability, putting the future of your business at risk. How to Protect Your Business Thankfully, there are strategies available to mitigate these potential issues: Cross-Purchase Buy-Sell Agreements: In this structure, each business owner holds a life insurance policy on the other owners, allowing the proceeds to bypass the business entirely. This structure can help avoid inflating the business’s valuation. Cross-Endorsement Structures: This approach reduces complexity by allowing each business owner to endorse their life insurance policy’s death benefit to the other owners, simplifying administration while avoiding the estate tax impact. Insurance LLC: Forming an LLC to own the life insurance policies can centralize and streamline policy management, although this requires careful structuring to ensure it avoids the same tax implications as entity-purchase agreements. Trusteed Buy-Sell Agreements: By placing the life insurance policies under the control of a trustee, the proceeds can be used to facilitate the buyout without increasing the business's estate valuation. Next Steps If your business has a buy-sell agreement in place, now is the time to review it with your financial advisor and legal counsel. Ensuring that your planning is up-to-date and compliant with the latest legal developments is crucial to protecting your business’s future. We’re here to help you navigate these changes and find the best solutions for your unique situation.
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